For employers who are not covered by the Workplace Relation system (e.g. employers who are not constitutional corporations) their current awards will continue as ‘transitional’ awards. Transitional awards operate up to five years from 27 March 2006. Employers covered by transitional awards have five years to decide whether to remain in the federal system (e.g. by incorporating) or move to a state system. Employers can choose to ‘opt out’ of the transitional system, for example, by making a state agreement.
The Standard does not apply to transitional awards. As a result wages, classifications, annual leave, personal/carer’s leave and parental leave remain in transitional awards.
A transitional award may include allowable transitional award matters and other permitted terms.
· These reflect the matters allowed to be included in awards generally (with necessary changes – e.g. annual leave, personal/carer’s leave and parental leave are allowable, which reflects the fact that the Standard does not apply to transitional employees).
· As with awards generally, there are some changes to the pre-reform list of allowable matters. Terms in awards that are no longer covered by the list of allowable matters cease to be enforceable from commencement.
Allowable transitional award matters are matters about the following:
· classifications of transitional employees and skill-based career paths;
· ordinary time hours of work, rest breaks, notice periods and variations to working hours;
· rates of pay generally (such as hourly rates and annualised salaries), rates of pay for juniors and employees to whom training arrangements apply, and rates of pay for employees under the supported wage system;
· incentive based payments, piece rates and bonuses;
· annual leave and annual leave loadings;
· personal/carer’s leave;
· ceremonial leave;
· leave for the purpose of seeking other employment after notice of termination;
· parental leave, including maternity leave and adoption leave;
· state or territory public holidays, entitlements of employees to payment in respect of those days, and days to be substituted for public holidays;
· monetary allowances (for expenses, responsibilities or skills not included in rates of pay, or for the performance of particular tasks, or work under certain conditions or locations);
· loadings for working overtime or for shift work;
· penalty rates;
· redundancy pay by an employer of 15 or more employees;
· stand-down provisions;
· dispute settling procedures;
· type of employment, such as full-time employment, casual employment, regular part-time employment and shift work; and
· pay and conditions for outworkers to the extent necessary to ensure that their overall conditions of employment are fair and reasonable.
Other terms may be permitted in a transitional award include:
· preserved transitional award terms;
· facilitative provisions;
· incidental and machinery provisions
· anti-discrimination clauses; and
· those providing for the appointment of boards of reference.
Preserved transitional award terms are those that relate to long service leave, notice of termination, jury service and superannuation. A preserved award term about superannuation ceases to have effect at the end of 30 June 2008 (when specific superannuation legislation will apply).
Incidental terms are those that are incidental to an allowable matter and essential for the practical operation of a particular term. Machinery provisions include matters dealing with (for example) the commencement, definitions, and arrangement of a transitional award.
Under the Workplace Relation system the following are expressly not allowable transitional award matters:
· rights of an organisation to participate in a dispute settling procedure (unless the organisation is the representative of the employer’s or employee’s choice);
· conversion from casual employment to another type of employment;
· restrictions on the range or duration of training arrangements;
· union picnic days;
· tallies within the meat industry;
· dispute resolution training leave;
· trade union training leave.
Other terms that are taken not to be allowable transitional award matters are terms:
· involving discrimination and preference that would contravene the Freedom of Association provisions of the Act;
· that authorise an officer of an association to enter, inspect or interview employees on an employers premises; and
· about enterprise flexibility provisions.
A term about a non-allowable matter is unenforceable after reform commencement.
The AIRC has power to prevent and settle industrial disputes about allowable award matters by conciliation. The AIRC is able to vary monetary entitlements, including wages in transitional awards, based on the wage setting decisions of the Fair Pay Commission. However the AIRC cannot make new transitional awards. Under the Workplace Relation system, wages are set by the Fair Pay Commission.
A transitional award ceases to have effect at the end of 5 years after reform commencement.
The AIRC may revoke a transitional award if it is satisfied that the award is obsolete or no longer capable of operating and it would not be contrary to the public interest to revoke the award.