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Wednesday, 30 June 1999
Page: 7852


Mr REITH (Workplace Relations and Small Business) (9:36 AM) —I move:

That the bill be now read a second time.

It is a national imperative for there to be progressive, evolutionary change to Australia's workplace relations system. Australian workplaces operate in an ever changing, ever challenging environment.

Similarly, as workers we want our living standards and those of our families to improve. The living standards of Australian workers and families depend on workplaces that have the capacity to maintain and improve those standards.

Australia may be isolated geographically from the rest of the world, but we must keep pressing to achieve an internationally competitive workplace relations system. The rest of the world is much closer to us than we really think. It has a say in the quality of our pay packets.

With the world moving ahead, remaining stationary in our reform effort really means that we fall behind. And if our workplace relations system falls behind, then so do our living standards. And, of course, workplace relations systems affect not only those in jobs but also the chances of unemployed Australians to get jobs.

We still have too many unemployed people in Australia. That is why it is the responsibili ty of the Australian government to do what a government is elected to do—to show leadership in the national interest, to make Australia stronger and to implement the improvements to Australia's workplace relations system that we promised at the last federal election.

Of course, workplace relations does not just involve economic considerations. It is also about human relationships, about fair dealing between employers and employees and about social considerations, such as getting the relationship between our work and family life better balanced and giving the many unemployed an opportunity to compete in the labour market.

That is why workplace relations reform is, under the coalition government, evolutionary change. Real people, real families, real workplaces are involved. But if this parliament considers it right to make change in an evolutionary rather than radical way then it must take up the opportunities for amendment as and when the next stage in the reform cycle comes along.

The changes the coalition government will be making to the workplace relations system in the second half of 1999 are the next evolutionary changes to the system, three years after the 1996 reforms. They are what we said we would do when we released our More Jobs, Better Pay policy in September 1998.

Our 1996 reforms have helped Australia become much stronger with fewer strikes, low inflation, higher productivity and low interest rates, have helped Australian families improve their living standards with more flexibility and more disposable income, have protected the low paid with real wage increases, have helped create more than 400,000 new jobs in our economy and have helped reduce unemployment to the lowest levels this decade.

These outcomes are the product of having been determined enough to do the right thing and take the initial steps in the reform cycle three years ago. It follows that continuing the same type of reforms, and building on their strengths, will allow all of us to reap the same benefits into the future. That is why the government is introducing this bill—not as an abstract policy prescription but to improve the quality of workplace relations in Australia and the outcomes for workers, employers and those seeking work.

We may not know the future, but we can make it more secure for our nation, for ourselves and for our families. We have such a good quality of life in Australia that we cannot afford to miss reform opportunities.

This next phase of workplace relations reforms build on the objects of the 1996 system that we now know has worked well. They propose important amendments that are necessary in light of experience to improve the operation of the system, entrench its gains and extend its benefits more widely throughout the work force.

. They will continue to give workers and employers at their workplace more choice and more opportunities to manage their relationships without forced interference from unwanted parties.

. They will continue to end the paternalism of the old system which told workers, their workmates and their employer what was good for them, without any regard to their own circumstances.

. They will make intervention by third parties in decisions made by workers or their employers more democratic and more relevant, removing similar centralisation and control eliminated by governments in comparable economies, including measures taken in the United Kingdom in the mid-1980s and not since overturned by the Blair Labour government.

. They will continue to devolve powers to the workplace where workers rights to make agreements individually or as a group, to withdraw their labour or not, to join or not join unions and to decide just how they want their industrial disputes resolved should be recognised and respected.

. They will continue to remove unnecessary complexity from the system so that workers and employers get a real say, not just lawyers, management consultants and union officials.

. They will continue to maintain a safety net of minimum wages and conditions to protect the low paid and disadvantaged in the work force.

. They will continue to remove red tape and unjustified cost, especially from small and medium sized businesses, including in the area of unfair dismissals.

Objects

The objects of the Workplace Relations Act will be amended to reflect and reinforce the reform agenda and to emphasise the proper safety net role of awards. The principal object and the objects of part VI will be amended to make it clear that the safety net is intended to help address the needs of the low paid. The amendments clarify that awards should be primarily for the protection of the low paid (rather than other groups) and that the level of wages and conditions is a factor in meeting their needs. They also indicate (by referring to `appropriate' allowable award matters) that this safety net does not require every allowable award matter to be included in each award made under the act.

The principal object is also being amended to recognise the role of mediation as an option available for dispute resolution; articulate the principle underpinning the introduction of secret ballots, and recognise changes to the commission's powers and functions in relation to both voluntary and compulsory conciliation. The amended principal object will also make it clear that industrial action that does not have protected status under division 8 of part VIB of the act is inconsistent with the purposes of the act. The act does not imply any legitimacy for such unprotected industrial action and provisions of the act about stopping or preventing such action should be applied in that context.

Workplace agreements

Australian Workplace Agreements (AWAs), Certified Agreements (CAs) and the `no disadvantage test' are retained. However, agreement approval will be simplified by streamlining some of the current procedural and approval requirements. Agreements based on the corporations power of the Constitution may be lodged with the Workplace Relations Registrar (or commission where there is doubt about the agreement) with appropriate supporting documentation, and will only be tested by the commission in certain circumstances including when a threshold number of em ployees raise objections to the agreement within a 14 day period after lodgement. For other certified agreements, the commission will only conduct public hearings on request, or where it has serious concerns regarding the filed documentation.

Unions that have chosen to be bound by agreements made directly with employees will no longer be able to block the extension or variation of those agreements. Provisions currently placing limitations on certified agreements that apply to a part of a single business will be repealed. A certified agreement made after the nominal expiry date of an award made under section 170MX will prevail over the award, and a certified agreement made under the provisions of the Workplace Relations Act will prevail over a CA made under the provisions of the previous Industrial Relations Act.

The current filing and approval processes for AWAs will be amalgamated to ensure a much simpler and more streamlined process. AWAs and variation agreements will be able to take effect from the day of signing or the date specified in the agreement or the day employment commences. This will mean that there is a presumption that the AWA meets all the statutory tests and that the parties in agreement require no further action. There are complementary provisions introducing cooling off periods and provisions to fully protect employee interests. AWAs for high salary earners (those whose remuneration is higher than $68,000) will be fast tracked, and identical AWAs will not be required to be offered to all comparable employees.

Approval of all AWAs will be by the Employment Advocate. Where agreements are made which raise concerns about the `no disadvantage' test (NDT), the Employment Advocate will retain the right to request that parties modify their agreement if it does not meet the requirements of the NDT, or reject the agreement. The Employment Advocate will also be empowered to approve AWAs on public interest grounds (for example, to meet circumstances where short-term business survival is at issue) but must do so in accordance with principles which may be laid down by the AWRC.

In addition to simplifying agreement making processes, the legislation will allow greater scope for use of AWAs, including their operating more effectively in combination with CAs. AWAs will prevail over CAs, either to the extent of any inconsistency or comprehensively. At present, this may only occur in limited circumstances. In addition, certified agreements will not be able to operate to exclude later AWAs, as is the case under current arrangements. Provision is also being made to ensure AWAs are not excluded by those awards, for the term of their duration, made under section 170MX.

Consistent with changes to the principal object and the objects of part VI focusing the safety net on the low paid, our amendments make it explicit that maintenance of internal relativities between classification based rates of pay within awards is not a relevant consideration in adjusting the safety net.

Awards

Allowable matters provisions will be tightened to clarify the original intent of the legislation and maintain the statutory rigour of the allowable matters provisions and to remove elements which duplicate other legislative entitlements, or are more appropriately decided at the workplace. Our amendments will more clearly require the commission, when simplifying awards, to have regard to the primacy of agreement making, the productivity and efficiency requirements of businesses—including small business—the removal of inefficient work practices and the importance of regulating workplaces to the minimum extent only.

The definitions and specifications of the various allowable award matters are also being tightened by reference to the basic elements of the relevant entitlement that is within the award making jurisdiction. For example, redundancy pay will only relate to genuine redundancy, and not to custom and practice that arise in certain industries, and the range of matters referred to by `other like forms of leave' will be more closely specified.

The current provisions of section 89A which allow matters that are incidental to the specified allowable award matters and neces sary for the effective operation of the award are amended so that only matters which are essential for the purpose of making a particular provision operate in a practical way can be included. A full bench of the commission will be required to approve all exceptional matters orders, rather than just multi-employer EMOs as is currently the case.

To provide a greater incentive to the parties for the award simplification process to be undertaken expeditiously, the current process for dealing with obsolete awards is being amended to require the registrar to identify such awards every three years (rather than the current five) and, once these awards are identified, to require the commission to finalise its dealings within six months. Awards will also be required to be simplified before they can be varied for the purposes of including future safety net adjustments.

Interaction of state and federal jurisdictions

The Workplace Relations Act is being amended to strengthen the presumption in favour of existing forms of regulation of employment relationships to the exclusion of proposed new federal award coverage. It will give greater recognition to cases where an employment relationship has been subject to statutory minimum employment conditions. This stronger presumption will apply to all cases before the commission which have not yet been finally determined on the question of whether a federal award should be made.

Roping-in

Businesses, and particularly small businesses, require better notice of proposed hearings of union roping-in logs of claims and broader rights of objection to them. Parties will be given at least 28 days notice prior to the initial listing of logs of claims which include unlawful demands or claims relating to matters outside the commission's jurisdiction. In addition, small business and other employers need to better understand their workplace relations responsibilities. To accommodate this, the act is being amended so that when logs of claims are served the industrial organisation making the demand must serve the other party with an information sheet relating to such claims. Content requirements for the sheet will be detailed in the regulations.

Australian Workplace Relations Commission (AWRC)

The Australian Industrial Relations Commission is to be renamed the Australian Workplace Relations Commission (AWRC) to reinforce the workplace focus of the system. Consistent with the government's policy statement More Jobs Better Pay, a number of changes are also being made to introduce contemporary management practices into the structure of the commission and provide the president with more responsibility over its work.

In order to put in place a more contemporary structure and increase the commission's flexibility to meet the changing mix and volume of its workload, the government is introducing a new three-tier structure to replace the current five-tier structure. The new structure will be comprised of a president, vice-presidents and commissioners, collapsing the current vice-president, deputy president and senior deputy president levels into the one level of vice-president. The remuneration of current members will be protected. Seniority will be removed as a basis for appointment to higher levels and revised tenure arrangements will be introduced for new appointees other than the president, allowing appointments for a fixed term of seven years. Provision will also be made for acting commissioners, on a similar basis to arrangements which currently apply to presidential members. This will allow for the commission to respond more flexibly to changing workloads.

In addition, a number of changes are being made in key areas of the commission's operations. The president, in conjunction with the Workplace Relations Registrar, is to be given greater responsibility and powers for managing the work of the commission and the registry, including over the training and professional development of members, also taking into account the needs of the concurrently appointed state members.

These changes will underpin the continuing introduction of contemporary management practices to improve access to, and the service delivery of, the commission and registry. They will be complemented by enhanced reporting requirements.

Conciliation

In order to assist the parties to achieve better outcomes by taking greater responsibility for their workplace relations arrangements, and also with the formal recognition being given to voluntary mediation, it is necessary to vary current compulsory conciliation requirements. The commission's compulsory conciliation powers will be limited to disputes relating to allowable matters, following termination of a bargaining period on certain grounds, demarcation disputes, unfair dismissal cases and, in exceptional circumstances, other disputes. Conciliation of private disputes in relation to non-allowable matters—that is, matters over which there cannot be arbitration—will be voluntary with a flat fee of $500 per application to be charged by the commission.

Complementary measures are being put in place to remove unnecessary procedural requirements in relation to voluntary conciliation in the agreement stream to reinforce the voluntary and informal nature of the proceedings.

Mediation

More Jobs Better Pay committed the government to giving formal legislative recognition to the provision of voluntary mediation services in industrial disputes as an alternative or supplement to the quasi-legal processes of the commission. While informal mediation has always been available to the parties, a clear role is being articulated for mediation as a substitute for tribunal based involvement. This legislation formally recognises the availability of mediation on a voluntary basis as an option for dispute resolution prior to protected action, during suspension of a bargaining period, following termination of a bargaining period, as a step in dispute resolution procedures and in relation to agreement making generally. The legislation also ensures that federal and state industrial authorities can be restrained from acting in appropriate cases where the parties are undergoing mediation. A facility will be established to accredit mediators and promote the use of mediation.

This change is consistent with the progressive development of a less centralised, less structured and more varied system that offers the parties more choice to develop their own workplace relations arrangements and culture. Mediation will provide an opportunity for a less interventionist and more informal alternative to the commission's conciliation processes. The involvement of independent mediators will also extend services for regional and small business, and for parties not wishing to get involved in the commission's formal processes.

To support the effective use of mediation, a Mediation Adviser will be established to establish and maintain a list of accredited mediators, approve mediation agencies to carry out assessment and accreditation of mediators, set competency standards in association with approved agencies and promote the use of mediation.

Unlawful industrial action and compliance

The act is being amended to improve the efficiency of the making and enforcement of orders against unprotected industrial action and to give better access to common-law remedies. The commission will be required to make an order under section 127 directing industrial action to cease as soon as it is satisfied that such action is unprotected. The legislation is also being amended to require that the AWRC as far as practicable must deal with a section 127 application within 48 hours of the application being received. If the application has not been determined within the 48 hours, the AWRC must issue an interim order to stop the industrial action, unless to do so would be contrary to the public interest. The amendments also clarify that sympathy and political action is unprotected.

In addition to directing that unprotected action cease, the AWRC will be able to make an order to prohibit impending or planned industrial action. It will also be able to make an order where there has been industrial action in the past three months and there is a possibility of further industrial action. Applications for orders will be able to be made by a person either directly or indirectly affected (or likely to be affected) by industrial action, and orders will be able to be made in respect of unions and their officials.

We are amending the act to clarify that orders may only be made against employers in respect of unprotected lockout action (not, for example, to prevent employers from changing rosters or relocating staff). Orders will be available in situations where work is regulated by an agreement made under the Workplace Relations Act. Our amendments further require the Federal Court to act promptly in dealing with applications for enforcement of section 127 orders. State Supreme Courts are also being given the power to enforce section 127 orders (including by injunction). Current restrictions on access to court (tort) action will be lifted by repeal of section 166A of the WR Act.

Protected industrial action and secret ballots

Protected industrial action will be preceded by longer (five-day) notice periods and by a secret ballot process overseen by the AWRC, which will be empowered to determine whether a ballot should or should not proceed. An application for a secret ballot can be refused on the grounds that the applicant is engaged in pattern bargaining or is not genuinely trying to reach agreement.

An application for a secret ballot will only be able to be made during a bargaining period and will be required to include a range of information, such as the proposed certified agreement to which a secret ballot relates, the group of employees or members who are to be balloted, and the question or questions to be asked in the ballot. Members of organisations making agreements (or the employees to be covered in the case of non-union agreements) would be eligible to vote in a ballot. The vote would be carried by a majority of valid votes cast with a quorum required of at least 50 per cent of eligible voters. The ballot paper will be required to include information on a range of matters together with a prescribed statement outlining the implications of taking or not taking industrial action. The government will refund 80 per cent of the reasonable and genuinely incurred costs of a ballot.

The AWRC will be empowered to suspend a bargaining period on application from a negotiating party if 14 days have passed since the protected industrial action commenced, unless the AWRC considers it is in the public interest for the bargaining period to continue. Suspension or termination of a bargaining period by the AWRC will also be required in the case of a party engaging in unprotected action in relation to a proposed agreement. The amendments will also allow for a bargaining period to be terminated if a party is engaging in pattern bargaining. The commission will still be able to terminate a bargaining period of its own accord in certain circumstances where protected action is threatening the health or welfare of the population or impacting adversely on the economy overall.

Where suspension or termination of the bargaining period occurs, the AWRC will be required to inform the parties of the availability of voluntary conciliation and mediation services and of the role of the Mediation Adviser.

Strike pay

In order to prevent distortion of the statutory intention, the legislation will expressly define the period in relation to which payment of strike pay is prohibited as the whole of each working day upon which any industrial action occurs.

Freedom of association

Amendments will give wider coverage to the freedom of association provisions of the act by closing loopholes which have emerged in the operation of part XA. There will be greater protection for employers and subcontractors and their employees against indirect pressure or coercion. In particular, conduct which breaches freedom of association under the guise of `site agreements' will be prohibited. It will be unlawful for a person who is in breach of part XA to continue to establish or maintain union closed shops, and parties will be required to take positive steps to overcome them. The current prohibition clauses in agreements which directly require union preference will equally apply to indirect preference provisions such as union encouragement or discouragement clauses. The provisions of the act which allow the Federal Court to set aside or vary contracts made by independent contractors, will be repealed.

Right of entry

In order to enter an employer's premises for the purposes of investigation or discussion, a union official will be required to have a written invitation from a union member. Invitations are to be effective for 28 days. To protect the anonymity of individual union members, a system of certificates will be introduced which will require union officials, if so desired by their members, to attain a certificate from the registrar. These certificates will act as a substitute for an invitation for the purpose of entry to premises.

Under the proposed changes, there will be a requirement that permit holders provide at least 24 hours written notice to the relevant employer and the occupier of the premises of their intention to enter the workplace. Union officials will only have the right to inspect records which relate to the employment of their members. Where a permit holder has intentionally hindered or obstructed any person or otherwise acted in an improper manner, the commission will have the power to revoke or vary a permit.

Termination of employment

The burden on employers, especially small and medium businesses, of unfair dismissal applications will be further eased through reforms to discourage speculative and unmeritorious claims and introduce greater rigour into their processing. Access to costs will be widened, contingency fees disclosed and the commission will be required, at the conciliation stage, to make a recommendation as to the appropriate settlement or discontinuance of the matter, having regard to the merits of the case. Constructive dismissal claims, where employees resign but claim unfair dismissal, will be tightened.

Mr Speaker, the introduction of this bill implements almost all remaining elements of the coalition's More Jobs Better Pay workplace relations policy for which a mandate was obtained at the October 1998 federal election. Already since the election the government has introduced and reintroduced legislation relating to youth wages, unfair dismissals and occupational superannuation. The bill also follows an extensive consultation process over the past 18 months, including the release of six ministerial discussion papers, a detailed election policy, a public implementation paper and stakeholder consultation through the National Labour Consultative Council and its Committee on Industrial Legislation. I thank all those who have constructively participated in these consultations.

Australia faces many challenges, some foreseen and some unforeseen as we enter the next millennium. We know that continuing to reform our workplace relations system, especially in relatively strong economic times, will make us stronger for those unforeseen economic and social challenges, and for the protection of the Australian sense of a fair go.

I commend the bill to the House and table the explanatory memorandum along with the regulatory impact statement.