Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

National system employers and employees whose terms were set under the WR Act and now sit under the Fair Work Act; Division 2B State reference employees and employers (former State system employees in referring States); employees covered by Australian Workplace Agreements, Individual Transitional Employment Agreements (ITEAs), pre-reform AWAs, pre-reform certified agreements, old IR agreements, section 170MX awards or notional agreements preserving State awards; bargaining representatives and unions seeking enterprise agreements where a transitional instrument still applies; the Fair Work Commission (and its predecessor body, Fair Work Australia), the Fair Work Ombudsman, the General Manager of the Fair Work Commission, the Australian Industrial Relations Commission (until it completed the Part 10A award modernisation process), the Workplace Authority Director, the Federal Court of Australia and the Federal Magistrates Court (now the Federal Circuit and Family Court). Outworkers, outworker entities and clothing-industry parties are specifically addressed in Schedule 21.

Schedule 16 carries the operative duties. Item 2 prohibits a person contravening a term of an award-based or agreement-based transitional instrument that applies to the person. Item 3 prohibits employer contraventions of the obligations attached to a conditional termination of an individual agreement-based transitional instrument under subitem 18(6) of Schedule 3, and prohibits a bargaining representative from contravening subitem 18(7). Item 4 prohibits an employer from contravening subitem 39(3) of Schedule 3 (notify employees about preserved redundancy provisions). Item 4A extends the no-contravention duty to terms of Division 2B State awards and Division 2B State employment agreements. Item 4B mirrors item 3 for Schedule 3A subitems 25(6) and 25(7). Item 4C requires employers to notify employees about automatic sunsetting under subitem 20A(3) of Schedule 3, subitem 26A(3) of Schedule 3A, and subitem 30(3) of Schedule 7. Item 5 picks up contraventions of WR Act sections 182 and 185 (continued through item 5 of Schedule 9) for transitional APCSs, the transitional federal minimum wage and transitional special minimum wages.

Schedule 8 item 4 imposes a hard 14-day window: where a collective agreement was made before the WR Act repeal day but had not been lodged, it must be lodged within 14 days of making, and the union version must have been approved before the WR Act repeal day; otherwise the agreement does not come into operation.

Schedule 7 Part 2 obliges Fair Work Australia (now the Commission) to apply the no-disadvantage test, instead of the better off overall test, to any enterprise agreement or variation made during the bridging period. The substitution operates inside Fair Work Act paragraphs 186(2)(d), 189(1)(b) and subsections 211(4) and (5).

Item 3 of Schedule 5 empowers the Fair Work Commission, after a modern award made in the Part 10A award modernisation process comes into operation, to terminate award-based transitional instruments and transitional APCSs that are completely replaced, or to vary their coverage where partly replaced. After all modern awards from the Part 10A process come into operation, the Commission must terminate any remaining modernisable instruments.

Schedule 5 item 6 anchors the transitional review of modern awards, which is the framework the Full Federal Court applied in National Retail Association v Fair Work Commission [2014] FCAFC 118 to a procedural-fairness challenge. Schedule 6 item 4 sets up the enterprise instrument modernisation process, and Schedule 6A picks up State reference public sector modern awards.

Schedule 9 item 2 confines the first annual wage review to the period from the FW (safety net provisions) commencement day to the next 30 June. Item 4 lets that first review skip a full range of special national minimum wages, provided any rate set in the transitional national minimum wage order is preserved.

Schedule 14 item 1 deems a WR Act Part 15 entry permit in force at repeal to be an FW Act entry permit on the same terms and expiry. Item 6 carries WR Act section 768 contraventions and Registrar action under WR Act subsection 744(4) into the FW Act suspension and revocation framework in section 510.

Schedule 17 inserts Federal Court of Australia Act 1976 sections 6A and 13 (Fair Work Division and General Division) and the parallel Federal Magistrates Act provisions. The Governor-General assigns Judges to Divisions; the Chief Justice may direct allocation when both Divisions are engaged. Schedule 23 inserts Fair Work Act sections 168A to 168D (modern enterprise awards), 338 and 339A (Federal Court jurisdiction in the Fair Work Division), 343A (delegation by the General Manager), 351A (Minister's entitlement to intervene) and 353A (representation in Fair Work Division proceedings).

Item 16 of Schedule 16 is the central enforcement engine. It applies Part 4-1 of the Fair Work Act as if items 2 to 8 and items 10 to 15 of Schedule 16 were Fair Work Act provisions, and as if the table in subsection 539(2) of the Fair Work Act included a fresh table covering the transitional civil remedies. Subsection 540(3) is taken to refer to items 40, 44C, 44H, 44J and 44K of that new table for outworker-style standing, and subsection 557(2) (course of conduct) is taken to refer to items 2 to 8 and 10 to 15 of Schedule 16. Item 17 forbids injunctions for contraventions of award-based or agreement-based transitional instruments.

The practical effect is that a person who breaches a transitional instrument can be ordered to pay a pecuniary penalty under Fair Work Act section 546, can have multiple breaches treated as a single contravention under section 557 if they arise out of one course of conduct, and can be subject to compensation orders. The Full Federal Court applied this machinery in QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2010] FCAFC 150, where Sch 16 item 2 supplied the substantive contravention and FW Act sections 546 and 557 supplied the penalty discretion.

Twenty-five June 2009: Royal Assent. Sections 1 to 4 commenced.

One July 2009: Schedules 1 to 5, 6 Parts 1 and 2, 6A, 7 to 21 and Schedule 22 items 1 to 90 commenced. WR Act repeal day. Workplace agreements and other WR Act instruments converted to transitional instruments. Part 10A of the WR Act was preserved for the AIRC to finish award modernisation.

One January 2010: Schedule 6 Part 3 commenced. The remaining provisions about modern enterprise awards came into force.

The bridging period ran from the WR Act repeal day to the FW (safety net provisions) commencement day. During the bridging period Divisions 3, 4, 5, 6 of WR Act Part 7 (AFPCS leave and hours), Divisions 1, 2 (other than sections 615 to 618), and 6 of Part 12 (meal breaks, public holidays and parental leave) continued, as did the WR Act notice-of-termination provisions in section 661 (and supporting sections 637(3) to (5), 638, 640, 642 and 662).

Schedule 12A item 2 set a transitional small business test for unfair dismissal: until 1 January 2011, small business meant fewer than 15 full-time equivalent employees, calculated by adding employees' ordinary hours over the 4 weeks before notice or dismissal, subtracting prescribed leave hours, and dividing by 152. From 1 January 2011 the head-count test in the Fair Work Act applied.

Unlodged collective agreements made before the WR Act repeal day had to be lodged within 14 days of making (Schedule 8 item 4) or fail to come into operation.

The Fair Work Act 2009 is the primary cross-referenced statute. Many transitional provisions read modifications into specific Fair Work Act sections rather than altering them on their face, including sections 173, 186, 189, 193, 211, 229, 481, 483A, 510, 524, 540, 546, 557, 562, 539(2). The Fair Work (Registered Organisations) Act 2009 is a renamed Schedule 1 of the WR Act, achieved through Schedule 22. The Federal Court of Australia Act 1976 and the Federal Magistrates Act 1999 are amended by Schedule 17 to create the Fair Work Divisions. The Workplace Relations Act 1996 is partially repealed (Schedule 1) but partially preserved through reach-back items in Schedules 4, 8, 9, 11, 14 and 20.

The Constitution sits behind the architecture. The Division 2A and Division 2B referring State concepts in Schedule 3A and Schedule 3 implement the State referrals of industrial relations power to the Commonwealth. The Constitution also informed the High Court's reasoning in Jemena Asset Management (3) Pty Ltd v Coinvest Limited [2011] HCA 33 about the paramountcy of federal industrial instruments.

The transitional civil remedy table in Schedule 16 item 16 is a parallel scheme to the Fair Work Act civil remedy table. Penalty maxima, standing and jurisdiction differ row by row. Practitioners must check the column 4 entry in the Schedule 16 item 16 table rather than assuming the FW Act maximum.

Item 17 of Schedule 16 prevents injunctions for award-based and agreement-based transitional instrument contraventions. Pecuniary penalties and compensation orders are still available, but interim or final injunctive relief that targets the transitional instrument itself is not.

Schedule 13 item 2 traps employees covered by an individual agreement-based transitional instrument or individual Division 2B State employment agreement: until the nominal expiry date passes or a conditional termination is made under subitem 18(2) of Schedule 3 or subitem 25(2) of Schedule 3A, the employee cannot be represented in bargaining, vote on, or be covered by an enterprise agreement. The employer must still issue a notice of employee representational rights under Fair Work Act section 173 explaining this timing rule.

Schedule 8 item 4's 14-day lodgment cliff is unforgiving. Pre-repeal collective agreements that missed the 14-day window from the day of making did not come into operation, and the Workplace Authority Director was prohibited from considering whether they passed the no-disadvantage test.

The 1 January 2011 unfair dismissal cut-over is easy to miss. A dismissal in 2010 was tested by the FTE-based small business test in Schedule 12A item 2; from 1 January 2011 the same employer might be a small business or not under a different test.

A construction labour-hire business with a 2008 union collective agreement made under WR Act section 328 found itself enforcing that agreement after 1 July 2009 as an agreement-based transitional instrument. Breaches were prosecuted under Schedule 16 item 2 with FW Act section 546 supplying the pecuniary penalty. This is the structure applied in Construction, Forestry, Mining & Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87.

A Queensland State-owned rail operator that breached a continuing transitional instrument by failing to consult before a privatisation decision faced multiple section 546 penalties for each agreement, with course-of-conduct treatment under section 557 to consolidate the contraventions. The Full Federal Court applied that exact machinery in QR Limited v CEPU [2010] FCAFC 150 and reduced the penalties on appeal.

A retail employer challenging a Fair Work Commission decision on award modernisation under Schedule 5 item 6 must show procedural unfairness against the standard articulated in National Retail Association v Fair Work Commission [2014] FCAFC 118.

A national-system employer dismissing an employee in October 2010 should have applied the Schedule 12A item 2 FTE small business test for unfair dismissal eligibility, but on 1 February 2011 must apply the Fair Work Act head-count test instead.

A union official whose right of entry permit was issued under WR Act Part 15 immediately before 1 July 2009 needed no fresh permit. Schedule 14 item 1 carried the existing permit across, with the same expiry date and conditions, until the FW Act regime issued a renewal.