Award modernisation: the new safety net
On 2 April 2008 Federal Employment and Workplace Relations Minister Julia Gillard, in a move that is likely to herald a new era in Australia’s industrial relations landscape, issued the award modernisation request to the Australian Industrial Relations Commission (AIRC) with little fanfare.
The role of awards in creating an effective safety net for workers in Australia was a major point of differentiation between the Coalition and Labor governments.
While the Coalition argued that statutory minimums consisting of just five conditions provided a sufficient safety net for employees, the Labor Party passionately argued that industry-specific awards consisting of 10 conditions is necessary to provide an effective safety net (on top of an expanded statutory standard that will now encompass 10 conditions instead of the previous five).
A major criticism levelled at awards is that over the years they have grown to the point where they have become unwieldy and an unfair burden for employers to try to observe in respect of their employees.
These criticisms have a great deal of merit. Awards as they currently stand are riddled with internal inconsistencies; they attempt to regulate every conceivable area of employment and are impossible for businesses to navigate without the aid of expensive legal advice.
Award modernisation aims to deal with this by paring back the size of awards to just 10 conditions. Furthermore, award modernisation requires modern awards to be expressed in plain English.
Now that the award modernisation request has been issued, the AIRC hopes to have a list of priority industries established by the end of this year. It is not surprising that industries such as hospitality, where employees are dependent on the minimum conditions stipulated by the award, will be the subject of award modernisation first. It is anticipated that the entire award modernisation process will be completed by the end of 2009 and the new modern awards will become operational from 1 January 2010.
An effective safety net is essential to protect the most vulnerable workers. However, it is equally important that employers and employees have some latitude to negotiate specific conditions which may deviate from award conditions but suit the needs of the parties. It appears that Labor has anticipated this problem too by allowing employees who earn above $100,000 the choice of being award-free.
To keep updated about the award modernisation process, go to: www.airc.gov.au.