Work choices or WorkChoices!
In Australia, there are significant changes underway with initiatives such as the Commonwealth’s Government’s welfare to work and workplace relations reforms. Essentially, they are said to be creating an environment designed to influence an increase in workforce participation and productivity.WorkChoices! Can all employers use the new WorkChoices law?
No, The Workplace Relations Act as amended by WorkChoices draws on a combination of constitutional powers to cover;
-trading, financial and foreign corporations (constitutional corporations) and their employees;
-employees and employers in the Australian Capital Territory, The Northern Territory and Christmas and Cocos (Keeling) Islands;
-The Commonwealth, including its authorities, and its employees;
-employers in respect of waterside, maritime and flight crew employees employed in connection with interstate, overseas, inter-territory trade and commerce; and
-most employees and employers in Victoria.
Also, not covered are sole traders, partnerships and some charitable organizations.
Now, if you are wondering what is a “constitutional corporation”, it’s;
- An entity incorporated under the Corporations Act that engages substantial trading or financial activities;
- An entity that is established as a body corporate under other legislation that is engaged in substantial trading or financial activities; or
- A foreign corporation
Be aware that the new WorkChoices law does not cover all aspects of the employment relationship. This means that employers will still need to consider other laws at the state and federal level that will continue to apply to them.
What is an “AWA”?
The Australian Workplace Agreement is an agreement between an employer and an individual employee, similar to a contract of employment insofar as it is an individual agreement.
Unlike AWAs prior to WorkChoices, AWAs no longer have to pass the “no-disadvantage test”, although there are other content requirements that must be met.
How are regular contracts of employment (common law) affected by workchoices?
All employees will continue to be covered by a contract of employment, whether written or unwritten. However, an employee’s terms and conditions of employment may be affected by WorkChoices.
The situation must be examined for each employee separately, comparing contractual entitlements against conditions under the Australia Fair Pay and Conditions Standard (‘Standard’ or ‘AFPCS’) and any applicable industrial instrument such as a workplace agreement, a federal award or a NAPSA (a notional agreement preserving State awards or laws)
Who does the Australian Fair Pay and Conditions Standard apply to?
The AFPCS does not apply to an employee:
- bound by or a party to an AWA approved before 27th March, 2006;
- bound by or party to an AWA filed before 27th March, 2006 and approved by the Employment Advocate after 27th March, 2006.
- covered by a Federal certified agreement filed before 27th March, 2006 and certified after 27th March, 2006.
- covered by a state employment Agreement made before 27th March, 2006.
Does the new standard affect minimum entitlements previously set by State law?
It could. If prior to 27th March, 2006, an employee was not covered by a Federal award, certified agreement or AWA then he or she might be covered by a preserved state agreement or a NAPSA (notional agreement preserving State awards).
Such an employee will only be covered by a NAPSA if no preserved State agreement applies.
Which employment entitlements do the standard cover?
The standard covers; basic rates of pay and casual loadings, maximum ordinary hours of work, annual leave, personal leave and parental leave and related entitlements.
Is there a limit on the number of hours an employee can work per week, and what does this mean for salaried staff and employees working overtime?
For employees covered by a preserved federal AWARD or a NAPSA, the hours of work guarantee in the AFPCS will not apply while that award or NAPSA applies till 27th March 2009.
Where the 38 hour week guarantee applies, employees ordinary working hours should be set at a maximum 38 hours per week (averaged over an agreed period not more than 12 months, with the averaging to commence from a specified date) with provision made for the employee to work reasonable additional hours.
Annual leave?
Annual leave is available to all employees other than casual. An employee’s entitlement to annual leave depends on the nominal hours worked by the employee, which is based on a set formula, and is credited to the employee every 4 weeks.
Personal leave? (Covers, Sick leave, carer’s leave and compassionate leave)
This paid accrued leave is accrued every 4 weeks at a rate of 1/26th of the normal hours worked by an employee during that 4 week period. Casual employees however don’t accrue paid personal leave but have the same unpaid entitlements provided to casual and full-time employees.
Parental leave?
The substantive entitlements in terms of the three types of leave are generally not affected, however some mechanical details concerning the types of leave have been added or amended.
Consistent with amendments made to the standard award provisions in 2001, casual employees are entitled to parental leave if they are engaged on a regular and systematic basis for a period of 12 months and if they have a reasonable expectation of a continuing engagement.
In Summary
If an employee, prior to 27th March, 2006 was not covered by a Federal award, certified agreement or AWA, then he or she might be covered by a preserved State agreement or a NAPSA. This employee will only be covered by a NAPSA if no preserved state agreement applies.
Apparently the AFPS will not affect businesses that prior to 27 March, 2006, entered into AWAs, federal certified agreements, or state employment agreements with their employees because the AFPCS does not apply to employees who are bound by those agreements.
In regards to enforcing the standard, this will arise from employees and unions requesting a minimum of entitlements under the Workplace Relations Act 1996.
However the Office of Workplace Services (the “OWS”) will be enforcing compliance with the AFPCS, as well as the Workplace Relations Act 1996 generally, by the use of trained inspectors.
Please note the above statements were made in some cases by the interpretation of WorkChoices and were intended to provide a basic understanding of the standard. Should you wish to examine more closely WorkChoices, contact the Office of the Employment Advocate on 1300 366 632 or visit their website

