The five things you must know about the new industrial relations rules

If you’ve just arrived back from work after the New Year’s break, then welcome to a brave new industrial relations world.  The second tranche of changes under the Rudd Government’s Fair Work industrial relations regime came into effect on January 1, specifically the new National Employment Standards and the Modern Awards system.  And while business groups are hoping the Fair Work Ombudsman will allow SMEs to get their heads around the changes in the next few weeks, it’s imperative entrepreneurs quickly get up to speed.

With this in mind, here are the five big things you need to get across as quickly as possible.

1. Flexible working arrangements:  From today, an employee who is a parent, or has a responsibility for the care of a child under school age may request flexible working arrangements, such as changes in hours of work, work patterns or work locations (that is, working from home). A business can refuse on “reasonable business grounds”, although it’s not exactly clear what these are – the size of the business, the role of the employee and the nature of their work (does it allow them to work from home?) will all be considerations.  Employees need to quickly put together a process for responding to these claims – and yes, everything needs to be done in writing.

2. Modern awards:  The Government has been working on its national Modern Awards system – which is designed to harmonise the thousands of state-based awards – for the best part of two years, but there will be plenty of employers unaware of changes to the awards covering their industry. Given the number of Modern Awards, it’s difficult to give specific advice about what to look out for, but entrepreneurs are advised to talk to their industry association or IR lawyer if they need clarification. But do it quickly – you don’t want to risk underpaying workers.

3. Parental leave doubles:  The basics of parental leave obligations remain the same – an employee can still request 12 months unpaid parental leave, although this has now been extended to same-sex couples.  But in addition, employees can now request an additional 12 months parental leave. This must be done via a written request made at least four weeks before the end of the original leave period. An employer can refuse on “reasonable business grounds” but if you’ve just coped for 12 months without that staff member, it’s going to be hard to argue you can’t keep coping.  It remains to be seen how often this right will be exercised, but it is one to watch.

4. Redundancy pay:  Hopefully fewer businesses are going to need to worry about making staff redundant this year, but it still may be an issue for some SMEs.  The new National Employment Standards set down for the first time the redundancy entitlements for any company with 15 or more employees. The redundancy provisions range from four weeks for an employee who has one year of continuous services through to 16 weeks for an employee with nine to 10 years’ service. The severance needs to be straight away, which could prove a further impost for a small business on the brink.

5. The Fair Work Information Statement:  The National Employment Standards state that all new employees must be given the Government’s Fair Work information statement, which sets out employees’ rights and obligations under the new laws. But while you only need to give the statement to new hires, IR lawyers suggest it might be a good idea to give it to all staff. You can download a copy here.

Smart Company E-Newsletter Monday, 04 January 2010

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