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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FAIR WORK AMENDMENT (REPEAL OF 4 YEARLY REVIEWS AND OTHER
MEASURES) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment, Senator the Hon Michaelia Cash)
Outline
FAIR WORK AMENDMENT (REPEAL OF 4 YEARLY REVIEWS AND OTHER
MEASURES) BILL 2017
OUTLINE
The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 (the
Bill) amends the Fair Work Act 2009 (the Act) to respond to two recommendations of the
Productivity Commission's Final Report into the Workplace Relations Framework (the PC
Report) and to respond to two recommendations of the Hon Peter Heerey AM, QC in his
Report of Inquiry into Complaints about the Honourable Vice President Michael Lawler of
the Fair Work Commission (FWC) and Related Matters (the Heerey Report).
The Bill will amend the Act to:
respond, in part, to the PC Report recommendation 8.1 by repealing the requirement
for the FWC to conduct 4 yearly reviews of modern awards from the beginning of
1 January 2018. Further amendments will ensure that the residual framework for the
making, varying and revoking of modern awards continues to provide a balanced, fair
and sensible safety net of terms and conditions of employment. Reviews that have
been commenced but not concluded under the current 4 yearly review will be able to
be finalised under the existing process;
respond to PC Report recommendation 20.1 by enabling the FWC to overlook minor
procedural or technical errors when approving an enterprise agreement, where those
errors were not likely to have disadvantaged employees. This includes errors
concerning the requirements relating to the Notice of Employee Representational
Rights;
respond to Mr Heerey's recommendations by:
- applying the complaint-handling powers of the Minister for Employment and the
President of the FWC to FWC Members who formerly held office in the
Australian Industrial Relations Commission (AIRC); and
- applying the Judicial Misbehaviour and Incapacity (Parliamentary Commissions)
Act 2012 (JMIPC Act) in relation to FWC Members.
House of Representatives page i Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Financial Impact Statement
FINANCIAL IMPACT STATEMENT
Nil
House of Representatives page ii Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Regulation Impact Statement
REGULATION IMPACT STATEMENT
The implementation of the two PC Report recommendations were certified as part of an
independent review process undertaken by the Department of Employment for the PC Report.
The PC Report is at http://www.pc.gov.au/inquiries/completed/workplace-relations#report.
The implementation of the two Heerey Report recommendations have been assessed by the
Office of Best Practice Regulation (OBPR) as being minor with any applicable regulatory
costs associated with these proposals excluded as they relate to non-compliance or
enforcement.
The OBPR IDs for this proposal are 20684 and 21879.
House of Representatives page iii Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
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 (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017
The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 (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 (the 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 amends the Act to respond to two recommendations of the Productivity
Commission's Final Report into the Workplace Relations Framework (the PC Report); and
amends the Act and the Fair Work (Transitional Provisions and Consequential Amendments)
Act 2009 (the Transitional Act) in response to two recommendations in the Report of Inquiry
into Complaints about the Honourable Vice President Michael Lawler of the Fair Work
Commission and Related Matters (Heerey Report) concerning conduct of Fair Work
Commission (FWC) Members.
The Bill's amendments:
respond, in part, to the PC Report recommendation 8.1 by repealing the requirement
for the FWC to conduct 4 yearly reviews of modern awards from the beginning of
1 January 2018. Further amendments will ensure that the residual framework for the
making, varying and revoking of modern awards continues to provide a balanced, fair
and sensible safety net of terms and conditions of employment. Reviews that have
been commenced but not concluded under the current 4 yearly review will be able to
finalised under the existing process;
respond to PC Report recommendation 20.1 by enabling the FWC to overlook minor
procedural or technical errors when approving an enterprise agreement, where those
errors were not likely to have disadvantaged employees. This includes errors
concerning the requirements relating to the Notice of Employee Representational
Rights; and
respond to Mr Heerey's recommendations by:
- applying the complaint-handling powers of the Minister for Employment and the
President of the FWC to FWC Members who formerly held office in the
Australian Industrial Relations Commission (AIRC); and
- applying the Judicial Misbehaviour and Incapacity (Parliamentary Commissions)
Act 2012 (JMIPC Act) in relation to FWC Members.
House of Representatives page i Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
Schedule 1 - Four yearly reviews of modern awards
Under Division 4 of Part 2-3 of the Act, 4 yearly reviews of modern awards were intended to
be the principal mechanism by which modern awards would be reviewed to maintain a fair
and relevant safety net of terms and conditions.
Schedule 1 to the Bill repeals the requirement for the FWC to conduct 4 yearly reviews of
modern awards from the beginning of 1 January 2018. Further amendments ensure that the
residual framework for the FWC to make, vary and revoke modern awards maintain a fair and
relevant safety net.
These amendments engage 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 and the right to a fair hearing under Article
14 of the International Covenant on Civil and Political Rights (ICCPR).
Schedule 2 - Procedural requirements in enterprise bargaining
Schedule 2 to the Bill makes amendments to provide that an enterprise agreement may be
approved despite minor procedural or technical errors. It engages the right to collectively
bargain under Article 4 of the International Labour Organization (ILO) Right to Organise and
Collective Bargaining Convention 1949 (No 98).
Schedule 3 - FWC Members
Item 1 of Schedule 3 to the Bill inserts new section 641B into the Act to provide for the
modified application of the JMIPC Act to FWC Members. This will enable the Parliament to
establish a Commission to investigate and report on alleged misbehaviour or incapacity of an
FWC Member, with a view to consider whether to request the Governor-General to:
remove a 'transitioned FWC Member' (i.e. an FWC Member formerly of the AIRC)
from office under section 82 or 86 of the Workplace Relations Act 1996 (the WR Act),
as continued in force by item 2 of Schedule 18 to the Transitional Act, or
terminate the appointment of a 'non-transitioned FWC Member' under section 641 of
the Act.
New subsection 641B(2) applies the JMIPC Act as if that Act were amended so that:
references to 'FWC Member' were substituted for references to 'Commonwealth
judicial officer' in relevant provisions of the JMIPC Act
references to sections 82 or 86 of the WR Act or to section 641 of the Act were
substituted for references to section 72(ii) of the Constitution (which deals with the
removal of judges from office)
certain terms (e.g. meanings of 'proved misbehaviour' or 'incapacity' and other
relevant terms in the Fair Work legislation) were included in section 7 of the JMIPC
Act (which provides defined terms for that Act), and
House of Representatives page ii Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
a reference to an investigation of a complaint under the Act (e.g. if the Minister or the
FWC President decides to handle a complaint about an FWC Member) were included
in the types of investigation mentioned in section 19 of the JMIPC Act.
The modified application of the JMIPC Act to FWC Members effected by item 1 of Schedule
3 engages the right to a fair trial and the right to privacy and reputation under Articles 14 and
17 respectively of the ICCPR, and the right not to be unjustly deprived of work under Article
6 of the ICESCR.
Human rights implications
The Bill engages the following rights:
the right to work and not to be unjustly deprived of work under Article 6(1) of the
ICESCR;
the right to just and favourable conditions of work under Article 7 of the ICESCR;
the right to a fair trial and fair hearing under Article 14 of the ICCPR; and,
the right to privacy and reputation under Article 17 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 ILO, such as the Right to Organise and Collective Bargaining
Convention 1949 (No. 98), that 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
limitation of working hours and periodic holidays with pay, as well as remuneration for public
holidays.
Repeal of 4 yearly reviews of modern awards
Modern awards, in addition to the National Employment Standards under the Act, deal with a
number of matters to provide a fair and relevant safety net of employment terms and
conditions. Modern awards provide for a range of protections for employees, including:
fair wages in modern award minimum wages;
rest periods, leave, and arrangements for when work is performed;
House of Representatives page iii Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
maximum work hours, as well as allowances, penalty rates and overtime; and
the capacity for casual employees to convert to permanent status in specified
circumstances.
Under Division 4 of Part 2-3 of the Act, 4 yearly reviews of modern awards were intended to
be the principal mechanism by which modern awards would be reviewed to maintain a fair
and relevant safety net of terms and conditions.
Recommendation 8.1 of the PC Report is, in part, to repeal the requirement for the FWC to
conduct 4 yearly reviews. The PC Report notes that in practice the 4 yearly review placed
substantial demands on parties and the process does not meet the Act's objective to create a
simple, easy to understand, sustainable award system. The 4 yearly review mechanism is too
resource intensive for both the FWC as well as employer and employee organisations taking
part in the review. The PC Report notes that while the FWC is streamlining the review
process, reform is required.
Schedule 1 to the Bill repeals the requirement for the FWC to conduct 4 yearly reviews of
modern awards from 1 January 2018. For a review of a modern award that has been
commenced but not completed by that time, the Bill provides a transitional measure
preserving the operation of the current provisions to enable the review to be finalised.
Outside of the 4 yearly review process, Division 5 of Part 2-3 of the Act currently provides
that the FWC is able to make, vary and revoke modern awards under section 157. The effect
of sections 134, 138 and 157 of the Act is that the FWC must ensure that modern awards,
together with the National Employment Standards, provide a fair and relevant minimum
safety net or terms and conditions in accordance with the modern awards objective.
Relevantly, a modern award may include terms that it is permitted to include and must include
terms that it is required to include, to the extent necessary to achieve the modern awards
objective. The FWC must, among other considerations, relevantly take into account:
relative living standards and the needs of the low paid;
the need to promote social inclusion through increased workforce participation;
the need to promote flexible work practices;
the need to provide additional remuneration in specified circumstances, including for
employees working public holidays;
the principle of equal remuneration for work of equal or comparable value;
the need to ensure a simple, easy to understand, stable and sustainable modern award
system for Australia.
The amendments maintain this effective framework for meeting the modern awards objective.
After the repeal of the requirement to conduct 4 yearly reviews, the framework that remains
for making, varying and revoking modern awards under Division 5 of Part 2-3 of the Act will
continue to require that the FWC is satisfied that making a determination is necessary to
achieve the modern awards objective. This allows the FWC to make a determination where
House of Representatives page iv Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
emerging social and economic matters demonstrate that change is necessary. For example, in
exercising its functions under Part 2-3, the FWC is required to take into account a range of
criteria, such as the need to promote social inclusion through increased workforce
participation. This requires the FWC to consider the changing labour market and the manner
in which work is evolving. It must also promote flexible modern work practices and the
efficient and productive performance of work, which again requires the FWC to look beyond
the way work has been performed historically and to make sure the safety net of terms and
conditions continues to meet community expectations.
Importantly, the Bill retains the review mechanism for the FWC to vary modern awards under
section 161 of the Act. Under this section, the FWC may vary a modern award on referral by
the Australian Human Rights Commission under section 46PW of the Australian Human
Rights Commission Act 1986 (dealing with discriminatory industrial instruments). If the FWC
is satisfied that a modern award reviewed requires a person to do an act that would be
unlawful under Part 4 of the Age Discrimination Act 2004, Part 2 of the Disability
Discrimination Act 1992, or Part II of the Sex Discrimination Act 1984; the FWC must make
a determination to vary the modern award to remove the discriminatory term.
Finally, in effect, the Bill reduces the regulatory burden for the FWC, as well as employer and
employee organisations, as there will no longer be a requirement for regular, systematic and
prolonged reviews. The residual framework for the making, varying and revoking of modern
award will not reduce the requirements for modern awards to provide a sensible, fair and
relevant safety net.
FWC Members
The UN Committee on Economic Social and Cultural Rights has stated that the right under
Article 6(1) of ICESCR encompasses the right not to be unjustly deprived of work, requiring
security against unfair dismissal.
The modified application of the JMIPC Act to FWC Members does not enable a Commission
to remove or dismiss an FWC Member. FWC Members have security of tenure. Relevant
provisions of the Fair Work legislation provide that FWC Members may only be removed by
the Governor-General, on an address from both Houses of the Parliament in the same session,
praying for such removal on the ground of proved misbehaviour or incapacity.
A Commission's role is limited to inquiring into allegations specified in a resolution of the
Houses of the Parliament and gathering information and evidence so the Parliament can be
well informed in its consideration of the removal of an FWC Member. The modified
application of the JMIPC Act would enable this process to occur in accordance with clear and
transparent processes.
Right to a fair hearing and fair trial
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.
Dismissing modern award 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.
House of Representatives page v Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
Currently, section 587 of the Act provides the FWC with a general discretion to dismiss an
application if it is not made in accordance with the Act; is frivolous or vexatious; or has no
reasonable prospects of success. However, it is intended that the residual model for making,
varying and revoking modern awards should not result in multiple applications that relate to
the specific matters that the FWC may have recently dealt through the current 4 yearly review
process.
New clause 27 of Part 5 of Schedule 1 to the Act inserts a temporary and limited transitional
dismissal power to complement the existing section 587 mechanism. This new provision
provides the FWC with flexibility to dismiss modern award applications under section 158,
where the FWC is satisfied that the specific matters in relation to which the application was
made, were or are being dealt with in the 4 yearly review. This limited dismissal power will
sunset two years after the commencement of Schedule 1.
The circumstances in which the discretionary power would be available are proportionate as
they deal with situations where the specific matters of the application were or are being
specifically dealt with in the 4 yearly review.
In the context of the recent protracted and comprehensive 4 yearly review of modern awards
by the FWC, it would be contrary to the objectives of a simple, easy to understand, stable and
sustainable modern awards system to allow parties to re-apply for determinations in regards to
matters recently dealt with by the FWC in that review.
It should further be noted that appeal rights are not impacted by these amendments.
FWC Members
Article 14 of the ICCPR protects the right to a fair trial and fair hearing. The main factor
when considering 'fairness' is whether both parties have been afforded a reasonable
opportunity to present their case, including the presentation of evidence, under conditions that
do not put either party at a substantial disadvantage.
A Parliamentary Commission may be established under the JMIPC Act (in its modified
application to FWC Members) to investigate specified allegations of misbehaviour or
incapacity of a specified FWC Member so the Parliament can be well informed when
considering whether to request the Governor-General to terminate the Member's appointment
or remove him or her from office. The character of a Commission's role would be
investigative, rather than adjudicative. A Commission would not determine whether facts are
proved or make recommendations to the Parliament about the removal of an FWC Member
from office. Under relevant provisions of the Fair Work legislation, it is for the Houses of
Parliament to consider whether conduct of an FWC Member amounts to proved misbehaviour
or incapacity.
The JMIPC Act positively advances the right to a fair hearing by a competent, independent
and impartial body established by law. As modified in its application to FWC Members, the
JMIPC Act:
provides for public hearings, while allowing a Commission to balance public interests
with the privacy and reputation of an FWC Member on a case by case basis; and
House of Representatives page vi Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
enables an FWC Member who is the subject of an investigation to attend and
participate in hearings.
The JMIPC Act provides appropriate protections for those who are connected with a
Commission (such as Members of the Commission, and witnesses and lawyers who appear at
a hearing of a Commission) similar to those applying to other Parliamentary committees so
that information provided to a Commission would not prejudice a person's right to a fair trial
in any subsequent criminal proceedings.
In particular, subsection 16(3) of the Parliamentary Privileges Act 1987 is taken to apply to
the proceedings, report and evidence of a Commission. The application of subsection 16(3) of
the Parliamentary Privileges Act 1987 would operate to prevent reliance on any conclusions
in a Commission report in any subsequent criminal proceedings. This provides adequate
protection for FWC Members who may be liable to prosecution based on the findings in a
Commission report. It upholds the right to be presumed innocent until proved guilty according
to law.
The JMIPC Act provides that a person is not excused from producing documents or
answering questions relevant to a Commission's investigation on the ground that it might tend
to incriminate them. While this might limit rights of a person under Article 14(3)(g) of the
ICCPR not to be compelled to testify against himself or herself or to confess guilt, the
limitation is reasonable, necessary and proportionate. The Parliament's consideration of
whether an FWC Member's tenure should be ended for proved misbehaviour or incapacity
supports public confidence in the independence and impartiality of the FWC.
The treatment of self-incrimination is appropriate to facilitate the ability of a Commission to
obtain relevant evidence for the investigation, so that it may provide a comprehensive report
and assist the Parliament in its consideration of removal of an FWC Member. The JMIPC Act
provides for use and derivative use protections where self-incriminatory information is
provided to a Commission. These protections restrict the use of self-incriminatory information
in later court proceedings or to gather evidence against a person who has disclosed self-
incriminatory information.
Right to privacy and reputation
FWC Members
Article 17 of the ICCPR prohibits arbitrary or unlawful interference with an individual's
privacy, family, home or correspondence, and protects a person's honour and reputation from
unlawful attacks. While the JMIPC Act, as applied to FWC Members, may limit aspects of
these rights in certain circumstances, the limitations are reasonable, necessary and
proportionate.
A Commission established pursuant to the application of the JMIPC Act to FWC Members
may deal with personal or sensitive information for the purposes of investigating specified
allegations of misbehaviour or incapacity of an FWC Member. The right to privacy and
reputation is important for two classes of people affected by the JMIPC Act:
the FWC Member who is the subject of a Commission's investigation, and
House of Representatives page vii Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
a person who may give evidence or otherwise be involved in a Commission's
investigation.
The JMIPC Act as applied to FWC Members provides for clear and transparent powers and
processes for investigation by a Commission, enabling it to appropriately assess rights to
privacy and reputation on a case by case basis, and balance competing public interests in the
removal of unfit FWC Members where necessary. Specific protections contained in the
JMIPC Act include the ability of a Commission to hold hearings in private, offences for
unauthorised publication of information, and restrictions on publication of private information
in a Commission's report.
The JMIPC Act empowers a Commission, or authorised Member of a Commission, to issue a
search warrant in circumstances where:
a Commission has reasonable grounds for suspecting that there may be, within 24
hours, documents or things connected with the matter a Commission is investigating,
and
that if a notice were given for the documents or things, the documents or things might
be concealed, lost, mutilated or destroyed.
It is appropriate to confer investigative and administrative functions associated with a
Commission on the Commission, rather than serving judges, given the special nature of its
role investigating allegations about judicial misbehaviour or incapacity (in addition to the
investigation of allegations about FWC Members under the amendments made by this Bill).
A Commission's role is limited to investigating an allegation of misbehaviour or incapacity
against an FWC Member specified through a resolution of the Parliament. This limits the
scope of the issue and execution of search warrants on a person's family or home.
A Commission is required to keep a written record of the reasons for issuing a search warrant.
This promotes transparency and accountability in the process of issuing search warrants.
These reasons will become part of the records of a Commission, which will be given to a
House of the Parliament where no longer needed.
Right to organise and 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.
Procedural requirements in enterprise bargaining
The amendments made by Schedule 2 to the Bill engage the right to collectively bargain by
providing that an enterprise agreement may be approved despite minor procedural or technical
errors in relation to certain procedural requirements in enterprise bargaining. The FWC must
be satisfied that the employees covered by the agreement were not likely to have been
disadvantaged by the errors.
House of Representatives page viii Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Statement of Compatibility with Human Rights
The PC Report noted that '[w]hile there are often good reasons for having procedural
requirements (for example, to prevent a party engaging in potentially misleading conduct
during the approval process) substance rather than form should prevail' (p 663).
This measure promotes collective bargaining because it enables the FWC to approve
enterprise agreements that it would previously have been required to reject simply because of
a minor procedural or technical error.
Conclusion
The amendments to the Act 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.
The JMIPC Act, as extended in its application to FWC Members by Schedule 3 to the Bill, is
compatible with human rights because it advances the protection of human rights, in
particular for right to a fair trial, the right to privacy and reputation, and the right not to be
unjustly deprived of work. To the extent that it may also limit human rights, those limitations
are reasonable and proportionate.
Minister for Employment, Senator the Hon Michaelia Cash
House of Representatives page ix Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Notes on Clauses
NOTES ON CLAUSES
In these notes on clauses, the following abbreviations are used:
Act Fair Work Act 2009
AIRC Australian Industrial Relations Commission
Bill Fair Work Amendment (Repeal of 4 Yearly Reviews and Other
Measures) Bill 2017
FWC Fair Work Commission
Heerey Report Hon Peter Heerey AM QC's Report of Inquiry into Complaints
about the Honourable Vice President Michael Lawler of the Fair
Work Commission and Related Matters
JMIPC Act Judicial Misbehaviour and Incapacity (Parliamentary
Commissions) Act 2012
Notice Notice of Employee Representational Rights
PC Report Productivity Commission's Final Report into the Workplace
Relations Framework
Transitional Act Fair Work (Transitional Provisions and Consequential
Amendments) Act 2009
WR Act Workplace Relations Act 1996
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.
House of Representatives 1 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 1
SCHEDULE 1 - FOUR YEARLY REVIEWS OF MODERN AWARDS
Overview
4. Under Division 4 of Part 2-3 of the Act, 4 yearly reviews of modern awards were the
principal mechanism by which modern awards would be reviewed to maintain a fair and
relevant safety net of terms and conditions.
5. Recommendation 8.1 of the PC Report is, in part, to repeal the requirement for the
FWC to conduct 4 yearly reviews. The PC Report notes that in practice, the 4 yearly
reviews placed substantial demands on parties and the process does not meet the Act's
objective to create a simple, easy to understand and sustainable award system. The
4 yearly review mechanism is too resource intensive for both the FWC as well as
employer and employee organisations taking part in the review. The PC Report notes that
while the FWC is streamlining the review process, reform is required.
6. Schedule 1 to the Bill repeals the requirement for the FWC to conduct 4 yearly
reviews of modern awards from the beginning of 1 January 2018. Further amendments
ensure that the residual framework for the making, varying and revoking of modern
awards under Division 5 of Part 2-3 of the Act continues to require that the FWC is
satisfied that making a determination is necessary to achieve the modern awards objective.
7. This framework allows changes to a modern award where emerging social and
economic matters demonstrate that change is necessary. For example, in exercising its
modern award functions, the FWC is required to take into account a range of criteria, such
as the need to promote social inclusion through increased workforce participation. This
requires the FWC to consider the changing labour market and the manner in which work is
evolving. It must also promote flexible modern work practices and the efficient and
productive performance of work, which again requires the FWC to look beyond the way
work has been performed historically and to make sure the safety net of terms and
conditions continues to meet community expectations.
Fair Work Act 2009
Item 1 - Section 12 (definition of 4 yearly review of modern awards)
8. Item 1 repeals the definition of 4 yearly review of modern awards in section 12 of the
Act. This is consequential to the repeal of Division 4 of Part 2-3 of the Act in item 8.
Item 2 - Section 12 (definition of work value reasons)
9. Item 2 amends the definition of work value reasons in section 12 of the Act. This is
consequential to the repeal of Division 4 of Part 2-3 of the Act and the amendment to
section 157 (see items 8 and 13).
Item 3 - Section 132 (paragraph relating to Division 4)
Item 4 - Section 132 (paragraph relating to Division 5)
10. Section 132 of the Act provides a guide to the operation of Part 2-3 of the Act to aid
the reader. Item 3 amends section 132 to remove the reference to the operation of 4 yearly
reviews of modern awards under Division 4 of Part 2-3.
House of Representatives 2 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 1
11. Item 4 amends section 132 to remove a reference to FWC's modern award powers
outside of the operation of 4 yearly reviews of modern awards.
12. These items are consequential to the repeal of Division 4 of Part 2-3 of the Act in
item 8.
Item 5 - Paragraph 135(1)(a)
13. Item 5 makes an amendment to paragraph 135(1)(a) to remove a reference to
subsection 156(3) and is consequential to the repeal of Division 4 of Part 2-3 of the Act in
item 8.
Item 6 - Paragraph 141(2)(b)
Item 7 - Subsections 141(3) and (5)
14. Items 6 and 7 make amendments to section 141 and are consequential to the repeal of
Division 4 of Part 2-3 of the Act in item 8.
Item 8 - Division 4 of Part 2-3
15. Division 4 of Part 2-3 (i.e. section 156 of the Act) provides for the FWC to conduct
4 yearly reviews of modern awards. Item 8 repeals the Division.
Item 9 -Division 5 of Part 2-3 (heading)
16. Division 5 of Part 2-3 provides for the FWC to exercise modern award powers outside
of 4 yearly reviews and annual wage reviews. Item 9 amends this heading, consequential
to the repeal of the operation of the 4 yearly reviews of modern awards in item 8.
Item 10 - Subsection 157(1)
17. Item 10 amends subsection 157(1), to remove the reference to the operation of
4 yearly reviews of modern awards, consequential to item 8.
Item 11 - Subsection 157(1) (note 1)
18. Item 11 repeals Note 1 of subsection 157(1) and substitutes a new Note 1 which
provides that generally the FWC must be constituted by a Full Bench to make, vary or
revoke a modern award. New Note 1 is consequential to the amendments to section 616 in
items 17 and 18.
19. Section 158 sets out who may apply to the FWC to make, vary or revoke a modern
award under section 157. The FWC also has a broad power to inform itself in relation to
modern award matters under section 590, including by inviting submissions from any
persons likely to be interested or affected by a proposed determination under section 157.
In practice, the FWC has invited submissions from all parties interested in the matter in
the conduct of 4 yearly reviews under section 156. It is expected that under amended
section 157, the FWC will similarly continue to invite such submissions.
House of Representatives 3 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 1
Item 12 - Paragraph 157(2)(b)
20. Subsection 157(2) provides for the varying of modern award minimum wages outside
of 4 yearly reviews of modern awards and annual wage reviews. Item 12 amends
paragraph 157(2)(b) to remove a reference to the operation of 4 yearly reviews of modern
awards. This is consequential to item 8.
Item 13 - After subsection 157(2)
21. Item 13 inserts a new subsection 157(2A) providing a definition of work value
reasons. This definition is identical to that which was contained in current
subsection 156(4), which by operation of the definition in section 12 applies to other
provisions in the Act. As subsection 156(4) is to be repealed by item 8, this consequential
change is required.
Item 14 - Paragraph 582(4)(a)
Item 15 - After paragraph 582(4)(aa)
Item 16 - At the end of subsection 582(4)
22. Section 582 provides that the President is able to give directions in specified
circumstances. Paragraph 582(4)(a) relates to the President's power to give directions
about the conduct of 4 yearly reviews of modern awards under Division 4 of Part 2-3.
Item 14 makes a consequential amendment to repeal paragraph 582(4)(a), given the repeal
of Division 4 of Part 2-3 by item 8.
23. Item 15 inserts a new paragraph 582(4)(ab) into the Act. It provides that the President
may give directions about the exercise of modern award powers under Division 5 of
Part 2-3.
24. Item 16 inserts a new paragraph 582(4)(e) into the Act. It provides that the President
may direct a single FWC Member to perform a function or exercise a power in relation to
the variation of a modern award. This provision should be read in conjunction with
section 616, as amended by items 17 and 18.
Item 17 - Subsections 616(2) and (3)
Item 18 - After subsection 616(3A)
25. Section 612 provides that a function or power of the FWC may be exercised by a
single FWC Member, as directed by the President, except as provided for in Subdivision A
of Division 4 of Part 5-1 of the Act. Currently, section 616 (within this Subdivision) sets
out certain functions of the FWC that must be performed by a Full Bench.
26. Existing subsection 616(1) provides that a modern award under Part 2-3 must be
made by a Full Bench. The Bill makes no change to this provision.
27. A 4 yearly review of modern awards must be conducted by a Full Bench under
subsection 616(2); and a determination that varies or revokes a modern award in a 4 yearly
review must be made by a Full Bench under subsection 616(3).
House of Representatives 4 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 1
28. Item 17 repeals subsections 616(2) and (3), and are consequential to the repeal of
Division 4 of Part 2-3 of the Act in item 8.
29. Item 18 inserts new subsections 616(3B), (3C) and (3D) into the Act.
30. New subsection 616(3B) provides that any determination that revokes a modern
award under Division 5 of Part 2-3 of the Act must be made by a Full Bench. This is a
change from the existing framework under which a single FWC Member could revoke a
modern award and reflects the fact that the residual framework under Division 5 of
Part 2-3 of the Act will now be the principal mechanism for the making, varying and
revoking modern awards.
31. New subsection 616(3C) provides a default rule that a determination that varies a
modern award under Division 5 of Part 2-3 must be made by a Full Bench. This is a
change from the existing framework under Division 5 of Part 2-3 under which a single
FWC Member could vary a modern award. In the absence of the 4 yearly review
mechanism, where reviews were conducted by a Full Bench, it is appropriate for a Full
Bench to consider such matters before making any determinations to vary modern awards.
32. However, some modern award variations may relate to routine matters where it would
be appropriate for a single FWC Member to perform that function. Therefore, the
President will have discretion to direct a single FWC Member to conduct a variation
matter for a modern award in the following circumstances.
33. First, consistent with the current framework, under new paragraph 616(3D)(a) the
President may direct a single FWC Member to perform a function or exercise a power
relating to a determination under:
section 159 (variation to update or omit name of employer, organisation or
outworker entity);
section 160 (variation to remove ambiguity, uncertainty or correct error); or
section 161 (variation on referral by Australian Human Rights Commission).
34. Second, under new paragraph 616(3D)(b) the President may direct a single FWC
Member to perform a function or exercise a power relating to a variation under new
section 157 where the President considers it appropriate to do so in specified
circumstances. The President may exercise this discretion in relation to:
a single award; or
2 or more awards relating to the same industry or occupation.
35. For example, an application may be made with the support of all stakeholders to
repeal redundant references from a single modern award. The President may consider it
appropriate in those circumstances to direct a single FWC Member to deal with the matter.
36. By way of further example, an application may be made to amend a term in one or
more modern awards relating to the building and construction industry, but not other
House of Representatives 5 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 1
industries. Again, the President may consider it appropriate to direct a single FWC
Member to deal with this industry-specific matter.
37. Where applications to vary modern awards may relate to more significant or
contentious matters, or may potentially present a 'test case' that could emerge as a
common issue across awards, the default position for Full Bench consideration will
prevail.
38. Where the President directs a single FWC Member to deal with a variation matter for
a modern award, appeal and review rights from the single Member decision to the Full
Bench will continue to be available in the usual manner.
House of Representatives 6 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 2
SCHEDULE 2 - PROCEDURAL REQUIREMENTS IN ENTERPRISE
BARGAINING
Overview
39. Part 2-4 of the Act sets out the framework for the making of enterprise agreements.
The PC Report considered the operation of the enterprise bargaining framework and,
relevantly, the purpose and effect of the statutory requirements that must be met before the
FWC can approve an enterprise agreement.
40. The PC Report recommended that the FWC should be able to overlook minor
procedural or technical errors when approving an enterprise agreement, if it is satisfied
that employees were not likely to have been disadvantaged by those errors. The PC Report
also recommended that this be extended to the requirements relating to the Notice given
under subsection 173(1) (Recommendation 20.1).
41. Schedule 2 to the Bill responds to Recommendation 20.1.
Fair Work Act 2009
Item 1 - Section 188
42. This item amends section 188 by inserting new subsection 188(1), consequential on
the amendment in item 2 of Schedule 2. This is a technical amendment to number the
subsection.
Item 2 - At the end of section 188
43. Section 188 sets out a list of matters for the FWC to consider when determining
whether an enterprise agreement has been genuinely agreed to by the employees covered
by the agreement.
44. This item inserts new subsection 188(2), which provides that an enterprise agreement
will also have been genuinely agreed to by the employees covered by the agreement if the
FWC is satisfied that the agreement would have been genuinely agreed to under
subsection 188(1), but for any minor procedural or technical errors made in relation to:
the requirements referred to in paragraph 188(1)(a) or (b), or
the Notice.
45. The FWC must also be satisfied that the employees covered by the agreement were
not likely to have been disadvantaged by the errors (paragraph 188(2)(b)).
46. The effect of this amendment is that an enterprise agreement will have been genuinely
agreed to despite any minor procedural or technical error if the employees (as a whole)
were not likely to have been disadvantaged by those errors.
47. Examples of minor procedural or technical errors could include (without limitation):
employees being informed of the time and place for voting on the proposed
enterprise agreement or the voting method that will be used for the agreement just
House of Representatives 7 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 2
after the start of the access period rather than by the start of the access period
(subsection 180(3));
employees being requested to approve a proposed enterprise agreement on the 21st
day after the last Notice was given, rather than at least 21 days after the day on
which the last Notice was given (subsection 181(2));
the inclusion of the employer's company logo or letterhead on a Notice;
the inclusion of additional materials that are stapled with a Notice; or
minor changes to the text of the Notice that had no relevant effect on the information
that was being communicated in it (for example, the Notice may say to contact a
particular person in the human resources department rather than 'contact your
employer').
48. When considering whether the employees were not likely to have been disadvantaged
by an error, the FWC could take into account, for example, the effect of the error and the
circumstances of the error.
49. This amendment responds to PC Report recommendation 20.1.
House of Representatives 8 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 3
SCHEDULE 3 - FWC MEMBERS
Overview
50. The JMIPC Act enables the Parliament to establish commissions of inquiry to inform
its consideration of any case for the removal from office of Commonwealth judges by
investigating and reporting on allegations of misbehaviour or incapacity. Like
Commonwealth judges, the tenure of FWC Members can only be ended because of proved
misbehaviour or incapacity by the Governor-General at the request of both Houses of
Parliament. However, the JMIPC Act presently only operates in relation to Commonwealth
judicial officers, so there is no formal mechanism to inform the Parliament's consideration
of allegations of misbehaviour or incapacity against FWC Members. Additionally, there is
some doubt about whether the complaint handling powers of the Minister and the FWC
President in the Fair Work Act apply to FWC Members who formerly held office in the
AIRC.
51. Amendments made by Schedule 3 to the Bill implement recommendations in the
Heerey Report to:
apply the JMIPC Act in relation to termination proceedings against FWC Members,
and
ensure that the powers of the Minister for Employment and the FWC President to
handle complaints apply to all FWC Members, irrespective of when they were
appointed.
Fair Work Act 2009
Item 1 - After section 641A
52. Item 1 of Schedule 3 to the Bill inserts new section 641B to provide for the modified
application of the JMIPC Act to FWC Members.
53. The JMIPC Act enables the Parliament to establish commissions of inquiry comprised
of members nominated by the Prime Minister and appointed by both Houses of Parliament.
The JMIPC Act establishes a framework for the conduct of investigations by a
Commission, with powers to hold hearings and take evidence on oath, require the
production of documents, obligations to observe natural justice requirements and with the
privileges and immunities of the Crown.
54. A Commission does not determine whether facts are proved or make
recommendations to the Parliament about the removal of a judge. A Commission only
considers the threshold question of whether there is evidence of conduct by a judicial
officer that may be capable of being regarded as misbehaviour or incapacity, and reports
on these matters to the Parliament. It is for the Houses of Parliament to determine whether
they regard particular conduct as proved misbehaviour or incapacity.
55. New section 641B modifies the JMIPC Act so the Parliament can establish a
Commission to investigate and report on alleged misbehaviour or incapacity of an FWC
Member, with a view to consider whether to request the Governor-General to:
House of Representatives 9 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 3
remove a 'transitioned FWC Member' from office under section 82 (in the case of a
Presidential Member) or section 86 (in the case of a Commissioner) of the WR Act, as
continued in force by item 2 of Schedule 18 to the Transitional Act, or
terminate the appointment of a 'non-transitioned FWC Member' under section 641 of
the Act.
56. Legislative provisions governing the circumstances in which appointments of FWC
Members may come to an end are different, depending on the time of the Member's
appointment. When Fair Work Australia (now the FWC) was established by the Act in
2009, Members of the AIRC were deemed to have been appointed to the new institution
(see item 1 of Schedule 18 to the Transitional Act). These are 'transitioned FWC
Members', described in table item 11 of new subsection 641B(2)). Their terms and
conditions of appointment, including in relation to removal from office for proved
misbehaviour or incapacity under sections 82 or 86 of the WR Act, were preserved by
item 2 of Schedule 18 to the Transitional Act. By contrast, section 641 of the Act governs
the termination of appointment of FWC Members appointed from 26 May 2009 onwards
('non-transitioned FWC Members' - see table item 9 of new subsection 641B(2)) on the
basis of proved misbehaviour or inability to perform duties because of physical or mental
incapacity.
57. New subsection 641B(2) applies the JMIPC Act as if that Act were amended so that:
references to 'FWC Member' were substituted for references to 'Commonwealth
judicial officer' in relevant provisions of the JMIPC Act;
references to sections 82 or 86 of the WR Act (as the case may be) or to section 641 of
the Act were substituted for references to section 72(ii) of the Constitution (which
deals with the removal of judges from office for proved misbehaviour or incapacity);
certain terms (e.g. meanings of 'proved misbehaviour' or 'incapacity' and other
relevant terms in the Fair Work Act or WR Act) were included in section 7 of the
JMIPC Act (which provides defined terms for that Act); and
a reference to an investigation of a complaint under the Act (e.g. if the Minister or the
FWC President decides to handle a complaint about an FWC Member) were included
in the types of investigation mentioned in section 19 of the JMIPC Act.
58. Certain provisions of the JMIPC Act exempt Commonwealth judicial officers from
requirements to attend hearings of a Commission, give evidence under oath, produce
documents or comply with search warrants. These immunities are consistent with
requirements for the independence of judges under Chapter III of the Constitution. While
those immunities operate in relation to an FWC Member who is also a Commonwealth
judicial officer (such as the FWC President, who holds a concurrent appointment as a
Justice of the Federal Court of Australia), they do not operate in relation to other FWC
Members.
59. Further detail about the provisions of the JMIPC Act can be found in the Explanatory
Memorandum to the Bill for that Act on the Federal Register of Legislation.
House of Representatives 10 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 3
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 2 - At the end of Part 1 of Schedule 18
60. Under Part 5-1 of the Act:
the FWC President may handle a complaint about an FWC Member's performance of
their duties and take measures the President believes are reasonably necessary to
maintain public confidence in the FWC (subsection 581A(1)), and may refer a
substantiated complaint to the Minister if the President thinks it warrants Parliament's
consideration (subsection 581A(4)), and
the Minister may handle a complaint about an FWC Member's performance of their
duties for the purpose of considering whether each House of Parliament should
consider asking the Governor-General to terminate the Member's appointment for
proved misbehaviour or incapacity, or to advise the Governor-General to suspend the
Member (other than the President) for misbehaviour or incapacity (section 641A).
61. The Heerey Report noted that there was some uncertainty about whether these
complaint handling provisions applied to FWC Members who formerly held office in the
AIRC (essentially because of their interaction with the preservation of WR Act terms and
conditions of appointment in respect of those Members by item 2 of Schedule 18 to the
Transitional Act). Mr Heerey recommended amendments to ensure the application of these
provisions to all FWC Members.
62. Item 2 of Schedule 3 to the Bill inserts new item 6A to Schedule 18 to the Transitional
Act. This provision ensures that the powers of the FWC President and the Minister under
sections 581A and 641A of the Act (respectively) apply in relation to a complaint made
about an FWC Member who formerly held office in the AIRC.
63. Sections 581A and s 641A both concern circumstances in which a complaint may
raise questions about whether an FWC Member's appointment may be terminated under
section 641 because of proved misbehaviour or inability to perform duties because of
physical or mental incapacity. By contrast, sections 82 and 86 of the WR Act (preserved by
item 2 of Schedule 18 to the Transitional Act in relation to AIRC Members who
transferred to the FWC) provide for the 'removal from office' of such Members on the
grounds of proved misbehaviour or incapacity. This difference in terminology raises some
doubt about the applicability of the Minister's and President's formal complaint-handling
powers to those Members.
64. New item 6A of Schedule 18 to the Transitional Act applies sections 581A and 641A
as if they were amended to refer to provisions of the WR Act (preserved by item 2 of
Schedule 18 to the Transitional Act in relation to AIRC Members who transferred to the
FWC) that govern the removal from office of a Presidential Member (section 82) or a
Commissioner (section 86). Amending Schedule 18 in this way ensures that the terms and
conditions of appointment for and other arrangements pertaining to former AIRC Members
are dealt with together.
65. A complaint may be made before or after the commencement of the provision, in
relation to a Member's performance before or after the commencement date (new
subitem 6A(4)).
House of Representatives 11 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 4
SCHEDULE 4 - APPLICATION AND TRANSITIONAL PROVISIONS
Overview
66. Schedule 4 to the Bill provides for application and transitional provisions in relation to
the amendments made by Schedules 1 to 3 to the Bill.
Fair Work Act 2009
Item 1 - In the appropriate position in Schedule 1
67. Item 1 inserts a Part 5 into Schedule 1 to the Act.
Part 5 - Amendments made by the Fair Work Amendment (Repeal of 4 Yearly Reviews
and Other Measures) Act 2017
Division 1 - General
25 - Definitions
68. New clause 25 of Division 1 of Part 5 of Schedule 1 provides for definitions for the
purposes of the amendments made by Schedule 1 to this Bill. New clause 25 inserts four
definitions.
69. The term 4 yearly review of modern awards is defined by its current meaning,
immediately before the commencement of Schedule 1 to the amending Act.
70. The term amended Act refers to the Act, as amended by the amending Act.
71. The term amending Act refers to the Bill, once passed.
72. The term Schedule 1 commencement day is defined as day on which Schedule 1 to the
amending Act (i.e. 1 January 2018) commences.
Division 2 - Amendments made by Schedule 1 to the amending Act
26 - Incomplete 4 yearly review of modern award
73. The 4 yearly review of modern awards mechanism in Division 4 of Part 2-3 will be
repealed from the start of 1 January 2018 by item 8 of Schedule 1 to the Bill. This will
ensure that the next phase of the 4 yearly review, currently scheduled to commence on
1 January 2018 will not commence.
74. New clause 26 provides a transitional provision in the event that the FWC has active
4 yearly review matters on foot as at the end of 31 December 2017 (i.e. matters that have
commenced but have not yet been concluded). This clause provides that Division 4 of
Part 2-3 and necessary consequential provisions as in force at the repeal time
(i.e. 1 January 2018) will continue to apply in relation to matters commenced but not yet
determined at that time.
House of Representatives 12 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017
Amendments ~ Schedule 4
27 - Dismissing applications
75. Under section 587 of the Act, the FWC has discretion to dismiss an application if it is
not made in accordance with the Act; is frivolous or vexatious; or has no reasonable
prospects of success.
76. New clause 27 inserts a limited transitional dismissal power in addition to the existing
section 587 mechanism. This new provision allows the FWC to dismiss modern award
applications under section 158, where it is satisfied that the specific matters in relation to
which the application was made, were or are being dealt with in the 4 yearly review. This
power will sunset two years after the commencement of Schedule 1.
Division 3 - Amendments made by Schedule 2 to the amending Act
28 - Application of amendments--when employees have genuinely agreed to an
enterprise agreement
77. New clause 28 relates to the application of amendments where employees have
genuinely agreed to an enterprise agreement.
78. The amendments to section 188 made by Schedule 2 to the Bill will apply to
applications to approve enterprise agreements made under section 185 after the
amendments commence. This means that minor procedural or technical errors that
occurred before commencement could be considered in an application to approve the
enterprise agreement made after commencement.
Division 4 - Amendments made by Schedule 3 to the amending Act
29 - Application of section 641B of the amended Act
79. Item 1 of Schedule 3 inserts new section 641B into the Act, which applies the JMIPC
Act in relation to FWC Members. New clause 29 applies new section 641B in relation to
alleged misbehaviour or incapacity of an FWC Member occurring before or after the
commencement of Schedule 3.
House of Representatives 13 Fair Work Amendment (Repeal of 4 Yearly
Reviews and Other Measures) Bill 2017