Manufacturing News

Workplace relations made much simpler

THE Australian Industrial Relations Commission (AIRC) is undertaking probably the single largest reformation to Australia’s industrial award system since its creation over 100 years ago.

The Award Modernisation process commenced in April 2008 amidst substantial speculation about what would and could be achieved.

Some degree of cynicism was understandable. The task involved consolidating the very large number of State and Federal industrial awards – which presently regulate minimum terms and conditions in various industries and occupations – into a much smaller number. It seemed unimaginably hard.

Additionally, as if the first proposition were not challenging enough, it was also intended that the new modern awards should not increase costs for employers or disadvantage employees, and should be described in simple, easy to understand language.

The cynicism has largely proved unfounded. So far the AIRC has created 44 modern awards after considering 23 industries and the more than 1000 awards that presently regulate those sectors. It has also released a further 50 draft awards and invited submissions on them.

Ai Group has devoted massive resources to the Award Modernisation process.

Our goal throughout has been to help ensure that the right balance is struck so that employers’ costs are not increased nor employees disadvantaged.

The manufacturing industry has seen the rationalisation of in excess of 300 State and Federal Awards into a single Manufacturing and Associated Industries and Occupations Award 2010 (“the Manufacturing Award”).

The Manufacturing Award, released by the AIRC in December 2008, was among the first of the modern awards created by the AIRC. It consolidates industries such as chemical, metal and engineering, furniture, rubber and plastic, brass and copper, and adhesives, to name just a few.

Everyone in this industry – whether they’re an employer or an employee – will need to get used to changes under the new award, which will apply from January 1, 2010.

The consolidation has largely achieved a single set of conditions for all manufacturing operations. This means that there will be a change in the terms and conditions that apply to many employees in the industry.

For example, under the new Manufacturing Award, the casual loading will be 25% for all casual employees. This represents a substantial change from the loading casuals currently receive in some manufacturing industries consolidated into the award, which in some circumstances has been as low as 10% and others as high as 33.3%.

The Commission has not yet decided what transition arrangements will apply to phase in the cost increases.

Another important change is that all modern awards will have the ability for individual employees and their employer to come to an agreement about varying the way in which certain award conditions may be applied to them.

This will provide flexibility to an employee if there are personal circumstances which require recognition, and flexibility to an employer to make arrangements that best suit the business.

Finally, it is important to note that the new award system will largely be unavoidable for the vast majority of employers who are constitutional corporations.

It will be applied according to the type of work being performed by an employee, rather than according to whether the award expressly names the business as an organisation required to apply its terms.

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