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2002
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
WORKPLACE RELATIONS AMENDMENT (FAIR
TERMINATION) BILL 2002
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for
Employment and Workplace Relations,
the Honourable Tony Abbott MP)
WORKPLACE RELATIONS AMENDMENT (FAIR TERMINATION) BILL 2002
OUTLINE
This Bill would amend the Workplace
Relations Act 1996 (the WR Act) to:
(a) insert new provisions into
the Act excluding certain classes of employees from the operation of the
termination of employment provisions, and repeal existing regulations that
exclude certain classes of employees from the operation of the termination of
employment provisions;
(b) make some changes to the provisions excluding
certain classes of employees from the operation of the termination of employment
provisions, in particular to restore provisions excluding casual employees
engaged for a short period (‘short-term casual employees’),
following a decision of the Federal Court invalidating regulations that
purported to exclude these employees (Hamzy v Tricon International
Restaurants t/as KFC [2001] FCA 1589);
(c) validate the operation of
regulations, purporting to exclude short-term casual employees from the
termination provisions, that were declared invalid by the Federal Court. The
validating provisions would operate from the time that the invalid regulations
were purportedly made, to the time when the new provisions to exclude short-term
casual employees from the termination provisions commence; and
(d) insert
new provisions into the Act requiring a fee to be paid when termination of
employment applications are lodged, and providing for this fee to be indexed
annually in line with movements in the Consumer Price Index.
FINANCIAL
IMPACT STATEMENT
There will be no significant impact on Commonwealth
expenditure.
NOTES ON CLAUSES
Clause 1 - Short title
This is a
formal provision specifying the short title of the Act.
Clause 2 -
Commencement
This clause specifies when various provisions of the
Bill are proposed to commence.
Clauses 1 to 3 will commence on Royal
Assent.
Schedules 1 and 2 will commence on a day or days to be fixed by
Proclamation. However, if the Schedules have not commenced within 6 months after
Royal Assent, subsection 2(3) has the effect that the Schedules will commence on
the first day following that six month period.
Clause 3 -
Schedules
Clause 3 provides that an Act or set of regulations
specified in a Schedule to this Act is amended or repealed as set out in the
Schedule, and that any other item in a Schedule operates according to its terms.
The clause further provides that amendment of regulations by this Bill
will not prevent the amended regulations being further amended or repealed by
the Governor-General, and provides that, for the avoidance of doubt, regulations
amended by the Act are still taken to be regulations.
1.1 This item would insert proposed section 170CBA, to exclude certain
classes of employees from the operation of certain termination of employment
provisions in Division 3 of Part VIA of the WR Act. Subject to some minor
amendments, the new provisions reflect the exclusions that are set out in
regulations 30B and 30BA of the Workplace Relations Regulations 1996 (the WR
Regulations).
1.2 Proposed subsection 170CBA(1) lists the kinds of
employees that would be excluded from the operation of, in effect, all of the
termination of employment provisions (including provisions about unfair
dismissal and unlawful termination). The classes of employees to be excluded
are:
• employees engaged for a specified period of
time;
• employees engaged for a specified
task;
• employees who are on probation (as long as the length of
the probation period is 3 months or less, or reasonable having regard to the
particular employment);
• casual employees engaged for a short
period (‘short-term casuals’);
• trainees who are
employed under particular types of traineeship agreements, or who are employed
under a traineeship for a specified period; and
• non-award
employees who earn more than a particular rate established in the WR
Regulations.
1.3 This list corresponds to the list of employees currently
excluded from the operation of the termination of employment provisions by
regulation 30B of the WR Regulations, with the following
differences:
• the words ‘or a qualifying period of
employment’ which appear in paragraph 30B(1)(c) of the WR Regulations
would not be included in proposed new paragraph 170CBA(1)(c). Subsections
170CE(5A) and (5B) of the WR Act deal with a ‘qualifying period of
employment’ in relation to termination of employment that is harsh, unjust
or unreasonable (referred to as ‘unfair dismissal’);
• proposed new paragraph 170CBA(1)(d) and subsection 170CBA(3),
which would exclude all short-term casual employees from the termination
provisions, are different from the current short-term casual exclusion in
paragraph 30B(1)(d) and subregulation 30B(3) of the WR Regulations. The current
regulations exclude casual employees who have been working for their employer
for less than 12 months from accessing termination of employment remedies. The
proposed provisions to be inserted in the Act would exclude casual employees who
have not been working on a regular and systematic basis for their employer for a
sequence of periods of employment extending over a period of at least 12 months,
or who do not have a reasonable expectation of continuing employment with their
employer. This reflects the scope of the exclusion in the regulations that were
declared invalid by the Federal Court in Hamzy v Tricon International
Restaurants; and
• the reference to subsection 170CC(3) and (4)
of the WR Act in subparagraph 30B(1)(f)(ii) of the WR Regulations would be
replaced, in proposed subparagraph 170CBA(1)(f)(ii), with a reference to
proposed subsections 170CBA(5) and (6), to reflect structural changes in the
provisions as a result of moving the exclusions from the WR Regulations to the
WR Act.
1.4 Proposed subsection 170CBA(2) provides that proposed
subsection (1) does not apply to exclude an employee engaged under a contract of
employment for a specified period of time, or for a specified task, from the
termination of employment provisions, if the employee has been engaged under
that kind of contract for the purpose (or a substantial purpose) of avoiding the
employer’s obligations under the termination provisions. This subsection
corresponds with subregulation 30B(2) of the WR Regulations.
1.5 Proposed
subsection 170CBA(3) sets out which casual employees are excluded from the
termination of employment provisions. As outlined above, a casual employee will
be taken to be engaged for a short period, and therefore excluded from the
termination provisions unless the employee has been engaged by their employer on
a regular and systematic basis for a sequence of periods of employment during a
period of at least 12 months; and the employee has, or would have had, a
reasonable expectation of continuing employment with the
employer.
1.6 Proposed subsections 170CBA(4), (5) and (6) would replace
current subsections 170CC(2), (3) and (4) of the WR Act, which are being
repealed (see Item 3 below). These provisions would explain in more detail which
non-award employees are excluded from the termination of employment provisions.
1.7 Proposed subsection 170CBA(4) would specify that employees are to be
taken not to be employed under award conditions if their employer is not bound
by a federal award, certified agreement, Australian Workplace Agreement, or old
IR agreement.
1.8 Proposed subsection 170CBA(5) would provide that
non-award employees who are not paid on a commission or piece rate basis are
excluded from the termination of employment provisions if their rate of
remuneration exceeds the rate established under regulation 30BB of the WR
Regulations.
1.9 Proposed subsection 170CBA(6) would provide that
non-award employees who are paid on a commission or piece rate basis are
excluded from the termination of employment provisions if their rate of
remuneration (calculated in accordance with regulation 30BC of the WR
Regulations) exceeds the rate established under regulation
30BB.
1.10 Proposed subsection 170CBA(7) would exclude certain classes of
employees from the operation of sections 170CL and 170CM and Subdivisions D and
E of Division 3 of Part VIA of the WR Act. Section 170CL requires an employer to
notify Centrelink if they decide to terminate the employment of 15 or more
employees for economic, technological, structural or other similar reasons.
Section 170CM requires employers to provide employees with a minimum period of
notice before terminating their employment. Subdivisions D and E allow the
Commission to make orders about severance pay and consultation with
representatives of employees (for instance, unions) in certain circumstances
where an employer is terminating the employment of 15 or more employees.
1.11 Proposed paragraphs 170CBA(7)(a) to (c) set out the kinds of
employees that would be excluded from the operation of these
provisions:
• casual employees (except ‘short-term
casuals’ – these casuals would be excluded from the operation of
sections 170CL and 170CM and Subdivisions D and E by proposed paragraph
170CBA(1)(d));
• daily hire employees working in the construction
industry;
• weekly hire employees working in the meat industry,
where their employment is terminated due to seasonal factors.
1.12 This
list corresponds to the list of employees that are currently excluded from the
operation of those provisions by paragraphs 30BA(a), (b) and (d) of the WR
Regulations. The exclusion in paragraph 30BA(c) of the WR Regulations is now
redundant, and would be repealed by Item 17 of the Bill.
1.13 Proposed
subsection 170CBA(8) would make clear that if an employee could be excluded from
termination of employment provisions by both proposed subsections 170CBA(1) and
(7), the employee is taken only to be covered by proposed subsection 170CBA(1)
and is therefore subject to the broader range of exclusions provided for by
subsection 170CBA(1).
Item 2 – Paragraphs
170CCD(1)(a)(b)(c)
1.14 This item would repeal paragraphs
170CC(1)(a), (b) and (c), and would replace the current heading to section 170CC
with a new heading “Regulations may provide for additional
exclusions”.
Item 3 – Subsections 170CC(2),(3) and
(4)
1.15 This item would repeal subsections 170CC(2), (3) and (4) of
the WR Act. These provisions would be replaced by proposed subsections
170CBA(4), (5) and (6).
Item 4 – After section
170CC
1.16 This item would insert proposed section 170CCA. This
provision would validate the operation of regulations excluding short-term
casuals from the operation of the termination of employment provisions, which
were ruled invalid by the Federal Court in Hamzy v Tricon International
Restaurants. The invalid exclusion was contained in paragraph 30B(1)(d) and
subregulation 30B(3) (as amended by Statutory Rules 1996 No. 307).
1.17 Proposed section 170CCA does not deem the invalid regulations to
have been valid. Rather, it declares that the rights and liabilities of
employers and employees are to be taken to have been as if the regulations had
been validly made. This provision is designed to ensure that everyone is and was
in the same position that they would be in, or would have been in, had the
invalid regulations been validly made. However, this section would not affect
the rights and liabilities of parties to proceedings which have been finally
determined by a court or by the Commission before the commencement of this item,
so far as the rights and liabilities that were the subject of the determination
directly relate to the invalid regulations.
Item 5 - Subsection
170CD(1)
1.18 This item would insert a proposed definition of
‘daily hire employee’ into subsection 170CD(1). This term is used in
proposed section 170CBA. The proposed definition is the same as the definition
of this term currently contained in subregulation 30A(1) of the WR
Regulations.
Item 6 – Subsection 170CD(1)
1.19 This
item would insert a new definition of ‘relevant training award’ into
subsection 170CD(1). The term ‘relevant training award’ is used in
the proposed definition of ‘traineeship agreement’ to be inserted
into subsection 170CD(1) (see Item 9). The new definition refers to the current
National Training Wage Award and future awards that may cover the same subject
matter.
Items 7 and 8 – Subsection 170CD(1)
These
items would insert proposed definitions of ‘State or Territory training
authority’ and ‘trainee’ into subsection 170CD(1). These terms
are used in proposed section 170CBA. The proposed definitions are the same as
the definitions of these terms currently contained in subregulation 30A(1) of
the WR Regulations.
Item 9 – Subsection
170CD(1)
1.20 This item would insert a proposed definition of
‘traineeship agreement’ into subsection 170CD(1). The proposed
definition is similar to the definition of ‘traineeship agreement’
currently contained in subregulation 30A(1) of the WR Regulations, except that
some minor changes have been made to reflect current arrangements in relation to
vocational education and training. In particular:
• paragraph (a)
of the definition refers to the proposed new definition of ‘the relevant
award’, rather than the National Training Wage Interim Award 1994, which
has now been superseded;
• the reference to NETTFORCE in the
current definition in the WR Regulations has been deleted, as that body has been
wound up and is no longer operating.
Item 10 – Subsection
170CD(2)
1.21 This item proposes to amend subsection 170CD(2) by
deleting the words ‘Subdivision C, D and E of this Division’ and
replacing them with the words ‘this Subdivision or Subdivision C, D and
E’. This change is necessary so that expressions to be inserted into
Subdivision A of Division 3 of Part VIA by this Bill would be taken to have the
same meaning as those expressions in the Termination of Employment Convention,
1982, a copy of which is set out in Schedule 10 of the WR
Act.
Workplace Relations Regulations 1996
Items
11 to 15 – Subregulation 30A(1) (definition of ‘daily hire
employee’, ‘NETTFORCE’, ‘State or Territory training
authority’, ‘trainee’ and ‘traineeship
agreement’)
1.26 These items would amend subregulation 30A(1)
of the WR Regulations by repealing the definitions of ‘daily hire
employee’, ‘NETTFORCE’, ‘State or Territory training
authority’, ‘trainee’ and ‘traineeship agreement’.
Those definitions will no longer be required in the WR Regulations due to
the proposed repeal of regulations 30B and 30BA.
Items 16 and 17
– Regulations 30B and 30BA
1.27 These items would repeal
regulations 30B and 30BA of the WR Regulations. These regulations, which exclude
certain classes of employees from certain termination of employment provisions,
would be replaced with new provisions in the WR Act. However, no provision
corresponding to paragraph 30BA(c) of the WR Regulations would be inserted into
the WR Act, as the exclusions in this paragraph is now
redundant:
• Schedule X of the Maritime Industry Seagoing Award
1983 is no longer in force;
• the system of engagement under
Schedule X of the Maritime Industry Seagoing Award 1983 is no longer in
operation; and
• there are no employees whose employment is
regulated by Schedule X of the Maritime Industry Seagoing Award
1983.
Items 18 and 19 – Regulation 30BB and
30BC
1.28 Proposed item 18 would amend regulation 30BB of the WR
Regulations by replacing the words ‘paragraphs 170CC(3)(b) and
(4)(b)’ with the words ‘paragraphs 170CBA(5)(b) and (6)(b)’.
Proposed item 19 would amend regulation 30BC of the WR Regulations by replacing
the words ‘paragraph 170CC(4)(b)’ with the words ‘paragraph
170CBA(6)(b)’.
1.29 These amendments are consequential amendments
to reflect the proposed repeal of subsections 170CC(3) and (4) and the
replacement of these provisions with new subsections 170CBA(5) and (6) (see
Items 1 and 3 above).
Part 2 – Application
provisions
Item 20 – Application of items 1 to 19 (other
than item 4)
1.30 This item would provide that the amendments made by
items 1 to 19, other than item 4, only apply in relation to terminations of
employment that occur after the commencement of Schedule 1 to the Bill, whether
or not the employment to which the termination relates started before or after
that time. The amendment proposed by item 4 (inserting section 170CCA) would
apply according to the terms described in the proposed
section.
Item 1 – After section 170CE
2.1 This item would
insert proposed section 170CEAA, to require a person lodging a termination of
employment application with the Australian Industrial Registry to pay a
fee.
2.2 Proposed subsection 170CEAA(1) lists the applications in respect
of which a fee is payable (applications made under subsections 170CE(1), (2),
(3) and (4) of the WR Act).
2.3 Proposed subsection 170CEAA(2) provides
that the amount of the fee is $50 if an application is lodged during the
financial year in which the provision commences. Section 22 of the Acts
Interpretation Act 1901 provides that the term ‘financial year’
means a period of 12 months beginning on 1 July.
2.4 Proposed subsection
170CEAA(3) provides for the calculation of the fee if an application is lodged
in later financial years. The amount would be calculated by multiplying the fee
that applied in the previous financial year by an indexation factor set out in
proposed subsection 170CEAA(4). The amount would then be rounded to the nearest
multiple of ten cents (and rounded up if the result is an amount ending in five
cents).
2.5 Proposed subsection 170CEAA(4) sets out the formula for
calculating the indexation factor for the purposes of calculating the amount of
the fee for lodging a termination of employment applications under proposed
subsection 170CEAA(3).
2.6 The indexation factor would be obtained by
dividing the sum of the All Groups Consumer Price Index Numbers for all four
quarters in the year ending on 31 March preceding the financial year in which
the application is lodged, by the sum of the All Groups Consumer Price Index
Numbers for all quarters of the year ending on 31 March before
that.
2.7 The intention is that the fee payable for lodging termination
of employment applications should be adjusted at the start of each financial
year to reflect movements (either upward or downward) in the Consumer Price
Index during the previous year. The Consumer Price Index movements will be
calculated based on the figures available for previous years ending in the March
quarter, as Consumer Price Index numbers for the June quarter are generally not
available until August each year, so would not be published in time to index the
fee from 1 July.
2.8 Proposed subsection 170CEAA(5) provides that the
indexation factor calculated under proposed subsection 170CEAA(4) would be
rounded to three decimal places before it is applied in calculating the amount
of the fee under proposed subsection 170CEAA(3).
2.9 Proposed subsection
170CEAA(6) provides that the indexation factor is only to be calculated with
respect to the most recently published reference base of the Consumer Price
Index, and that later substituting Consumer Price Index numbers are to be
disregarded unless substituting numbers are issued to take account of changes in
the Consumer Price Index reference base.
2.10 Proposed subsection
170CEAA(7) provides that an Industrial Registrar may exempt a person lodging a
termination of employment application from paying the fee, if the fee would
cause that person serious financial hardship.
2.11 Proposed subsection
170CEAA(8) provides that a fee paid for lodging a termination of employment
application is to be refunded if the person making the application discontinues
the application at least two days before the first proceedings in the Australian
Industrial Relations Commission relating to the application are scheduled to
begin.