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Thursday, 2 December 2004
Page: 43


Senator MARSHALL (12:10 PM) —The Workplace Relations Amendment (Agreement Validation) Bill 2004 before us today is a response from the government to accommodate the Electrolux decision. The Electrolux decision clarified—from the High Court's point of view anyway—that all matters in a certified agreement must only pertain to the employee-employer relationship; that any certified agreement which contains matters that do not pertain is questioned and made void if it contains those provisions and the agreement would fall away as if they did not exist, as if the agreement was never made at all. One of the further consequences of the Electrolux decision is that any industrial action that was taken at the time in pursuit of a certified agreement is therefore potentially deemed illegal because the Industrial Relations Commission did not have the power, according to the High Court, to certify those agreements in the first place.

The government claims that this bill is designed to provide certainty for the parties in industrial relations. It does no such thing. This bill is fundamentally flawed and needs substantial amendment to provide any certainty at all for both employees and employers. I will go through the reasons why the bill is flawed in a moment. We clearly know the real reason the government has put this bill up before us today. It was clearly to stop unions responsibly providing for their members new agreements to replace those that were made void by the Electrolux decision.


Senator Santoro —That is an outrageous statement.


Senator MARSHALL —It is not an outrageous statement. To support that, the press release put out by the Minister for Employment and Workplace Relations says this:

The Government is determined to ensure agreements entered into by business are upheld and enforced. Unions in the electricity and construction industry have tried to take advantage of uncertainty caused by the Electrolux decision by pressuring businesses to renegotiate agreements which contain clauses which are union friendly and bad for business. The new legislation will remove the need for businesses to renegotiate their agreements.

The real issue here is that the need for businesses and employees to renegotiate their agreements was created by the High Court. It was the High Court that determined that agreements containing matters that did not directly pertain to the employee-employer relationship were void, as if they were never, ever made. There is nothing wrong with unions seeking, as a consequence of the Electrolux decision, to provide certainty for their members by seeking to enter into a new legal bargaining round within the framework provided for by the Workplace Relations Act. That is a responsible course of action. Nowhere in any of the submissions was it indicated that anything the unions were doing was illegal or inappropriate, because it was not. They were actually following the processes laid down by the Workplace Relations Act.

There are a number of flaws in this bill. The first flaw is this: far from providing certainty, this bill actually provides uncertainty. Future agreements which may be certified by a single member of the commission do not necessarily mean that all matters pertain, that they have been properly certified and that any protected action taken to support the agreement is protected. So all we see this bill actually doing, in this window of opportunity, is trying to validate part of the agreement. It provides no certainty for any agreements being negotiated or certified from 2 September last year onwards. We still have the situation that, if this bill becomes law, all we will be able to say with any certainty about agreements certified before 2 September is that they have been properly certified—little else. We will not know which clauses are enforceable and valid and which clauses are not, because the problem will still arise as the different tribunals and courts determine and narrow down the scope of what does pertain to the employer-employee relationship. Clauses that have been properly certified by the commission may be deemed by future tribunals in future decisions to be invalid. If that is the case, the whole agreement becomes invalid again. There is no certainty provided in the negotiating process or the certification process. Simply because a commission certifies an agreement does not mean that that agreement will not be challenged in the future because some of the clauses may be a problem.

I want to give you an example. It is an example given by witnesses from Suncorp-Metway, who did appear before the legislation committee inquiry. They were concerned that a number of the clauses in their agreement may not pertain directly to the employer-employee relationship and that some of them were similar in nature to clauses that had already been ruled out by different tribunals. They were concerned about that, but this week their agreement was in fact certified by the Industrial Relations Commission and, on the day that it certified it, the IRC was indeed satisfied that all matters pertained. But future determinations, as I said earlier, may change that, so we will have a situation where the parties have negotiated an agreement in good faith, the employees have voted on it as a package, it has been certified by the commission and then, potentially a year down the track, a new ruling by the Industrial Relations Commission or the Federal Court—or even the High Court for that matter—may determine that one of the clauses does not properly pertain to the employment relationship and the agreement is then void. This bill provides absolutely no certainty in the negotiating processes provided under the Workplace Relations Act in that respect. That is the first significant flaw. It actually identifies quite clearly the distorted view of the government in this area and only reinforces the real reason that this bill has come before the parliament today.

Secondly, the bargain struck between employees and employers is disturbed by the validity of the agreement. If this bill becomes law, it will disturb the moral authority of agreements already validated and will retrospectively remove the informed consent of employees. It will also mean that persons who at the time of voting knew the consequences of giving approval will now have no certainty about the ongoing consequences of the effect of the agreements entered into in good faith. Clauses agreed and genuinely approved may be removed as a consequence of this bill becoming law, without the employees having any say in the matter. The bill will also stop the employees going back to the employer and saying, `Now that the package—this agreement—has been disturbed, we want to sit down and talk to you about a new package.' So employees ultimately end up with a lesser package than was negotiated.

The process of negotiation in industrial relations is that both parties—the employees, their representatives and the employers—sit down and negotiate an agreement. Employees or employers do not then have an opportunity to cherry pick which clauses they would like to agree to or disagree to. It is voted on and approved and certified by the commission as an entire package. Different people—both employers and employees—will put a different weight on the value of each individual clause when they make up their mind whether or not to approve the package. What this bill does is retrospectively go back and renegotiate the bargain that was already struck in good faith by employees and employers. It changes the bargain. It makes it less because it actually validates parts of it and invalidates other parts of it and takes some clauses out of the agreement. So the agreement that people voted on as an entire package is disturbed by this bill, and that is unfair.

This is one of the points that the Scrutiny of Bills Committee identified. It identified that retrospectively this bill is disadvantaging persons by changing the structure and the nature of the agreement that they entered into in good faith. It says:

The Committee draws Senators' attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference.

Senator Barnett is actually a member of that committee. He signed off on this report. He supported this report, yet here he is in the parliament today saying, `That doesn't matter.' He is slavishly committed to the government's agenda—and I have mentioned what the real agenda was—and he does not care whether it unduly trespasses on individual rights. He simply says, `The government wants to do this. It is an anti-union piece of legislation, so let's go ahead regardless.' I think the Scrutiny of Bills Committee has identified a serious flaw.

The third significant flaw in the approach of partial validation is that it has at least two important consequences. The first is that, far from providing the parties to such agreements with certainty, it creates greater uncertainty. This is because the pre-Electrolux agreements are to be validated only to the extent of those clauses that deal with permitted matters. Permitted matters include matters pertaining to the employment relationship. The question of which clauses in agreements already certified do or do not pertain to the employment relationship is the same as the one that arises in the certification of new agreements post Electrolux. There is no certainty that a particular clause in a pre-Electrolux agreement would be validated by this bill until that question is decided by a tribunal, just as parties to agreements awaiting certification cannot be sure that each clause within them will ultimately be found to pertain. Again, there is no certainty provided by this bill at all.

The Department of Employment and Workplace Relations says that it is simply a matter of drafting clauses in the appropriate manner so as to make them pertain. The courts have long held that these types of agreements are drafted not by lawyers but by persons who do not have such a careful eye in such matters. They are drafted by persons who are seeking to reach agreements affecting their workplace. They are drafted by employees, employers and their representatives, including unions. The ridiculous position that this government has created and that this bill does not fix is that you can have two clauses which have the exact same effect but, depending on how they are drafted, one may pertain to the employment relationship and one may not. That is what the department has put to us. That is the ridiculous situation that this government has created with this bill. This bill does not go anywhere near addressing those issues. We need a situation where those that are affected in their workplace can freely negotiate those agreements together. What you are creating is a lawyers picnic, because it is about drafting. If you get a clever lawyer to draft a clause in such a way that it will be deemed to pertain to the employee-employer relationship, it will get through, even though it may have the exact same effect as a different clause drafted differently. I am not surprised that the government wants to do that, because it is nearly all lawyers on that side of the chamber, and I know how lawyers love to create more work for their own.

This becomes even more absurd when one has regard to the relevant principal objects of the Workplace Relations Act—the government's act. Section 3 says:

(b) ensuring that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and employees at the ... enterprise level; and

(c) enabling employers and employees to choose the most appropriate form of agreement for their particular circumstances, whether or not that form is provided for by this Act;

This bill does not ensure that the primary responsibility rests with the employer and the employees, nor does it enable employers and employees to choose the most appropriate form of agreement. This responsibility is taken out of the hands of those persons who are supposed to be entrusted with this responsibility—that is, the employers and the employees.

The fourth fundamental flaw is that this bill does not clarify the status of industrial action taken in support of certified agreements prior to the Electrolux decision. I am concerned to ensure that unions and their members who took industrial action in good faith, believing on reasonable grounds that it was protected, should have legal protection from any action which might be taken against them by employers. This government states in the second reading speech:

Parties could not have reasonably expected that protected action was available to support claims for non-pertaining matters.

That, again, is a most outrageous statement. Given that the full court of the Federal Court held that protected action could be taken in support of non-pertaining matters, it seems more than reasonable to expect that unions adopted a similar view. The full court of the Federal Court—a very high authority—determined that action could be taken in support of matters that did not pertain, and here is the government saying that people should have said, `Well, even though the full court of the Federal Court has said you can do this, we should actually question that, and when we are considering whether we should pursue our industrial rights under this act through protected industrial action, we should somehow ignore a decision of the full court of the Federal Court.' It is ridiculous for the government to put that.

The government has indicated, again in the second reading speech:

However, the Government considers it would be highly undesirable for parties to exploit uncertainty in relation to past industrial action by initiating or threatening legal action.

That is also my aspiration, as I have indicated. That is why, again, the government and the minor parties should support the second Labor amendment that will be proposed in the committee stage. Our amendment does in fact validate that industrial action that was taken in good faith, knowing the authority of the full court of the Federal Court decision at the time. Irrespective of our joint aspirations in this regard, the bill does not give effect to the stated objective. Although the government believes that legislating to protect past industrial action, to the extent that the action was taken in support of non-pertaining matters, would be complex or practically difficult, the reasons for this are not obvious. We will provide the solution to you in the form of amendments, so you should support those, given that that is one of the stated objectives in the second reading speech. We will see how you perform on that.

I will summarise the points I have made. This bill does nothing to provide certainty. It does not provide certainty for the agreements pre the Electrolux decision, and it does not provide certainty for post-Electrolux agreements. Until the commission, the courts and other tribunals determine what does and does not pertain and until the ridiculous argument of the department that it is simply a matter of drafting is resolved, there will continue to be uncertainty.

What really needs to happen, and what cannot happen through this bill because it is fundamentally flawed in really providing the long-term certainty which we would like to see, is that agreements that were certified at that time—and if the commission is of the view that all the matters in the agreement at the time pertain to the employee-employer relationship—should be valid for the life of the agreement. That is the best way to achieve certainty. The basis of our first amendment is to say, `Let's validate agreements in their entirety. The commission certified them in the full knowledge of the Workplace Relations Act, of other decisions of different tribunals and of the courts at the time. Those agreements were negotiated in good faith based on the law of the day and the decisions that were available at the time. They should be certified in their entirety.' Only that will give the certainty which this bill claims to be seeking to provide but which it does not. This bill is purely there to try to stop unions quite rightly renegotiating agreements or replacing agreements that were voided by the Electrolux decision. There is nothing unlawful or improper about that.

I know there was a lot of talk that some unions were seeking to put in new claims. My understanding and advice is that no union sought to do that. Unions sought to roll over their existing agreements under a new timetable because the agreements would be starting again, and the only new clauses being put into those agreements related to issues that were already under negotiation with employers and employer groups and that affected the industry as a whole. They were the only new issues. Unions were simply seeking to provide the certainty which this bill claims to do but does not and put in place agreements to provide the foundation for the wages and conditions for their members into the future. We will be speaking on our amendments in the committee stage.