The "fairness test" was a central concept of the WorkChoices industrial relations laws that operated in Australia from 2006 to 2010. It was implemented in the Workplace Relations Amendment Act2007, which was given Royal Assent on 28 June 2007 and predominantly came into operation on 1 July 2007. The Act saw the renaming of the then Office of Workplace Services, which became the Workplace Ombudsman, and the creation of the Workplace Authority, combining the former Office of the Employment Advocate and parts of the then Department of Employment and Workplace Relations, now the Department of Education, Employment and Workplace Relations. The Fairness Test operated retrospectively from 7 May 2007. The test was introduced by the then Howard government as a “fine-tuning” of WorkChoices, but received criticism from both employer associations and trade unions including the Transport Workers Union for not providing adequate protections to employees. The Fairness Test applied to all Collective Agreements and Australian Workplace Agreements lodged with the Workplace Authority between 7 May 2007 and 10 April 2008, where employees earned under $75,000 base annual salary and work in industries or occupations usually covered by awards and where the CA or AWA removes or modifies protected Award conditions. Protected award conditions include penalty rates and loadings, monetary allowances, public holidays, rest breaks and incentive based payments and bonuses. Where protected award conditions had been varied or removed, agreements had to provide ‘adequate compensation’ to employees. The Workplace Authority had to take into consideration the particular circumstances of the employee/s, such as their pattern of work. Adequate compensation can include monetary benefits, or non-monetary benefits which is of ‘significant value’ to the employee. The Fairness Test applied where a business was, prior to 27 March 2006, bound to a State Award, which became a Notional Agreement Preserving a State Award, a Federal Award, or where the work done by the employee is in an industry or occupation which would have been covered by an Award or NAPSA prior to the 27 March 2006. Where the business was not bound to a particular Award or NAPSA, the Workplace Authority could designate a Federal Award for the purposes of the fairness test. When an agreement did not pass the Fairness Test, the Workplace Authority notified the employer and allowed them the opportunity to vary the agreement in order to pass. When the agreement was not varied or the variation did not pass the Fairness Test, the agreement will not apply at all, and the employee will derive their minimum terms and conditions at work from the industrial instrument that is otherwise capable of applying to the employee. Where an employee was previously not covered by any industrial instrument but had an Award designated for the purpose of the Fairness Test, the protected Award conditions will continue to apply to the employee. It is also important to note that the Fairness Test does not check agreements for Prohibited Content or compliance with the Australian Fair Pay and Conditions Standard.
The End of the Fairness Test
The Workplace Relations Amendment Act 2008 was passed by Parliament on 19 March 2008 and given Royal Assent on 27 March 2008, coming into operation on 28 March 2008. The Forward with Fairness Act removed the Fairness Test for Agreements made on or after 28 March 2008, and instead introduced the new No Disadvantages Test. Whilst new agreements will no longer be subject to the Fairness Test, agreements lodged prior to the operation of the Forward with Fairness Act continue to be assessed for the Fairness Test by the Workplace Authority.
