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Wednesday, 26 November 1986
Page: 2738


Senator SIDDONS(10.09) —by leave-I move:

That the Bill be now read a second time.

Because of the importance of this Bill, I would like to take a few minutes of the Senate's time to outline the history and principal objectives of the Bill. This Bill was originally drafted by me in 1982 with the help of two eminent lawyers, Dr Ronald McCallum of Monash University and Dr Graham Smith of Riverina-Murray Institute of Higher Education, who donated their valuable time in the interests of industrial relations in Australia. Mr Monro, Parliamentary Counsel assisting the Senate, gave extensive advice on the original draft. The unexpected 1983 election prevented this original Bill being introduced into the Senate, but it was taken up by the then Senator Jack Evans, who developed it further and introduced it into the Senate on 14 December 1983. This Bill was never debated.

I have now streamlined the original Bill and, with extensive help from Dr McCallum, Dr Smith and Mr Monro, now introduce the Bill in a form which I hope is readily readable and understandable by all members of the Parliament, and all members of the public who are interested in industrial relations.

It does represent, I believe, an historic step forward in industrial relations in this country. It has been drafted after careful consideration of the Constitution and legal precedent, and these considerations are set out in some detail in a joint publication by Drs Smith and McCallum in the Journal of Industrial Relations, March, 1984. This paper should be carefully studied by any serious student of industrial relations in Australia.

The centralised wage fixing system is under threat from the New Right and the Liberal Party of Australia. The accord mark III, or the two-tiered wage system, has just been accepted in principle by unions. This consists of one tier of wage rises granted by the Conciliation and Arbitration Commission and a second tier to be negotiated at the enterprise level. Thus the principle of enterprise bargaining has gained acceptance. This Bill does not in any way cut across the two-tiered system of wage fixing currently under debate, but offers a clear alternative, on company level wage bargaining, to the existing centralised wage fixing system in Australia, should both management and unions agree.

The Government-sponsored work practices meeting in Melbourne in late September resulted in all parties deciding that reform must occur at the work place level as a result of discussion between employers and employees. This is further acceptance of the role of collective bargaining, and this Bill establishes a legislative framework to allow this to happen. The Liberal Party talks vaguely about collective bargaining, but it has no practical policy options. This Bill is the culmination of an immense amount of work and gives the Government the option of either adopting the Bill in its entirety or in a modified form immediately, thus pre-empting an acrimonious and confusing debate on wage fixing in this country-a debate which, if not settled quickly, will undoubtedly become a major election issue. Wage fixing is far too important an issue to become a pawn in tawdry electioneering.

This Bill offers a practical alternative to centralised wage fixing. It puts in place a voluntary collective bargaining mechanism alongside the present conciliation and arbitration framework. It gives a clear alternative to wage fixing while keeping in place the centralised wage fixing system. It is the first realistic, practical alternative to the present centralised system and would offer enormous flexibility to wage fixing in this country.

This Collective Agreements Bill is one of the most innovative pieces of legislation ever to come before the Parliament. It cuts across the grid of Federal and State arbitration laws, minimises demarcation disputes and, most importantly, promotes the growth of mature negotiating skills at the work place. The Bill relies on the corporation powers in the Constitution to conclude binding agreements with the trade unions, providing both parties wish to do so. It is purely voluntary, and does not disrupt or impinge upon Federal or State arbitration laws. Where there is more than one trade union involved, the Bill allows for a chief negotiating union to negotiate on behalf of all unions involved. The features of the Collective Agreements Bill are as follows:

1. It allows unions and employers to enter into binding contracts outside the centralised system, should they so desire, but keeps the centralised system in place.

2. It prevents collective agreements from undercutting awards.

3. It gives unions a central place in negotiating agreements.

These first three points differentiate our approach to collective bargaining from that of the Liberals. They want to destroy the centralised system, reduce wages and destroy the union. We do not.

I seek leave to incorporate the balance of the second reading speech in Hansard.

Leave granted.

The balance of the speech read as follows-

4. It allows agreements on a wide range of areas such as work practices, job design, demarcation, profit sharing and worker participation, as well as wages and conditions.

5. It dovetails with present Commonwealth and State industrial law.

The reasons for supporting collective agreements are:

1. They enable employment packages to be put together which suit the needs of individual enterprises, while protecting the interests of workers.

2. They encourage co-operation between employers and employees and between different unions in one work place.

3. They enable productivity to be increased by the inclusion of a wide range of matters in agreements.

4. They formalise over-award bargains. Without legal recognition such bargains often lead to industrial disputes.

5. They help develop sophisticated negotiating skills in the work place.

Because the Federal Government's power to legislate in this area is limited to interstate industrial disputes, there is no single mechanism for conciliation and arbitration.

This means that employers and unions alike are faced with a multiplicity of Federal and State labour laws which are more complex and legalistic than those of any comparable federation such as Canada or the United States of America.

The present system is too complex, too legalistic and too centralised to function effectively.

Formal collective agreements reached through informal collective bargaining often relate to matters which could never be incorporated in either federal awards or in certified agreements.

Agreements often cover matters such as the payment of health insurance for employees and their families, and consultation over the implementation and effects of technological change and various other ``managerial prerogatives'' which have been held by the High Court to be beyond the jurisdiction of the Australian Conciliation and Arbitration Commission.

The only way of stabilising collective bargaining is to institutionalise it through legislation. Collective bargaining already exists.

This Bill will make agreements enforceable at law, and will have a normative effect where, and only where, they are entered into voluntarily.

This Bill seeks to overcome major defects in our systems of compulsory conciliation and arbitration.

As the Australian Parliament's power to enact conciliation and arbitration laws are limited to the prevention and settlement of industrial disputes, extending beyond the limits of any one state, it is impossible for there to be a single national mechanism of compulsory conciliation and arbitration.

The Australian arbitration tribunals, by their very nature, operate the most centralised labour relations mechanism of all Western industrial democracies, with the exception of Austria.

This centralisation prevents the establishment of mature negotiating skills at the work place.

The limited scope of the `industrial power' in our constitution, together with the limited scope of the State labour relations laws, inhibits the development of formal industrial relations practices in relation to such matters as consultation between trade unions and employers over the introduction and implementation of technological changes, redundancy schemes, employee participation, work practices, penalty rates, job security, and other `management prerogatives'.

This Bill is a voluntary mechanism which neither disrupts nor impinges upon federal or state arbitration laws. Under this proposal, if trade unions and a corporate employer voluntarily conclude a binding collective agreement, then during the life of the collective agreement the various federal and state arbitration tribunals will be deprived of jurisdiction (other than with respect to demarcation disputes) to settle any labour relations differences between such trade unions and that corporate employer.

Once a collective agreement is signed, both parties will be expected to comply with it. Consequently, if during the duration of such a collective agreement, wage rates in a relevant award were increased, such an increase would not automatically flow on to employees under such a collective agreement.

To enhance the making of such broad agreements, provision is made for the disclosure of information by the parties at the negotiating stage.

The voluntary nature of this proposal is enhanced by the absence of punitive measures.

However, there are provisions to ensure that parties conform to collective agreements which have entered into voluntarily, and to deprive them of the benefits of this proposal should they fail to comply.

If a party to a collective agreement, whether the employer or a trade union, breaches a collective agreement (other than in a matter relating to safety, health or the welfare of employees), then any of the other parties has the automatic right to immediately terminate the collective agreement.

The proposal will require every collective agreement to contain a grievance procedure which must be availed of at first instance, to settle any differences which may arise between the parties.

After the completion of such a procedure, the parties then have the option of gaining an interpretation of the agreement from the court.

A collective agreement will be a civil contract between the parties. Parties will have recourse to the Federal Court to ensure compliance by other parties.

They will be able to sue other recalcitrant parties and obtain orders requiring the other parties to abide by the agreed terms and conditions of the agreement.

This is the crux of this Bill-that collective agreements should be enforceable at law. This Bill provides a legal framework which will not impinge upon the federal or state mechanisms of compulsory arbitration.

In addition, it takes into account the trade union structure in Australia.

In comparable federations such as Canada and the USA, where collective bargaining is common, it is possible to operate mechanisms where a single trade union is the exclusive bargaining agent for every employee in a bargaining unit.

However, in Australia trade unions are registered under the various conciliation and arbitration statutes and trade union Acts.

Consequently, a system of collective bargaining must recognise this structure and must allow multi-union bargaining within each enterprise. This Bill does this by providing framework which utilises the existing trade union structure at both federal and state levels.

By providing a legal framework for voluntary collective bargaining, this Bill acknowledges the realities of Australian industrial life-that collective bargaining already exists and is being extensively practised-that collective bargaining often relates to matters which can never be incorporated in either federal or state awards.

Debate (on motion by Senator Grimes) adjourned.