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Fair Work Amendment (Transfer of Business) Bill 2012
Introduced into the House of
Representatives on 11 October 2012
Portfolio: Education, Employment and Workplace
Relations
1.2
This bill seeks to protect employee entitlements in circumstances where
there is a transfer of business from a non-national system employer that is a state
public sector employer (old employer) to a national system employer. A transfer
of business involves the transfer of employment of one or more employees of the
old employer to the new employer.
1.3
This bill will amend the Fair Work Act 2009 (FW Act) to:
- provide for the transfer of employees’ terms and conditions of
employment from an old employer to a national system employer where there is a
connection between the two employers. This will be achieved through the
creation of a new federal instrument that copies the transferring employees’
existing terms and conditions of employment in a relevant state award or
agreement;
- enable Fair Work Australia (FWA) to make orders that modify the general
effect of the transfer of business rules in these circumstances. In
particular, FWA will be able to make orders regarding the coverage of certain
instruments and their application to new employers; and
- provide for the interaction between the transfer of employees’ terms and
conditions of employment and the FW Act, including the National Employment
Standards, and other necessary transitional and technical provisions.
1.4
The statement of compatibility explains in helpful detail how the bill
engages and promotes the right to work and rights in work in articles 6 and 7
of the International Covenant on Economic, Social and Cultural Rights (ICESCR),
and the right to freedom of association in article 22 of the International
Covenant on Civil and Political Rights (ICCPR) and the corollary right to join
trade unions in article 8 of ICESCR.
Right to work and rights in work
1.5
The statement of compatibility states that the bill promotes the rights
to work and to just and favourable working conditions in articles 6 and 7 of
ICESCR as it ‘extends the FW Act’s protection of an employee’s entitlements in
a transfer of business situation to also cover transfers that occur between
non-national system employers and national system employers’. In particular,
the bill ensures that:
- the award or agreement that governed a transferring employee’s terms and
conditions with the old employer transfers with them to continue to cover their
employment with the new employer;
- there is no break in service between the old and new employer, meaning
that entitlements determined by an employee’s length of service with an
employer (e.g. annual leave) encompass both periods of service; and
- the National Employment Standards (NES) applies to transferring state
public sector employees as a safety net to guarantee that where the terms and
conditions in the transferring instrument(s) are less advantageous than those
available under the NES, the transferring employee has the benefit of the NES.
Freedom of association and right to join trade unions
1.6
The statement of compatibility notes that the bill also modifies the
operation of the Fair Work (Registered Organisations) Act 2009
(Registered Organisations Act)[1]
to ensure that an employee association that is registered under relevant state
legislation and which represents non-national system employees can continue to
represent those employees in the federal system (subject to the employees’
ongoing eligibility for membership of the association), for a transitional
period, to ensure that those employees are not deprived of the right to
representation.
1.7
Whether that particular state-registered employee association will
continue to represent employees in the federal system beyond the transitional
period will depend on whether it makes a successful application to become a
recognised state-registered association under Schedule 2 of the Registered
Organisations Act. A state-registered association can only maintain ongoing
recognition in the federal system if it can be shown that it does not have a
‘federal counterpart’ (see Registered Organisations Act s 9A) and is registered
under a prescribed state law (Registered Organisations Act clause 1 of Schedule
2). The statement states that this is intended to prevent costly and disruptive
demarcation disputes.
1.8
The statement explains that the bill promotes the right to freedom of
association in article 22 of ICCPR and the right to join trade unions in
article 8 of ICESCR on the following basis:
Currently, there is no
ability for a State public sector employee who transfers to the national system
to remain represented by their State employee association. In this way, the
Bill promotes the rights outlined above through establishing a framework under
which a State public sector employee who transfers to employment with a
national system employer may, conditional upon certain requirements being met
by the State employee association, remain represented by the State employee
organisation, at least for a transitional period.
1.9
The committee considers that the proposed measures in the bill appear
to be beneficial and are unlikely to raise any human rights concerns.
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