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Thursday, 10 November 2005
Page: 9

Mr McCLELLAND (9:46 AM) —The incorporated speech read as follows—

Australia has been a party to ILO Convention No. 98 Concerning the Application of the Principles of the Right to Organise and to Bargain Collectively since the 28th February 1974.

Article 4 of that convention requires signatories to implement measures “to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers’ organisations and workers organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements”.

A cursory examination of the Workplace Relations Amendment (Work Choices) Bill 2005 indicates that Australia is not complying with that obligation.

For instance, newly enacted section 1071 will enable a negotiating party to apply for an order from the Australian Industrial Relations Commission (the AIRC) to suspend a bargaining period “to allow for cooling off”. Of note is the fact that the section does not empower the AIRC to order the parties to maintain or restore the pre dispute status quo during the course of the cooling off period. This means, for instance, that once a cooling off period is ordered, an employer would be free to continue offering employees individual agreements despite the fact that the trade union representing the interests of those employees was seeking a collective agreement.

In other words, on their face, the provisions do not appear to enable the AIRC to make an order that would prevent a party to negotiations from taking a course of action that could undermine the collective bargaining process during the cooling off period.

The criteria the AIRC is required to consider before suspending a bargaining period are set out in subsection 1071(1)(c). Interestingly, those criteria are expressed in cumulative terms and include:

(i)   whether suspending the bargaining period would be beneficial to the negotiating parties because it would assist in resolving the matters at issue: and

(ii)   duration of the action: and

(iii)   whether suspending the bargaining period would be contrary to the public interest or inconsistent with the objects of the act:

(iv)   and any other matters that the commission considers relevant.

The first criteria will inevitably be the subject of considerable debate but notably the section does not include reference to any resolution of the matter being fair and equitable. Arguably it would be open to a party to submit that terminating or negating the impact of industrial action by ordering a cooling off period would result in capitulation by the striking party thus “resolving the matters at issue”. In other words, consistently with the Federal Governments frequently stated policy of the parties to the employment relationship determining matters between themselves, without intervention by a third party, the outcome of the resolution of the matters at issue appears to be an irrelevancy to the AIRC’s deliberations in considering whether to impose a cooling off period.

In that context, it is to be noted that the provisions do not refer to any concept of good faith bargaining nor require the AIRC to have regard to whether or not a party to a dispute is acting unconscionably. An interesting point of difference is to contrast the absence of any reference to a concept of good faith bargaining in section 1071 which empowers the commission to impose a cooling off period and will most likely be used by employers, with the provisions of section 106B(4) which imposes on trade unions an obligation to establish that they have undertaken bargaining in good faith if they wish to avoid their industrial action being categorised as “pattern bargaining”. In the absence of a specific reference to the concept of bargaining in good faith in section 1071(3) it remains unclear as to whether the AIRC should, before suspending a bargaining period, apply its traditional principles of equity and good conscience to take into consideration the fairness of any likely resolution of the matters in dispute as well as the conduct of the parties during the period of disputation.

Finally, It is to be noted that the public interest criteria in S107l(c)(iii) is expressed in the negative in the sense that AIRC is required to consider not whether suspending the bargaining period would be in the public interest but rather whether it would be contrary to the public interest to suspend of the bargaining period. The expression of the public interest criteria in this way would appear to impose less of a hurdle on the AIRC imposing a cooling off period.

Sub-paragraphs 107l(3) and (4) empower the AIRC to grant one extension of a suspension period but the limitation on the granting of only one extension of a cooling off period would appear to be restricted to an application by an employer and not, for instance, an application by a third-party under section l07J.

Section 1088 specifically confirms that industrial action undertaken during a cooling off period is not protected action.

Suspension on application by a third-party

Section 107J empowers the AIRC to suspend a bargaining period on application by a third party. The section is expressed in particularly broad language, for instance, section 107J(1)(e) provides that the AIRC may suspend the bargaining period “if the Commission considers that the suspension is appropriate” having regard to specified criteria including “any other matters that the Commission considers relevant.”

Section107J(2) indicates that virtually any industrial action by a trade union could potentially establish the criteria for the section being invoked. The section provides that, in exercising its discretion, the AIRC “may” have regard to the following:

(a)   if the person is an employee—the extent to which the action affects the interests of the person as an employee;

(b)   the extent to which the person is particularly vulnerable to the effects of the action;

(c)   the extent to which the action threatens to:

(i)   damage the ongoing viability of a business carried on by the person; or

(ii)   the supply of goods or services to a business carried on by the person; or

(iii)   reduce the person’s capacity to fulfil a contractual obligation;

(iv)   cause other economic loss to the person;

(d)   any other matters the commission considers relevant.

Significantly the term “employee” in paragraph 107(2)(a) is not specifically defined and would potentially include an employee not only of the employer against whom the industrial action is taken but also an employee of a third-party affected by the industrial action. In that sense it is clear that the potential class of applicants who may seek the imposition of a cooling off period is extremely broad.

Again sub-paragraphs 107J(4) and (5) empower the AIRC to grant one extension of a suspension period, however it would seem that the limitation on the Commission granting just one extension applies to an application by a third-party under 107J. In other words, there appears to be nothing to prevent an application for a cooling off period by an employer under section 1071 followed by an application for an extension of the cooling off period by an employer also under section 1071, followed by an application for a cooling off period by a third-party under section 107J followed by an application for an extension of the cooling off period by a third-party under that later section.

Prohibition of Pattern Bargaining

Section 107H prohibits industrial action that is in support of pattern bargaining claims. The concept of pattern bargaining is defined broadly in section 106B as including where:

(a)   the person is a negotiating party to two or more proposed agreements; and

(b)   the course of conduct involves seeking common wages or conditions of employment for two or more of those proposed agreements: and

(c)   the course of conduct extends beyond a single business.

It can be seen that prima facie any two schedules of demand prepared on a common word-processing system could fall foul of section 107H. However, returning to the interesting point identified earlier, the government has for the first time since 1996 recognised a concept of good faith bargaining in subsection 106B(4). That subsection provides a defence to an allegation of pattern bargaining if a trade union can discharge an onus of proof imposed by the legislation to satisfy the Commission that during the course of the bargaining period the party:

(a)   demonstrated a preparedness to negotiate an agreement which takes into account individual circumstances of the business or part;

(b)   demonstrated a preparedness to negotiate an agreement with an expiry date which takes into account the individual circumstances of the business or part

(c)   negotiated in a manner consistent with wages and conditions of employment being determined as far as possible by agreement between the employer and its employees at the level of the single business or part;

(d)   agreeing to meet face to face at reasonable times proposed by another negotiating party;

(e)   responding to proposals made by another negotiating party within a reasonable time;

(f)   not capriciously adding or withdrawing items for bargaining.

It is unclear as to whether a union that fails to establish a defence to engaging in pattern bargaining is at risk of a finding that their conduct up until that point has been unprotected action. This is a particularly important issue given that the party taking the industrial action bears the onus of proving that they were bargaining in good faith and were not undertaking pattern bargaining (Section 106B(5)). On a literal construction of section 107H there appears to exist, until that onus is discharged, a substantial risk for trade unions that they will be found to have engaged in pattern bargaining.

It Appears that the operation of Section 108D would result in a failure to discharge that onus refuting the allegation of Pattern Bargaining that industrial action both up until that finding is made and after the finding is not protected action. In other words section 108D would appear to have its own operation irrespective of whether an order is made to suspend or terminate the Bargaining Period under section 107H.

The state of uncertainty caused by the inconsistency is particularly concerning as on the broad and literal construction of section 108D a trade union could retrospectively be held to have engaged in unprotected action thus exposing the union and relevant officers to the prospect of a penalty or action for damages.

In other words, on this broader construction the risk associated with undertaking pattern bargaining is a risk that begins immediately that the industrial action is commenced even if, but for the provisions of section 107H, the provisions of the act in respect to the technical requirements of establishing lawful protected action have been complied with.


Section 111A empowers “the Court” to grant an injunction “in such terms as the Court considers appropriate” against industrial action that is “engaged in, or is threatened, impending or probable” where that industrial action is in respect to “pattern bargaining”.

“Court” is defined as meaning the Federal Court of Australia, the Federal Magistrates Court, a Supreme Court of a State or Territory, or County Court, of a state.

Arguably the provision is superfluous in that once a bargaining period is suspended or terminated the person or body subject to the industrial action would have access to common law remedies including injunctive relief. On the other hand, as a result of creating access to a specific statutory injunctive mechanism the Government has removed the need for a party seeking injunctive relief to establish a prima facie case in respect to all elements of a common law tort action including, typically, necessary intent to cause economic harm.

In other words section 111A appears to be a general catch all that is analogous to a strict liability situation in that the party seeking injunctive relief would appear to be automatically entitled to that relief on establishing the existence of pattern bargaining without proving any other elements of mens rea that are normally associated with applications for injunctive relief based on the economic torts or statutory penal provisions that proscribe or outlaw industrial action.

Of note is the fact that a party is entitled to seek injunctive relief under section 111A irrespective of whether or not the Commission has suspended the bargaining period under section 107H. The section would also be available to injunct ongoing industrial action if a trade union continued with industrial action despite the Commission suspending a bargaining period.

Industrial Action Must Not Take Place “in Concert” with Persons Who Are Not Protected for That Industrial Action.

Section 108C provides that industrial action is not protected action if “it is engaged in concert with one or more persons or organisations that are not protected purposes for the industrial action” or “it is organised other than solely by one or more protected persons.”

There is an extensive body of case law in respect to the concept of “acting in concert” including, most relevantly, in respect to industrial action, case law concerning the operation of sections 45D and 45E of the Trade Practices Act. Presumably that body of case law will apply to the operation of section 170MM.

The wording of section 108C raises the same issue discussed earlier in respect to section 108D in that both sections are expressed broadly and state that the particular conduct referred to in the respective sections is not “protected action”. As previously noted a literal construction of the two sections may mean that industrial action, as a result of a subsequent finding by the AIRC, retrospectively loses the status of being protected action thus exposing the trade union and officials of the trade union to a potential penalty or action for damages.

These provisions have potentially far reaching repercussions for trade unions that join in industrial action with other trade unions that may, for instance, jointly have members in a particular enterprise. In particular, in such a situation, it would appear that a technical error on the part of one union in effecting the protected action provisions of the legislation may ultimately end up infecting the protected action status applying to all other trade unions and officials engaging in that joint industrial action.

In conclusion it can be seen by this brief and necessarily cursory analysis of even these limited number of provisions that the thrust of this legislation will effectively make collective bargaining a practice that occurs only with the acquiescence of the employer. This is not in accordance with the principles of Australia’s International Treaty obligations and significantly shifts the balance of industrial power away from those organisations that represent working Australians.