Australian Regulatory Compliance Review

Fair Work Information Statement

From 1 January 2010, all employers covered by the national workplace relations system have an obligation to give each new employee a Fair Work Information Statement before, or as soon as possible after, the employee starts employment.

The right for new employees to receive the Statement is one of 10 minimum standards in the National Employment Standards (NES) that apply to employment of employees. Together with modern awards, the NES is a key feature of the national workplace relations system from 1 January 2010.

The Statement contains information about:

• the National Employment Standards (NES)
• the effect on an employee’s NES entitlements when there is a transfer of business
• modern awards
• agreement making under the Fair Work Act 2009
• individual flexibility arrangements
• the right to freedom of association
• termination of employment
• right of entry (including the protection of personal information by privacy laws)
• the role of the Fair Work Ombudsman and Fair Work Australia

Fair Work Act amendment passed

The Fair Work Amendment (State Referrals and Other Measures) Bill 2009 has been passed by both Houses of Parliament .

Assent is expected before commencement on 1 January 2010.

The amendment will extend coverage of the Fair Work Act to unincorporated private sector businesses, charities and State Government bodies.

Extension of scope of Fair Work Act update

The Fair Work Amendment (State Referrals and Other Measures) Bill 2009 was introduced into Parliament in October but as at 27 November, the Bill is waiting for Senate approval.

The Bill will extend coverage of the Fair Work Act to unincorporated private sector businesses, charities and State Government bodies.

However it is reliant on referral of powers laws from the States.

Superannuation clearing house service for small business

The Minister for Superannuation, Chris Bowen MP, and Minister for Small Business, Craig Emerson MP, have announced that the Government will deliver a free superannuation clearing house service for small business through Medicare Australia.

The clearing house service will be available for small businesses with less than 20 employees from July 2010.

Eligible small businesses will register for the service on-line from May 2010 and thereafter their superannuation contributions will be paid to a single location (the clearing house) which will forward them on to the nominated superannuation funds.

Small businesses that choose to use the clearing house service will have their legal obligation to make superannuation contributions discharged when payment of the correct amount is made to the clearing house.

Employers will also be able to pass on choice of fund nominations to the clearing house for processing.

Medicare Australia will develop an online system for registration and on-going payments, with payments initially being made via electronic funds transfer (EFT).

Employee share scheme taxation bills introduced

The Government has introduced into Parliament the Tax Laws Amendment (2009 Budget Measures No. 2) Bill 2009 and the Income Tax (TFN Withholding Tax (ESS)) Bill 2009 to reform the taxation of employee share schemes.(Background here)

When passed, the legislation (which will apply from 1 July 2009) will assess all discounts on shares and rights provided under an employee share scheme in the income year in which the shares and rights are acquired

Changes since the exposure draft include:

• widening the exposure draft refund provisions to ensure that a refund will not be denied when employee share scheme benefits are forfeited as a result of leaving employment;
• including additional guidance and examples of the real risk of forfeiture test, including when forfeiture conditions relating to retirement would constitute a real risk;
• providing transitional arrangements for shares and rights acquired before 1 July 2009;
• adjusting the exposure draft provisions related to salary sacrifice arrangements to make it administratively easier to offer complex schemes involving both shares or rights with a real risk of forfeiture, and salary sacrifice arrangements;
• exempting employee share trusts from capital gains tax over shares acquired to satisfy the exercise of rights provided under an employee share scheme; and
• amending certain tests in the exposure draft package, such as the tests requiring schemes to be offered to a broad cross-section of employees, to make the rules easier to comply with.

Tax on employee share scheme benefits cannot be deferred beyond the time when an employee ceases employment with their employer.

The Assistant Treasurer has previously asked the Board of Taxation to consider two further issues raised in consultation:

• how to best determine the market value of employee share scheme benefits; and
• whether shares and rights under an employee share scheme at a start-up, R&D or speculative focused company should have separate tax deferral arrangements, despite not being subject to a real risk of forfeiture.

The Board of Taxation will report their findings in relation to these issues to the Government by February next year.

Draft model OHS Act released for comment

The Workplace Relations Ministers' Council through Safe Work Australia has released the draft model Occupational Health and Safety Act and administrative regulations for public comment until 9 November 2009.

The new occupational health and safety reform agenda aims to harmonise OHS legislation across Australia.

It is intended that all jurisdictions will enact model OHS Act and model regulations and complete all related transitional arrangements by December 2011.

Stage 3 award modernisation

The Award Modernisation Full Bench of the Australian Industrial Relations Commission has issued a decision and the Stage 3 modern awards

Disability Discrimination amendment

ComLaw has issued an updated consolidated Disability Discrimination Act 1992 containing recent amendments.

Key amendments to the Disability Discrimination Act are those that:

• make explicit that refusal to make reasonable adjustments for people with disability may also amount to discrimination
• make the defence of unjustifiable hardship available in relation to all unlawful discrimination on the ground of disability, except harassment and victimization
• clarify matters to be considered when determining unjustifiable hardship
• clarify that the onus of proving unjustifiable hardship falls on the person claiming it
• make clear that the definition of disability includes genetic predisposition to a disability and behaviour that is a symptom or manifestation of a disability
• replace the 'proportionality test‘ in the definition of indirect discrimination with the requirement to prove that the condition or requirement imposed has the effect of disadvantaging people with the disability of the aggrieved person
• shift the onus of proving the reasonableness of a requirement or condition in the context of indirect discrimination from the person with disability to the responden

Responding to sexual harassment claims

In Poniatowska v Hickinbotham [2009] FCA 680 the Federal Court found an employer discriminated against Ms Poniatowska on the ground of her sex, and contravened s 14(2)(c) of the Sexual Discrimination Act by so discriminating against her by dismissing her. The judge ordered damages of $463,000 calculated as follows:

• past and the future disadvantage for pain and suffering : $90,000
• loss of earning capacity $200,000
• future loss of earning capacity :$140,000
• future medical expenses: $3000
• Interest: $30,000

The significant facts (besides the actual finding of sexual harassment by a co-employee) were the employer's response to the employee's complaints:

In my judgment, Ms Poniatowska was not dismissed for the reasons stated in the termination letter. I also find, for the reasons indicated, that none of the first warning letter, the second warning letter, the third warning letter or the suspension letter set out accurately matters about which her employer was satisfied that she had conducted herself in her employment so as to warrant the giving of those letters. Put bluntly, I find that none of those warning letters, or the suspension or termination of her employment, were for her poor work performance.

I find that there was a different, but consistent, motivation for those communications. It was to set the scene for the termination of, and ultimately to terminate, Ms Poniatowska’s employment because she had, over a period of time, revealed by what she had done in relation to the May 2005 allegations, the June 2005 allegations and the Lotito allegations, a sensitivity to the conduct of the type to which those allegations related.

Fair Work Act unfair dismissal provisions commence 1 July

The Fair Work Act unfair dismissal provisions will commence on 1 July 2009.

The Act defines a small business employer for unfair dismissal purposes as being one who employs:

• until 1 January 2011, less than 15 full time equivalent employees; and
• after 1 January 2011, less than 15 employees by individual head count.

Employees of a small business will only be able to claim for unfair dismissal after they have been employed for at least 12 months. To dismiss someone fairly after 12 months the employer will have to comply with a Fair Dismissal Code for Small Business.

Small business employers will also be exempted from the redundancy pay obligations. For the purpose of this redundancy pay exemption, the 15-employee test (calculated on an individual head count basis) has been retained.