4.16 Ethical purchasing policy
As part of its response to Work Choices, the Victorian Government established the Ethical Purchasing Policy - Mandatory Safety Net for Nominated Sectors (MSN Policy). The aim of the policy is to establish and maintain a safety net of fair minimum employment standards for employees of funded organisations. The policy was implemented on 7 August 2006.
Under the MSN policy, Victorian Government Departments must ensure that organisations they fund provide their employees engaged in supplying the funded services with "terms and conditions of employment that are not less favourable overall than those provided by the relevant award(s) which applied prior to Work Choices, and comply with the provisions of nominated legislation".
Funded organisations are not required to provide terms and conditions of employment that are identical to those contained in the relevant award or awards.
This is a mandatory requirement and forms part of the standard service agreement used by Department of Human Services and will operate as an on going contractual obligation for the life of the service agreement.
Subcontractors engaged for the delivery of funded services must also comply with identical requirements. A subcontractor, for the purpose of the MSN policy, is an entity who is not engaged by DHS but who has contracted (formally or implicitly) with the funded organisation to perform some or all of the organisation's obligations in respect of the delivery of the services specified in the funding agreement. The policy requirements apply only to employees of the subcontractors who are directly engaged in the provision of goods or services to the funded organisation.
Relevant Federal Awards
Information regarding relevant awards, employee classification scales and pay rates is available online at http://www.airc.gov.au (external link), or http://www.wagenet.gov.au (external link).
Care should be taken to ensure that the awards, classification scale and pay rates that are used for determining the no less favourable test are current and accurate.
Legislation
The MSN policy includes a requirement that the minimum terms and conditions proposed or provided by funded organisations and their subcontractors fully comply with standards and obligations established by nominated legislation. Entitlements established by the nominated legislation must be maintained. The nominated legislation as at May 2008 comprises:
- the Long Service Leave Act 1992 (Vic)
- the Juries Act 2000 (Vic), and
- the Outworkers (Improved Protection) Act 2003 (Vic).
Information regarding Nominated Legislation is accessible from IRV and online at the IRV website available through Business Victoria at http://www.business.vic.gov.au (external link).
Australian Fair Pay Commission
For the purpose of comparison, the employee's wages must be not less than the relevant award plus all relevant wage adjustments made by the Australian Fair Pay Commission (AFPC).
The AFPC can be contacted on 1300 139 699 or (03) 8621 8212. Updated pay rates are available online at http://www.workplaceauthority.gov.au (external link). Again, care should be taken to ensure that the award based wage rates utilised for determining the no less favourable test are accurate and reflect current AFPC wage decisions.
Australian Industrial Relations Commission (AIRC)
Allowances contained in awards (including transitional awards) are reviewed by the AIRC following the publication of an AFPC determination. Under the MSN policy, as part of the requirement to provide employment standards no less favourable, the relevant award or awards must also reflect all adjustments to allowances made by the AIRC. AIRC changes to award allowances are published and available online at http://www.airc.gov.au (external link).