Labor’s plans for IR

The new Labor Government has announced that the first piece of legislation to be introduced during the February sitting of Parliament will be the new industrial relations (IR) system. Although much was made of the difference between the Labor Party and Coalition when it came to the question of IR, it is important to understand the precise nature of the similarity and the points of difference between the two.

In three important areas, Labor’s new industrial relations system will not significantly depart from the current system. Firstly, Labor will retain the federal nature of the system and the state IR systems will inevitably cease to exist (except in respect of the state public sector and local government employees). The Labor system will also preserve many of the Coalition changes which have prescribed a diminished role for unions in the workplace (for example, right of entry). Finally, it is important to recognise that the majority of Labor’s changes will not come into force until January 2010. Rudd is indeed the epitome of piecemeal reform.

One of the major changes we can expect in the February legislation is the abolition of the controversial Australian Workplace Agreements (AWAs). However, even with this change, the Labor reforms will allow employers who currently utilise AWAs to continue making Individual Transitional Employment Agreements (ITEAs) until 2010. The new ITEAs, however, will not be able to override an applicable Award or collective agreement like the current system of AWAs and must have a nominal expiry date of 31 December 2009.

The second most dramatic change we will see in this legislation is an expanded Standard which will apply to all employees immediately. The current Standard makes provisions for things like annual leave and sick leave, but Labor’s new Standard will contain 10 basic terms and conditions that no employer will be able to derogate from. Contained in this new Standard will be an entitlement to redundancy pay and the right to request up to two years’ parental leave, with an employer only able to knock back such a request on “reasonable” grounds.

Predictions about the nature of the February legislation come from policy documents released by the Labor Party prior to the elections. No one has seen the final legislation just yet. The Bill which ends up getting passed will depend upon the amount of pressure the unions and business can bring to bear upon the Labor party and the Australian Senate’s willingness to acknowledge the Labor mandate to IR reform.