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Thursday, 11 May 2000
Page: 16337

Mr REITH (Minister for Employment, Workplace Relations and Small Business) (5:01 PM) —I move:

That the bill be now read a second time.

An enduring characteristic of the Howard coalition government has been our commitment to policy-making in the national interest. Our workplace relations policies are designed to benefit both the national interest and our workplaces as a whole, not narrow sectional interests. We are transforming what was for decades a centrally controlled industrial relations system into one where outcomes are put above process, where co-operation substitutes for backroom deals, and where agreements between employers and employees at the workplace level have primacy over the intervention of third parties.

Two broad goals underpin these reforms. The first is to ensure that Australia has a workplace relations system that sustains and enhances our living standards, our jobs, our productivity and our international competitiveness. The second is to promote a more inclusive and cooperative workplace system, one that accepts the realities of a diverse, mobile and skilled labour force—where most employers and employees are capable of making agreements on wages, conditions and work and family responsibilities subject to a safety net of minimum standards. Achieving these goals has required structural reform to the system.

As this week's budget papers noted, international authorities have recently concluded that `structural reforms have raised Australia's sustainable productivity growth, thereby enhancing the growth potential of the economy'. The result has been lower unemployment and jobs growth, with 699,600 new jobs created in workplaces since March 1996 and an unemployment rate today of 6.8 per cent—and the flow-on benefits to families from those new jobs.

One of the structural reforms that has underpinned these outcomes is the system of genuine workplace or enterprise bargaining. The overwhelming majority of Australian employees in the workplace relations system are now employed under enterprise or workplace agreements—whether collective or individual, whether under federal or state laws. This system of enterprise bargaining has produced mutual benefits for workers, employers and the national interest on almost every criterion—better wages, relevant conditions, higher productivity, more jobs, increased competitiveness, greater workplace participation and lower dispute levels. It has been consistent with the economic and social goals already mentioned. Significantly, its outcomes have been far superior to those of the centrally controlled system that preceded it.

Evidence that enterprise bargaining is central to the national interest lies in the fact that it has, since the early 1990s and until recently, been a policy attracting bipartisan political and industrial support at federal and state levels in every Australian jurisdiction. In fact it was the Keating Labor government and the ACTU that both adopted it as policy in their Accord Mark VI in 1990, and pursued it vigorously in industrial tribunals, legislatively and publicly. For all of the deficiencies of the Keating Labor government, for all of the inadequacies of the bargaining model implemented at that time, Labor knew what we all know—that the enterprise bargaining system was a structural reform in the national interest.

Its importance is underscored in this week's budget papers which state the position clearly: `The strongest productivity growth in the private sector has also been in those industries dominated by enterprise bargaining—mining, finance and insurance and manufacturing' (Budget Strategy and Outlook 2000-01 Budget Paper No. 1). Yet the enterprise bargaining system is today under serious threat, politically and industrially. The ACTU leadership and certain unions have opportunistically turned their faces against it by supporting a return to industry-wide pattern bargaining.

Enterprise bargaining is the system where wages and conditions are determined by genuine negotiation at each enterprise through workplace participation by management, the workforce and their representatives, with outcomes based on local circumstances and mutual interests. Pattern bargaining on the other hand is the practice whereby unions demand common outcomes in respect of terms and conditions of employment across a swathe of employers or an industry in lieu of genuine enterprise bargaining, and then use the statutory protected action provisions to legitimise industrial action in pursuit of such claims. Pattern bargaining is designed to undermine Australia's successful enterprise bargaining system and return workplace relations outcomes to a centrally controlled one-size-fits-all approach. This is currently the case in one of Australia's major industry sectors—the manufacturing industry—an industry where business welfare and an employee's job security is closely allied to international competitiveness and productivity growth.

Pattern bargaining is a manipulation of the legislative right to enterprise bargaining provided for by the Workplace Relations Act 1996 (the act), and by the previous Labor government's industrial legislation. Under pattern bargaining, union officials making backroom deals assume control over multiple outcomes, not by participative workplace negotiation involving local circumstances and those who have most at stake—employers and employees.

This bill is essential to maintain the integrity of the enterprise bargaining system in Australia and its mutually beneficial outcomes. The coalition indicated in our 1998 workplace relations policy that we would improve the legislative framework to distinguish between protected action in pursuit of genuine bargaining, and illegitimate bargaining and related industrial action. We are now acting on that undertaking.

Employers and employees have clearly embraced enterprise bargaining in the past decade. More than 17,000 collective agreements have been formalised under the federal system alone, with thousands more under state bargaining systems, as well as individual workplace agreements under federal and some state laws. More than 80 per cent of all federal award employees are covered by enterprise bargaining agreements. Agreements made directly between employers and their employees, with limited third party involvement, are becoming increasingly used as a vehicle for better wages and flexible and innovative employment conditions and work practices.

Threats to enterprise agreements are not confined to the manufacturing industry. Manipulation of the legislative bargaining regime, if not contained, is capable of flowing on to other industry sectors where like-minded union officials seek to dictate wage and condition outcomes. The manufacturing industry campaign, which is already under way and will be escalating in Victoria from 1 July, presents a serious threat to the workplace relations system. Such an outcome would compromise many of the gains made in that and other sectors since the introduction of enterprise bargaining nearly a decade ago. It would not be in the national interest. This is a matter that calls for immediate remedial legislation.

The provisions contained in this bill will:

qualify access to the right to take protected industrial action so that where, on application by a negotiating party, the Australian Industrial Relations Commission finds that a party is engaging in pattern bargaining (as defined) it must terminate the bargaining period, rendering industrial action unprotected at law;

enhance the effectiveness of the Australian Industrial Relations Commission's power to issue orders that unlawful industrial action cease or not occur;

give the Australian Industrial Relations Commission a power to order cooling-off periods in respect of protected industrial action where this will assist the resolution of matters in dispute;

protect existing rights to pursue common law remedies in response to unlawful industrial action in supreme courts without additional litigation in the form of anti-suit injunctions being sought from or issued by the Federal Court; and

make other minor or technical amendments necessary for the effective operation of the industrial action and compliance provisions of the act.

It is important to note that these substantive amendments in the bill relating to pattern bargaining, cooling-off periods and unprotected industrial action provide an important determinative role for the Australian Industrial Relations Commission, as the independent arbiter on disputed matters. In this way, the bill recognises a proper and enhanced jurisdiction for the commission, in addition to its existing functions.

Orders relating to unprotected industrial action

The present section 127 of the act was introduced to provide a timely remedy for parties affected by unprotected industrial action. This section empowers the commission to issue orders to stop or prevent industrial action. Whilst section 127 has generally proved to be an effective mechanism, delays in the making or enforcement of section 127 orders have in some cases had the negative consequence of extending the period during which businesses are exposed to unprotected industrial action.

The proposed amendments are designed to overcome these problems by amending the processes by which such orders are made. The new provisions will require the commission to deal with section 127 applications within 48 hours of their lodgment, including the determination of whether the industrial action is or is not protected action.

If the application is unable to be determined within the 48 hours, the commission is required to issue an interim order to stop or prevent the industrial action, unless to do so would be contrary to the public interest.

Industrial action and pattern bargaining

The definition of pattern bargaining in the bill means that pattern bargaining is a course of conduct, bargaining or the making of claims in a campaign or part of a campaign that involves seeking common outcomes in respect of wages or other employment conditions. The commission must be satisfied that two elements exist:

the conduct, bargaining or making of claims is part of a campaign that extends beyond a single business; and

the conduct, bargaining or making of claims is contrary to the objective of encouraging genuine enterprise or workplace agreement making.

A course of conduct or bargaining by an association of employees that extends beyond a single business is taken to be contrary to the objective of genuine enterprise bargaining unless the commission is satisfied that all of the common elements sought are of such a nature that they are not capable of being pursued at the single business level.

An organisation of employees would not be considered to be engaged in pattern bargaining merely because it is seeking terms and conditions of employment which would give effect to a full bench decision establishing national standards.

This approach will ensure that bargaining, and in particular protected industrial action taken in support of bargaining, is focussed on mutually beneficial outcomes at the enterprise level.

Limiting protected industrial action to persons directly involved

Arising from the operation of the existing act, the government's attention has been drawn to circumstances where unions have sought to involve all their members who are employed by an employer negotiating an agreement in taking protected action irrespective of whether the employee would be subject to the proposed agreement. This is not the intention of the 1996 act.

The bill proposes amendments that would ensure that protected action during negotiations for a certified agreement are only available to those to whom the proposed agreement will apply. In practice, the effect of these proposed changes will be that industrial action will not have immunity if it is taken in concert with any person or organisation of employees that is not protected in respect of industrial action being taken.

Court to determine if action is protected action

The proposed provisions would expressly confer jurisdiction on the Federal Court to determine whether industrial action is protected, and, if so, whether the industrial action is covered by the immunity provided by the act.

Although the Federal Court already has such jurisdiction, questions have arisen in the operation of the act as to whether its jurisdiction is exclusive of the jurisdiction of state or territory courts. The proposed amendments will clarify that the Federal Court's jurisdiction in respect of these matters is not exclusive.

In addition, proposed provisions will protect existing rights to pursue common law remedies in response to unlawful industrial action in supreme courts without additional litigation in the form of anti-suit injunctions being sought from or issued by the Federal Court.

Power to order cooling-off periods

Under the existing statutory scheme, the commission has used existing provisions to order a form of cooling-off period to provide a circuit breaker during particularly difficult bargaining disputes. Such decisions have been made in the best interests of the parties and should be given specific statutory recognition.

The bill does that.

Under the proposed amendments, the commission would suspend a bargaining period for a specified period on request of one of the negotiating parties, if it were satisfied that the suspension would assist parties to resolve their differences, provided that the suspension would not be contrary to the public interest. Industrial action taken in relation to a proposed agreement while the bargaining period is suspended would not be protected action.

This bill is necessary to ensure that the legislative framework relating to enterprise bargaining and industrial action is properly meeting its intended objectives. Without this remedial legislation, the checks and balances in the system which regulate the rights and responsibilities of employers, employees, unions and employer associations will be undermined by illegitimate bargaining and immunity for illegitimate industrial action.

That cannot and should not be allowed to occur. The national interest, as well as the mutually beneficial outcomes that the enterprise bargaining system is providing to Australian workplaces, must remain paramount.

In introducing this bill, it is appropriate to note the persuasive evidence and submissions made by the Australian Industry Group and its members to the Senate Employment, Workplace Relations, Small Business and Education Legislation Committee last September. In conjunction with other business organisations, the AI Group has clearly identified the need for this remedial legislative action in order to maintain the proper conduct of workplace relations in the manufacturing sector. I am therefore hopeful that this legislation will be in place by 1 July 2000.

Before concluding, I should also acknowledge the constructive discussions the government has had with the Australian Democrats on this issue. In their minority Senate report last November, the Democrats indicated that government proposals at that time were deficient, but that the matter justified further consideration. This bill reflects a range of revised government proposals. Those revisions, while still addressing the problem of pattern bargaining and associated industrial action, take into account more fully both evidence given to the 1999 Senate committee, as well as the policy thrust of the Australian Democrats, particularly their concern for a proper role for the commission in these matters. I also wish to put on the record my appreciation of those within my own office and within the department who have worked assiduously to bring this bill to its presentation in the parliament today.

I commend the bill to the House, and table the explanatory memorandum.

Debate (on motion by Mr Griffin) adjourned.