Dear Subscriber,

Welcome to our first monthly e-newsletter. Our focus over the coming months will be to provide some helpful information to our clients on a whole range of business and commercial topics. In this issue we discuss Australian Workplace Agreements (AWA's), their abolition by the Federal Labor Government, what this means for businesses who have them and what are the broad alternatives.

AWA's & Your Business

One of the goals of Federal Labor's election pledge in 2007 was to abolish AWA's. This has now occurred - no new AWA's are permitted.

Introduced by the former Howard Government in the late 1990's, this statutory form of individual contract had been extensively utilised in small and large businesses alike and permitted the variation of award conditions on an overall no-disadvantage basis. Never popular with the union movement, these were always going to be a target under any new Labor administration

In its place, but only as a transitional step, the new Government has introduced a temporary replacement. This replacement, known as an Interim Transitional Employment Agreement (ITEA), is also an individual statutory agreement, but it will not be able to run beyond 31 December 2009.

The big difference between these and the former AWA's is that to be approved, they are required to be tested against any relevant award as well as any existing collective agreement that applies in the workplace. Hence, the safety net against which they are tested has been substantially raised. Another important consideration for employers here, also, is that ITEAs can only be made with a more limited category of staff - generally where an employer already has staff on AWAs. The obvious reality here is that it is anticipated that few employers will actually use them.

So where does this leave employers that already have staff covered by AWA's?

Many employers brokered new AWA's for lengthy terms on the eve of them being abolished. These have not been disturbed by the Government's new legislation and will continue to operate. After their term, they are able to be set aside. Those staff in workplaces on out of term AWA's can have these set aside and will fall back on any relevant award or collective instrument that applies.

What are the options for the future?

Many AWA's buy out overtime and other award based conditions in return for a higher overall salary. In some workplaces, staff have operated under these for a considerable period of time and both the employee and the business are comfortable with their operation. Terminating the AWA and falling back on an award or collective agreement is not a suitable option either for the employer or the employee. In these workplaces, the most suitable outcome will be to not have them set aside and let them continue to operate.

In those workplaces where a union proposes a new collective agreement that picks up these conditions and meets the employer needs, then this may present as an option for employers and staff.

For those workplaces which are non-unionised, the employer may well decide to broker a collective agreement directly with employees and have this registered. Another option is that they choose to enter into individual common law agreements with their staff which do not reduce or vary the underpinning award or collective agreement.

Individual advice should be sought so as to cater for any specific needs of the enterprise or workplace. What is clear is that the choices available to tailor employment conditions through an individual agreement are now more limited.

In our September edition, we will be talking about some pertinent offshore legal issues connected with the sub prime crisis and how this has had an effect on investment across the business sector.

PETER HILL