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2010-2011-2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
FAIR WORK AMENDMENT (TRANSFER OF BUSINESS) BILL 2012
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be Moved on Behalf of the Government
(Circulated by authority of the Minister for Employment and Workplace Relations, the
Honourable William Shorten MP)
Outline
AMENDMENTS TO THE FAIR WORK AMENDMENT (TRANSFER OF
BUSINESS) BILL 2012
OUTLINE
The Government will move amendments to the Fair Work Amendment (Transfer of
Business) Bill 2012 (the Bill) to ensure that the provisions better align with the existing
transfer of business provisions in Part 2-8 of the Fair Work Act 2009 (FW Act) and operate as
intended.
Fair Work Australia orders
The Government proposes amendments to ensure that Fair Work Australia (FWA) can hear
applications and make orders in anticipation of there being a transfer of business, including
before a transferring employee's employment is terminated by the first employer. These
amendments will more closely align with similar provisions relating to FWA orders in
Part 2-8 of the FW Act. Similar to orders in Part 2-8 of the FW Act, orders in relation to
transferring employees take effect no earlier than the time that the employee is re-employed
by the new employer and no earlier than the time that the employee starts to perform the
transferring work for the new employer in relation to non-transferring employees.
Amendments are also proposed to clarify that FWA can make orders relating to multiple
employees, rather than being required to make one order per employee. This approach is
consistent with Part 2-8 of the FW Act.
Application and coverage of the Bill
The Government proposes amendments to clarify that local government employers are not
included in the coverage of the Bill. These amendments reflect the intended coverage and
application of the Bill.
Consistency with Part 2-8 treatment
An amendment is also proposed to ensure that the same rules apply to transfers of business
under proposed Part 6-3A as apply to transfers of business under Part 2-8 of the FW Act in
relation to the General Protections.
Financial Impact Statement
Nil
Senate page 1 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
Human rights
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Amendments to the Fair Work Amendment (Transfer of Business) Bill 2012
These amendments are compatible with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Overview
The Bill will amend the FW Act to protect employee entitlements in circumstances where
there is a transfer of business from an old State employer to a national system employer.
Amendments to the Bill will ensure that the provisions operate as intended, and better align
with the existing treatment of transfer of business in the FW Act (principally contained in
Part 2-8 of the FW Act) by:
· making it clearer that FWA can make orders in anticipation of there being a transfer of
business;
· ensuring that consolidation orders and orders about employee coverage made by FWA
cannot have retrospective operation;
· clarifying that FWA can make orders relating to multiple employees, rather than being
required to make one order per employee;
· ensuring that the same rules apply to transfers of business under proposed Part 6-3A as
apply to transfers of business under Part 2-8 of the FW Act in relation to the General
Protections; and
· clarifying that local government employers are not included in the coverage of the Bill,
reflecting the intended coverage and application of the Bill.
Human rights implications
The amendments contained in the Bill that are of a technical nature do not engage any of the
rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011.
Some amendments engage with the right to work and rights in work including the right to just
and favourable conditions of work in articles 6(1) and 7 of the International Covenant on
Economic, Social and Cultural Rights (ICESCR).
The Right to Work and Rights in Work
Article 6(1) of the ICESCR recognises the right to work and obliges State Parties to take
appropriate steps to safeguard this right. The United Nations Committee on Economic,
Social and Cultural Rights (the UN Committee) has stated that the right to work in article
6(1) of ICESCR encompasses the need to provide the worker with just and favourable
conditions of work. Article 7 of the ICESCR sets out the right to just and favourable
Senate page 2 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
Human rights
conditions of work, including remuneration which provides all workers, as a minimum, with
fair wages and equal remuneration for work of equal value without distinction of any kind.
The Bill engages with and promotes the right to work and rights in work including the right
to just and favourable conditions of work in articles 6(1) and 7 of the ICESCR. The FW Act
promotes the right to just and favourable working conditions by preserving employee
entitlements where there is a transfer of business between two national system employers.
The Bill extends the FW Act's protection of employee entitlements in a transfer of business
situation to also cover transfers that occur from certain non-national workplace relations
system employers to national workplace relations system employers. Although the
application and coverage of the Bill would not further extend to transfers of business from a
local government employer, former local government employees who move into the national
workplace relations system otherwise have the benefit of the protections, rights and
entitlements of the FW Act.
The effect of one amendment would be to ensure that the same rules apply to transfers of
business under proposed Part 6-3A as apply to transfers of business under Part 2-8 of the FW
Act in relation to the provisions regarding the General Protections, including the exemptions
contained in those provisions. Importantly, when a national workplace relations system
employer employs a transferring employee and a transfer of business occurs, the transferring
employee is entitled to the benefit of his or her previous industrial instruments and accrued
entitlements.
Conclusion
To the extent that the amendments engage human rights, they do so in a manner that is
consistent with existing provisions in the FW Act.
Minister for Employment and Workplace Relations,
the Honourable William Shorten MP
Senate page 3 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
Notes on Amendments
NOTES ON AMENDMENTS
In these notes on amendments, the following abbreviations are used:
FW Act Fair Work Act 2009
FWA Fair Work Australia
the Bill Fair Work Amendment (Transfer of Business) Bill 2012
Transitional Act Fair Work (Transitional Provisions and Consequential Amendments)
Act 2009
Senate page 4 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
Amendment 1 - Schedule 1, item 1, page 4 (lines 2 and 3)
1. The amendment to new section 768AB of the Bill made by this item provides that the
terms employee and employer in new Part 6-3A have their ordinary meaning. The
amendment will operate with other amendments to enable FWA to make orders where there
is likely to be a transfer of business.
Amendment 2 - Schedule 1, item 1, page 5 (line 22)
2. This technical amendment to new subsection 768AE(1) changes a cross-reference to
new paragraph 768AD(1)(a) to make it clearer that an employee becomes a transferring
employee in relation to a transfer of business at the time that his or her employment with the
old State employer is terminated.
Amendment 3 - Schedule 1, item 1, page 7 (lines 7 to 20)
Amendment 4 - Schedule 1, item 1, page 8 (line 21) to page 9 (line 3)
3. These amendments to new subsections 768AI(1) and 768AK(1) make clear that
copied State instrument(s) come into operation in relation to a transferring employee
immediately after the termination time of the transferring employee.
Amendment 5 - Schedule 1, item 1, page 20 (before line 8)
Amendment 6 - Schedule 1, item 1, page 20 (line 31) to page 21 (line 34)
Amendment 7 - Schedule 1, item 1, page 22 (lines 15 to 20)
Amendment 8 - Schedule 1, item 1, page 23 (after line 13)
Amendment 9 - Schedule 1, item 1, page 23 (line 27) to page 24 (line 30)
4. This group of amendments relate to the provisions of the Bill that enable FWA to:
· vary copied State instruments (new Division 5 of new Part 6-3A of the Bill); and
· make orders about the coverage of copied State instruments and other instruments (new
Division 6 of new Part 6-3A of the Bill).
5. Broadly, the amendments are intended to enable FWA to hear applications and make
orders where there is likely to be a transfer of business, reflecting similar provisions in
Part 2-8 of the FW Act.
6. Amendment 5 inserts new subsection 768AX(1A) to make clear that new section
768AX, which deals with the variation of copied State instruments, applies if there is or is
likely to be a transfer of business.
7. Amendment 6 omits and substitutes new subsections 768AX(2) and 768AX(3) which
deal with who may apply to FWA for a variation of a copied State instrument and the matters
that FWA must take into account in deciding whether to vary a copied State instrument.
Senate page 5 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
8. The effect of this amendment is to enable applications to be made, heard, and decided,
and for appropriate matters to be considered where there is or is likely to be a transfer of
business.
9. Amendment 7 omits subsection 768AX(6) and substitutes new subsections 768AX(6)
and 768AX(7).
· New subsection 768AX(6) ensures that a variation can be made where there is or is likely
to be a transfer of business, which more closely aligns with provisions in Part 2-8 of the
FW Act.
· New subsection 768AX(7) changes the way that FWA's decision to vary an instrument is
described to better align with the terminology in Part 2-8 of the FW Act. It also removes
an unnecessary reference to orders not taking effect in relation to a transferring employee
before the employee's re-employment time, when the instrument starts to operate in
relation to the employee. This was unnecessary because a variation to an instrument
cannot take effect in relation to a particular employee until such time as the instrument
covers that employee. For example, a copied State instrument can only cover a
transferring employee from the time that the employee is re-employed by the new
employer (see new section 768AN).
10. Amendment 8 inserts new section 768AZA in Division 6 of new Part 6-3A. The
amendment is intended to make clear that FWA can make orders where there is or is likely to
be a transfer of business, reflecting similar provisions in Part 2-8 of the FW Act.
11. Amendment 9 omits and substitutes new subsections 768BA(2), 768BA(3) and
768BA(4). This amendment is intended to more closely align the new provisions with
similar provisions in Part 2-8 of the FW Act and ensures that applications can be made,
heard, and decided, and for appropriate matters to be considered where there is or is likely to
be a transfer of business.
12. New subsection 768BA(4) would align the commencement of an order made under
new subsection 768BA(1) with similar provisions in Part 2-8 of the FW Act. An order must
not come into operation in relation to a particular transferring employee before the later of:
· the transferring employee's re-employment time; or
· the day on which the order is made.
Amendment 10 - Schedule 1, item 1, page 25 (line 17) to page 30 (line 15)
13. This amendment makes changes to Division 7 of the Bill. This Division enables
FWA to effectively consolidate various workplace instruments that may apply at a
workplace.
14. New subsection 768BCA and amendments to new subsections 768BD(2) and
768BD(3) and new subsections 768BG(3) and 768BG(4) make it clear that FWA can make
consolidation orders where there is or is likely to be a transfer of business. The effect of
these changes is to enable applications to be made, heard, and decided, and for appropriate
matters to be considered where there is or is likely to be a transfer of business.
Senate page 6 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
15. These changes are intended to more closely align the provisions in this Division with
similar provisions in Part 2-8 of the FW Act.
16. This amendment also clarifies that FWA can make one order relating to multiple
employees (new subsection 768BD(1) in respect of transferring employees and new
subsection 768BG(1) in respect of non-transferring employees). This is also highlighted in
changes to the Guide to the Division and consequential changes are made to new sections
768BE, 768BF, 768BH and 768BI.
17. The amendment also modifies new subsection 768BE(1) which deals with the
application and coverage of consolidation orders to transferring employees. The subsection
requires a consolidation order to specify, among other things, when a copied State instrument
for an employee applies to and covers other transferring employees.
18. It is intended that FWA be able to make consolidation orders in relation to both
copied State awards and copied State agreements. For example, if FWA were to order that
both the copied State award and copied State agreement for an employee were to operate in
relation to other transferring employees then subsection 768BE(2) will have the effect that,
once those consolidation orders come into operation, both copied State awards and copied
State agreements for the other transferring employees cease to operate.
19. Changes to new subsections 768BD(4) and 768BG(5) align the commencement of
orders made under this Division in relation to transferring and non-transferring employees
with similar provisions in Part 2-8 of the FW Act. This means that orders in relation to
transferring employees under new section 768BD cannot come into operation before the day
on which the order is made, or the time that the transferring employee is re-employed by the
new employer, whichever is the later. Similarly, orders in relation to non-transferring
employees under new section 768BG cannot come into operation before the day that the
order is made, or the time that the employee starts to perform the transferring work for the
new employer, whichever is the later.
Amendment 11 - Schedule 1, item 1, page 43 (table item 3, column 1)
20. This technical amendment amends table item 3 in new subsection 768BY(2) that
incorrectly translated the notes in item 13 of Schedule 3A of the Transitional Act in relation
to copied State instruments. These notes refer to other items in Schedule 3A of the
Transitional Act that have not been translated in new subsection 768BY(2) and are not
intended to have any application in relation to copied State instruments.
Amendment 12 - Schedule 1, item 3, page 47 (lines 10 to 12)
21. This technical amendment changes references in section 9A of the FW Act from
Schedule 1 to (the) Schedules. This change is consequential on amendment 21, which creates
a new Schedule 2 rather than a new Part to Schedule 1.
Amendment 13 - Schedule 1, items 14 and 15, page 48 (line 22) to page 49 (line 2)
22. This amendment omits two signpost definitions that would have been inserted into
section 12 of the FW Act. This amendment is consequential on amendment 10.
Senate page 7 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
Amendment 15 - Schedule 1, item 24, page 50 (line 12)
Amendment 16 - Schedule 1, item 25, page 50 (line 16)
23. Amendments 15 and 16 change cross-references in signpost definitions of original
State agreement and original State award that would be inserted into section 12 of the
FW Act by the Bill. These amendments are consequential on amendments 3 and 4.
Amendment 14 - Schedule 1, page 49 (after line 14)
Amendment 17 - Schedule 1, item 34, page 51 (after line 24)
Amendment 18 - Schedule 1, item 35, page 52 (lines 14 and 15)
24. Amendment 14 inserts definitions of local government employee and local
government employer into section 12 of the FW Act to make clear that, for the purposes of
new Part 6-3A, they have the same meaning as they have in subsection 30K(1) of the
FW Act.
25. Amendments 17 and 18 would amend items 34 and 35 of Schedule 1 of the Bill which
insert signpost definitions of State public sector employee and State public sector employer
into section 12 of the FW Act. The amendments clarify that local government employers are
not included in the coverage of the Bill.
Amendment 19 - Schedule 1, page 54 (after line 31)
26. This amendment amends subsection 341(5) of the FW Act to make clear that the same
rules apply to transfers of business under proposed Part 6-3A as apply to transfers of business
under Part 2-8 of the FW Act in relation to the General Protections.
Amendment 20 - Schedule 1, page 56 (after line 8)
Amendment 21 - Schedule 1, item 67, page 56 (line 22) to page 57 (line 16)
27. Amendment 20 is a technical amendment which repeals and substitutes section 795A
of the FW Act, consequential on amendment 21.
28. Amendment 21 is a technical amendment which provides that instead of being
contained in Part 2 to Schedule 1 of the FW Act, the provisions regarding the application of
the Bill will be included in a new Schedule 2. This will ensure that there is only one Part 2 to
Schedule 1 to the FW Act.
Senate page 8 Amendments to the Fair Work Amendment
(Transfer of Business) Bill 2012
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