Consultation requirements for national system employers
The Fair Work Act 2009 (the Act) requires that all modern awards in operation, and enterprise agreements made after 1 January 2014, comply with new consultation requirements.
Employers were previously required to consult with employees when implementing a major workplace change that would have a significant effect on the employee.
This obligation has now been extended to require employers to consult with an employee about a change to their regular roster or ordinary working hours. Employees are also entitled to have representation for that consultation.
Modern awards were amended from 1 January 2014 to include a standard consultation clause which incorporates the new requirements.
The previous consultation requirements regarding major workplace change have been preserved and continue to apply in conjunction with the new requirements.
As such, employees covered by modern awards should be consulted about issues including (but not limited to):
- Termination of employment
- Major changes in composition, operation or size of the employer’s workforce or skills required
- Elimination or diminution of job opportunities, promotion opportunities or job tenure
- The need for retraining or transfer of employees to other work locations
- Restructuring of jobs, and
- Changes to regular roster or ordinary hours of work.
Notwithstanding this, where the modern award makes provision for alteration of any of these matters, an alteration is not deemed to have significant effect and therefore consultation may not be necessary. To confirm this, please contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or firstname.lastname@example.org.
All enterprise agreements made after January 1, 2014 must include a term complying with the new consultation requirements.
If an enterprise agreement does not meet this requirement, the model consultation term contained within the Fair Work Regulations 2009 will be taken as a term of the enterprise agreement.
Model consultation term
The model consultation term requires an employer to consult with employees where it:
- Has made a definite decision to introduce a major change to production, program, organisation, structure or technology to its enterprise that is likely to have a significant effect on the employees, or
- Proposes to introduce a change to the regular.
How to consult
Major workplace change
Where an employer has made a definite decision to introduce major change in the workplace, the employer must notify the affected employees and their representatives, if any.
The change must then be discussed and the employer must:
- Provide all relevant information about the change in writing to affected employees and their representatives;
- Outline the expected effects of the changes proposed; and
- Outline any other information relevant to the change (this does not require the disclosure of confidential information or information that would be contrary to the employer’s interests).
Hours of work and rostering
Before making any decision to change employees’ regular rosters or ordinary hours of work, an employer must consult affected employees.
To consult adequately, an employer must:
- Provide information to the employee and their representative (if any) about the proposed changes to their hours of work, including what the changes are, when they are likely to commence and what the employer reasonably believes will be the effect(s) of the change
- Invite the affected employees and their representatives (if any) to give their views about the impact of the change, including in relation to their family and/or caring responsibilities, and
- Give genuine consideration to any views given by the employee about the impact of the changes.
It is important to ensure that these discussions are adequately documented.
It is also essential for employers to check the employee’s individual contract of employment to ensure the change in hours of work are still within the terms and conditions to which the individual was employed.
Where a dispute arises as a result of the operation of the consultation term, the dispute resolution mechanisms of the relevant industrial instrument will apply.
Penalties for non-compliance
Compliance with consultation terms are enforceable by application to a Court and may result in penalties of up to $63,000 for a corporation and $12,600 for an individual (as of 1 July 2018).
Consultation where 15 or more redundancies will result
In addition to consultation provisions contained in Modern Awards and enterprise agreements, the Fair Work Act 2009 (the Act) prescribes notification and consultation obligations in the case of 15 of more employees being made redundant.
Where an employer is considering a major change which will result in 15 or more employees being made redundant, employers are required to notify and consult with relevant employee associations (unions) who are entitled to represent the interests of employees.
The purpose of such consultation is to consider measures to avert or minimise the proposed terminations and measures to mitigate the adverse effects of the proposed terminations.
In addition, the Act requires employers to notify Centrelink where 15 or more employees are to be made redundant. This notification must occur as soon as practicable after the decision has been made and must be in the form prescribed by the Fair Work Regulations 2009. The notification must set out the reasons for the termination, the number and categories of employees likely to be affected and the time, or the period over which, the employer intends to carry out the terminations.
Award and agreement free employees
The Act’s provisions relating to 15 or more employees being made redundant extends to employees who are award and agreement free.
Like to know more?
In addition to the consultation obligations prescribed by Modern Awards and Enterprise Agreements, employers may also be required to comply with additional obligations set out by other industrial instruments and/or company policies.
For further advice on meeting consultation obligations call CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email email@example.com.