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WORKCHOICES: Implications for Small Business

The November 2006 High Court ruling stated that the Federal Government’s WorkChoices legislation is valid in every aspect. It means that it is here to stay. Whilst some employers have taken the time to wade through WorkChoices to understand what it really means for their business and their staff, many more employers have been hesitant to implement changes allowed under Work Choices.

How can you take advantage of the new flexibility permitted by WorkChoices and move forward in a positive direction?

EWO partner, Employee Relations Strategies, is very familiar with WorkChoices and provides the ‘need to know’ facts for your business.

Q. After the High Court Decision last November, what issues still remain in doubt and how can they be addressed?

The majority decision of the High Court stated no issues were in doubt. All constitutional corporations are covered by the new WorkChoices legislation, as well as employers in general in Victoria, the ACT and Northern Territory.

Some issues remain around what is a constitutional corporation. Previous cases decided by the High Court have held that a public hospital and the Red Cross have been constitutional corporations. Workers that probably do NOT fall into the constitutional corporation category are those employed by partnerships, trusts or sole-traders.
Q. The Federal Government seems to have indicated that there are still changes to be made at a later date. What are these be likely to be? Should companies wait to see what these are before proceeding with changes?

Our view is that the Government would only make more changes to WorkChoices in one of two circumstances -

Firstly, to override State laws developed as a consequence of the High Court ruling. For example, NSW Child Employment laws have complicated the issue of labour rates for youths in NSW.

Secondly, to address technical anomalies in the operation of the legislation. As an example, the Legislation was recently amended to stop employers having to pay penalty rates to employees on sick leave.

The outcome of the Federal election later this year should not distract employers from using the opportunities provided by WorkChoices. Even if the Labour Party were to win Government, Labor would itself want to maintain many aspects of Work Choices such as the use of the Corporations power and legislation of minimum legal entitlements. It also might not gain control of the Senate and hence would have to negotiate any changes with the minor parties and independents.

Q. Employer obligations under workers compensation, OHS and discrimination laws still seem to be ambiguous and State governments still have the ability to legislate. What suggestions can be made with regard to making these areas clearer for businesses?

Work Choices did not override State and Territory responsibility for OHS, Workers Compensation and Anti-Discrimination law therefore nothing has changed as a result of the introduction of Work Choices.

We agree these areas can appear complex.

Q. Are there any specific changes to employment records that need to be made with relation to the new WorkChoices legislation? 

WorkChoices requires the employer to maintain records for –

  • general employee information
  • hours of work (including overtime)
  • pay
  • leave
  • superannuation
  • termination and 
  • transmission of business (if applicable).

The record keeping provisions of WorkChoices are more extensive than previous legislation, however most payroll and accounting system should capture the majority of this information or at least be updating current software to handle the new requirements.

Employers have been given an extended period of time to set up their record keeping system before the regulations become enforceable on 27 March, 2007.  

Q. What sections of the new legislation should be prioritised and complied with first in the coming months?

Record keeping would be a priority as the date of enforcement is fast approaching, 27 March 2007. Letters of offer should also be reviewed to make sure they don’t clash with the new minimum Work Choices requirements. For example, the new requirement for 10 days cumulative personal/carers leave has slipped past some employers. Minimum pay rates have also been created for all employees covered under Work Choices whereas before there was no uniform law that regulated this.

Q. How can small companies address the possibility of staff de-motivation relating to negative things they hear about WorkChoices in the press?

A communication strategy can be implemented to inform employees about what the Company is planning to do under WorkChoices. In many cases this might well be that there are no plans. Provide employees with the opportunity to discuss any concerns they might have regarding WorkChoices.

Q. If companies have a legal question regarding the changes how should this be addressed?

Contact ER Strategies for practical answers to legal questions that may arise from the WorkChoices legislation. Our National number is 1300 55 66 37.

Q. What are your tips to take advantage of the flexibility that WorkChoices offers small business?

WorkChoices has provided the perfect opportunity for employers to introduce work practices that are more suitable to their workplace or in many cases, to legalise current practices that might be technically illegal.

ER Strategies works exclusively for employer clients to provide practical, commercial solutions to employee relations and industrial relations issues. Our Online HR Resources Service provides an easy to use, Work Choices compliant library of all the HR and Employee Relations documents & tools you could need to create a productive working environment. Our website is at

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