ACTU and AiG at odds on role of modern awrd transition period
June 3rd, 2009
The ACTU and AiG are at loggerheads over the question of whether transitional provisions in modern awards should be used to protect employees from being disadvantaged by the modernisation process.
In submission to the AIRC, the AiG says the transitional provisions, which allow changes wrought by modern awards to be phased-in over a five-year period, should be focused on helping employers cope with increased costs.
Where employees are disadvantaged, the primary mechanism for dealing with that should be through the Fair Work Act’s take home pay orders, it says.
It continues that, even if transitional modern award provisions are used to cushion the impact of change on employees – a likely prospect, given that the Government urged the Commission to do just that in its submission – they should have a “limited life” and be directed only to preserving entitlements or phasing-in cuts to benefits.
The employer group’s other suggestions include:
- Transitional provisions should only be used to cushion the impact of changes to “significant remuneration-related entitlements”;
- All employees covered by a modern award should receive the same fixed percentage increases as part of a phase-in of entitlements, regardless of the award that previously covered them; and
- For industries identified as being vulnerable to “substantial economic hardship”, the Commission should consider special transitional provisions that would suspend the application of onerous aspects of the modern award for two years.
The submission also sets out a number of model transition clauses it recommends the Commission adopt.
Meanwhile, the ACTU in its submission argues the award modernisation process, rather than take home pay orders, should be the primary means of ensuring employees are not disadvantaged.
It “strongly rejects” the proposal that take home pay orders remove the need for transitional arrangements in modern awards, saying they are not sufficient to safeguard employee interests.
The union peak body points out that the Government has said the scope for take home pay orders is “tightly constrained,” with relevant limitations including:
- Orders will be only available for employees covered by the modern award when it commences operation and that remain in the same or a comparable position after January 1 next year;
- Employees must have already suffered an actual reduction in take home pay before applying for an order; and
- Affected employees may not be able to obtain more than one order, even where circumstances may change that require a new order.
Further, it urges the Commission to consider that employers will derive significant economic benefits from award modernisation due to the reduction in the complexity of the safety net and removal of duplication and red tape in the move to a federal system.
The ACTU also says the evidence available to the Commission on the costs to employers of award modernisation is “simply not available” and that the consultations on transitional provisions might not be an adequate forum to scrutinise the costs impacts of particular modern awards.
“Employer groups have made a range of claims as to the costs to employers of modern awards, which have received considerable media attention. In our submission many of these claims are spurious and misleading,” it says.
www.wo.gov.au Tuesday 2nd June 2009