On Tuesday 25 November 2008, the Rudd Government introduced the Fair Work Bill 2008 (Cth) (the Bill), into the House of Representatives. This Bill represents the next phase in the Government‟s agenda to overhaul the Australian industrial relations system and eliminate the former system, known as WorkChoices (under the former Coalition Government‟s reforms of 2006).

Once the Bill is passed into legislation, it will completely replace the Workplace Relations Act 1996 (Cth), and will create a national workplace relations system. There will be significant changes to the way that the system currently operates. According to the Government, this new system will be fair to working people, flexible for business and promote productivity and economic growth.

• A safety net, comprising modern awards, 10 National Employment Standards and minimum wages. The National Employment Standards were released to the public on 16 June 2008. These standards are a set of minimum employment conditions that cannot be stripped away under any circumstances. They will apply to all employees and guarantee:
• Maximum weekly hours of work
• Right to request for flexible working arrangements
• Parental leave and related entitlements
• Annual leave Personal/Carers leave and compassionate leave
• Community service leave
• Long service leave
• Public holidays
• Notice of termination and redundancy pay
• Provision of a 'Fair Work Information Statement'

• Old agreements will continue to apply until they are replaced. The National Employment Standards will come into effect on 1 January 2010. They will apply to all employers and will override less favourable conditions in contracts or registered agreements.

• The Fair Work Bill will establish a body known as FWA, which will consist of a President, Deputy Presidents, Commissioners, and Minimum Wage Panel members. FWA will have jurisdiction over awards and enterprise agreements, workplace determinations, the National Employment Standards, minimum wages, right of entry, transfer of business, equal remuneration, unfair dismissals, unlawful dismissals, dispute resolution, and industrial action. Judging by these features, it appears that FWA will absorb the current responsibilities of both the Australian Industrial Relations Commission, the Workplace Authority, and the Fair Pay Commission. On 13 February 2009, it was announced that the current Australian Industrial Relations Commission President, Justice Geoffrey Giudice, has accepted the role as the first President of FWA.

• The Fair Work Bill will apply to all 'national system employers', the definition of which is the same as that currently contained in the Workplace Relations Act 1996. This definition identifies which employees are currently covered by that Act. However, modern awards (described as “an award made under Part 2-3” of the Bill, in other words awards made after the putative Fair Work Act commences) will not be deemed to apply to 'high income employees.' This includes employees who have a written guarantee from their employer that they will be remunerated at a level that would exceed a threshold amount, not yet stated, to be set by the regulations.

• All enterprise agreements will have to contain a dispute settlement clause (as is currently required by the Workplace Relations Act) which must allow recourse to Fair Work Australia or an independent third party, and employees must be permitted to have representation during the process if they so choose.

• New Fair Work Divisions will be created in the Federal Court and Federal Magistrates Court to deal with award breaches, agreements, and breaches of the National Employment Standards. As is presently the case under the Workplace Relations Act in relation to awards and agreements, where a breach is found the Court will be able to make any order it considers appropriate, and is capable of ordering injunctions to prevent breaches.

• There will be a small claims jurisdiction for claims up to $20,000, or “if a higher amount if it is prescribed by the regulations – that amount”. Parties in this jurisdiction will only be allowed legal representation with the leave of the court, if FWA considers that, in the interests of efficiency and fairness, a party should be represented by a lawyer. Otherwise, the parties may only be supported by a representative or agent. However, employer representatives and representatives of employer groups or unions who are legally qualified are not deemed to be lawyers, so will not need to seek permission from FWA in order to represent a party. This is a similar approach to the provisions in the current Workplace Relations Act, which allows legal representation only with leave in the Australian Industrial Relations Commission, State industrial commissions, the Federal Court, or the Federal Magistrates Court.

• FWA will be able to make a determination when industrial action is causing, or threatening to cause, significant economic harm to the parties. Generally, both of the parties will need to be suffering harm, other than in a lock-out where employee detriment will suffice.

• Awards and enterprise agreements made after the commencement of what will be the Fair Work Act must include a 'flexibility term' (defined as a term allowing the parties to vary the effect of the award, in relation to that employee only, in cases of genuine need), allowing the employee and employer to negotiate a certain amount of leeway in the terms of the award or agreement. In practice, this may enable parties to make employment arrangements more suited to the current needs of the business and/or the employee in question, without breaching the award. The award must also include a dispute settlement term and must specify “ordinary hours of work‟ for each employee classification that is defined in the award or agreement. Discriminatory or objectionable terms, or terms that deal with right of entry or long service leave, are prohibited.

• Right of entry provisions will be broadened, allowing unions to enter workplaces in order to investigate reasonably suspected breaches of the National Employment Standards or of a fair work instrument (such as a modern award or enterprise agreement) if that suspected breach affects one of their actual or potential members, or to hold meetings with union members or potential union members. Under the Workplace Relations Act, currently unions can only enter workplaces in which they suspect a breach of the Act, an ITEA, or an award or a collective agreement that binds at least one current member of that union has occurred. The Bill, however, allows entry in order to “hold discussions with … persons … whose industrial interests the … organisation is entitled to represent”. This appears to allow entry solely for recruitment purposes. Under the Bill, entry permits will be issued by FWA, and right of entry disputes will be dealt with by FWA.

• Under the current workplace relations legislation, federal system employees are only able to seek legal redress for unfair dismissal, if:
• their employer has over 100 employees; and
• the employer had not dismissed the employee for genuine operational reasons; and
• the employee has completed their probationary or qualifying period; and
• the employee does not earn over the set remuneration cap or (if they do earn more than the remuneration cap) they are covered by an award.

• The Fair Work Bill will change employees' access to unfair dismissal remedies in the following ways:
• they will be eligible to claim unfair dismissal if they have completed six months'; service (or one year if they were employed by a “small business employer”, defined as an employer with 15 or less employees);
• they are covered by a modern award, enterprise agreement or they earn less than the remuneration limit to be set by the regulations;
• they were not contracted to work for a set amount of time or for a specified task that has been completed; and
• their dismissal was not in accordance with the Small Business Fair Dismissal Code (which has yet to be drafted).
• Significantly, the time allowed for making an application for an unfair dismissal remedy will be decreased from the current limit of 21 days after termination, to only seven days after termination.

• Provisions prohibiting sham arrangements, whereby an employer induces an employee to enter into an independent contracting arrangement disguised as an employment relationship, appear to be substantially identical to those currently contained in the Workplace Relations Act.

• Arguably the most significant departure from the current federal legislation is the Bill‟s provisions concerning redundancy pay. The Bill promises that all „national system employees‟ (the definition of which is identical to that of employees covered by the Workplace Relations Act) with at least 12 months‟ service and whose employer employed more than 15 employees (and who have not been offered a „substantially similar‟ position with continuity of entitlements) are entitled to redundancy pay if their employer has terminated them because it no longer wishes their job to be done by anyone, or because the employer is insolvent or bankrupt. The amount of redundancy is determined according to the number of years of completed service, resulting in a redundancy entitlement that is the same as the current “termination, change and redundancy” standard (e.g. four weeks‟ redundancy pay for between one and two years‟ service for those under the age of 45, etc.).

• The no-disadvantage test for ITEAs will be replaced with the “better off overall” test (“BOOT”) for enterprise agreements. The old test required that an ITEA could not “result in a reduction in the overall terms and conditions of employment of the employee whose employment is subject to the agreement under any reference instrument [relevant collective instrument] relating to the employee”. The BOOT test, applied by FWA, will require that award-covered employees, and prospective award-covered employees, that would be covered by the agreement must be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee. However, like now, the FWA may still approve an agreement that does not pass the BOOT test in “exceptional circumstances” if it is satisfied that approving the agreement would not be contrary to the public interest (for example, to tide over an employer having a “short-term crisis”). This category of agreement would expire no later than two years after approval, and would only be open to agreements that, but for a failure to pass the BOOT test, would otherwise be approved.

• Bargaining representatives must comply with the good faith bargaining requirements contained in the Bill which includes refraining from unfair conduct in negotiations, fairly considering all proposals put forward by other parties, responding to other parties in a timely manner, and disclosing all relevant information. Such requirements are not contained in the Workplace Relations Act. However, the Bill still subjects bargaining agents to the current prohibition on demanding, purporting to demand or doing anything that “purports to have the effect of demanding” bargaining services fees (i.e. fees payable by a person or group to a union or other industrial association, or a person representing an industrial association, that represents a party during the bargaining process, against their will).

• Transfer of business rules will be slightly more relaxed. In the Fair Work Bill, the terminated employee has three months to be employed by the new employer, whereas in the current Act, there is a maximum of two months allowed. Notably, the Bill will provide that “high income guarantees” (see point 3 above) will be transferable to the employee's employment with the new employer as if the new employer had given the guarantee.