What major changes should an employer make to their operations now that we have the Fair Work Act?

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The much debated new legislation is now with us.

As with the containment of terrorism, we have had to endure a lot of political rhetoric associated with this “revolution”. We even have a hotline where you can ring up with a “tip”. If you see an employer acting suspiciously, you should ring up. Our way of life may depend on it. Maybe if
the employer is wearing an unusual head covering, a phone call in the national interest is all the more important.

The usual suspects from the “dispute industry” have had their say. Life will apparently never be the same because union officials can come to a place of business on a minimum of 24 hours notice (and maximum of 14 days notice) and address the staff (or more exactly, those who want
to be addressed), in an assigned room, at lunch time. Nothing may be done to either encourage or discourage staff from attending during said lunch time. For most workplaces, though, this “change” is completely irrelevant.

For many years, the reality has been that the only workplaces that actually have “industrial relations” (either good or bad) with unions, are those where the employer positively chooses to have them. The Opposition tell us that the new legislation will cost thousands of jobs. The Government tell us that many wrongs have now been righted. Let’s look at some facts, and spot the differences.

Workchoices is gone

This is the main theme. Workchoices enabled collective agreements and registered individual agreements which undercut award conditions.
During the period of the operation of this function – March 2006 to May 2007, some did. Most did not. It was not readily seen by most employers, during the boom that was then going on, how cutting pay and conditions was a prudent way to attract and retain staff.

Then, Workchoices was killed. Not by the ACTU, not by Julia Gillard, but by John Howard. In May 2007, when panicked by the community reaction to legislation which was specifically intended to make his very constituency (“the Howard battlers”) poorer, he introduced the
“Fairness Test”. This “new” test was in all practical ways, exactly the same as the “NoDisadvantage Test”, which had been abolished just 14 months before, when Workchoices commenced. It prevented awards being undercut. John Howard, workers’ saviour.

The John Howard “Fairness test” is for all intents and purposes, identical to the Julia Gillard “Better Off Overall “ test. That is, you can’t use registered agreements to undercut awards. Except for that “14 month attack” by the Liberal party on the very people who kept electing them, you never could. The non-union agreement regime was first introduced by the Keating Government in 1994, with a “No Disadvantage” test, and it has been in place ever since, except for that period of folly.

So, the new Act continues the “post-Workchoices” system introduced (albeit in response to opinion polls ) by John Howard. Collective agreements are still going to be largely non-union. AWAs have gone, but personal “flexibility agreements” have replaced them. Really, not much has changed.

David Jones Matter- Serious Exaggeration

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A major issue has engulfed David Jones Ltd this week. The former Chief Executive admitted aggravated
impropriety (which has been reported in prurient detail by the press). It is also alleged that middle management were warned of his conduct, but did nothing about it. It is further alleged that non-executive board members are responsible for something they did not know about.

This is indeed serious.

It would be a pity, though, if this publicity led Companies to despair. It would do no one any good if employers began to think that they were going to be penalised millions no matter what they did about devising policies and cultures aimed at preventing sexual harassment and other abuses. Companies should not worry, though. If this matter goes to a hearing, the chances of the Applicant getting any more than
about $20,000 plus economic loss are all but non-existent.

On the facts – none of which have been “hidden”, you might say – the victim would be awarded by the Federal Court of Australia between $15,000 and $25,000. That is based on the consistent practice of the courts and tribunals in this area since they began, back in the seventies. There has been no deviation.

If she had been rendered unemployed or incapacitated by the offensive conduct (and we have had cases where that has happened) she would also receive damages for economic loss. In some cases that has meant several years‟ worth of remuneration.

An example is Nikolich v Goldman Sachs, where the person was so injured by what had happened in breach of health and safety, he could not work. In other words, in some extreme cases, you could add a few hundred thousand to the $15 to 25,000. In the David Jones case, the victim has claimed $37million. It is outrageous nonsense to suggest that the Federal Court would grant $37million to a person who is not seriously injured. They are definitely a victim and definitely and understandably traumatised, but not seriously injured. In fact the victim herself
convened a press conference to declare that she did not want money, and that once awarded it, would donate it to charity.

What is the basis of this claim?

The application claims breach of the Trade Practices Act (by the corporation) in so far as the obligations
under that Act have been breached. It is said that there was „deceptive and misleading conduct‟ in leading the Applicant to believe these abuses would not occur. That is followed up by the same allegation against individuals (identical words) under the State Fair Trading Act. If that can be proved, then the Applicant will get damages – ie, loss of money.

What is the loss of money? It is apparently very small. It will be the loss of earnings arising from her having to leave the employment. It would be for the period which elapses until she gets another job. She has a “duty to mitigate”, so she must show that she has another job, or tried to get one, or that she is prevented by illness from doing so.