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Education and Employment Legislation Committee
28/09/2016
Fair Work Amendment (Respect for Emergency Services Volunteers) Bill 2016

STEWART, Professor Andrew John, Private capacity

[12:09]

CHAIR: Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a short opening statement. At the conclusion of your remarks, I will invite members of the committee to put questions to you.

Prof. Stewart : I suspect I may be just about the only person here today neither qualified nor interested in talking about the precise rights and wrongs of the current dispute at the CFA. My focus is really entirely on the bill and the extent to which the bill represents a sensible and appropriate way of addressing the issues that have clearly arisen at the CFA and which may conceivably arise in the future at whatever other emergency services bodies might be covered by the bill. I put in a written submission which says something about the scope of the bill but what I am intending to do right at the moment is go to the core of the issues that I see with the bill and then obviously I will be happy to take questions.

I have a number of main points. The first is that this bill will really not address or is not needed to address many of the issues that have arisen in the proposed CFA agreement. To the extent that the CFA agreement might have discriminatory terms in it, the bill does not deal with that and it does not need to because the Fair Work Act already does. The Fair Work Act has provisions that allow and in fact require the Fair Work Commission to knock back a proposed enterprise agreement that has discriminatory terms in it. To the extent that there is an issue, as you just heard from Ms Nolan, about the proposed agreement interfering in a general sense with the capacity of CFA management to operate, the bill does not deal with that in any general way—and that is really not a matter for the law in any event other than in some very minor borderline issues that we do not need to go into.

To the extent that the bill deals with the question of an agreement contradicting the legislation that governs an emergency services body such as the CFA act, again the bill does not need to say anything about that because there is already a capacity under state law to address those issues. In my submission, I point out that the provisions this bill seeks to insert into the Fair Work Act can only be relevant if an enterprise agreement is put to the Fair Work Commission. In the case of the CFA right now, that can only happen if the Victorian Supreme Court is satisfied that the CFA board can lawfully agree to the agreement. In other words, the issue about whether or not the CFA would be acting unlawfully if it signed off on this agreement is a matter that not only can be put before a state court but has been put before a state court.

So that really just leaves the concerns about the role of the agreement of the type proposed at the CFA or, as I say, potentially some other emergency services bodies interfering with the role and responsibilities of volunteers. So the keys provisions in the bill here are the ones on page 4—proposed section 195A paragraphs (a) through (c)—and the bill talks about an enterprise agreement restricting or limiting a body's ability to engage or deploy its volunteers or provide support or equipment to those volunteers to manage its operations in relation to those volunteers or to recognise, value, respect promote the contribution of volunteers. So that is really where the bill is having its key effect. That is the set of issues which, at the moment, without this bill will not be legally addressed. Bear in mind, these are only issues that go beyond the question of the CFA or a body like it being able to comply with its statutory responsibilities. The question of the CFA being able to do its statutory job is already addressed by the state and can be considered by a state court—we do not need the bill to deal with that.

So what are my concerns about what the bill is proposing in relation to those provisions? That is two interrelated questions. First, how on earth does the Fair Work Commission consider what they mean and, secondly, are they constitutionally valid? In both cases, what you have got is a recipe for four uncertainty, which, I have suggested in my submission, would pretty much ensure that the current dispute of the CFA will simply continue. It will exacerbate the current dispute. It certainly has the potential to ensure that, if this bill is passed, the dispute will run on well past the current fire season.

On the interpretation issues, if you take a literal view of what this provision says, it is hard to see how you could have any enterprise agreement for a body like the CFA because that enterprise agreement, by definition, contemplates that work will be done by employees. It contemplates that resources and equipment will be provided to employees. But if that is the case, by definition, that is a job that a volunteer is not doing. That is equipment or resources not being provided to volunteers so is that not, in the words of the bill, restricting or limiting the body's ability to engage or deploy its volunteers, or to provide support or equipment those volunteers? No, that is a literal interpretation. I would hope that the Fair Work Commission, if it had to, or a court, if it had to interpret those words, would take a commonsense view and say, 'No, it is not any restriction. Surely it is an undue restriction or an unreasonable restriction.' Those words are not in the bill; they have to be read in and that is never a good idea.

For a start, on a literal interpretation, the bill potentially stops any agreement. If we assume that the sensible interpretation will be: we are not talking about any restrictions; we are talking about unreasonable restrictions or undue restrictions, that then creates a problem that the Fair Work Commission or court has to start forming judgements about how a body like CFA should be run. In effect, it sets up a tribunal or court sitting in judgement about how a CFA decides whether or not to allocate work between professional employees and volunteers. Beyond that, it sets up a recipe for anyone who wants to argue with the outcome to keep on appealing and arguing about it. If the CFA agreement is ultimately struck and if it survives the Supreme Court action and goes before the Fair Work Commission, these provisions, if they are in place whether before or after that happens, will provide a vehicle for ongoing argument about the validity of key provisions in the agreement.

The second point is about constitutionality. I certainly do not suggest in my submission that the bill is definitely unconstitutional or the legislation would be definitely unconstitutional. I say with some force, however, that there will be an obvious argument that it is unconstitutional. The High Court has said in a series of decisions that it is perfectly okay for federal law to regulate the wages and employment conditions of state government workers or state government agency workers but there are limits. One of the limits articulated in a 1995 decision involving the Australian Education Union and also the Victorian government, as it happens, was that the Commonwealth cannot tell a state who or how many people it employs to do work. There is an argument that would be exactly what the Commonwealth would be doing with this legislation; it would be having a federal body, the Fair Work Commission, in effect overwriting the decisions of a state government body like the CFA when it decides how it wants to structure its relations with both its employees and its volunteers.

If there was a constitutional challenge, it might succeed or it might fail but there is a clear potential there for that matter to be dragged not just through the Fair Work Commission but all the way up through the courts to the High Court. So, again, the legislation, it seems to me, is a recipe for uncertainty in dealing with a dispute of the kind that clearly underlies this legislation.

CHAIR: Thank you. Senator Cameron.

Senator CAMERON: Professor Stewart, can I go back to those four points that make up the objectionable terms under the bill? I go to the third one first. It says an objectionable emergency management term is a term that has or is likely to be 'restricting or limiting the body's ability to recognise, value, respect or promote the contribution of its volunteers to the wellbeing and safety of the community'. How would that be applied in law?

Prof. Stewart : With difficulty is the answer. Obviously this only becomes relevant if an agreement is struck, it comes before the Fair Work Commission and somebody objects to the Fair Work Commission or a member of the Fair Work Commission themselves or staff of the Fair Work Commission identify the possible application of that provision. In that event you have an argument, and I think it is obviously possible to see how you could construct an argument either way about any agreement that necessarily is dealing with the role of professional employees in relation to volunteers. Anything that a body like the CFA agrees with its employees about their employment has a potential to impact on volunteers, because it is the type of body that uses both employees and volunteer workers together. Of course, there are many other organisations that do that, but the bill is concerned with an emergency services body.

It seems to me that you could easily construct arguments which would be perfectly plausible that an agreement of the kind that is being proposed either does or does not fail that test. My point is not so much about which argument would be right as the fact that it is easy to construct the arguments and therefore the scope for disputation, uncertainty, delay and expense is considerable.

Senator CAMERON: Some of the evidence we have had before us—certainly from the volunteers groups—is basically about impinging and a union's capacity to deal with managerial prerogative issues. Isn't it true that there is no unfettered managerial prerogative in this country?

Prof. Stewart : From a legal point of view—it is difficult to answer that question, because the issue of managerial prerogative arises in a number of areas. For the purpose of some legal issues such as what you can and cannot validly have in an enterprise agreement, arguably there is no relevance given to what is managerial prerogative and what is not. In other areas such as whether a dismissal is fair there is scope for saying that, yes, there is such a thing as managerial prerogative. Clearly, I think, though, we would say this: the law recognises that employers have a right to manage their business. It also recognises that employees have a legitimate interest in the way they are treated. So, to the extent that the dispute at the CFA is about the right balance to be struck, there is a clear industrial issue there. Is it a legal issue? Not so much. What this bill will do is create a legal issue around the very specific question of how a body like the CFA manages its employees and its volunteers. Do employees have a legitimate interest in that? Yes. Do volunteers have a legitimate interest in that? Yes. Again I stress I am not here to talk about the rights and the wrongs. It seems to me from everything I have heard that there are clearly strongly held and potentially legitimate concerns on every side of this debate. The question is: does this bill help resolve the dispute? I would say no; it just adds uncertainty.

Senator CAMERON: You say 'adds uncertainty'. That means the situation would be worse under this bill? There are problems there that needs to be resolved, and this adds to that uncertainty, so it makes it worse.

Prof. Stewart : I would say that is certainly my view. There is clearly uncertainty at the moment because we do not know what the outcome of the Victorian Supreme Court litigation is going to be. There would be further uncertainty assuming the Victorian Supreme Court gives an agreement the go-ahead. Of course, that might be an agreement that is rather different from the one that has currently been proposed. If an agreement comes before the Fair Work Commission, there might be arguments about discriminatory content. There is an element of uncertainty there which we cannot escape from. This adds another layer.

Senator CAMERON: I go to the issue of standing before the Fair Work Commission. This bill talks about designated emergency management bodies and does not prescribe them by the regulations or any other body by the regulations. Is it correct that the Fair Work Commission can provide standing to someone who makes a submission to the commission to seek standing and make a point about an issue and also that this prescription goes way beyond anything else that exists in the whole history of standing in the various iterations of the Fair Work Act in this country?

Prof. Stewart : I cannot speak for the whole history of federal legislation since 1904—

Senator CAMERON: You're an expert!

Prof. Stewart : That is true—but not without at least going back and checking. I can certainly talk about the Fair Work Act and I do make this point in my written submission. Under the act as it stands, nobody has an automatic right to make a submission in a matter relating to an enterprise agreement before the Fair Work Commission with the sole exception of the federal minister when there is a matter of federal public sector employment involved. So what this bill would do is to give some volunteer organisations a right to have a say about any matter affecting an enterprise agreement at a relevant organisation that goes beyond a right that is simply not available to anyone else. Employees, employers, employer associations, state governments and even the federal minister do not have the rights that this bill would give to a volunteer organisation. The practical situation under the Fair Work Act is that, if a body comes along that has a legitimate interest and can be seen to have a legitimate interest in an enterprise agreement, it is allowed to put views to the commission.

CHAIR: You sat in the audience this morning. Would you not argue that, from what you have heard today, the volunteers of the CFA do have a legitimate right to have a view and have it heard on this issue?

Prof. Stewart : I certainly believe that they have concerns which on the face of it—I am speaking here as a member of the public—

CHAIR: It is all on the face of it.

Prof. Stewart : On the face of it they seem to be legitimate concerns. And it is easy to see how an agreement at a body like the CFA, even though it is an agreement between the CFA and its employees, has a potential effect on volunteers. I would expect in that situation the Fair Work Commission to exercise its general discretion—which is what it has under the current act—to allow volunteers to be heard. What this bill would do is remove any discretion from the Fair Work Commission but only in relation to volunteer organisations, so the Victorian government would not have a right to have a say, the federal minister would not have a right, volunteers would not have a right but organisations, as long as they are incorporated or mentioned in the regulations, would.

CHAIR: Thank you. Senator Lambie.

Senator LAMBIE: I just noticed that you have in the past helped the government on the drafting and structure of the fair work legislation. Is that the federal one?

Prof. Stewart : I assisted the department, which at the time was the Department of Education, Employment and Workplace Relations, with the drafting of the Fair Work Act and also some of the transitional legislation that followed.

Senator LAMBIE: I notice that you have been given a couple of grants as part of a team to study the Fair Work Commission's role in facilitating workplace cooperation. Is that the Fair Work Commission in Victoria?

Prof. Stewart : That is the federal Fair Work Commission. Yes, I am part of a research team. It is called a Linkage grant. It involves working with an industry partner, which in this case is the Fair Work Commission, to research some of the things which both the Fair Work Commission and some state commissions have done to help promote workplace cooperation.

Senator LAMBIE: When was that grant given to you? When did you start looking into that?

Prof. Stewart : That was 2013, I think.

Senator LAMBIE: So the way this is being handled by Fair Work in Victoria with what is going on now—what is your overall judgement on that? What do you have to say about the way it has all played out, with them standing over the top as a bureaucracy.

Prof. Stewart : Perhaps I should just clarify first that the research project to which you are alluding is concerned with some very specific initiatives about how the Fair Work Commission or a body like it can help organisations to produce more cooperative or productive workplace relations. It does not involve reviewing absolutely everything they do. But to answer the specific question you just asked, the role the Fair Work Commission has played to date in the form of conciliation recommendations from Commissioner Roe, the president's involvement—from everything I have read about that it just seems to be a fairly standard way of the Fair Work Commission getting involved in helping to resolve what is clearly a very difficult dispute. Without having had any direct involvement in those matters, I cannot speak to whether or not the Fair Work Commission has done everything it could have or whether it could have done a better job.

CHAIR: But you have an opinion.

Senator LAMBIE: You must have an opinion.

CHAIR: You are a self-confessed expert. You are sharing your opinion with us on the constitutionality or not of the bill before us. What is your opinion on Senator Lambie's question?

Prof. Stewart : The answer, without having much more direct involvement—I have had journalists talk to me about this matter and interview me, not so much about the original dispute, or not so much the CFA dispute, but about the federal government's proposed legislation and now actual legislation. I am not in a position to talk about the rights and wrongs, other than to say that I think there are legitimate concerns. I could understand why the Commonwealth would be interested in intervening in this matter. And it seems to me that potentially you can think about sensibly constructed legislationwhich, for example, ensures—if the Fair Work Act does not already—that an agreement struck for a body like the CFA does not impede the CFA or an equivalent body from fulfilling its statutory responsibilities. I think it is to the extent that the bill goes beyond that into this nebulous area of the proper relationship between employees and volunteers, which is a matter of legitimate interest for those volunteers—the extent to which the bill's provisions actually provide a solution to that. That is where my concern is.

Senator LAMBIE: I just have to ask: we have been paying you to do a study since 2013. Is that correct? We have been paying you, or a team, to do a study on the Fair Work Commission's role in facilitating workplace cooperation—

Prof. Stewart : No, that is not the way those grants work. I am paid by my university to be involved in that research. The funding that comes from the Australian Research Council is directed, for example, to employing research assistants to help us do that study. It provides certain travel expenses and so on. But the organisation that pays me to do the research is the university, and of course that is a publicly funded body, so—

CHAIR: I think it is part of your KPI, isn't it, getting Linkage grants from the ARC?

Prof. Stewart : It certainly looks good on the university's record and the person's CV.

Senator LAMBIE: Did you actually apply for the grant yourself?

Prof. Stewart : I was part of a team. I am one of a number of investigators who applied, along with the Fair Work Commission and the Industrial Relations Society of New South Wales, Newcastle branch.

Senator LAMBIE: Do you mind if I ask you what that grant was worth and when your time line is up for the end of that grant or for the study to be completed?

Prof. Stewart : I cannot remember off the top of my head what the amount is. It is 100 and something thousand dollars of ARC funding in total. We are in the final year of the grant, and as we speak I am working on one of the outputs from that, which is a book. My colleagues have written some case studies, which are available on the Fair Work Commission website, which document ways in which the commission can help organisations to turn around poor workplace relations. I think I can be very confident in saying that the CFA is not one of the organisations that has been involved in that particular project. There is pretty clearly an argument—

CHAIR: [inaudible] across Australia, though, is it? The way you are saying it is that it is in the minority of companies or organisations across Australia.

Prof. Stewart : Yes. This is an approach which has been rolled out for a small number of organisations.

CHAIR: I would just hate for people to get misinformation from your evidence.

Prof. Stewart : The starting point for our research has been some very successful initiatives going back over 20 to 30 years in the Hunter region in New South Wales. The Fair Work Commission has been rolling this out more recently and has had some what they think and we think are great successes.

CHAIR: When you were employed by the workplace relations federal department, who was the Minister for Workplace Relations at that time?

Prof. Stewart : That would have been Julia Gillard.

Senator RHIANNON: If this summary is incorrect, please elaborate, because I found your opening statement very useful. Are you saying that the CFA currently has the right to manage its own affairs as it wants but if the bill passes then the federal government would be restricting the right of a state fire service to decide how to best protect the citizens in its area and that that could be unconstitutional?

Prof. Stewart : The CFA's right to manage its affairs is constrained by the legislation under which it operates. It is constrained by its current enterprise agreement, and you heard Ms Nolan express some concerns about that. The provisions of the bill, if the bill is passed, will introduce some further constraints on the capacity of the CFA to reach an agreement with its employees. Now, it is a matter for debate, and there is clearly room for reasonable difference of opinion, about whether an agreement that the CFA reaches with its professional firefighters does or does not have the effect of limiting its ability to manage.

CHAIR: In evidence we have heard that both the volunteer and paid firefighters within the CFA are all professionals. The use of language in this dispute is quite important.

Prof. Stewart : The answer is that the right to manage is going to be contested no matter what. There is going to be an argument that any agreement that the CFA reaches with its employees limits the ability of the CFA to manage. That might be right or it might be wrong. The point is what the bill will do. That is obviously the issue this committee is considering. The bill will limit the CFA's capacity to reach agreement in particular terms, bearing in mind that the bill's provisions would only become relevant if the Victorian Supreme Court had been satisfied that the agreement is not inconsistent with the CFA's obligations under its legislation. This bill comes into play only if the Victorian Supreme Court lifts its current injunction.

Senator RHIANNON: Could you just elaborate on the Supreme Court. I was interested, and it has come up a number of times in evidence here, and you mentioned that we do not know the outcome at the moment, and also in your evidence you have said that different interpretations can be given, open to debate in different areas. Would it not be useful or best for this committee to wait until the Supreme Court have made a decision, so that we are more fully informed?

Prof. Stewart : I can see how that argument can be made, but I do not think I would express a view about that. The point I am making is that if you go ahead and consider this bill, if the bill is passed, it is still only going to become relevant to an agreement if the agreement gets through the hurdle of the current Supreme Court litigation. I am avoiding the question, Senator, simply because it seems to me that there is not a simple yes or no answer to that. Of course, if you waited, you would know what the outcome is of that litigation, but bear in mind that that could take some time and there could be an appeal. At some point, it seems to me that the committee will probably have to come back—and the committee is obliged to finish its work anyway.

Senator CAMERON: Section 172(1) of the act deals with permitted matters and that has to be done in accordance with parts 2 to 4 of the act. Permitted matters include matters pertaining to the relationship between an employer that would be covered by the agreement and that employer's employees who would be covered by the agreement. Isn't it true that health and safety issues are commonly dealt with in agreements and matters dealing with managerial prerogative are included in agreements? So these two issues are normal in agreements.

Prof. Stewart : Anything that is put in an agreement where an employer is making a commitment as to how it is going to employ its staff is, by definition, impinging on management's freedom. By definition, it is agreeing that it will do or not do certain things. So any agreement is going to have an impact on managerial freedom and managerial prerogative. Of course, the terms of the agreement have to relate to the relation between the employer and its employees. So, by definition, the agreement is not directly concerned with the employer's relationship with its volunteers or with any contractors that it uses or anyone else. But, clearly, what is agreed with employees can have an impact on those people.

Senator CAMERON: So, for instance, is the type of safety equipment provided to the career firefighters a matter that would be a legitimate negotiated position under the act?

Prof. Stewart : It is certainly a matter which an enterprise agreement can deal with, though the agreement cannot legally deal with, for example, an issue of safety equipment in a way that would override the operation of state work health and safety laws.

Senator CAMERON: The act does provide for an overriding situation in emergencies, does it not?

Prof. Stewart : The Fair Work Act says that an enterprise agreement cannot override state or territory laws dealing with certain subjects. They include work health and safety, workers compensation, discrimination, training. Federal enterprise agreements—and I think this is the provision you are referring to—cannot override state laws dealing with essential services or emergency management to the extent that those laws are concerned with a direction to perform work. So, if a state essential services or emergency law—and the CFA legislation would, on the face of it, fall within that category—provides for certain things to happen, to secure essential services or to deal with an emergency, a federal enterprise agreement cannot override that.

Senator CAMERON: And that goes for the Equal Opportunity Act 2010—

Prof. Stewart : Yes.

Senator CAMERON: the Occupational Health and Safety Act 2004—

Prof. Stewart : Yes.

Senator CAMERON: In relation to the Fair Work Act, it cannot override the powers and obligations under the Country Fire Authority Act, as well?

Prof. Stewart : I would disagree with that last point in terms of how broadly you just put it. The situation is that the enterprise agreement cannot override that act to the extent it is dealing with essential services or the management of emergencies and a direction to perform work.

Senator CAMERON: So for instance, section 27 of the Country Fire Authority Act designates how the chief officer controls brigades in an emergency. That would be not overridden?

Prof. Stewart : That is correct. The operation of that provision would be protected from being overridden by anything in a federal enterprise agreement.

Senator CAMERON: If, as we have heard this morning from assertions by the volunteers organisation, there are 15 brigades called out to a fire, then those volunteers need to have a copy of the enterprise agreement in their back pocket to know what they can do and cannot do. That is not possible under the operation of the act, is it?

Prof. Stewart : The legal position is as I have described. What the practical position might be is not a matter that I can comment on. The extent to which, if an agreement were made in the terms currently proposed, that would at a practical level create difficulties is not a matter on which I can venture an opinion. But the legal position is that the enterprise agreement could not obstruct the operation of the state legislation in the situation you have described.

CHAIR: Professor Stewart, on reflection, because we have run out of time, could you please review the evidence given by the volunteer fire brigades this morning about specific examples of the chain of command—aside from that specific clause, a chain of command within the operations of the CFA which this particular EBA undermines and ensures that they cannot do what they are supposed to do under the state act. On notice, if you could have a look at their evidence when the Hansard comes out and give us your advice and opinion, that would be fantastic.

Prof. Stewart : I would be happy to do that. I did not hear all of the volunteer organisations' evidence this morning.

CHAIR: That is fine. It will give you a chance to have a look at it so we can clarify it. Thank you very much for your evidence today. Senator Roberts, did you have a question?

Senator ROBERTS: Just a quick one. You have raised the practical level. If the EA is overridden by the statutory provisions in Victoria—but the EA, we have been told by the previous CEO of the CFA and by the volunteers, actually does override the statute—then, on a practical level in a bushfire emergency, are we going to have to go to court before we respond to the bushfire?

Prof. Stewart : I suppose that is the very qualification I was making in relation to Senator Cameron's question. Again, I did not hear all of the volunteer organisations' evidence this morning, although I did hear Ms Nolan's evidence, and it seemed to me that what she was talking about was not so much a question of what the legal position would be but on a practical level. Again, I simply am not qualified to say at a practical level what difficulties would be caused. You would—

CHAIR: I think Peter Rau made it really clear in terms of having to send people off to dispute mechanisms. Thank you very much, Professor Stewart, for your evidence.