FAIR WORK AMENDMENT (REMAINING 2014 MEASURES) BILL 2015 Explanatory Memorandum

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FAIR WORK AMENDMENT (REMAINING 2014 MEASURES) BILL 2015

2013-2014-2015 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES FAIR WORK AMENDMENT (REMAINING 2014 MEASURES) BILL 2015 EXPLANATORY MEMORANDUM (Circulated by authority of the Minister for Employment, Senator the Hon Michaelia Cash)

Outline FAIR WORK AMENDMENT (REMAINING 2014 MEASURES) BILL 2015 OUTLINE The Fair Work Amendment (Remaining 2014 Measures) Bill 2015 (the Bill) makes amendments to the Fair Work Act 2009 (Fair Work Act) to implement elements of The Coalition's Policy to Improve the Fair Work Laws. Specifically, the Bill responds to a number of outstanding recommendations from the Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation (June 2012) review into the operation of the Fair Work Act by the Fair Work Review Panel. The Bill will amend the Fair Work Act to:  respond to Fair Work Review Panel recommendation 6 by providing that, on termination of employment, untaken annual leave is paid out as provided by the applicable industrial instrument;  respond to Fair Work Review Panel recommendation 2 by providing that an employee cannot take or accrue leave under the Fair Work Act during a period in which the employee is absent from work and in receipt of workers' compensation;  respond to Fair Work Review Panel recommendations 9, 11, 12 and 24 by: o requiring flexibility terms in modern awards and enterprise agreements to provide for unilateral termination of individual flexibility arrangements with 13 weeks' notice; o requiring flexibility terms in enterprise agreements to provide, as a minimum, that individual flexibility arrangements may deal with when work is performed, overtime rates, penalty rates, allowances and leave loading; o confirming that benefits other than an entitlement to a payment of money may be taken into account in determining whether an employee is better off overall under an individual flexibility arrangement and require individual flexibility arrangements to include a statement by the employee setting out why he or she believes that the arrangement meets his or her genuine needs and leaves him or her better off overall at the time of agreeing to the arrangement; and o providing a defence to an alleged contravention of a flexibility term where the employer reasonably believed that the requirements of the term were complied with at the time of agreeing to a particular individual flexibility arrangement.  respond to Fair Work Review Panel recommendation 38 by providing that there will not be a transfer of business under Part 2-8 of the Fair Work Act when an employee becomes employed with an associated entity of his or her former employer after seeking that employment on his or her own initiative before the termination of the employee's employment with the old employer. Similar amendments are also made in relation to Part 6-3A of the Fair Work Act; Fair Work Amendment (Remaining 2014 i House of Representatives Measures) Bill 2015

Outline  amend the right of entry framework of the Fair Work Act by: o repealing amendments made by the Fair Work Amendment Act 2013 that required an employer or occupier to facilitate transport and accommodation arrangements for permit holders exercising entry rights at work sites in remote locations; o providing for new eligibility criteria that determine when a permit holder may enter premises for the purposes of holding discussions or conducting interviews with one or more employees or Textile, Clothing and Footwear award workers; o repealing amendments made by the Fair Work Amendment Act 2013 relating to the default location of interviews and discussions and reinstating pre-existing rules; and o expanding the FWC's capacity to deal with disputes about the frequency of visits to premises for discussion purposes.  respond to Fair Work Review Panel recommendation 43 by providing that, subject to certain conditions, the FWC is not required to hold a hearing or conduct a conference when determining whether to dismiss an unfair dismissal application under section 399A or section 587. Fair Work Amendment (Remaining 2014 ii House of Representatives Measures) Bill 2015

Financial Impact Statement FINANCIAL IMPACT STATEMENT Nil Fair Work Amendment (Remaining 2014 iii House of Representatives Measures) Bill 2015

Regulation Impact Statement REGULATION IMPACT STATEMENT A Regulation Impact Statement (RIS) was prepared for the measures in this Bill when they were originally introduced as measures of the Fair Work Amendment Bill 2014. The RIS can be accessed from the Office of Best Practice Regulation website at: http://ris.dpmc.gov.au/2014/03/19/amendments-to-the-fair-work-act-2009-details-stage- regulation-impact-statement-department-of-employment/. Fair Work Amendment (Remaining 2014 iv House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 Fair Work Amendment (Remaining 2014 Measures) Bill 2015 The Fair Work Amendment (Remaining 2014 Measures) Bill 2015 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Overview of the Bill The object of the Fair Work Act 2009 (Fair Work Act) is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. This Bill makes amendments to the Fair Work Act to respond to a number of outstanding recommendations from the Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation review (the Fair Work Review Report) and in relation to other matters concerning right of entry. The Bill will amend the Fair Work Act by:  amending the National Employment Standards (NES) in the Fair Work Act in relation to payment of annual leave upon termination of employment and the taking or accruing of leave while receiving workers' compensation. These amendments implement Fair Work Review Panel recommendations 2 and 6;  amending Part 2-3 and Part 2-4 of the Fair Work Act in relation to the requirements for flexibility terms in modern awards and enterprise agreements and individual flexibility arrangements made under those terms. These amendments respond to recommendations 9, 11, 12 and 24 made by the Fair Work Review Panel in the Fair Work Review Report;  providing that there will not be a transfer of business under Part 2-8 of the Fair Work Act when an employee becomes employed with an associated entity of his or her former employer after seeking that employment on his or her own initiative before the termination of the employee's employment with the old employer. These amendments respond to recommendation 38 made by the Fair Work Review Panel in the Fair Work Review Report. Similar amendments are also made in relation to Part 6-3A of the Fair Work Act;  amending the right of entry framework of the Fair Work Act by: o repealing amendments made by the Fair Work Amendment Act 2013 that required an employer or occupier to facilitate transport and accommodation arrangements for permit holders exercising entry rights at work sites in remote locations; o providing for new eligibility criteria that determine when a permit holder may enter premises for the purposes of holding discussions or conducting interviews with one or more employees or Textile, Clothing and Footwear (TCF) award workers; Fair Work Amendment (Remaining 2014 v House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights o repealing amendments made by the Fair Work Amendment Act 2013 relating to the default location of interviews and discussions and reinstating pre-existing rules; and o expanding the FWC's capacity to deal with disputes about the frequency of visits to premises for discussion purposes.  providing that, subject to certain conditions, the FWC is not required to hold a hearing or conduct a conference when determining whether to dismiss an unfair dismissal application under section 399A or section 587. Human rights implications The Bill engages the following rights:  the right to work under Article 6(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR);  the right to just and favourable conditions of work under Article 7 of the ICESCR;  the rights of parents and children under Articles 3, 5 and 18 of the Convention of the Rights of the Child (CRC) and Article 5(b) of the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW);  the right to an effective remedy under Article 2 of the International Covenant on Civil and Political Rights (ICCPR);  the right to a fair hearing under Article 14 of the ICCPR;  the right to protection against arbitrary and unlawful interferences with privacy under Article 17 of the ICCPR; and  the right to freedom of association in Article 22 of the ICCPR. The definition of 'human rights' in the Human Rights (Parliamentary Scrutiny) Act 2011 relates to the core seven United Nations human rights treaties. However, the content of the rights to work and rights in work in the ICESCR can usefully be informed by specific obligations in treaties of the International Labour Organisation (ILO), such as the Right to Organise and Collective Bargaining Convention 1949 (No. 98), which protects the right of employees to collectively bargain for terms and conditions of employment. Right to work and rights in work Article 6(1) of the ICESCR recognises the right to work and obliges States Parties to take appropriate steps to safeguard this right. The United Nations Committee on Economic Social and Cultural Rights has stated that the right to work in Article 6(1) of the ICESCR encompasses the need to provide the worker with just and favourable conditions of work. Article 7 of the ICESCR requires that States Parties recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular, remuneration that provides all workers with fair wages, a decent living and rest, leisure and reasonable Fair Work Amendment (Remaining 2014 vi House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays. Payment for annual leave Under the Fair Work Act, the NES and modern awards provide a safety net of minimum terms and conditions of employment. Currently, the NES provides that on termination of employment, if an employee has a period of untaken annual leave, the employer must pay the employee the amount that would have been payable had the employee taken that period of leave, which includes any loading on that leave. This amendment responds to recommendation 6 made by the Fair Work Review Panel in the Fair Work Review Report. The Fair Work Review Panel stated that section 90(2) of the Fair Work Act was intended to preserve the existing arrangements for the payment of leave loading upon termination. However, the current provision has meant that the 'longstanding arrangements under awards and enterprise agreements have been disturbed'. This has meant additional costs to employers. The amendments in Part 1 of Schedule 1 to the Bill provide that employees are entitled to be paid an hourly rate for each hour of paid annual leave they have accrued but not taken and that hourly rate must be at least equal to the employee's base rate of pay. This means that employees will receive fair wages for annual leave that is accrued and untaken upon termination of employment. The amendments also make it clear that modern awards and enterprise agreements may provide for more beneficial terms than those provided for under the NES. The amendments will have the effect of restoring the historical provision and providing certainty for employers. These amendments are consistent with recognising the right to just and favourable conditions of work, because the NES continues to ensure that employees receive remuneration that provides for fair wages and a decent living, consistent with Article 7 of the ICESCR. Taking or accruing leave while receiving workers' compensation The Fair Work Act currently provides that an employee is not entitled to take or accrue any leave or absence under the NES during a period in which an employee is absent from work because of a personal illness or injury for which the employee is receiving compensation under a Commonwealth, State or Territory compensation law. However, subsection 130(2) provides that an employee may take or accrue leave during a compensation period if taking or accruing leave is permitted by a Commonwealth, State or Territory compensation law. The amendment in Part 2 of Schedule 1 to the Bill provides that an employee cannot take or accrue any type of leave while he or she is absent from work and is receiving workers' compensation. This amendment responds to recommendation 2 made by the Fair Work Review Panel in the Fair Work Review Report. Currently, confusion exists as to what arrangements apply in each jurisdiction as to whether leave may be accrued or taken while an employee is absent from work and in receipt of workers' compensation. In those jurisdictions where it is possible to accrue leave (Queensland and the Commonwealth) employers incur an additional cost relative to other jurisdictions. It appeared anomalous to the majority of the Fair Work Review Panel that employees in two jurisdictions may accrue annual leave while on workers' compensation but not under other jurisdictions. Fair Work Amendment (Remaining 2014 vii House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights This amendment engages but does not limit human rights because the NES continues to ensure that employees receive remuneration that provides for fair wages and a decent living, consistent with Article 7 of the ICESCR. Rather, the amendment ensures that all employees in the national system have the same entitlements in relation to the taking or accrual of leave during a period in which the employee is in receipt of workers' compensation. Individual flexibility arrangements The Fair Work Act requires all modern awards and enterprise agreements to contain a flexibility term that enables an employee and his or her employer to agree to an arrangement (an individual flexibility arrangement) varying the effect of certain terms of the applicable modern award or enterprise agreement in relation to that employee and the employer in order to meet their genuine needs. If an employee and employer agree to an individual flexibility arrangement under the flexibility term in the relevant modern award or enterprise agreement, the instrument has effect in relation to the employee and the employer as if it were varied by the flexibility arrangement and the arrangement is taken to be a term of the instrument. Part 3 of Schedule 1 to the Bill ensures that workers have access to flexibility by requiring that enterprise agreement flexibility terms must provide, as a minimum, that individual flexibility arrangements may be made that vary the effect of terms of the enterprise agreement about arrangements for when work is performed, overtime rates, penalty rates, allowances and leave loading. Bargaining representatives for an enterprise agreement may continue to agree to include any other matters within the scope of their enterprise agreement flexibility term. Modern award flexibility terms already provide that individual flexibility arrangements may be made about these five matters. Part 3 of Schedule 1 to the Bill will also extend the notice period for unilateral termination of an individual flexibility arrangement to 13 weeks, giving employers and employees greater certainty about working arrangements. The amendments in respect of individual flexibility arrangements promote the right to just and favourable conditions of work as they will facilitate greater access for employees to flexibility regarding their working arrangements whilst continuing to ensure that they remain better off overall under the individual flexibility arrangement than without it. These amendments respond to recommendations 9, 12 and 24 made by the Fair Work Review Panel in the Fair Work Review Report. Items 9 and 17 respond to a Fair Work Review Panel recommendation that the Fair Work Act be amended so that an employer has a statutory defence to any claim for underpayment and penalties made after entering into an individual flexibility arrangement (recommendation 11). These amendments provide an employer with a defence to an alleged contravention of a flexibility term provided that the employer's belief that it had complied with the requirements of the flexibility term, based on the facts and circumstances in existence at the time of making the individual flexibility arrangement, was reasonable. In these circumstances an employer will not breach the civil remedy provision in section 45 or section 50, as relevant. New subsection 203(4A) requires a flexibility term in an enterprise agreement to require the employer to ensure that any individual flexibility arrangement made under it includes a Fair Work Amendment (Remaining 2014 viii House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights statement by the employee setting out why he or she believes, at the time of agreeing to the arrangement, that it meets his or her genuine needs and results in him or her being better off overall. This promotes the right to just and favourable conditions of work by providing greater transparency about the existing safeguards. Transfer of business Currently, under Part 2-8 of the Fair Work Act, when an employee transfers between associated entities, the industrial instrument covering the old employer and the employee automatically transfers with the employee to the new employer even if the transfer occurs at the initiative of the employee. The only way to prevent the old employer's instrument applying to the new employment is to secure an order to that effect from the FWC. The Fair Work Review Panel noted that it would be 'preferable to spare both parties the time and expense of making such an application' in these circumstances (page 206). Consequently, the Fair Work Review Panel recommended that the Fair Work Act should make it clear that in these circumstances, the employee's employment should be subject to the terms and conditions provided by the new employer (recommendation 38). These amendments respond to recommendation 38. The amendments to Part 2-8 engage the right to just and favourable conditions at work. The amendments may result in reductions to employee entitlements where the new employer's industrial instrument has terms and conditions that are less favourable than the old employer's instrument or a transferring employee has entitlements that carry over and are later paid out by the new employer at a lower rate. On the other hand, where the new employer's industrial instrument has terms and conditions that are more favourable than the old employer's instrument or the transferring employee's salary increases the amendments will result in an increase to employee entitlements. Any concerns regarding possible reductions may be balanced against the overriding criteria that the employment with the new employer must have been sought by the employee on his or her own initiative, before the termination of the employee's employment with the old employer. An employee who is seeking to gain particular employment can be expected to assess the advantages and disadvantages of doing so before he or she transfers to the new employer. Further, any change in an employee's conditions will remain underpinned by the legislative safety net and an employee's continuity of service will not be affected. The amendments will not operate in circumstances where the employee's movement to another employer is in response to a direction by the old employer. Nor would they operate if the movement comes about as a result of the old employer taking or threatening to take action against the employee. The General Protections in Part 3-1 of Chapter 3 of the Fair Work Act may also apply in that circumstance. The Fair Work Review Panel also noted that an amendment pursuant to its recommendation 38 'is unlikely to increase the risks of employees having their terms and conditions of employment diminished through transfers to associated entities' (page 206). The above considerations also apply to the amendments to Part 6-3A. Fair Work Amendment (Remaining 2014 ix House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights Dismissing unfair dismissal applications The unfair dismissal provisions of the Fair Work Act safeguard the right to work, including security against unfair dismissal. The unfair dismissal amendments will assist in the efficient resolution of claims by encouraging all parties to participate in proceedings in a reasonable manner. The amendments set out that an unfair dismissal claim can be dismissed without the FWC holding a hearing or conducting a conference where:  the applicant has unreasonably failed to attend a conference or hearing, comply with an FWC direction or order, or discontinue an application after a settlement agreement has been concluded; or  the application is frivolous or vexatious or has no reasonable prospects of success. The amendments strike the appropriate balance between the need to protect workers from unfair dismissal and to provide a deterrent against unreasonable conduct during proceedings. The unfair dismissal amendments are reasonable and proportionate to address the time and expense caused to the parties to an unfair dismissal matter of a requirement for a hearing or conference where an unfair dismissal application has not been prosecuted or the application has not been made in accordance with the Fair Work Act, is frivolous or vexatious or has no reasonable prospects of success. The power provided to dismiss certain unfair dismissal applications without a hearing or conference is discretionary and subject to certain safeguards, including that the parties must be invited to provide further information to the FWC that relates to whether the power should be exercised and that the FWC must take account of any such information. Existing appeal rights to a Full Bench of the FWC against decisions of the FWC are not disturbed by the unfair dismissal amendments. These amendments respond to Fair Work Review Panel recommendation 43. The Fair Work Review Panel was of the view that the requirement in section 397 of the Fair Work Act, for the FWC to conduct a conference or hold a hearing if a matter involves disputed facts, was a significant contributing factor in the reluctance of the FWC to dismiss unmeritorious, vexatious or frivolous applications without a conference or hearing. The Fair Work Review Panel recommended that the Fair Work Act be amended to provide the FWC with the discretionary power to dismiss unfair dismissal applications without a conference or hearing in circumstances where the application is frivolous or vexatious or has no reasonable prospects of success, a settlement agreement has been concluded or an applicant fails to attend a proceeding or comply with an FWC direction or order. As a safeguard, the Fair Work Review Panel recommended that the FWC be required to invite the parties to provide further information for the FWC to consider before making a decision to dismiss an application or not. The unfair dismissal amendments will not prevent genuine claims from being pursued. Instead, they will discourage unreasonable conduct and are appropriate and proportionate to address the time and expense that such conduct may cause another party to incur. Fair Work Amendment (Remaining 2014 x House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights Rights of parents and children Article 3 of the CRC provides that, in all actions undertaken by legislative bodies amongst others, the best interests of the child shall be a primary consideration, while Article 18 of the CRC states that States Parties shall use their best efforts to ensure recognition of the principle that both parents have common responsibilities for the upbringing and development of the child. Article 5(b) of the CEDAW provides that States Parties should take all appropriate measures to ensure that family education includes a proper understanding of maternity as a social function and the recognition of the common responsibility of men and women in the upbringing and development of their children, it being understood that the interest of the children is the primordial consideration in all cases. Individual flexibility arrangements The amendments in respect of individual flexibility arrangements promote the common responsibility of men and women in the upbringing and development of their children as they will facilitate greater access for employees to flexibility regarding their working arrangements. Part 3 of Schedule 1 to the Bill facilitates greater access to flexibility by requiring that enterprise agreement flexibility terms must provide, as a minimum, that individual flexibility arrangements may be made that vary the effect of terms of the enterprise agreement about arrangements for when work is performed, overtime rates, penalty rates, allowances and leave loading. These amendments implement recommendation 24 made by the Fair Work Review Panel in the Fair Work Review Report. Part 3 of Schedule 1 to the Bill will also extend the notice period for unilateral termination of an individual flexibility arrangement to 13 weeks, giving employers and employees greater certainty about working arrangements. These amendments implement recommendation 12 made by the Fair Work Review Panel in the Fair Work Review Report. Right to an effective remedy Article 2(3) of the ICCPR provides the right to an effective remedy, including the right to have that right determined by competent judicial, administrative or legislative authorities, or any other competent authority and matters such as the right to a presumption of innocence and the right to not be compelled to testify against himself or herself or to confess to guilt. Dismissing unfair dismissal applications The unfair dismissal amendments will not prevent genuine claims from being pursued. Instead they will discourage unreasonable conduct and are appropriate and proportionate to address the time and expense that such conduct may cause another party to incur. Right to a fair hearing Article 14 of the ICCPR states that in the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law. Fair Work Amendment (Remaining 2014 xi House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights Dismissing unfair dismissal applications The FWC is an independent tribunal, which exercises its powers in a fair and just manner, including by applying the principles of procedural fairness. In cases where the FWC determines to dismiss an unfair dismissal application without a hearing or conference, this will limit access to a competent, independent and impartial tribunal established by law. As a safeguard, however, each party will have a reasonable opportunity to present their case. The power to dismiss an unfair dismissal application without a hearing or conference is only to be exercised in very limited circumstances where there is clear evidence for the FWC to be satisfied of the unreasonable conduct of the applicant. As an additional safeguard, the amendments require that if the FWC decides not to hold a hearing or conduct a conference for the purpose of determining whether to exercise a designated application-dismissal power, the parties must be invited to provide further information and for this information to be taken into account. This will assist in ensuring that procedural fairness is afforded. It should further be noted that appeal rights are not impacted by these amendments. Right to protection against arbitrary and unlawful interferences with privacy Article 17 of the ICCPR provides that no one shall be subjected to arbitrary or unlawful interference with their privacy. The right to privacy can include the right to respect the privacy of workers in professional or business premises. For interference with privacy not to be arbitrary it must be in accordance with the provisions, aims and objectives of the ICCPR and should be reasonable in the particular circumstances. Reasonableness in this context incorporates notions of proportionality to the end sought and necessity in the circumstances. Right of entry The amendments set out at Part 5 of Schedule 1 to the Bill limit the right to workers' privacy in their employment by providing for a right of entry to workplaces. However, this limitation is necessary, reasonable and proportionate, and promotes the right to safe and healthy working conditions, set out at Article 7(b) of the ICESCR by providing for unions to enter workplaces to hold discussions and represent the interests of their members. Right to Freedom of Association The right to freedom of association is enshrined in Article 22 of the ICCPR. Article 8(1) of the ICESCR supports this by providing that States Parties to that Covenant undertake to ensure the right of everyone to form trade unions and join the trade union of his or her choice, and not place restriction on the exercise of this right. Article 8 also provides that the right of trade unions to function freely subject to no limitations other than those prescribed by law and which are necessary in a democratic society for, inter alia, the rights and freedoms of others. Finally, Article 8 protects the right to strike, provided it is exercised in conformity with the laws of the particular country. Article 22 of the ICCPR protects the right to freedom of association, including the right to form and join trade unions. Article 8(1) of the ICESCR protects: Fair Work Amendment (Remaining 2014 xii House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights  the right to form and join trade unions;  the right of trade unions to function freely subject to necessary limitations in the interests of national security, public order or the protection of the rights and freedoms of others; and  the right to strike, provided it is exercised in conformity with the laws of the particular country. Right of entry The amendments made by Part 5 of Schedule 1 to the Bill engage the right to freedom of association and the rights of people to form organisations to represent their interests. Of particular relevance in the right of entry context is guidance provided by the Committee on Freedom of Association established by the Governing Body of the International Labour Organisation in its 336th Report at paragraph 108 that: ... Governments should guarantee access of trade union representatives to workplaces with due respect for the rights of property and management, so that trade unions can communicate with workers ... Part 3-4 of the Fair Work Act provides a framework for right of entry for officials of organisations and empowers the FWC to deal with the misuse of rights and disputes. The object of Part 3-4 is to establish a framework for right of entry that balances:  the right of organisations to represent their members in the workplace, hold discussions with potential members and investigate suspected contraventions;  the right of employees and TCF award workers to receive, at work, information and representation from officials of organisations; and  the right of occupiers of premises and employers to go about their business without undue inconvenience. The amendments made by Part 5 of Schedule 1 to the Bill provide for the circumstances in which a permit holder is entitled to exercise a right of entry to hold discussions or conduct interviews with employees. The organisation must be covered by an enterprise agreement that applies to work performed at the premises, or, in circumstances where the organisation is not covered by an enterprise agreement it must have been invited to send a representative to the premises by an eligible person. These amendments place limits on the classes of persons who may exercise entry for discussion purposes, and in what circumstances. To the extent that these provisions limit the right to freedom of association, the limitation is necessary, reasonable and proportionate, because the amendments ensure that entry for discussion purposes can only be exercised if there are employees or TCF award workers on the premises who wish to participate in discussions, and the organisation has a legitimate role at the work site. The amendments ensure that the role of trade unions in Australian workplaces is enshrined appropriately in the right of entry framework, and balances the needs of employers, occupiers and employees in a manner that is consistent with the object of Part 3-4. Fair Work Amendment (Remaining 2014 xiii House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights The Bill also repeals amendments made by the Fair Work Amendment Act 2013 that provided for interviews and discussions to be held in rooms or areas agreed by the occupier and permit holder, or in the absence of agreement, in a meal or break room; and that facilitated assistance with transport and accommodation for permit holders at remote sites. The repeal of these amendments does not limit the right to freedom of association. Rather, the amendments set out in the Bill merely relate to procedural matters of how a trade union may go about exercising its entry rights under the Fair Work Act, and the extent to which an occupier is required to facilitate the entry. They do not prevent or otherwise limit the exercise of existing entry rights. The amendments also broaden the capacity of the FWC to deal with disputes about the frequency of entry to premises for discussion purposes. In dealing with right of entry disputes, FWC must take into account fairness between the parties concerned, and the combined impact of visits by permit holders on the operations of the employer or occupier. These amendments ensure appropriate conduct by permit holders while exercising right of entry for discussion purposes, consistent with the right of entry framework established by the Fair Work Act, and provide for an avenue for the prompt resolution of disputes by an independent arbiter. The amendments in Part 5 of Schedule 1 to the Bill provide for right of entry disputes to be resolved with due respect for both the rights of employees to be represented at work and the rights of the occupiers of premises to maintain their property and manage their businesses. To the extent that the amendments limit the right to freedom of association, the limitations are necessary, reasonable and proportionate. Collective bargaining Article 4 of the ILO Right to Organise and Collective Bargaining Convention 1949 (No. 98) protects the right of employees to collectively bargain for terms and conditions of employment. It requires States Parties to (among other things) take measures appropriate to national conditions to encourage and promote machinery for voluntary negotiation between employers or employers' organisations and workers' organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements. The Fair Work Act provides a framework with an emphasis on collective bargaining in good faith. Where an employer does not voluntarily agree to bargain in circumstances where a majority of relevant employees want to bargain, the FWC can require bargaining to commence by making a majority support determination (section 237). Individual flexibility arrangements These amendments engage, but do not limit, Article 4 of the ILO Right to Organise and Collective Bargaining Convention 1949 (No. 98), which places primacy on the regulation of terms and conditions of employment by means of collective agreements. The amendments both ensure that employees retain the benefit of their collectively negotiated enterprise agreement and also facilitate greater access for employees to flexibility regarding their working arrangements, should that meet the parties' genuine needs and result in the employee being better off overall with the individual flexibility arrangement than without it. The Fair Work Act requires all enterprise agreements to contain a flexibility term that enables an employee and his or her employer to agree to an arrangement (an individual flexibility arrangement) varying the effect of certain terms of the agreement in relation to that employee Fair Work Amendment (Remaining 2014 xiv House of Representatives Measures) Bill 2015

Statement of Compatibility with Human Rights and the employer in order to meet their genuine needs, provided that the arrangement leaves the employee better off overall than he or she would be without the arrangement. The amendments made by Part 3 of Schedule 1 to the Bill require all enterprise agreements to provide, as a minimum, that individual flexibility arrangements may be made that vary the effect of terms of the enterprise agreement about arrangements for when work is performed, overtime rates, penalty rates, allowances and leave loading. These minimum matters reflect those included in the usual flexibility term for modern awards and the model flexibility term for enterprise agreements in the Fair Work Regulations 2009. Bargaining representatives for an enterprise agreement may continue to agree to include any other matters within the scope of their enterprise agreement flexibility term. The amendments also insert a new requirement that an individual flexibility arrangement include a statement about why the employee believes the arrangement meets his or her genuine needs and leaves him or her better off overall. These amendments respond to recommendations 9, 12 and 24 made by the Fair Work Review Panel in the Fair Work Review Report. Conclusion The amendments are compatible with human rights because they advance the protection of human rights. To the extent that the amendments may limit human rights, those limitations are reasonable, necessary and proportionate. Minister for Employment, Senator the Hon Michaelia Cash Fair Work Amendment (Remaining 2014 xv House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 NOTES ON CLAUSES In these notes on clauses, the following abbreviations are used: Fair Work Act Fair Work Act 2009 Fair Work Fair Work Regulations 2009 Regulations FWC Fair Work Commission FWO Fair Work Ombudsman NES National Employment Standards the Bill Fair Work Amendment (Remaining 2014 Measures) Bill 2015 the Fair Work The panel appointed to review the Fair Work Act 2009 and the Review Panel Workplace Relations Amendments (Transition to Forward with Fairness) Act 2008 the Fair Work Towards more productive and equitable workplaces: An Review Report evaluation of the Fair Work legislation Clause 1 - Short title 1. This is a formal provision specifying the short title. Clause 2 - Commencement 2. The table in this clause sets out when the provisions of the Bill commence. Clause 3 - Schedules 3. Clause 3 of the Bill provides that legislation that is specified in a Schedule is amended or repealed as set out in that Schedule, and any other item in a Schedule operates according to its terms. Fair Work Amendment (Remaining 2014 1 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 SCHEDULE 1 - AMENDMENTS Part 1 - Payment for annual leave Overview 4. Part 1 of Schedule 1 to the Bill amends section 90 of the Fair Work Act to provide that on termination of employment, untaken annual leave is paid out at the employee's base rate of pay. The amendments in this Part implement Fair Work Review Panel recommendation 6. Fair Work Act 2009 Item 1 - Subsection 55(4) (paragraph (b) of note 2) Item 2 - Subsection 55(4) (at the end of note 2) Item 3 - Subsection 90(2) 5. Item 3 repeals and substitutes new subsection 90(2). New subsection 90(2) provides that if an employee has a period of untaken paid annual leave at the time when the employment of the employee ends:  the employer must pay the employee an hourly rate for each hour of paid annual leave that the employee has accrued and not taken; and  that hourly rate must not be less than the employee's base rate of pay that is payable immediately before the termination time. 6. The amendment restores the historical position that, on termination of employment, if an employee has a period of untaken annual leave, the employer must pay the employee in respect of that leave at the employee's base rate of pay. The effect of this is that annual leave loading will not be payable on termination of employment unless an applicable modern award or enterprise agreement expressly provides for a more beneficial entitlement than the employee's base rate of pay. 7. Items 1 and 2 insert amendments consequential upon the amendment made by item 3. 8. A legislative note to new subsection 90(2) refers the reader to the interaction rules at section 55 of the Fair Work Act. Section 55 sets out the relationship between the NES and modern awards and enterprise agreements. 9. Subsection 55(4) provides that a modern award or enterprise agreement can include:  terms that are ancillary or incidental to the operation of NES entitlements; and  terms that supplement NES entitlements; provided that the effect of those terms is not detrimental to an employee in any respect compared to the NES. The effect of this is that modern awards and enterprise agreements are permitted to provide more beneficial terms than the minimum standards provided by the NES. Fair Work Amendment (Remaining 2014 2 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 10. Legislative note 2 to subsection 55(4) provides examples of supplementary terms that are permitted by paragraph 55(4)(b). Item 2 inserts an example into legislative note 2 at the end of subsection 55(4). The example makes clear that a modern award or enterprise agreement is permitted to include supplementary terms that provide that, when the employment of an employee ends, the employee is to be paid the amount that would have been payable to the employee had the employee taken that period of leave. This amount could include annual leave loading, which is not otherwise payable under new subsection 90(2). 11. Item 1 is consequential to the amendment made in item 2. Part 2 - Taking or accruing leave while receiving workers' compensation Overview 12. Part 2 of Schedule 1 to the Bill repeals subsection 130(2) of the Fair Work Act. The effect of this is that an employee who is absent from work and in receipt of workers' compensation will not be able to take or accrue leave under the Fair Work Act during the compensation period. The amendment in this Part implements Fair Work Review Panel recommendation 2. Fair Work Act 2009 Item 4 - Subsection 130(2) 13. Subsection 130(1) provides that an employee is not entitled to take or accrue any leave or absence, whether paid or unpaid, under Part 2-2 of the Fair Work Act during a period in which the employee is absent from work because of a personal illness or injury for which the employee is receiving compensation payable under a Commonwealth, State or Territory workers' compensation law. 14. Item 4 repeals subsection 130(2) of the Fair Work Act. The effect of this amendment is that national system employees will not be entitled to take or accrue annual or any other type of leave under Part 2-2 of the Fair Work Act while he or she is absent from work and in receipt of workers' compensation. The amendment ensures that national system employees will have the same entitlements in relation to the accrual and taking of leave under Part 2-2 of the Fair Work Act while absent from work and in receipt of workers' compensation, regardless of the particular compensation law that applies to them. Part 3 - Individual flexibility arrangements Overview 15. Under the Fair Work Act, every modern award and enterprise agreement must contain a flexibility term that allows an employer and an individual employee to make an individual flexibility arrangement that varies the effect of certain terms of the modern award or agreement, as between them, to meet their genuine needs. 16. An individual flexibility arrangement must, amongst other things:  set out the terms of the modern award or enterprise agreement that are to be varied in their effect; Fair Work Amendment (Remaining 2014 3 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1  be genuinely agreed to by the employer and the employee;  result in the employee being better off overall than if no individual flexibility arrangement were in place; and  be signed by both the employer and employee (and a parent or guardian of the employee in the case where the employee is under 18 years of age). 17. The usual flexibility term in modern awards was initially developed by the Australian Industrial Relations Commission during the award modernisation process. It enables an individual flexibility arrangement to vary the effect of terms about arrangements for when work is performed, overtime and penalty rates, allowances and leave loadings. 18. The scope of an enterprise agreement flexibility term is a matter for bargaining. An enterprise agreement flexibility term enables an individual flexibility arrangement to vary terms of the enterprise agreement in relation to a particular employee, provided the employee is better off overall. An individual flexibility arrangement cannot exclude the NES. 19. If an enterprise agreement does not include a flexibility term, or if it does not contain a flexibility term that complies with the requirements of the Fair Work Act, the model flexibility term (prescribed by the Fair Work Regulations) is taken to be a term of the agreement. As with the usual flexibility term in modern awards, it enables an individual flexibility arrangement to vary the effect of terms about arrangements for when work is performed, overtime and penalty rates, allowances and leave loadings. 20. While in operation an individual flexibility arrangement is enforceable as a term of the modern award or enterprise agreement under which it is made. 21. The amendments in this Part respond to recommendations 9, 11, 12 and 24 made by the Fair Work Review Panel in the Fair Work Review Report and it is intended that this will provide clarity and certainty for employers and employees, whilst maintaining the protections in the Act that individual flexibility arrangements (whether made under a modern award or an enterprise agreement) cannot exclude the National Employment Standards and each must result in the employee being better off overall than they would have been if no individual flexibility arrangement had been entered into. Division 1 - Modern awards (genuine needs statements) Fair Work Act 2009 Item 5 - After paragraph 144(4)(c) 22. This item inserts new paragraph 144(4)(ca) which requires a flexibility term in a modern award to require the employer to ensure that any individual flexibility arrangement made under it includes a statement by the employee setting out why he or she believes, at the time of agreeing to the arrangement, that it meets his or her genuine needs and results in him or her being better off overall. 23. Requiring these matters to be put into writing ensures that both the employer and employee consider these requirements before agreeing to an individual flexibility arrangement. This statement could be used as evidence of the employee's state of mind at the time that the individual flexibility arrangement was agreed to and may be relevant to Fair Work Amendment (Remaining 2014 4 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 assessing the reasonableness of the employer's belief that it had complied with those requirements for the purposes of new section 145AA (inserted by item 9). The genuine needs statement is intended to provide additional safeguards for both employers and employees. Division 2 - Modern awards (other matters) Fair Work Act 2009 Item 6 - Paragraph 144(4)(d) 24. This item repeals and substitutes paragraph 144(4)(d) concerning the requirement that modern award flexibility terms set out how individual flexibility arrangements made under the term may be terminated by the employer and employee. Previously the provision did not specify the minimum unilateral notice period or that the arrangement could be terminated at any time by the employer and employee by agreement in writing. 25. New paragraph 144(4)(d) provides that a flexibility term in a modern award must require the employer to ensure that any individual flexibility arrangement agreed to under the term must be able to be terminated by either the employer or employee giving written notice of 13 weeks (subparagraph 144(4)(d)(i)). Where both the employer and employee agree in writing to the termination of the individual flexibility arrangement, there is no requirement that 13 weeks' notice must be given and the arrangement can be terminated at any time (subparagraph 144(4)(d)(ii)). 26. This amendment is consistent with the decision of a Full Bench of the FWC in Modern Awards Review 2012 - Award Flexibility [2013] FWCFB 2170 (15 April 2013) to extend the notice period for unilateral termination of an individual flexibility arrangement from four weeks to 13 weeks. The usual flexibility terms in modern awards were varied to give effect to this determination on 4 December 2013. 27. Formalising the minimum notice period for unilateral termination of an individual flexibility term as a statutory requirement addresses the current inconsistency of approach in the framework between the requirements for modern award and enterprise agreement flexibility terms. It ensures that the period of notice required for unilateral termination of individual flexibility arrangements made under modern awards and enterprise agreements will remain consistent in the future. 28. This amendment responds to the Fair Work Review Panel's recommendation that paragraph 144(4)(d) and subsection 203(6) be amended to require a flexibility term to require employers to ensure that an individual flexibility arrangement provides for termination by either the employee or the employer giving written notice of 90 days, or a lesser period agreed between the employer and employee (recommendation 12). Item 7 - At the end of subsection 144(4) 29. To assist readers, this item inserts a legislative note to subsection 144(4) that confirms that the requirement that an individual flexibility arrangement leave an employee better off overall (see paragraph 144(4)(c)) can be satisfied by the provision of benefits that are not monetary. This does not change the protections that apply in respect of individual flexibility arrangements. Rather, the legislative note is intended to provide clarity and certainty to employers and employees. Fair Work Amendment (Remaining 2014 5 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 30. It is expected that the subjective preferences of the employee would be relevant in assessing the relative value of benefits. Illustrative example Elizabeth is employed full time in the accounts section at Oze Airlines Pty Ltd. The Airline Operations Ground Staff Award 2010 applies to Elizabeth's employment. This modern award enables an individual flexibility arrangement to be made between an employer and its employees in relation to arrangements for when work is performed. Elizabeth has school aged children that she wishes to pick up from school two days per week. She negotiates an individual flexibility arrangement with her employer that she will work longer hours three days per week, so that she can leave at 3pm on the other two days to pick up her children. Elizabeth will still work the equivalent of full time hours. 31. Individual flexibility arrangements are intended to facilitate arrangements that meet the parties' genuine needs. Therefore, in considering whether an individual flexibility arrangement leaves an employee better off overall, the employee's views and preferences will be relevant, as will those of the employer. Illustrative example Jordan is a clerical employee at Community University. Under the Higher Education Industry - General Staff - Award 2010 the ordinary hours of work for PACCT staff are 36.75 hours each week to be performed in a span between 8am and 6pm each day. Hours worked outside this span attract penalty rates. Jordan's employer usually requires clerical employees to work from 9am to 5.30pm. In his spare time, Jordan coaches an under-12s basketball team. To do this, he needs to be able to leave work at 4pm on Tuesdays and Thursdays each week. He wants to start work at 7.30am on these days, but usually this would attract a penalty under the terms of the modern award. The modern award allows the employer and an employee to make an individual flexibility arrangement that varies the terms of the modern award dealing with arrangements for when work is performed and penalty rates. Jordan approaches his employer and asks whether the employer will make an individual flexibility arrangement with him under which the employer agrees that Jordan can work from 7.30am to 4pm on Tuesdays and Thursdays. Jordan agrees that he will not be paid a penalty on these days, even though he starts work at 7.30am. Jordan is genuinely happy to agree to this arrangement because it enables him to balance his work and personal commitments. The employer agrees to this arrangement. The employer must ensure that Jordan is better off overall under the individual flexibility arrangement than under the modern award. Often this will require the employer to make a comparison of the relevant financial benefits that the employee would receive under the modern award, and the modern award as varied by the individual flexibility arrangement. In Jordan's case, however, he has agreed under the individual flexibility arrangement to give up a financial benefit (penalty rates) in return for a non-financial benefit (leaving work early). It is intended that, in appropriate circumstances, such an arrangement would pass the better off overall test. Because the better off overall test is being applied here to an individual Fair Work Amendment (Remaining 2014 6 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 arrangement, it is possible to take into account an employee's personal circumstances in assessing whether the employee is better off overall. Relevant factors in Jordan's case that suggest the individual flexibility arrangement is likely to pass the better off overall test are:  Jordan initiated the request for the individual flexibility arrangement, suggesting that he places significant value on being able to leave work early to coach the basketball team;  Jordan genuinely agreed to the arrangement;  the period of time falling outside the span of hours is relatively insignificant. It is only one hour out of the 36.75 hour ordinary week that Jordan works. 32. This amendment responds to the Fair Work Review Panel's recommendation that the better off overall requirement in paragraph 144(4)(c) and subsection 203(4) be amended to expressly permit an individual flexibility arrangement to confer a non-monetary benefit on an employee in exchange for a monetary benefit (see recommendation 9). 33. As the Fair Work Act already permits benefits that are not monetary to be taken into account when determining whether an employee is better off overall under an individual flexibility arrangement and to avoid casting doubt on this by altering the current provisions, recommendation 9 has been implemented by way of legislative note rather than substantive provision. 34. The Fair Work Act currently provides that a flexibility term must require that an individual flexibility arrangement must, relevantly, be genuinely agreed to by the employer and the employee and result in the employee being better off overall than if no individual flexibility arrangement were in place. This will remain the case under the Bill. It is intended that the new requirement that a genuine needs statement be included in an individual flexibility arrangement (new paragraph 144(4)(ca) inserted by item 5) would provide a written record to assist in any assessment of the requirements. 35. These amendments are intended to provide clarity and certainty about the operation of the Fair Work Act and are consistent with the original intention of the Fair Work Act as explained at paragraphs 860-868 of the Explanatory Memorandum to the Fair Work Bill 2008. Item 8 - At the end of subsection 145(3) 36. This item inserts a legislative note to subsection 145(3) which explains that an employer does not contravene a flexibility term in the circumstances set out in new section 145AA (inserted by item 9). The legislative note is intended to explain the interaction between these provisions for the avoidance of doubt. Item 9 - After section 145 37. If an individual flexibility arrangement does not satisfy a requirement in section 144, as reflected in the relevant modern award flexibility term, the arrangement continues to have effect as if it were an individual flexibility arrangement, but the flexibility term will have been contravened (subsection 145(3)). Fair Work Amendment (Remaining 2014 7 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 38. This item inserts new section 145AA. New section 145AA provides that an employer does not contravene a flexibility term of a modern award in relation to a particular individual flexibility arrangement if, at the time when the arrangement is made, the employer reasonably believes that the requirements of the term were complied with, so far as the requirements are applicable to the arrangement. 39. This provides an employer with a defence to an alleged contravention of a flexibility term provided that the employer's belief that they had complied with the requirements, based on the facts and circumstances in existence at the time of making the individual flexibility arrangement, was reasonable. In these circumstances an employer will not breach the civil remedy provision in section 45 and will not be exposed to liability in respect of the alleged contravention of the flexibility term. 40. The genuine needs statement required to be included in an individual flexibility arrangement by new paragraph 144(4)(ca) (inserted by item 5) would be available as evidence of the employee's state of mind at the time that the individual flexibility arrangement was agreed to and may be relevant to assessing the reasonableness of the employer's belief that it had complied with those requirements for the purposes of new section 145AA (inserted by item 9). 41. This amendment responds to the Fair Work Review Panel's recommendation that the Fair Work Act be amended to provide a defence to an alleged contravention of a flexibility term under subsection 145(3) or subsection 204(3) (see recommendation 11). Division 3 - Enterprise agreements Fair Work Act 2009 Item 10 - Before paragraph 203(2)(a) Item 11 - Paragraph 203(2)(a) 42. Item 10 inserts new paragraph 203(2)(aa), which deals with the minimum matters about which a flexibility term in an enterprise agreement must permit individual flexibility arrangements to be made. 43. New paragraph 203(2)(aa) provides that if an enterprise agreement includes terms that deal with one or more of certain listed matters, then the flexibility term in that enterprise agreement must provide that the effect of those terms may be varied by an individual flexibility arrangement agreed to under the flexibility term. Those matters are:  arrangements about when work is performed;  overtime rates;  penalty rates;  allowances; and  leave loading. Fair Work Amendment (Remaining 2014 8 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 44. This means that if an enterprise agreement contains terms that deal with one or more of those matters, then the flexibility term must provide, as a minimum, that individual flexibility arrangements may be made under the flexibility term that vary the effect of those terms of the enterprise agreement. Should the enterprise agreement only contain terms dealing with some of those matters, then the flexibility term is only required to make provision in respect of those matters. 45. Item 11 amends paragraph 203(2)(a) to make it clear that employers, employees and their bargaining representatives may bargain for and agree to include additional matters about which individual flexibility arrangements can be made in the flexibility term. 46. These amendments taken together make it clear that while bargaining representatives may continue to agree to include any and all matters within the scope of their enterprise agreement flexibility term, the five matters listed in new paragraph 203(2)(aa) must be included as a minimum. 47. These five minimum matters reflect those that are included in the usual flexibility term in modern awards which was developed by the Australian Industrial Relations Commission during the award modernisation process (Award Modernisation [2008] AIRCFB 550). The Full Bench gave detailed reasons for its decision as to which matters should and should not be included in the scope of the usual modern award flexibility term. 48. The development of the model flexibility term for enterprise agreements in Schedule 2.2 to the Fair Work Regulations was informed by the usual flexibility term for modern awards. 49. The FWC revisited the appropriateness of the scope of the usual flexibility term in modern awards in Modern Awards Review 2012 - Award Flexibility [2013] FWCFB 2170 (15 April 2013). The Full Bench considered submissions from stakeholders to both expand and contract the matters about which individual flexibility arrangements may be made, but concluded that these five matters were still the most appropriate for inclusion. 50. These amendments implement the Fair Work Review Panel's recommendation that section 203 be amended to require enterprise agreement flexibility terms to permit individual flexibility arrangements to deal with the matters set out in paragraph 1(a) of the model flexibility term for enterprise agreements in Schedule 2.2 of the Fair Work Regulations, along with any additional matters agreed by the parties (recommendation 24). This does not change the protections that apply in respect of individual flexibility arrangements that may be made under the flexibility term of an enterprise agreement. Item 12 - At the end of subsection 203(4) 51. To assist readers, this item inserts a legislative note to subsection 203(4) that confirms that benefits that are not monetary may be taken into account for the purposes of determining whether an individual flexibility arrangement results in an employee being better off overall than the employee would have been if no individual flexibility arrangement was in place. This does not change the protections that apply in respect of individual flexibility arrangements. Rather, the legislative note is intended to provide clarity and certainty to employers and employees. Fair Work Amendment (Remaining 2014 9 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 52. It is expected that the subjective preferences of the employee would be relevant in assessing the relative value of such benefits. The following examples were used in the Explanatory Memorandum to the Fair Work Bill 2008 and are relevant here. Illustrative example Danae is employed full time as a graphic designer at Pax Designs Pty Ltd. The Pax Designs Pty Ltd Enterprise Agreement 2010 enables an individual flexibility arrangement to be made between the employer and its employees in relation to the span of ordinary hours to be worked. Danae has school aged children that she wishes to pick up from school two days per week. She negotiates an individual flexibility arrangement with her employer that she will work longer hours three days per week, so that she can leave at 3pm on the other two days to pick up her children. Danae will still work the equivalent of full time hours. 53. The better off overall requirement for individual flexibility arrangements is intended to be different to the better off overall test for enterprise agreements. The key difference is the point of comparison. When assessing the better off overall test for the purposes of approval of an enterprise agreement (which may apply to many employees uniformly), a comparison is made between the terms of the agreement and the terms of the relevant reference instrument. When assessing the better off overall requirement for an individual flexibility arrangement, a comparison is made between the individual employee's position with and without an individual flexibility arrangement. Illustrative example Josh works as a membership consultant at a gymnasium. Under the enterprise agreement applying to his employment, the ordinary hours of work are 37 ½ hours each week to be performed in a span between 8am and 6pm each day. Hours worked outside this span attract penalty rates. Josh's employer usually requires membership consultants to work from 9am to 5.30pm. In his spare time, Josh coaches an under-12s footy team. To do this, he needs to be able to leave work at 4pm on Tuesdays and Thursdays each week. He wants to start work at 7.30am on these days, but usually this would attract a penalty under the terms of the agreement. The agreement allows the employer and an employee to make an individual flexibility arrangement that varies the terms of the agreement dealing with hours of work and penalty rates. Josh approaches his employer and asks whether the employer will make an individual flexibility arrangement with him under which the employer agrees that Josh can work from 7.30am to 4pm on Tuesdays and Thursdays. Josh agrees that he will not be paid a penalty on these days, even though he starts work at 7.30am. Josh is genuinely happy to agree to this arrangement because it enables him to balance his work and personal commitments. The employer agrees to this arrangement. The employer must ensure that Josh is better off overall under the individual flexibility arrangement than under the agreement. Often this will require the employer to make a comparison of the relevant financial benefits that the employee would receive under the Fair Work Amendment (Remaining 2014 10 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 agreement, and the agreement as varied by the individual flexibility arrangement. In Josh's case, however, he has agreed under the individual flexibility arrangement to give up a financial benefit (penalty rates) in return for a non-financial benefit (leaving work early). It is intended that, in appropriate circumstances, such an arrangement would pass the better off overall test. Because the better off overall test is being applied here to an individual arrangement, it is possible to take into account an employee's personal circumstances in assessing whether the employee is better off overall. Relevant factors in Josh's case that suggest the individual flexibility arrangement is likely to pass the better off overall test are:  Josh initiated the request for the individual flexibility arrangement, suggesting that he places significant value on being able to leave work early to coach the footy team;  Josh genuinely agreed to the arrangement;  the period of time falling outside the span of hours is relatively insignificant. It is only one hour out of the 37 ½ hour ordinary week that Josh works. 54. This amendment responds to the Fair Work Review Panel's recommendation that the better off overall requirement in paragraph 144(4)(c) and subsection 203(4) be amended to expressly permit an individual flexibility arrangement to confer non- monetary benefits on an employee in exchange for a monetary benefit. 55. As the Fair Work Act already permits benefits that are not monetary to be taken into account when determining whether an employee is better off overall under an individual flexibility arrangement, and to avoid casting doubt on this by altering the current provisions, recommendation 9 has been implemented by way of legislative note rather than substantive provision. 56. Similarly, the Fair Work Act currently provides that a flexibility term must require that an individual flexibility arrangement must, relevantly, be genuinely agreed to by the employer and the employee and result in the employee being better off overall than if no individual flexibility arrangement were in place. This will remain the case under the Bill. It is intended that the new requirement that a genuine needs statement be included in an individual flexibility arrangement (new subsection 203(4A), inserted by item 13) would provide a written record to assist in any assessment of the requirements. Item 13 - After subsection 203(4) 57. This item inserts new subsection 203(4A) which requires a flexibility term in an enterprise agreement to require the employer to ensure that any individual flexibility arrangement made under it includes a statement by the employee setting out why he or she believes, at the time of agreeing to the arrangement, that it meets his or her genuine needs and results in him or her being better off overall. 58. Requiring these matters to be put into writing ensures that both the employer and employee consider these requirements before agreeing to an individual flexibility arrangement. This statement could be used as evidence of the employee's state of mind at the time that the individual flexibility arrangement was agreed to and may be relevant to assessing the reasonableness of the employer's belief that it had complied with those Fair Work Amendment (Remaining 2014 11 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 requirements for the purposes of new section 204A (inserted by item 17). The genuine needs statement will provide additional safeguards for both employers and employees. Item 14 - Paragraph 203(6)(a) 59. Subsection 203(6) provides that a flexibility term in an enterprise agreement must require the employer to ensure that any individual flexibility arrangement agreed to under the term must be able to be terminated by either the employer or employee giving written notice of not more than 28 days, or at any time if they agree in writing to the termination. 60. This item amends paragraph 203(6)(a) to increase the required written notice period for unilateral termination of an individual flexibility arrangement made under an enterprise agreement to 13 weeks. 61. The capacity for the parties to, at any time, agree in writing to terminate an arrangement other than by providing 13 weeks' notice remains the same. 62. This amendment responds to the Fair Work Review Panel's recommendation (recommendation 12) that paragraph 144(4)(d) and subsection 203(6) be amended to require a flexibility term to require employers to ensure that an individual flexibility arrangement provides for termination by either the employee or the employer giving written notice of 90 days, or a lesser period agreed between the employer and employee. Item 15 - At the end of subsection 204(3) 63. This item inserts a legislative note to subsection 204(3) which explains that an employer does not contravene a flexibility term in the circumstances set out in new section 204A (inserted by item 17). Item 16 - Subsection 204(4) 64. This item repeals and substitutes subsection 204(4) which provides for termination of an arrangement that was intended to be an individual flexibility arrangement but which does not meet the requirements set out in section 203. 65. This amendment is consequential upon item 14 and does not alter the existing position. The ability for either party to terminate an individual flexibility arrangement that does not comply with the requirements in section 203 by giving not more than 28 days' notice, or at any time by agreement in writing, does not change. Item 17 - After section 204 66. If an individual flexibility arrangement does not satisfy a requirement in section 203, as reflected in the relevant enterprise agreement flexibility term, the arrangement continues to have effect as if it were an individual flexibility arrangement, but the flexibility term will have been contravened (subsection 204(3)). 67. This item inserts new section 204A. New section 204A provides that an employer does not contravene a flexibility term of an enterprise agreement in relation to a particular individual flexibility arrangement if, at the time when the arrangement is made, the employer reasonably believes that the requirements of the term were complied with, so far as the requirements are applicable to the arrangement. Fair Work Amendment (Remaining 2014 12 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 68. This provides an employer with a defence to an alleged contravention of a flexibility term provided that the employer's belief that they had complied with the requirements, based on the facts and circumstances in existence at the time of making the individual flexibility arrangement, was reasonable. In these circumstances an employer will not breach the civil remedy provision in section 50 and will not be exposed to liability in respect of the alleged contravention of a flexibility term. 69. The genuine needs statement required to be included in an individual flexibility arrangement by new subsection 203(4A) (inserted by item 13) would be available as evidence of the employee's state of mind at the time that the individual flexibility arrangement was agreed to and may be relevant to assessing the reasonableness of the employer's belief that it had complied with those requirements for the purposes of new section 204A (inserted by item 17). 70. This amendment responds to the Fair Work Review Panel's recommendation (recommendation 11) that the Fair Work Act be amended to provide a defence to an alleged contravention of a flexibility term under subsection 145(3) or subsection 204(3). Part 4 - Transfer of business Fair Work Act 2009 Item 18 - Section 12 (paragraph (a) of the definition of transfer of business) 71. Item 18 amends the definition of transfer of business so that it is defined by reference to subsection 311(1) and new subsection 311(1A). Item 19 - After subsection 311(1) Item 20 - At the end of section 768AD 72. As a general rule, where there is a transfer of business situation the old employer's enterprise agreement or other relevant industrial instrument will continue to cover the employee and the new employer in relation to the transferring work regardless of how the employee came to be employed with the new employer. The only way that continued coverage does not occur is if there is an order to that effect from the FWC. 73. The Fair Work Review Panel recommended that the Fair Work Act be amended to make it clear that when employees, on their own initiative, seek to transfer to an associated entity of their current employer they will be subject to the terms and conditions of employment provided by the new employer (recommendation 38). Items 19 and 20 implement that recommendation. 74. Item 19 inserts a new subsection 311(1A) after subsection 311(1). 75. New subsection 311(1A) 'switches off' the transfer of business rules contained in Part 2-8 of the Fair Work Act in the case of an employee who becomes employed with an associated entity of his or her former employer after seeking that employment on his or her own initiative before the termination of the employee's employment with the old employer. That employee will then be covered by the relevant industrial instrument (if any) that covers the type of work performed for the new employer by the employee. The effect will be that the new employer will no longer be required to seek orders from the FWC to achieve that Fair Work Amendment (Remaining 2014 13 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 outcome. The normal rules concerning an employee's continuity of service in section 22 are not affected by this amendment. 76. The reference in paragraph 311(1A)(b) to employment terminating is intended to capture all of the circumstances in which employment ceases, including resignation and termination by operation of law (for example, temporary contract). 77. In order to determine whether an employee sought to become employed on his or her own initiative before the termination of his or her employment with the old employer it will be necessary to consider the circumstances giving rise to the creation of the new employment relationship. For example, an employee may be considered to have sought employment on his or her own initiative where an employer provides information about job opportunities within the corporate group which the employee then chooses to pursue for career progression or lifestyle reasons. 78. However, it is not intended that an employee who accepts alternative employment within a corporate group in the context of an organisational restructure would be covered by the new provision (for example, in a redundancy or redeployment scenario). In such cases, the employee's move from one employer to another arises from an operational decision made by the employer and is not properly characterised as occurring at the initiative of the employee. In these circumstances it is intended that the transfer of business rules would apply and an order from the FWC under section 318 would be required to displace coverage of the old employer's industrial instrument. 79. Item 20 inserts new subsections 768AD(5) and (6) at the end of section 768AD. New subsection 768AD(5) provides that there is no transfer of business 'connection' for the purpose of paragraph 768AD(1)(d) when a person becomes employed with an associated entity of his or her old State employer after seeking that employment on his or her own initiative before the termination of the person's employment with the old State employer. This means that the person will be covered by the relevant industrial instrument (if any) that covers the type of work performed for the new national system employer by the person. New subsection 768AD(6) preserves the person's continuity of service by providing that the rules in sections 768BL, 768BM and 768BN are not affected. Those provisions will continue to operate as if there had been a transfer of business. 80. The reference in paragraph 768AD(5)(b) to employment terminating is intended to capture all of the circumstances in which employment ceases including resignation and termination by operation of law (for example, temporary contract). 81. In order to determine whether a person sought to become employed at his or her own initiative for the purposes of paragraph 768AD(5)(b) the same considerations referred to at paragraphs 77 and 78 above in relation to paragraph 311(1A)(b) will be relevant. Part 5 - Right of entry Overview 82. Part 3-4 of the Fair Work Act confers rights on officials of organisations who hold entry permits to enter premises and exercise certain powers while on those premises. The object of the Part is to establish a framework under which permit holders may enter premises for investigation and discussion purposes, which appropriately balances the rights of Fair Work Amendment (Remaining 2014 14 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 organisations to represent their members in the workplace, the right of employees to be represented at work and the right of occupiers of premises to go about their business without undue inconvenience. 83. While the Bill will make a range of amendments to Part 3-4 it will not amend Subdivision AA of Division 2 of Part 3-4 which provides special entry rights for permit holders seeking to enter to investigate suspected contraventions relating to Textile, Clothing and Footwear award workers. Specifically, however, the Bill will:  repeal amendments made by the Fair Work Amendment Act 2013 that required an employer or occupier to facilitate transport and accommodation arrangements for permit holders exercising entry rights at work sites in remote locations;  provide for new eligibility criteria that determine when a permit holder may enter premises for the purposes of holding discussions or conducting interviews with one or more employees or Textile, Clothing and Footwear award workers;  repeal amendments made by the Fair Work Amendment Act 2013 relating to the default location of interviews and discussions and reinstating pre-existing rules; and  expand the FWC's capacity to deal with disputes about the frequency of visits to premises for discussion purposes. Fair Work Act 2009 Repeal of amendments made by Schedule 4 to the Fair Work Amendment Act 2013 84. Schedule 4 to the Fair Work Amendment Act 2013 inserted Division 7 into Part 3-4 to address circumstances in which permit holders or an organisation and occupiers have been unable to reach agreement on accommodation and transport arrangements in remote areas. Items 21, 23, 24, 33 and 34 of Part 5, Schedule 1 to the Bill repeal these amendments. Item 21 - Section 12 (definition of accommodation arrangement) Item 23 - Section 12 (definition of transport arrangement) Item 24 - Section 478 Item 33 - Division 7 of Part 3-4 Item 34 - Subsection 539(2) (cell at table item 25, column headed "Civil remedy provision") 85. Items 21 and 23 remove signpost definitions of accommodation arrangement and transport arrangement from the Dictionary in section 12. These signpost definitions are unnecessary as a consequence of the repeal of Division 7 of Part 3-4. 86. Item 24 omits the reference to Division 7 from the guide to Part 3-4 in section 478, consequential to the repeal of Division 7. 87. Item 33 repeals Division 7 of Part 3-4. Fair Work Amendment (Remaining 2014 15 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 88. Item 34 omits the references to subsections 521C(3) and 521D(3) from the table in subsection 539(2) of the Fair Work Act, consequential upon the repeal of Division 7 of Part 3-4. Amendments relating to entry for discussion purposes Item 25 - Section 484 89. Section 484 deals with when a permit holder may enter premises for the purposes of holding discussions. Currently, section 484 provides that a permit holder may enter premises to hold discussions with persons at the premises if one or more of those persons:  perform work on the premises;  are entitled to be represented by the permit holder's organisation; and  wish to participate in discussions. 90. Item 25 repeals and replaces existing section 484 of the Fair Work Act. New section 484 provides for new criteria that a permit holder's organisation must satisfy in order to exercise entry for discussion purposes. 91. New subsection 484(1) provides for right of entry for discussion purposes in circumstances where the permit holder's organisation is covered by the enterprise agreement that applies to work performed on the premises. A permit holder may hold discussions with persons who satisfy the criteria set out in new paragraphs 484(1)(a) to (c). New paragraphs 481(1)(d) and (e) provide that a permit holder may enter premises for the purposes of holding discussions with those persons if an enterprise agreement applies to the workplace, and the permit holder's organisation is covered by the agreement. 92. New subsection 484(2) provides for right of entry for discussion purposes in circumstances where the permit holder's organisation is not covered by an enterprise agreement. A permit holder may hold discussions with persons who satisfy the criteria set out in new paragraphs 484(2)(a) to (c). A permit holder may hold discussions with those persons if:  either: o an enterprise agreement applies to work performed on the premises, but the enterprise agreement does not cover the permit holder's organisation (new subparagraph 484(2)(d)(i)); or o no enterprise agreement applies to work performed on the premises (new subparagraph 484(2)(d)(ii)), and  the organisation has been invited to send a representative to the premises by a member or prospective member who performs work on the premises, and whose industrial interests the permit holder's organisation is entitled to represent (new subparagraphs 484(2)(e)(i) and (ii)). 93. New subsection 484(2) requires a member or prospective member who performs work at the premises to invite the organisation to send a representative to the premises to hold Fair Work Amendment (Remaining 2014 16 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 discussions. A legislative note to new subsection 484(2) refers the reader to the FWC's power to issue an invitation certificate under new section 520A that states that the FWC is satisfied that the organisation has been invited. However, it is not mandatory for an organisation to apply for an invitation certificate to demonstrate that the invitation requirement has been satisfied. Rather, it is intended that, for example, a letter or voluntary statement from the member or prospective member who issued the invitation stating that he or she has extended such an invitation will be sufficient to demonstrate that the invitation requirement has been satisfied. 94. Legislative notes to new subsections 484(1) and (2) refer the reader to:  the FWC's power under section 508 to deal with the misuse of rights by a permit holder or organisation;  obligations on persons under sections 501 and 502 not to refuse or unduly delay entry by a permit holder, or intentionally hinder or obstruct a permit holder; and  the requirement in paragraph 487(1)(b) to provide notice to the occupier of entry for discussion purposes and that once a permit holder has provided such notice, he or she may hold discussions with any eligible persons on the premises. Item 31 - After Subdivision D of Division 6 of Part 3-4 95. Division 6 of Part 3-4 of the Fair Work Act sets out provisions relating to the issuing of, and details to be included in, entry permits, entry notices, exemption certificates and affected member certificates. Item 31 inserts new Subdivision DA into Division 6 of Part 3-4 of the Fair Work Act to require the FWC to issue invitation certificates in certain circumstances. 96. An invitation certificate will demonstrate that the FWC is satisfied that a member or prospective member has requested the presence of the permit holder's organisation, while protecting the identity of the member or prospective member. This is intended to provide certainty for an occupier that a request has in fact been made in circumstances where it is not verified that a request was made, and that, as such, the requirements in section 484 relating to an invitation have been met. 97. As noted above, an organisation is not required to apply for a certificate in relation to every occasion upon which the organisation or one of its permit holders seeks to exercise a right of entry for discussion purposes. However, the ability to apply for such a certificate prevents the need to disclose the identity of the member or prospective member of an organisation who has extended an invitation to the organisation to attend the premises. 98. New subsection 520A(1) provides that, upon application by an organisation, the FWC must issue an invitation certificate if the FWC is satisfied that a member, or prospective member, of the organisation whom the permit holder's organisation is entitled to represent, performs work on particular premises to be entered and has invited the organisation to send a representative to the premises for the purposes of holding discussions with persons at the premises. Fair Work Amendment (Remaining 2014 17 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 99. New subsection 520A(2) lists the content requirements for an invitation certificate. An invitation certificate is required to state the following:  the premises to which it relates;  the organisation to which it relates; and  that the FWC is satisfied of the matters in new subsection 520A(1). 100. New subsection 520A(3) provides that the FWC must specify an expiry date in an invitation certificate. The invitation certificate ceases to have effect at the end of the date specified. 101. New subsection 520A(4) provides that, in specifying an expiry date in an invitation certificate, the FWC must comply with any limitations, restrictions or requirements prescribed by the Fair Work Regulations. 102. New subsection 520A(5) provides that an invitation certificate must not reveal the identity of the member or prospective member to whom it relates. This is intended to protect the privacy of a person who invites an organisation to send a representative to the premises. 103. A decision under new section 520A is appealable under section 604 of the Fair Work Act. 104. The President of the FWC may, in writing, delegate the functions of the FWC under Division 6 of Part 3-4 to the General Manager, an SES employee of the FWC, or a member of staff of the FWC who is in a class of employees prescribed by the Fair Work Regulations (paragraph 625(2)(g) and subsection 625(3)). The delegation of procedural powers of this kind is intended to ensure the efficient operation of the FWC. 105. It is intended that the FWC will be able to issue invitation certificates promptly upon receiving an application, to ensure that a permit holder may hold discussions within a reasonable timeframe. Item 22 - Section 12 106. Item 22 inserts a new signpost definition of invitation certificate into the Dictionary at section 12 and refers readers to the definition set out in new subsection 520A(1). Item 32 - Paragraphs 521(a), (b), (c) and (d) 107. Item 32 makes amendments consequential upon the inclusion of new section 520A, by omitting the words "and affected member certificates" from paragraphs 521(a), (b), (c) and (d) of the Fair Work Act and substituting a reference to both affected member certificates and invitation certificates. Item 35 - After paragraph 601(5)(f) 108. Section 601 of the Fair Work Act sets out the writing and publication requirements for FWC decisions. Subsection 601(5) provides for a number of exceptions to the requirement to publish certain decisions under subsection 601(4). Fair Work Amendment (Remaining 2014 18 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 109. Item 35 amends subsection 601(5) to include new paragraph 601(5)(fa), consequential upon the amendment made by item 31. New paragraph 601(5)(fa) provides that the FWC is not required to publish a decision to issue, or to refuse to issue, an invitation certificate under section 520A. The volume of these decisions would impose a significant burden on the FWC that is not justifiable, given that these decisions will be routine and uncontroversial. Location of discussions 110. Subdivision C of Division 2 of Part 3-4 of the Fair Work Act sets out mandatory requirements that a permit holder must meet when exercising or attempting to exercise rights under Part 3-4. 111. Section 492 deals with the conduct of interviews or discussions in a particular location. 112. Section 492A requires a permit holder to comply with any reasonable request made by an occupier of premises to take a particular route to reach a room or area for interviews or discussions. Item 26 - Sections 492 and 492A 113. Item 26 repeals section 492 and section 492A, which were significantly amended by the Fair Work Amendment Act 2013, and substitutes new section 492. New section 492 returns the provision to the form it took prior to amendment by the Fair Work Amendment Act 2013. 114. New subsection 492(1) allows an occupier of premises to request that a permit holder meet employees in a specific room or area of the premises or to take a particular route to that location. The request must be a reasonable request. A legislative note to new subsection 492(1) informs the reader that under subsection 505(1) of the Fair Work Act, the FWC may deal with a dispute about whether the request is a reasonable one. 115. New subsection 492(2) sets out a number of circumstances in which a request will be considered to be unreasonable. The list is non-exhaustive and is not intended to be a comprehensive list of what would constitute an unreasonable request. 116. New paragraph 492(2)(a) provides that a request will be unreasonable if the nominated room or area is not fit for the purpose of conducting the interviews or holding discussions. This is intended to cover situations where the room or area nominated for interviews or discussions is inappropriate or unsafe. 117. New paragraph 492(2)(b) provides that a request will be unreasonable where the request is intended to intimidate, discourage or make it difficult for people to participate in the interview or discussions. 118. New subsection 492(3) clarifies that a request to meet employees in a particular location or to take a particular route to reach that location is not unreasonable solely because the location or route is not the one the permit holder would have chosen. 119. New subsection 492(4) provides that additional circumstances in which a request made under subsection 492(1) is or is not reasonable may be prescribed in the Fair Work Regulations. Fair Work Amendment (Remaining 2014 19 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 FWC to deal with disputes about frequency of entry Item 27 - Subsection 505(1) 120. Item 27 repeals subsection 505(1) of the Fair Work Act and substitutes new subsection 505(1), which returns the wording of the provision to its original form, prior to amendments made by the Fair Work Amendment Act 2013. This amendment is consequential upon the amendment made by item 33. 121. New subsection 505(1) of the Fair Work Act provides that the FWC may deal with a dispute about the operation of Part 3-4, including a dispute about whether a request made under either section 491, 492 or 499 is reasonable. This is not an exhaustive list and not intended to limit the kind of disputes that the FWC may arbitrate in relation to the operation of Part 3-4. 122. A legislative note to new subsection 505(1) informs the reader that sections 491, 492 and 499 deal with requests for permit holders to use particular rooms or areas, and comply with occupational health and safety requirements. Item 28 - Subsection 505(5) 123. Item 28 repeals subsection 505(5) and substitutes the wording of the provision in its original form prior to amendment by the Fair Work Amendment Act 2013. New subsection 505(5) provides that in dealing with a dispute under Part 3-4, the FWC must not confer rights on a permit holder that are additional to, or inconsistent with, rights exercisable in accordance with Division 2 or 3 of Part 3-4, unless the dispute is about whether a request under either section 491, 492 or 499 is reasonable. Item 29 - Subsection 505A(4) 124. Item 29 repeals subsection 505A(4). The effect of this is to remove the high threshold that requires the FWC to be satisfied that the frequency of entry by a permit holder or permit holders from the same organisation would require an unreasonable diversion of the occupier's critical resources before it can exercise its power to arbitrate such a dispute. Item 30 - Subsection 505A(6) 125. Item 30 repeals subsection 505A(6) and substitutes new subsections 505A(6) and (7). New subsection 505A(6) provides that in dealing with the dispute, the FWC must take into account the following factors:  fairness between the parties concerned (see new paragraph 505A(6)(a)); and  if the dispute relates to an employer - the combined impact on the employer's operations of entries onto the premises by permit holders of organisations (see new paragraph 505A(6)(b)); and  if the dispute relates to an occupier of premises - the combined impact on the occupier's operations of entries onto the premises by permit holders of organisations (see new paragraph 505A(6)(c)). Fair Work Amendment (Remaining 2014 20 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 126. The effect of new paragraphs 505A(6)(b) and (c) is to require the FWC to have regard to both fairness between the parties to the dispute, and the cumulative impact on the workplace of entries by all organisations, rather than the impact of visits by one or more permit holders of a single organisation. This is intended to address situations in which several organisations frequently utilise entry rights for the purposes of holding discussions or conducting interviews to the detriment of productivity at the site. 127. New subsection 505A(7) provides that, for the purposes of new paragraphs 505A(6)(b) and (c), it is immaterial whether the organisations or permit holders are party to the dispute. This ensures that the FWC may consider the cumulative impact of visits by permit holders of organisations other than the organisation that is party to the dispute. Part 6 - FWC hearings and conferences Overview 128. Part 6 of Schedule 1 amends Part 3-2 of the Fair Work Act which deals with unfair dismissal. The amendments commence the day after Royal Assent and provide that, subject to certain conditions, the FWC is not required to hold a hearing or conduct a conference, when determining whether to dismiss an unfair dismissal application under section 399A or section 587. The amendments in this Part implement Fair Work Review Panel recommendation 43. Fair Work Act 2009 Item 36 - Section 12 129. Section 12 contains the Dictionary to the Fair Work Act. Item 36 inserts a definition of the term designated application-dismissal power into the Dictionary to describe the powers available to the FWC under sections 399A and 587 to dismiss unfair dismissal applications.  Section 399A enables the FWC to dismiss an unfair dismissal application where the applicant has unreasonably failed to attend a conference or hearing, comply with an FWC direction or order, or discontinue an application after a settlement agreement has been concluded.  Section 587 provides the FWC with a general power to dismiss applications, including those that are frivolous or vexatious or have no reasonable prospects of success. Item 37 - Section 397 Item 38 - At the end of section 397 130. Section 397 requires the FWC to hold a hearing or conduct a conference in relation to an unfair dismissal matter if it involves disputed facts. Item 38 inserts new subsection 397(2) to provide that this requirement does not apply when the FWC is deciding whether to exercise a 'designated application-dismissal power'. Item 37 makes an amendment consequential to item 38. Fair Work Amendment (Remaining 2014 21 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 1 Item 39 - At the end of section 399 131. Section 399 provides that the FWC is only permitted to hold a hearing in relation to a matter arising under Part 3-2 if it considers it appropriate to do so, taking into account the views of the parties and whether a hearing would be the most effective and efficient way to deal with the matter. Item 39 inserts new subsection 399(4) which is an avoidance of doubt provision to make it clear that the reference to a 'hearing in relation to a matter arising under this Part' in section 399 includes a reference to a hearing for the purposes of deciding whether to exercise a designated application-dismissal power. Item 40 - After section 399A 132. Item 40 inserts new section 399B. It provides that if the FWC decides not to hold a hearing or conduct a conference for the purpose of determining whether to exercise a designated application-dismissal power, the parties must first be invited to provide further information to the FWC that relates to whether the power should be exercised (subsection 399B(1)). The new section also requires the FWC to take account of any information that is provided (paragraph 399B(1)(b)). These requirements will assist in ensuring that procedural fairness is afforded to the parties when the FWC is considering whether to dismiss an unfair dismissal application under section 399A or section 587. 133. New subsection 399B(2) provides that if as a result of the information provided, the FWC considers that it would be desirable to hold a hearing or conduct a conference for the purposes of determining whether to exercise a designated application-dismissal power, it may do so. Item 41 - Subsection 587(1) (note) Item 42 - At the end of subsection 587(1) 134. Item 42 inserts legislative notes to subsection 587(1) to draw the reader's attention to section 399 in relation to hearings and to the requirement under section 399B for the FWC to invite the parties to provide further information to the FWC before the FWC decides whether to exercise the designated application-dismissal power in section 587. Item 41 makes an amendment consequential to item 42. Fair Work Amendment (Remaining 2014 22 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 2 SCHEDULE 2 - APPLICATION AND TRANSITIONAL PROVISIONS 135. Schedule 2 inserts a new Schedule 5A at the end of the Fair Work Act to make application and transitional provisions. Fair Work Act 2009 Item 1 - At the end of the Act 136. This item inserts a new schedule in the Fair Work Act (Schedule 5A). New item 1 - Definitions 137. This item defines amending Act for the purpose of new Schedule 5A. New item 2 - Part 1 of Schedule 1 to the amending Act 138. New item 2 of new Schedule 5A provides for these amendments to apply in relation to the end of the employment of an employee, if the end of the employment occurs after the commencement of Part 1 of Schedule 1 to the amending Act. New item 3 - Part 2 of Schedule 1 to the amending Act 139. New item 3 of new Schedule 5A provides for this amendment to apply in relation to a compensation period beginning after the commencement of Part 2 of Schedule 1 to the amending Act. New item 4 - Division 1 of Part 3 of Schedule 1 to the amending Act 140. This item provides that new paragraph 144(4)(ca) (inserted by item 5) applies to modern awards in operation after the commencement of Division 1 of Part 3 of Schedule 1 to the amending Act whether or not the award was made before that time. New item 5 - FWC to vary certain modern awards--genuine needs statement 141. This item requires the FWC to make a determination varying existing modern award flexibility terms to comply with new paragraph 144(4)(ca) (inserted by item 5). This determination takes effect from the commencement of Division 1 of Part 3 of Schedule 1 to the amending Act. New item 6 - Division 2 of Part 3 of Schedule 1 to the amending Act 142. This item provides that new section 145AA (inserted by item 9) applies in relation to an individual flexibility arrangement made after the commencement of Division 2 of Part 3 of Schedule 1 to the amending Act. New item 7 - Division 3 of Part 3 of Schedule 1 to the amending Act 143. This item provides that the amendments made to subsections 203(2) and (6), and section 204 (inserted by items 10, 11, 14, 15 and 16), and new subsection 203(4A) (inserted by item 13) apply in relation to enterprise agreements made after the commencement of Division 3 of Part 3 of Schedule 1 to the amending Act. Fair Work Amendment (Remaining 2014 23 House of Representatives Measures) Bill 2015

Amendments ~ Schedule 2 144. It also provides that new section 204A (inserted by item 17) applies in relation to an individual flexibility arrangement made after the commencement of Division 3 of Part 3 of Schedule 1 to the amending Act. New item 8 - Part 4 of Schedule 1 to the amending Act 145. Subsection (1) of this item provides that new subsection 311(1A) (inserted by item 19) applies to an employee who becomes employed by a new employer (for the purposes of that employee) after the commencement of Part 4 of Schedule 1 to the amending Act. 146. Subsection (2) of this item provides that new subsections 768AD(5) and (6) (inserted by item 20) apply to a person who becomes employed by a new employer for the purposes of that employee) after the commencement of Part 4 of Schedule 1 to the amending Act. New item 9 - Part 5 of Schedule 1 to the amending Act 147. New subitem 9(1) of new Schedule 5A provides for this amendment to apply in relation to interviews conducted, and discussions held, after the commencement of item 26. 148. New subitem 9(2) of new Schedule 5A provides for this amendment to apply in relation to a dispute if the FWC commences dealing with the dispute:  on its own initiative after the commencement of Part 5 of Schedule 1 to the amending Act; or  on application made after the commencement of Part 5 of Schedule 1 to the amending Act. New item 10 - Part 6 of Schedule 1 to the amending Act 149. This item provides that the amendments made by Part 6 of Schedule 1 to the amending Act apply in relation to an application for an order under Division 4 of Part 3-2 (remedies for unfair dismissal) if the application was made after the commencement of that Part. The amendments commence the day after Royal Assent and provide that, subject to certain conditions, the FWC is not required to hold a hearing or conduct a conference, when determining whether to dismiss an unfair dismissal application under section 399A or section 587. Fair Work Amendment (Remaining 2014 24 House of Representatives Measures) Bill 2015

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