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Tuesday, 7 December 1971
Page: 4176


Mr LYNCH (Flinders) (Minister for Labour and National Service) - by leave - On 15th December 1904 - 67 years ago this month - the royal assent was given to the first Commonwealth Conciliation and Arbitration Act, an Act of Parliament which was then, as it remains today, a unique and important piece of social legislation. It is unique in that it provides a legislative framework within which organisations of employers and employees are given the opportunity to regulate their industrial relationships. It is important because the results that flow from the operation of the system provided in the legislation affect every member of the Australian community, either as a wage earner or citizen.

In the field of industrial relations it must be recognised that employer organisations and trade unions will always have different interests to protect. These stem from the desire of the worker as expressed through his trade union to obtain improved conditions of employment and higher rewards for the commodity he has to sell - his labour - and of employers to manage and operate their businesses in the most efficient and profitable manner and thus maximise returns to the owners. The Conciliation and Arbitration Act is designed to provide the means for resolving industrial disputes arising from such differences in an orderly and just manner. The second and very distinguished President of the then Commonwealth Court of Conciliation and Arbitration. Mr Justice Higgins summarised the aims of conciliation and arbitration by saying: . . the process of conciliation, with arbitration in the background, is substituted for the rude and barbarous processes of strike and lockout. Reason is to displace force; the might of the State is to enforce peace between industrial combatants as well as between other combatants; and all in the interests of the public.

These words remain as fundamentally true today as they were when written in 1915. However, recently the adequacy of our Commonwealth conciliation and arbitration machinery to deal with the complex problems that face us in the fast changing economic, technological and industrial conditions of the 1970s has been the subject of considerable debate. The situation today is vastly different from that at the turn of the century and in the early years of the Conciliation and Arbitration Act. Whereas then (he community was prepared to accept a high level of unemployment as inevitable and normal, full employment is now accepted as a cardinal objective of government economic and social policy.

The maintenance of full employment, however, brings with it the critical economic problems associated with a finely balanced economy. Labour costs are a vital element in preserving the balance of our economy. If they increase beyond the level of increases in productivity an acceleration in inflation is inevitable and our capacity to maintain full employment is seriously undermined. Thus, the determination of wages and conditions of employment cannot always be left to the parties themselves to decide without regard to the social and economic effects on the community as a whole. Hence, our systems of Commonwealth and State conciliation and arbitration.

One effect of maintaining full employment is that the balance of industrial power has moved strongly in favour of the trade unions. The strongest unions have been able to use this power, often by direct action, to achieve increases in wages and improvements in working conditions at an accelerating rate and to a degree which has contributed significantly to a spiralling inflationary situation. This has provided major problems for the system in endeavouring to provide wage justice for workers in smaller unions which have not had this advantage in bargaining power. The implications of pressure for wage increases of this nature were expressed cogently in the Australian White Paper on full employment in 1945 - when a Labour Government was in power - as follows:

The problem of wages in a full employment economy is to ensure on the one hand that workers receive in the form of higher real wages a fair share of increases in productivity resulting from technical progress, and on the other hand that undue sectional pressure for wage increases does not lead merely to a rising spiral of wages and prices without any real benefit - and perhaps with disadvantages - to the workers themselves.

In similar vein the Oxford economist, Lord Thomas Balough, who was economic adviser to the last British Labour Government, dealt with this question in his recent book Labour and Inflation'. He wrote:

Free bargaining increased inequality; it resulted in a relative ' worsening of the position of the poorest paid and least aggressively organised classes of society. . . . Trade union action was successful in certain instances in increasing the share of certain privileged or closely organised groups such as tally clerks, dock workers and so on. The lower paid, the defenceless and the handicapped, despite the declamation of the unions, have not been protected.

The direct social gain from 'industrial action' was not merely negligible; it might well have been negative. lt must also be said that many employers are far too ready to meet excessive wage demands. They may see short-term advantages in this course of action but the problems are merely postponed and the disadvantages to the wider community are considerable.

Employers could learn from the generally quite marked solidarity of the unions. Too often they speak with discordant voices. Too frequently individual employers are left in isolated exposed positions. A united, though by no means necessarily negative, approach would often lead to more appropriate settlements. This does not mean that employers should automatically reject union demands. They must show a willingness to negotiate particular problems but in a sensible and responsible manner. %\

The use of direct industrial action to exert pressure on employers is reflected in the increasing incidence of industrial stoppages. During the decade 1960 to 1970, the number of industrial disputes involving stoppages of work recorded by the Commonwealth Statistician increased from 1,145 to 2,738, an increase of 139 per cent. The number of workers involved over the same period increased by 127 per cent and the loss in working time by 230 per cent. In terms of wages lost due to strikes, the increase was 428 per cent. Even allowing for the 22 per cent increase in population and the 42 per cent increase in the number of wage and salary earners over this decade, the increases I have just quoted must give cause for serious concern. Lest it be thought that I have chosen 1960 as a base year which shows the position in the worst light, I point out that if either 1959 or 1961 were used as a base year the percentage increases would be even greater.

More disturbing, however, is the upsurge in industrial unrest during the last 2 years. During the year 1969-70 - the last full year for which figures are available - stoppages, working days lost, and number of workers involved in disputes rose by 36 per cent, 22 per cent and 6.4 per cent respectively over the previous year. Figures available to September 1971 reveal that the position has deteriorated even further. The time lost in industrial disputes in the first 9 months of this year, 2.6 million man days, exceeds the total for the whole of 1970. The time lost up to September this year exceeds that of any full year since 1929 when the loss was 4.5 million. In only 3 other years since 1913 when strike statistics were collected for the first time- 1917, 1919 and 1910- has the time lost so far this year been exceeded in a full year. The effects of industrial disputes on the community are not simply measurable by the loss of man days. This represents only the tip of the iceberg. Strikes and other forms of industrial action cause hardship to workers not directly involved. Then there is the danger to the economy from the wage-induced inflation associated with industrial unrest. This is posing a long-term threat to economic growth, the balance of payments and full employment.

The increase in the incidence of industrial stoppages and the impact of substantial wage increases on inflation have called into question the role of the Conciliation and Arbitration Commission. Throughout its history there have been criticisms of the Commission and its predecessor, the Court, and because of the nature of its responsibilities this is to be expected. The important fact is, however, that it continues to have general acceptance, not only from employer organisations and trade unions generally, which are most directly concerned with its operation, but also from the general community. No institution can be free from criticism or from the need for change. In this connection, it is relevant to point out that the Conciliation and Arbitration Act has been amended on 52 occasions. While some of these amendments have been of a minor nature, others have been far reaching in character. Today the Act remains an essential part of Australia's social, economic and industrial relations legislative framework.

The present Government has consistently advocated the retention of our system of conciliation and arbitration but in so doing has not been unmindful of the need for change when required. In 1956, for example, the late Harold Holt, then Minister for Labour and National Service, in introducing the Bill to effect the last major revision of the Act spoke of 'the need for the most effective system of compulsory arbitration, with suitable personnel and adequate powers, that this Parliament can devise'. (House of Representatives Hansard, I Ou May 1956, p 1990).

The Australian Labor Party too, both in government and opposition, has maintained its support for conciliation and arbitration. In 1947, during the period when the Labor Party occupied the Government benches, Dr Evan was moved to 'assert confidently that the Australian worker, the employer and the Australian community have been far better off with the court than they could possibly have been without it'. (House of Representatives Hansard, 12th March 1947, p 548)! Dr Evatt then emphasised, a basic principle which is equally true today when he said: 'that, within the limits permitted by the Constitution, the maintenance of industrial peace, and the adjustment of the terms and conditions of employment, are matters not merely of local or private concern, but also of vital importance to the. community as a whole'. ( House of Representatives Hansard, 12th March 1947, p 548).

Systems of conciliation and arbitration have existed in the States for many years, some even pre-dating the Federal system. Labor governments in the States have always supported these systems.

During the recently concluded National Tripartite Conference discussions on the Conciliation and Arbitration Act, representatives of both the National Employers Policy Committee and the Australian Council of Trade Unions and the other union associations represented at the discussions supported the retention of the system. In passing let me remind the House that the Australian trade union movement has benefited greatly from the provisions of the Conciliation and Arbitration Act and the protection it has given unions and their members.

Public opinion polls clearly indicate that the great majority of Australians favour the continuation of our system which has helped to shape the very nature of indus trial relations in Australia over the past 67 years. Those who wish to weaken the authority of the Commission or even to destroy it have brought forward no acceptable viable alternative.

In many countries where the alternative of collective bargaining operates the industrial situation is far worse than in Australia. Statistics compiled from International Labour Organisation sources indicate that for the 5 years 1965 to 1969 the average annual number of man-days lo-,t per 1,000 employees in the mining, manufacturing, construction and transport industries in Australia was 456, compared with 1,556 for Canada, 1,232 for the United States and 1,574 for Italy. Furthermore, most countries are showing a rising trend in time lost through industrial disputes. For example, the number of man-days lost in 1970 was at least 30 per cent higher in the United States, about 60 per cent higher in the United Kingdom and 100 per cent higher in New Zealand than in the previous year.

Taken over the whole of its long history, the Conciliation and Arbitration Commission and its predecessor, the Commonwealth Court of Conciliation and Arbitration has been of immeasurable benefit to the Australian worker. It has established a code of wages and working conditions which in its totality places the Australian worker in a highly favourable position compared with his counterpart elsewhere. The concept of the basic wage and more recently the minimum wage has ensured that he cannot be exploited no matter how weak his union representation is or in what industry he works. Australia was amongst the first countries to achieve a 40-hour week, paid annual and sick leave and long service leave for industrial type employees. The detailed regulation of working conditions including such matters as a contract of employment, paid public holidays, overtime rates and safety, health and welfare matters are further illustrations of the benefits that have been achieved through our Federal and State systems.

It is not only the individual worker who benefits from the operation of the conciliation and arbitration system. The encouragement of employer and employee organisations was an object of the original Act and has been a major factor in the development of the strong and effective trade unions and employer organisations which exist in Australia today.

Because of the benefits conferred on unions under the legislation the Government is concerned at the increasing degree to which some trade unions are resorting to coercive methods against both employees and employers in order to make union membership compulsory. Some firms and authorities are threatened with black bans because they supply goods and services to an employer in dispute with unions over union membership. Individual workers are denied the freedom to decide whether or not they will join a particular organisation, with the threat of losing their employment if they refuse to join.

While the Government has always encouraged the organisation of representative bodies of employers and employees and their registration under the Act and has encouraged workers to join their appropriate unions, it believes that coercive action to force people to join unions is wrong in principle. It is contrary to the principles of the universal Declaration of Human Rights and it is a matter to which I will be referring in my proposals foi amendments to the legislation.

A further issue which has greatly concerned the Government in recent years has been the tendency by trade unions to use the strike weapon over issues totally unrelated to industrial matters. I instance stoppages in connection with the Moratorium and the Vietnam War, stoppages which interfere with trade with some foreign countries because of opposition to the policies of their governments, bans on the export of merino rams and many others. Because there is no industrial basis in such issues, there is no effective solution to stoppages of this type within the framework of the Conciliation and Arbitration Act. The Government is therefore giving attention to measures to deal with such stoppages by legislation separate from the Conciliation and Arbitration Act.

At the outset, it must be stated that it is not within the power of the Commonwealth Government to provide solutions to all problems in the industrial relations field. Only 40 per cent of workers are covered by Federal awards. The Commonwealth can only legislate within the lim it. of the Constitution. For example, the Commonwealth cannot legislate to control agreements between employers and trade unions made outside the Commission's jurisdiction. Its powers to deal with stoppages in individual plants is limited because they are intra-State in character.

It must also be remembered that Australia does not have one system of conciliation and arbitration; it has 7, the Commonwealth system and a separate one in each of the States. Many of the difficulties that arise in the industrial relations field are caused by this dichotomy which results in neither the Commonwealth nor the Slates being able to deal effectively with many disputes. Constitutional problems are of course involved here. It is the Government's responsibility to provide the legislative framework to assist employers and unions in resolving disputes between them. A critical factor, however, is the nature of the relationship between those parties and the attitudes they bring to the resolution of disputes. We live in a period of' rapidly changing attitudes and of growing indiscipline and disregard for authority in various sectors of our national life. It would be surprising if this malaise of our time was not reflected in the industrial relations area.

Within the limits of the constitution, the Government believes that improvements to the operation of the system can be effected and what it is putting forward is a comprehensive series of balanced and constructive proposals to improve the system. The success of these proposals, however, will depend to a very large extent upon the parties themselves because it is only they who can make the legislation operate effectively.

While the Government believes that our present system of conciliation and arbitration is sound and must be retained, it accepts the necessity to amend the legislation to meet the realities of the 1970s. It is now 15 years since there was a major reconstruction of the Conciliation and Arbitration Act as a result of the High Court's decision in the Boilermakers' Case which required the separation of the judicial and administrative functions of the then Court of Conciliation and Arbitration.

In considering the proposals I will put before the Parliament, the Government has not acted unilaterally. At the request of the National Labour Advisory Council, I convened a National Tripartite Conference on which were representatives of the National Employers Policy Committee representing all the major national employer organisations in Australia, the Australian Council of Trade Unions, the Australian Council of Salaried and Professional Associations and the Council of Commonwealth Public Service Organisations which between them represent most trade unionists in this country. 1 must make it clear that this conference was in no sense a negotiating body from which some agreed or compromise proposals for amendment of the Act would emerge. The parties understood that its purpose was to give them the opportunity to put their views to Government as to amendments to the Act they believed desirable to improve the system and that the question of what amendments would be made was solely a matter for the Government to determine.

In addition, I invited written submissions from other individuals and groups not represented. A number of these were received and considered. I have also had the opportunity of studying a large number of individual representations to me and other members of the Government on this subject as well as informed comment and articles in the news media and learned publications. Thus. I have had available a broad spectrum of views as to what changes should be made in the system. In the views that have been expressed, there was a strong consensus of opinion that a greater emphasis should be given to conciliation and that steps should be taken to make conciliation more effective.

In essence, therefore, the proposals which I am about to outline are designed to improve and strengthen the Conciliation and Arbitration Act and to facilitate the work of the Commission. Our aim is to ensure that it will remain a statute which will provide for the orderly conduct of industrial relations in this country, will benefit both workers and employers and. most important, will protect the interests of the whole community in the settlement of industrial disputes.

In making this statement well ahead of the introduction of legislation, the Government is taking the opportunity of outlining its proposals to the entire community. This will enable responsible consideration to he given to what is intended by the Government. I now come to the Government's proposals.

The Conciliation and Arbitration Process

The mou important aspect of the changes that the Government has in mind concern the processes of conciliation and arbitration themselves. The objects of .he Conciliation and Arbitration Act are often overlooked. Let me restate them.

(a)   to promote goodwill in industry:

(b)   lo encourage conciliation with a view to amicable agreement, thereby preventing and settling industrial disputes.

(c)   to provide means for preventing and settling industrial disputes not resolved by amicable agreement, including threatened. impending and probable industrial disputes, with the maximum of expedition and the minimum of legal form and technicality;

(d)   to provide for the observance and enforcement of agreements and awards made in settlement of industrial disputes; and

(e)   to encourage the organisation of representative bodies of employers and employees and their registration under this Act.

Thus, significant emphasis is placed in the Act upon the process of conciliation. This has always been so and the critics of the system too often tend to forget it.

In recent years, largely because of the prevailing economic circumstances, there has been a tendency for parties to attempt to settle their differences by agreement outside the Commission. The Government considers it would be preferable for the Commission to be more involved in this process and for more effective facilities to be provided to assist the parties.

The Government therefore proposes to restructure the Conciliation and Arbitration Commission and completely separate the conciliation function from that of arbitration. Under this new arrangement. members of the Commission will be divided into 2 groups, each with distinct responsibilities. The first will consist of presidential members and arbitration commissioners and will exercise only arbitral functions. The second will consist of conciliation commissioners and will exercise only conciliation functions. The conciliation commissioners and the arbitration commissioners will have the same status.

Conciliation commissioners will have the important task of assisting parties to resolve their differences. The extent to which they become personally involved in conferences and discussions between the parties will be a matter for their judgment in individual cases, but they will be expected to be in constant communication with parties during the conciliation proceedings. In some cases, the nature of the problems confronting the parties may require a conciliation commissioner's presence during all discussions and negotiations.

When a conciliation commissioner has taken all reasonable steps to secure settlement by conciliation but the parties cannot resolve their differences the matter will go to arbitration. Thus there will be no departure from the well-established and lon a-accepted need for the Commission to possess arbitral powers where parties cannot resolve their differences by conciliation.

The Government sees particular merit in this separation of functions. We believe that in providing for the settlement of disputes in this way the conciliation process will be made more meaningful and more attractive to the parties. Steps will be taken to ensure that the confidential nature of conciliation proceedings and what has transpired in these proceedings will not be admissible in any subsequent arbitration by an arbitration commissioner. These factors, we hope, will encourage more disputes to be resolved wi:hin the framework of the -Commission. Thus, there should be a more positive approach to conciliation and a strengthening of the processes of the Commission.

Agreements reached in the conciliation process will be certified as awards or orders of the Commission. We also propoe to enhance the role of presidential members of the Commission by extending their responsibilities. At the present time their principal work involves sitting on benches constituted under sections 33, 34 and 35 of the Act, though for many years certain key industries have been assigned to presidential members rather than the lay commissioners. In addition since last year, presidential members have had responsibility for matters arising under sections 32a and 33a of the Act.

Under the present system the President of the Commission assigns groups of industries to individual commissioners. Each commissioner is then responsible for all activities of conciliation and arbitration in those industries. The Act does not allow presidential members to be assigned in this way.

To provide for the separation of conciliation from arbitration and to assist in the elimination of possible delays in the hearing of matters, the Government has in mind that the Act will provide for the establishment of what might be termed task forces in the Commission. Under this arrangement a presidential member will be responsible for a group of industries with one or more conciliation commissioners and arbitration commissioners. Thus there will always be more than one person with an intimate knowledge of the particular industries available to deal with disputes. The presidential member will be responsible for co-ordinating the work of the group.

This greater involvement of presidential members will assist them in carrying out their functions under the reference an.d appeal provisions of the Act. I hope that it will bring about a greater degree of coordination amongst all the members of the Commission. Because of our intention to separate conciliation from arbitration, it will not be possible to involve presidential members of the Commission in the conciliation process. They must be available for full bench matters. These are arbitral proceedings.

One particularly important matter arises out of the proposal to separate the conciliation and arbitration functions of the Commission. The Government acknowledges that the most satisfactory means of settling differences in industrial relations is by the parties themselves reaching agreement. Nevertheless, the public interest must be protected. There are three parties connected with industrial relations and one is the community. An agreement reached between employers and unions may have major repercussions in other areas of employment and may not be in the best interests of the wider community.

The Act already takes account of the public interest. It reserves certain matters of particular importance to full benches of the Commission and provides a system of references and appeals. The Government does not believe that it would be realistic to rely entirely upon the reference and appeal provisions, in relation to an award or order arrived at under the new conciliation process.

The Government intends to provide that a full bench of the Commission must review a conciliated award or order if the Commonwealth refers an award or order on the issue public interest. The Commission will be empowered to confirm the award or order in light of what is put to it -or to make such changes it deems necessary.

Consistent with the nature of the conciliation process the intention is to provide that counsel, solicitors or paid agents shall not represent parties in proceedings before a conciliation commissioner although they will not be precluded from participating in such proceedings in an advisory capacity.

Appeals

The Government proposes to extend the appeals provisions of the Act. There are circumstances in which an award or order of the Commission, because of its nature, could affect significantly a party, other than those involved in its making. Therefore, we will provide for such a party to be able to seek leave to appeal against an award or order if it is able to satisfy the Commission that it is affected <> is likely to be affected by that award or order.

The Act will also be amended to provide that an award or order made by the Commission shall be made formally without delay, that no formal order or award shall bear a date other than the date on which it is actually signed and that it shall be made available to parties on that date. The statutory period for the lodging of appeals will commence on that date. This will prevent a situation in which an appeal could not be lodged because the signing of a formal order had not taken place.

Constitution of Full Benches

The Government has in mind changes in the constitution of Full Benches of the Commission. At present, what might be termed full benches, are constituted under sections 33, 34 a«d 35 of the Act. In each case, the constitution of the Bench is different. Under section 33, the Act provides for the 'Commission in Presidential Session' consisting of only presidential members, of not less than 3 in number, to make awards as to standard hours of work, the basic wage and long service leave. Under section 34 - (references) the Commission must consist of not less than 3 members, at least one being a presidential m mber. Under section 35 - (appeals) it must be constituted by not less than 3 members at least 2 being presidential members.

The Government proposes to rational :se these provisions in 2 ways. First, the term Commisison in Presidential" Session' will be discarded. It will be replaced by the term Full Bench'. It is also proposed that the legislation will make provision for full benches to consist of not less than 3 members with, in the case of section 33 matters, at least 3 presidential members but' leaving the option of adding further members, either presidential members or arbitration commissioners, if thought desirable. In appeal and reference matters, the Commission will be constituted by not less than 3 members of whom 2 must be presidential members. Consistent with their role, conciliation commissioners will not sit on full benches of the Commission.

Matters reserved to Full Bench under Section 33

The Government proposes to add to the matters which are reserved for determination by Full Benches of the Commission under section 33 of the Act. The matters to be included are of major significance and in the past have been dealt with by the Commission constituted under the reference provisions of the Act

The matters to be added to section 33 will be national wage cases; equal pay test cases; annual leave cases; and the minimum wage.

Qualifications of presidential members

The Government has fully considered the qualifications for appointment as presidential members. For many years, it has been suggested that the qualifications, for appointment as presidential members should be widened to enable the appointment of persons who possess other than legal qualifications. So far as is relevant, the Act now provides that a person shall not be appointed as a presidential member unless he is or has been a barrister or solicitor of the High Court or of the Supreme Court of a State of not less than 5 years' standing.'

The Government has decided to broaden the basis for appointment of presidential members of the Commission to allow for the appointment of persons who have an accepted standing by virtue of experience at senior level in industry or government service or who have appropriate tertiary qualifications in economics, industrial relations or commerce. However, the office of President will remain one to which only a legally qualified person may be appointed.

At present, a presidential member is entitled to the rank, designation, status and precedence of a judge. There would be serious objections if persons not legally qualified were to be given the style and title of judges. All future appointees as presidential members, therefore will not have these styles and titles but in view of the high status of their office, it is proposed that they be accorded the title 'The Honourable' and be addressed as 'Mr Deputy President'.

The judicial status of existing presidential members of the Commission will be preserved. Future presidential members appointed will retire at age 65 instead of age 70. There will then be a common retiring age for all members of the Commission. 1 propose that in future the positions of conciliation commissioners and arbitration commissioners will be advertised when new appointments are being considered. In this way, the field of choice for such appointments will be widened.

Need for the Commission to take account of Economic Consequences in its decisions

In recent years the economic consequences that can flow from decisions made by the Conciliation and Arbitration Commission have been under considerable discussion. There is no doubt that many decisions of the Commission have a major impact on our national economy and as such affect the economic and social wellbeing of all citizens. It is therefore most important that what the Commission does in settlement of industrial disputes should not jeopardise the nation's economic life.

The Government does not consider that it would be sensible or practicable to write a blanket provision into the Act requiring the Commission to take into account the likely economic consequences of every decision made by it. Many of its decisions have no impact on the economy. Nevertheless, matters which come before the Commission under section 33, under section 34 (references) or under section 35 (appeals) will normally involve issues of considerable importance not only industrially but in respect of the national economy. The Government will amend the Act to provide that in dealing with matters under these 3 sections the Commission will be required to have regard to the likely national economic consequences of any award or order that it might make in settlement of a dispute.

Dispute Settlement Procedures

Throughout 1969 and 1970, my predecessors held discussions with representatives of the ACTU and the National Employers' Policy Committee on the sanctions provisions of the Act. All parties agreed to work out a set of principles for the establishment of procedures for dealing with disputes. Those principles were endorsed by the ACTU and the NEPC on behalf of their constituent bodies. Their purpose was to guide employers' organisations, employers, unions and workers towards establishing their own particular procedures within industries or establishments that would best suit their particular needs, lt was agreed that it would be the mutual responsibilities of individual unions and employers to give effect to the guidelines in one of the following ways: (a) by incorporating the procedures in awards by consent; or (b) by incorporation in agreements lodged with the appropriate tribunals; or (c) by the formal exchange of agreed documents.

The parlies agreed that it would be important to translate the principles into action as soon as practicable on the basis of mutual decisions by the parlies. 1 can only say that the extent to which these principles have been taken up and particular procedures developed from them by both employers and the unions has been disappointing.

The Government proposes to provide in the Act thai, in the making of an award, the Commission would encourage the parties to include a provision for procedures to settle disputes arising between them in industrial establishments in which work is being carried out under the terms of the award. Clearly, dispute settlement procedures will not work unless both sides are prepared to make them work. There would be little advantage in including them in awards in circumstances in which parties do not express such a willingness but we hope that by making provision for them in the Act in the manner I have, just indicated, Commissioners will bring these provisions to the attention of the parties and they will be encouraged to give them more consideration than they are apt to do now.

Special Provisions in relation to the Australian Capital Territory and Northern Territory 1 have already made reference to the Constitutional limitations on the Commonwealth's power to legislate in the field of industrial relations. However, it is not limited in this manner in respect of the mainland Territories - the Northern Territory and the Australian Capital Territory. Even so, the powers of the Commission in these 2 Territories are limited by the Act and by the Northern Territory (Administration) Act and the Seat of Government (Administration) Act. In effect, in relation to the Territories the Commission has power to settle industrial disputes as distinct from its power elsewhere in Australia which is to settle interstate industrial disputes.

This means that even as to employees in the 2 Territories the Commission may only settle disputes which involve persons working in an industry in the Constitutional sense of that word. The High Court has held on a number of occasions that certain work is not 'industrial' in this sense. The most recent of these decisions has been the Firefighters Case (44 ALJR 391). One of the results of this has been that the Commission has no jurisdiction to settle disputes involving firemen employed in the Australian Capital Territory.

In its consideration of the decision of the High Court, the Government has decided that no longer will the jurisdiction of the Commission in the Australian Capital Territory and the Northern Territory be limited to dealing with industrial disputes. The Government sees no reason why disputes involving- persons employed in these Territories, whether they are. in an industry or not, should not be capable of being brought before the Commission.

Therefore, the Commonwealth proposes to amend the Act so as to provide that disputes as to all persons employed' in the 2 mainland Territories should come within the scope of the Act: In providing for this, however, the Government does not propose that there should be interference with any existing arbitral arrangements applying in these Territories by virtue of legislation other than the Conciliation and Arbitration Act.

Problems created by the case of Moore v Doyle

For some time close consideration has been given to the problems created for organisations of employers and employees and therefore for the whole system of conciliation and arbitration in this country oy the Commonwealth Industrial Court Case of Moore v Doyle (15 FLR 59). The essential problem that emerges from this case is that officials of Federal organisations have been elected to office by persons who do not belong to the organisation registered under the Conciliation and Arbitration Act but belong to a State-registered body which is not one and the same as the State branch of the Federal organisation.

The case has created serious problems for union and employer bodies. The decision has implications for the very standing in law of such organisations registered under the Conciliation and Arbitration Act and State industrial legislation. One of these implications is that many officials of organisations may be now, and as a result of elections in the future, invalidity in office.

The complete solution to this requires both Commonwealth and State legislation. For the present, however, it is important that the Commonwealth itself should lake legislative action. Implications of the Court's observations have been under; consideration by a working party formed under the auspices of the National Labor Advisory Council. On this working party are represented my own Department, the Attorney-General's Department, State officials and representatives of the employers and the ACTU.

The problems thrown up by Moore v Doyle are extremely complex and a total solution is yet to emerge. However, some preliminary steps can be taken by the Commonwealth towards protecting officials of registered organisations. The Govern ment's consideration of this matter is continuing with a view to the development of more comprehensive solutions prior to the introducing of legislation in the next session of Parliament.

The matters on which the Government has decided to take action can be categorised as being measures to restrict opportunities to exploit the problems highlighted by Moore v Doyle - and i.i another case Steuart v Oliver - by placing some limitations on challenges to elections in organisations under section 141 of the Act. That section is one which permits members of organisations to have the Court order that officials of organisations carry out the rules of such bodies. The section can be used and has been used in connection with the election of officials in organisations.

The Government proposes to legislate to place a time limit on the taking of actions under section 141 in relation to elections for offices not conducted under Part IX, i.e., under the control of the Registrar. The Government also proposes to legislate so as to provide that elections conducted in that manner cannot be challenged at all under section 141. We also propose to legislate so that a past election in any organisation cannot be challenged under section 141 unless that challenge is lodged within a specified time after the proposed amending legislation comes into operation.

We are also giving close attention to a further proposal, namely to allow a registered organisation to include in its membership persons not engaged in an industry or an industrial pursuit as long as they are engaged in functions which are similar to those performed by those persons in the organisation who are engaged in an industry or an industrial pursuit.

Compulsory Unionism

Earlier in my statement, 1 indicated the Government's grave concern at the recent and continuing efforts by some trade unions to bring about compulsory unionism in this country. The Government and, I believe, the community are opposed to compulsory, unionism. We will amend the provisions of the Act relating to registered organisations to prevent unions from enforcing compulsory unionism. We will legislate to make it clear that:

(a)   only voluntary associations will bc entitled to registration under the Act;

(b)   only registered organisations will have the right lo act on behalf of groups of employees and employers;

(c)   registered organisations will be entitled to represent members of the organisation before the Conciliation and Arbitration Commission where the organisation is a party to a dispute and in proceedings before the Industrial Court;

(d)   an employee who is not a member of a registered organisation will be entitled to represent himself in any disputes to which he is a party;

(e)   an employee, although entitled to join a registered organisation, will not be required to do so.

Steps will also be taken to ensure that no threat, duress or intimidation is used to induce a person to join a registered organisation; that an employer shall not dismiss an employee or prejudice him in his employment by reason of the circumstance that he is not a member of a registered organisation; and that a registered organisation or its officials or agents shall not by threat, duress or intimidation seek to induce an employer to dismiss an an employee or prejudice him in his employment solely because he is not a member of a registered organisation, we will also amend section 5 of the Act to further protect a person who is dismissed or is threatened with dismissal because he is a member of a registered organisation and will remove anomalies in that section.

Secret Ballots

Earlier in this statement I drew attention to the alarming increase in industrial stoppages. The Government believes that too often there are circumstances when "the rank and file of union membership is not consulted before strike action is determined and are not given an opportunity to express views on the issues involved or the course of action determined by officials.

It considers that there is a need to strengthen the present provisions of the Act which enables the Commission to hold a secret ballot of members of an organisation where it thinks their views ought to be ascertained to assist the prevention or settlement of an industrial dispute. The present requirement of the Act that there be an industrial dispute considerably restricts the Commission's power to order a ballot where one might be desirable - for example, where a dispute is confined to a particular plant or undertaking.

The Government proposes to amend the Act to provide that the Commission may order a secret ballot if it thinks that the views of members or of a section or class of members of an organisation or of a branch of an organisation ought to be ascertained with a view to averting a ban, limitation or restriction on the performance of work in accordance with an award. This will enable the Commission to order a ballot if it thinks fit in circumstances such as I have mentioned. The Government has also decided to provide that the Commission's power to order a secret ballot may be exercised by a presidential member rather than by a bench of 3 members, as at present. There will also be more effective protective provisions for the conduct of a ballot along the lines now provided in Part IX of the Act - officially conducted elections for office bearers.

Sanctions

This Government has consistently held the view that sanctions are an essential feature of our system of conciliation and arbitration. Nothing that has been put before the Government has shaken this view. Australia's system of industrial arbitration is a unique part of our federal heritage of which we should be proud. All the major political parties should be zealous in attempting to preserve its essential features. The central element of our system is that industrial disputes as to remuneration and other conditions of work should be the subject of settlement by an impartial tribunal, the decision of which shall have the force of law. Arbitration is a form of legislation. No law can be effective unless it is enforceable. No law can be enforceable unless there be a sanction for its breach. Any system of industrial relations such as ours which provides for industrial awards to regulate with the force of law the relation between employers and employees and the conditions under which workers may be employed must also provide judicial support for these awards to have legal force. The Australian system aims to prevent direct action in industrial disputes, by providing for "conciliation and arbitration. The basis of the sanctions is that the terms of awards must be capable of being upheld at law. Awards of the Commission grant benefits but they also place obligations upon the parties. Employers are bound to apply the provisions of awards to their employees. Both unions and employers are bound to observe the settlement of the disputes which awards bring about.

These principles are so clear as to be self-evident. That they are so is proved by the fact that since 1904 sanctions in varying forms have been a feature of the Conciliation and Arbitration Act. They have been maintained by governments of all political persuasions. When the Labor Government was asked in 1947 to remove the sanctions from the Act, the then AttorneyGeneral, the late Dr Evatt, said that the Government, 'rejected suggestions that all existing disciplinary powers of the court itself should be eliminated'. (House of Representatives, Hansard, 12th March 1947, p. 551.) There are sanctions provisions in State industrial legislation. Up to the time the Labor Party went out of office in New South Wales in 1965, it resisted efforts to have such provisions removed from the Industrial Arbitration Act. We hear a great deal of clamour for the abolition of sanctions but it would seem that those who join in this campaign certainly do r.ot mean all sanctions should be abolished - merely sanctions against the trade unions. They conveniently ignore the fact that the sanctions provisions of the Conciliation and Arbitration Act guarantee to employees that they can enforce the provisions of awards. It would seem, therefore, that many of those who advocate the abolition of sanctions against unions wish to bring about a situation in which they can apply economic coercion in support of their vested interests to the detriment of their fellow workers and the community at large. The trade union movement in this country wields great power - power which derives from its entrenched participation in the free enterprise system. This Government does not wish to see a weak trade union movement bur, by the same token, it wishes to ses a balance of power between employers and unions in the settlement of industrial disputes. Everyone should be equal before the law.

Successive Ministers for Labour have emphasised that the sanctions provisions of the Act are intended as a last resort to be used when all reasonable steps have been taken to settle disputes by conciliation and. if needs be, by arbitration. That the Government's policy is clearly to place the main emphasis in the legislation on the prevention and settlement of disputes by conciliation and arbitration . is evidenced by the amendments which were made to the Act in 1970. Moreover, those amendments indicated the Government's willingness to he flexible in the matter of sanctions. The Government has been prepared to discuss the sanctions issue with the trade union movement and employers at various times since early 1969. This clearly indicates its considerable patience over this issue. Government policy on sanctions does not emerge from any desire by the Government to engage in confrontation with the trade union movement. The Government has noted with interest that the Leader of the Opposition (Mr Whitlam) and the honourable member for Hindmarsh (Mr Clyde Cameron) both recently have indicated that they support the principle that there should be industrial sanctions in some form. The sanctions provisions of the Act have been described, not on this side of the House, as vicious and discriminatory. I reject both of these descriptions. It is said that Australia is the only country in the Western world with a system of industrial sanctions. This ignores the fact that in many other countries there are industrial sanctions. They are on the statute book in New Zealand. As recently as last year, special sanctions were enacted in that country in connection with a maritime strike. There are penalties for the contravention of collective agreements in countries where a collective bargaining system operates. These include Canada, the United States of America, the United Kingdom, Sweden, Norway and Israel. While the mechanics of sanctions may differ from country to country and as between systems, their existence is fundamental to a society which values and relies onthe rule of law.

The Government proposes to strengthen section 32a of the Act by stressing that the first obligation of a presidential member in dealing with a notification to him under that section will be to bring about a cessation of the conduct which has given rise to the notification. If he cannot achieve this, he will be required to issue a certificate unless he is clearly of the view that a prompt settlement of the dispute is likely. The Government has decided that there should be no changes in the level of penalties provided by section 119 of the Act. Beyond this, I should add that the Government currently has under review all of the other sections of the Act which provide for penalties. These penalties cover a wide range of matters and most of them have been in the Act for many years. The results of this review will be made known in the next session of Parliament.

Industrial Court Fines

Let me make 3 points about the Government's attitude towards the payment of fines imposed on unions by the Commonwealth Industrial Court.

1.   Several unions have not paid fines totalling $37,950 imposed on them by the Court under the sanctions provisions of the Act which operated untilJune 1970. These fines were legally imposed and the Government expects the unions concerned to honour their obligations to pay them.

2.   Fines totalling $10,200 have been imposed on unions by the Court under the legislation which came into operation in June 1970. An amount of S6.000 has been paid. The Government will take action immediately under the enforcement provisions of the legislation, through the AttorneyGeneral's Department, to ensure that the balance of S4.200 is collected. As a first step in this process, the unions concerned will be immediately given a period of 14 days in which to pay the fines.

3.   The Government will ensure that all future fines imposed under the sanctions provisions of the Act are collected.

Other Amendments

Other amendments the Government will make to the Act are as follows:

(i)   amendment of section 145 to require up to a maximum of 3 months' written notice of resignation of membership of an organisation addressed to the officials designated in the rules of the organisation;

(ii)   amendment, of section 58 to enable awards to be made allowing for the unlimited accumulation of sick leave. This should be of considerable significance in reducing time lost in industry through unauthorised work absences;

(iii)   amendment of section 188a to provide that the fee for furnishing a copy of the rules of an organisation be prescribed by regulation;

(iv)   strengthening of the provisions of the Act in relation to the Arbitration Inspectorate of my Department which is responsible for ensuring that awards made by the Commission are enforced. This will also assist towards our aim of ratifying 1LO Convention No. 81- The Labour Inspection Convention, 1947;

(v)   development of the existing provisions for the granting of financial assistance to persons involved in litigation before the Commonwealth Industrial Court under sections 140 and 141 of the Act where it can be established that a person is personally responsible for costs.

Conclusion

In this review of the Conciliation and Arbitration Act, the Government has taken an objective, balanced and constructive approach with a view to balancing and strengthening the effectiveness of the conciliation and arbitration system. The system is an integral part of Australia's industrial and social framework. The Government believes that what it is proposing will make a significant improvement in industrial relations in this country.

The Government provides the institutional frame work. The effectiveness of the legislation and the system provided by it must depend on the good sense and goodwill of all parties, in particular the employers and the unions. The system will work as well as the parties allow it. to work.

In this, all parties, including the Government, have their respective responsibilities. By this statement foreshadowing its intentions, the Government has indicated how it will discharge its responsibility in the interests of the Australian people. This statement precedes the introduction of draft legislation to the Parliament. As such, it will provide the opportunity for the development of an informed public mind.

Other related Commonwealth legislation for example, the Public Service Arbitration Act and the Coal Industry Act will now be examined in the light of what I have indicated in this statement. As the need to do so arises, there will be consultations by the Government with interested parties. I commend the statement to honourable members. I present the following paper:

Conciliation and Arbitration Act - Ministerial Statement, 7th December 1971.'

Motion (by Mr Wentworth) proposed:

That the House take note of the paper.







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