The States refer their Powers… or do they?

23 June 2009 Topics: Workplace relations and safety

On 27 May 2009 the Federal Government introduced the Fair Work (State Referral and Consequential and Other Amendments) Bill 2009 (second transitional Bill) to the House of Representatives. The second transitional Bill has been drafted to support the implementation of the Federal Government’s new industrial relations system.

The purpose of the second transitional Bill is to assist in the creation of a uniform national workplace relations system for the private sector. The second transitional Bill provides the framework for a workplace relations system where businesses, both large and small, are covered by one national system and one set of laws. It aims to transition the remainder of the private sector employment arrangements, who stayed in the State systems after Work Choices, to the Federal system.

This transition is intended to be done through a co-operative approach from the States who will provide “text based referrals” of the State’s industrial relations power to the Federal system. What this means is that State legislation will be created to specify what sectors within each State will, in the near future, look to the Fair Work Act 2009 (Cth) for their workplace relations laws.

Due to their hesitation to hand over the industrial relations power in full, the States will still be able to claw back this power in the future if amendments are made to the legislation with which they don’t agree.

Unlike the other States, Victoria has announced that it will refer both private and public sector employment arrangements to the Federal system. This move is not surprising considering Victoria has been operating under the Federal System since 1996 when Premier Kennett provided a full referral of powers to the Federal Government.

New South Wales and Queensland are not so bold; their respective Ministers have announced that they will only refer to the Federal System the private sector employment arrangements that are not already caught under the Federal System. This will benefit employers in the States where there is uncertainty about which workplace relations system applies, or who are competing with other businesses who are clearly covered by the Federal system.  It is anticipated that on 1 July 2009, Victoria will continue to operate in the Federal system.

Western Australia is taking a different approach, announcing that it will not be referring any of its IR powers, instead conducting an independent review into its own industrial relations system. This review will consider opportunities for harmonisation with the Federal IR laws, but only to the extent that the harmonisation would be appropriate to the State’s unique industrial relations system.

In addition to the amendments itemised above, further amendments have been put before Parliament in relation to the first of the transitional provisions which were released in late April 2009 which deal with the operation of old agreement under the Fair Work Act 2009. Of particular interest are the amendments relating to the demarcation provisions for unions and the potential phasing in of Modern Award terms.

Once this legislation has been finalised we will provide a detailed briefing on what employers will need to do in order to be prepared to move to the new system on 1 July 2009.

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