INTRODUCTION

Recent history of industrial regulation
Recent Rudd Government amendments
Victoria

This chapter provides a summary of the law as at 1 July 2009. The chapter's focus is on the rights, entitlements and obligations of employees in Victoria. Those rights, entitlements and obligations derive from a wide range of sources, including statute, awards, collective agreements, individual agreements and the common law.

The most significant statute affecting employment conditions in Australia is the federal Fair Work Act 2009 (Cth) ("FW Act"). The FW Act replaces the Workplace Relations Act 1996 (Cth) ("WRA"). The FW Act sets out:

most of the rights and duties of employees and employers;
the procedure for the negotiation and certification of federal agreements; and
amongst other things, governs the affairs of federally registered unions.

This chapter primarily deals with:

the common law employment contract;
workplace agreements and awards under the WRA and the FW Act;
statutory and common law terms of employment;
enforcement of entitlements; and
termination of employment.

However, this chapter is not limited to the above topics. See the table of contents for further information.

Interrelationship between statute, statutory agreements and common law contracts: Terms and conditions of employment contained in legislation, awards or statutory agreements are generally minimum terms and conditions. This means that the parties can agree by contract to pay more than the minimum for any one or more entitlements in the statute, award or statutory agreement.

A common law contract can not provide for a lesser term than that contained in a statute, award or statutory agreement. The employer must provide the employee with at least every minimum term or condition in the statute, award or statutory agreement. It is no excuse if the employee was, overall, better off under the common law contract.

Contracts and statutory award and agreement terms and conditions exist side by side, with an employee entitled to the most beneficial term that applies. For example, the ordinary hours pay in a contract may be the most beneficial term for the employee's ordinary hours of work, but the award overtime condition may be the most beneficial for overtime work. In those circumstances, the employee is legally entitled to the contractual term for ordinary time work and the award term for overtime work.

Recent history of industrial regulation

Prior to 1992, terms and conditions for employees were largely regulated through State and Federal Awards made by industrial tribunal (i.e. the Australian Industrial Relations Commission (AIRC)). Employees had to receive, at a minimum, all the terms and conditions in the relevant award. A common law contract for a lesser term or condition than contained in the award would not override the award term or condition.

Federal Awards were created as a result of the settlement of interstate industrial disputes.

In 1992 the Victorian Government abolished State Awards and created a system of a limited number of minimum statutory entitlements, with all other terms and conditions having to be negotiated between employers and employees. These changes led to unions seeking Federal Awards to cover employees formerly covered by Victorian State awards and eventually led to the Victorian State Government referring limited industrial relations powers to the Commonwealth Parliament.

In 1993 the Federal Government introduced collective bargaining to the federal system as a mechanism to modify terms and conditions applying to employees in particular workplaces. The objective was to increase the productivity of the business and the potential for employees to gain additional benefits by the creation of a more flexible system of industrial regulation. The bargaining system included a requirement that employees who were to be subject to statutory agreements be at "no disadvantage" overall when their enterprise agreement terms and conditions were compared to the terms and conditions in the underlying award.

In 1996 the Federal Government introduced the WRA. This Act introduced statutory individual agreements (AWAs), reduced the involvement of unions in a range of areas and limited the range of matters that could be included in a Federal Award.

In 2004 an agreement was reached between the Federal Government and the Victorian Government for the Victorian Government to refer much of its industrial relations powers to the Federal Parliament. This enabled the AIRC to make Federal Awards that could apply to all Victorian workers in industries specified in those awards. Victorian employers did not need to be party to an interstate dispute to be covered by a Federal Award.

The WRA was substantially amended in 2005, largely taking effect on 27 March 2006. The major changes included:

abolishing the "No Disadvantage Test" for the approval of statutory agreements and replacing it with a requirement that the agreement must meet only five minimum terms and conditions. This allowed for agreements to significantly undercut the relevant award terms and conditions;
excluding a large number of employees from protection from unfair dismissal, by excluding employees employed by an employer with less than 100 employees and excluding employees terminated for genuine operational reasons;
significantly downgrading awards and creating a number of avenues to displace the operation of awards; and
the use of the Corporations power in the Constitution to take over the regulation of industrial relations from the states, where the employer was a trading or financial corporation.

Recent Rudd Government amendments

The Rudd Government has made substantial changes to industrial legislation. Some changes have already been legislated and took effect from March 2008 (the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth) ("Transition to Forward with Fairness Act")), while other changes will take effect from 1 July 2009 and 1 January 2010 (the FW Act).

Further changes are contained in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) ("FWTPCA Act").

Victoria

While most states in Australia have retained their own workplace legislation, in Victoria the Government referred its power to deal with industrial matters to the Federal Government by way of the Commonwealth Powers (Industrial Relations) Act 1996 (Vic). Most Victorian employers and employees were covered by the WRA. The Victorian Government has announced that it will refer the power necessary for the FW Act to cover all private sector employees and employers in Victoria.

Other legislation, such as the Commonwealth Sex Discrimination Act 1984, Racial Discrimination Act 1975 and Disability Discrimination Act 1992, and the Victorian Equal Opportunity Act 1995, Long Service Leave Act 1992 and Occupational Health and Safety Act 2004, also affect working conditions in Victoria.