June-12 CONTENTS 1 The BHP Miner's Strike: Industrial Action and - PDF document

June-12 CONTENTS 1 The BHP Miner's Strike: Industrial Action and Productivity under the Fair Work Act 2 Enterprise Migration Agreements in the Resources Sector: Roy Hill Project Sparks Controversy 3 9% to 12%: Amendments to the Minimum Employer Superannuation Contribution 4 Bullying in the Workplace: Federal Government Announces Review 1 The BHP Miner's Strike: Industrial Action and Productivity under the Fair Work Act The recent week-long strike involving over 3,000 of BHP's coalminers in Western Australia has dominated Australia's news headlines, causing closures of 6 mines run by the BHP Billiton- Mitsubishi Alliance (BHP). BHP has been deep in a bargaining dispute marked by numerous strikes with the Construction, Forestry, Mining and Energy Union (CFMEU) and the employees it represents for 18 months. The CFMEU is now claiming that BHP is refusing to engage the CFMEU in good faith negotiations. In particular, the CFMEU and its members are seeking an agreement on pay, flexible working arrangements and housing. The strike action has prompted widely publicised criticism of the Fair Work Act from employer representatives regarding the damaging effects of increased union power on productivity, particularly in the context of the resources boom. As BHP's chief executive has publicly argued, the increase in the scope of content that can be included in an enterprise agreement under the Fair Work Act makes it more difficult for employers to reach a negotiated agreement with their employees and any relevant union(s), opening employers up to the risk of employees taking lawful industrial action in support of such claims. The BHP industrial action demonstrates how the Fair Work Act has forced employers into accepting impediments to productivity, either by accepting claims which would limit their capacity to make ordinary operational decisions or rejecting such claims and risking the consequences of employees taking prolonged and widespread industrial action. Labor government representatives have denied this impact on productivity, but have pointed to the potential for changes arising from the review of the Fair Work Act which is currently taking place. 2 Enterprise Migration Agreements in the Resources Sector: Roy Hill Project Sparks Controversy

The Federal government’s recent decision to enter into an Enterprise Migration Agreement (EMA) to cover the Roy Hill mining project located in Western Australia has been widely criticised in the Australian media and general public. The EMA is the first of its kind and is rumoured to provide for the immigration of 1,700 overseas workers, including electricians, scaffolders and boilermakers, to operate the project. The grant of the EMA has sparked political debate regarding the use of local Western Australian labor to operate Australian resources projects. Employer associations such as the Australian Industry Group (Ai Group) and the Business Council of Australia have responded favourably to the grant of the EMA, with the Ai Group's CEO commenting that EMAs will alleviate labor market pressures in the resource sector and that a skilled migration program will provide economic benefits to the country. By contrast, the Australian Greens are seeking amendments to Australia's workplace relations and migration legislation in order to create a legislative framework to regulate the grant of EMAs which would require employers that seek EMAs to advertise jobs to locals before accessing foreign workers and forcing those employers to create a local jobs board to recruit and train local workers. The announcement of the EMA has also caused internal conflict within the Australian Labor Party which has led to caucus voting to set up a sub-committee with power to monitor and oversee future grants of EMAs in the resources sector. 3 9% to 12%: Amendments to the Minimum Employer Superannuation Contribution The Superannuation Guarantee (Administration) Amendment Act 2012 (Cth) (Superannuation Amendment Act) received royal assent on 29 March 2012. Under the Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee (Charge) Act 1992 (Cth) (Superannuation Acts), employers are required to contribute a percentage of their employees' earnings towards superannuation (being pension/retirement) funds. An employer who does not make the required minimum contribution in respect of each of its employees will be required to pay a "charge", which will be more than the mandatory minimum contribution would have been. For the financial year ending 30 June 2012, the minimum employer contribution is 9%, to be calculated by reference to an employee's ordinary time earnings (capped at a certain amount). A contract of employment may require a higher rate of contribution, although this is not common industry practice in the Australian private sector. The Superannuation Amendment Act has amended the Superannuation Acts to increase minimum employer superannuation contributions from 9% to 12% progressively from next year to the 2019-2020 financial year as follows: 2013-14: 9.25% 2014-15: 9.5% 2015-16: 10% 2016-17: 10.5% 2017-18: 11% 2018-19: 11.5%

2019-20: 12% In addition to increasing the amount of the minimum employer contribution, the Superannuation Amendment Act will also remove the age limit of 70 years on superannuation contributions from 1 July 2013. Employers should review their employees' contracts of employment to determine whether the remuneration payable to employees is expressed to be inclusive or exclusive of superannuation, and account for increases to the minimum superannuation contribution over the next few years accordingly. 4 Bullying in the Workplace: Federal Government Announces Review The Australian Federal government has announced that it will carry out a review of the nature, causes and extent of bullying in the workplace by 30 November 2012. The Federal government's review is intended to complement the work already being carried out by Safe Work Australia, which is responsible for harmonisation of Australia's occupational health and safety laws and is currently drafting a Bullying Code of Practice. In addition to these work health and safety obligations, in Victoria the Crimes Amendment (Bullying) Bill 2011 (Vic) (which has come to be known as "Brodie's Law") has introduced 10 year prison terms for bullying. Bullying not only has a damaging impact on the culture of workplaces, but also causes significant financial burdens for businesses, with the total cost of workplace bullying in Australia estimated to be between $6 billion and $36 billion annually. Employers and other duty holders under the work health and safety legislation should be aware of, and should ensure that they are comfortable that they comply with, the Bullying Code of Practice in its current draft form and any amendments to this Code which arise from Safe Work Australia's current review. Furthermore, employers should be aware that bullying in the workplace may be a focus of the labor government's election campaign which could, in the extreme, lead to further legislation being introduced to deal directly with the issue. If you have any questions arising out of the contents of this Update, please do not hesitate to contact Adam Salter by email at asalter@jonesday.com or by phone on +612 8272 0514. If you no longer wish to receive the "Monthly Update - Australian Labor & Employment", please send a reply email to asalter@jonesday.com with the subject UNSUBSCRIBE.