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Outline and commentary on the Workplace Relations Legislation (More Pay Better Jobs) Amendment Bill 1999
Department of the Parliamentary Library
Telephone: (02) 6277 2463
Facsimile: (02) 6277 2475
Outline, comments and commentary on the Workplace Relations Legislation Amendment (More Jobs, Better Pay) Bill 1999. This paper contains a non-comprehensive outline of key features of the Bill with commentary on it by the industrial newsletters Workforce and Industrial Relations and Management Newsletter, The Sydney Morning Herald, the view of the Australian Chamber of Commerce and Industry, as well as the critique of the Bill drafted by 80 industrial lawyers.
- The Bill will confine the AIRC's compulsory arbitration powers to a few areas. The Bill removes matters which the AIRC can include in awards. As well it points out to the AIRC that it is not obliged to include all of what remain as allowable matters in any particular award.
- The Bill retains the award system as a safety net and forms the benchmark for the no disadvantage test whereby any subsequent enterprise agreements are judged as to whether they disadvantage or enhance employees' conditions. In the 1999 Safety Net Wage Case, employers argued that the federal minimum award wage for an adult ($385.40 currently) be used as the benchmark for the no disadvantage test in enterprise bargaining/individual contracts. This submission was rejected then, and in this bill awards are retained. The Government has also flagged its consideration of the use of the Corporations power to frame national industrial relations rather than the Conciliation and Arbitration power (of the Constitution).
- Current allowable matters (either specified as such o r interpreted as such) which will become non-allowable include:
- Skill-based classifications;
- tallies and bonuses;
- long service leave;
- public holidays not declared by a state govt;
- union picnic days;
- notice of termination;
- accident make-up pay,
- training and education provisions;
- transfer between work locations;
- long service leave;
- paid leave for jury service;
- employees' time records; and
- The removal of long service leave has a two year transition period. The proposal is structured so that State LSL standards will apply. This is similar to the proposal to remove award superannuation in so far as a substitute arrangement, the Super Guarantee Legislation is to apply .
- Employees dependent on federal safety-net flow-ons (ie after an SNW decision has been given) for a pay increase will not be able to access them until their awards have been simplified. (Note that a majority of awards remain unsimplified after the first round of award simplification introduced in 1997; these amendments will require a 'second round' of simplification and will form the major work, or what remains for the AIRC)
- It might be argued argue that a similar principle applied under the “Structural Efficiency Principle' (review the award in line with AIRC guidelines before set pay rises can be accessed over 1988-1991). This is not quite correct as there was then a legislative process to review awards not tied to pay increases. The then SEP process can be more likened to today's enterprise bargaining where pay increases are not tied to award simplification.
- The Bill also sets out new requirements for logs of claims , requiring unions to provide information to employers about the process and about employers' rights and obligations when the log is served.
- The Bill enlarges the range of agreements that will displace the operation of federal awards, and amends s111 AAA to make it harder for workers under state systems to move to the federal sphere.
- The Bill proposes changes to its industrial action provisions, both protected and unprotected . Protected industrial action allows either unions or employers a degree of immunity from civil actions for losses arising from the industrial action. It is only available in respect of the formal bargaining process which (hopefully) will lead to an enterprise agreement. Unprotected action occurs in any other industrial action situation, for example when workers protest the loss of jobs through restructuring.
- The Bill introduces of secret ballots for protected industrial action.
- The AIRC must authorise for a ballot to take place.
- The ballot process is likely to affect all protected action, but particularly pattern bargaining because protected action in support of claims mirroring provisions in existing Enterprise Agreements is excluded from protected industrial action.
- The legislation extends the notice period for industrial action from three to five working days.
- Notices of pending industrial action or lockouts would need to provide t he precise nature and form of the intended action; the day or days when the action will take place; and its intended duration.
- The secret ballot proposal is different to ballots for protected action available to unions in the United Kingdom. Pre-strike ballots were introduced in the UK in 1980, and have been progressively tightened through amendments brought in over the 1980s and 1990s. In these circumstances, industrial action can be called by a union for any reason, including the employer significantly breaking the terms and conditions of an agreement, or introducing significant workplace change. According to Jane Elgar and Bob Simpson Industrial action ballots and the law', British unions initially accepted the ballot process. Quite often an intention to call a ballot signalled to the relevant employer that workers would take action. It therefore increased the bargaining power of union negotiators. However the more the ballot became a requirement to inform employers of the detail of any forthcoming action (as well as a process for naming participants) the more unions have come to dislike ballots. As voluntary associations, unions prefer to rely on their internal rules to determine industrial procedures.
- Under Australia's conciliation and arbitration system, recourse to serious industrial action was limited (but never entirely eliminated) by the system of arbitration - its purpose was to minimise strikes and lockouts. Despite the C&A system being designed to minimise the protracted disputes witnessed in the Hunter Valley No1 dispute (1997) and the Waterfront dispute (1998), ballots of union members (including secret ones, if needed) have been a provision of federal industrial law going back to the Conciliation and Arbitration Act 1904. Notification to the AIRC (and the parties) of any forthcoming protected industrial action re a process of bargaining has been in practice since 1994. Enterprise bargaining has changed the process of C&A. EB is based on a contest to secure good employment outcomes for employees, or maximise productivity/minimise employment costs from the employer's view. Protected industrial action is now available only in the middle of bargaining for a new agreement.
- Rules of unions specify processes to notify industrial disputes, as this has been a legal requirement. Union rules will also specify consultative processes on the calling of industrial action, since the rules must allow authorisation of directed industrial disputes.
- Common to the UK and proposed Australian versions of pre-strike ballots are advance forms of notice and detail of the action to be provided to the employer, making action reasonably futile, especially for the larger businesses which can transfer production. In the UK, the law has required information on workers taking part in the ballot, and this feature is to be redressed in 1999 legislative amendments. While the UK did not have ballots prior to 1980, the Australian Industrial Relations Commission and its predecessors have had authority to require ballots under the legislation. In either national situation, a successful ballot does not mean that action will actually take place.
- There will be laws to prevent pattern bargaining , (where the same claim is served on many employers):
- The introduction of "cooling off" periods during protected action, the Bill attempts to end the effectiveness of protracted campaigns by providing employers access to "cooling off" periods.
- Also, the AIRC will be required to suspend a bargaining period 14 days after protected action is first taken. (which may mean that unions stand to lose their leverage in critical periods if employers can have strikes called off).
- quicker access to remedies in the courts for employers (including the State courts).
- the AIRC will be obliged to issue orders to stop or prevent it within 48 hours of an application being made
- new s127AAA provisions (employer seeks court orders for action to cease) increase employers' access to state and territory courts for remedies in respect of unprotected industrial action
- the Act's definition of 'industrial action' is to cover unions only. Unions, particularly the CFMEU have been successful in having actions by employers caught by the definition of industrial action such that when an employer makes significant changes to workplace operations they can be caught by the Act (employer has engaged in industrial action and this is illegal).
- Industrial action is currently defined broadly (as it was in the 1993 IR Act) to cover any change to normal work arrangements. The Bill rewrites the definition to cover unions only.
Right of entry
- The Bill proposes that unions can only enter workplaces if they have a written invitation from a member.
Freedom of association
- Freedom of Association provisions were introduced in 1996 and can be found at s.298 of the WRA. These provisions provide a legal right for a person to join a union, and/or not to join a union and were the basis of the successful reinstatement of terminated waterside workers in the 1998 Patrick dispute. Should a person be detrimented in his/her employment due to violation of a prohibited reason, the provisions stipulate heavy penalties.
- 'Prohibited Reasons' include, for example, the termination of an employee (or the prejudice of the employee's employment) due to the employee's union activities and includes action against an employee who does not take part in union determined industrial action.
- extends the laws' reach to conduct carried out because one person
- refuses to pay a fee to a union, (both US and Canadian laws allow 'union security' clauses under which non-members working under a collective agreement can be obliged to pay a membership fee or similar arrangement, but certain US States can override these clauses under 'right to work' laws)
- refuses to enter into a restrictive agreement or arrangement (including a site agreement),
- has been a union member for a shorter or longer time than another member,
- or is doing something permitted or required by a Commonwealth industrial law or order.
- provides for the removal from certified agreements and awards provisions which encourage or discourage union membership, or which indicate support for unionism or non-unionism;
- prohibits the establishment or maintenance of union closed shops at workplaces and businesses
- defines a closed shop as a workplace or business with 60% or more of workers in one union.
The Australian Industrial Relations Commission
- The AIRC will become the Australian Workplace Relations Commission and the Registry the Australian Workplace Relations Registry.
- In changes to the AIRC itself, there will be no distinction between the offices of Vice President, Senior Deputy President and Deputy President, with all renamed Vice President.
- The Bill has introduced seven-year appointments for Commissioners.
- The President now has to develop a training and professional development program for members, which members have to participate in.
- The Bill establishes a distinction between compulsory and voluntary conciliation by the AIRC with compulsory conciliation available only for matters that can be arbitrated :
- disputes over allowable matters;
- demarcation disputes;
- unfair dismissal cases;
- following on the termination of a bargaining period on certain grounds;
- and in exceptional circumstances, other disputes.
- Voluntary conciliation will be available for a range of matters. including
- assisting agreement-making under Part VIB;
- assisting the resolution of disputes arising under awards, CAs and AWAs; and
- assisting resolution of certain types of industrial dispute.
- The Bill introduces independent mediators as competition for the AIRC.
- There will be a national accreditation scheme for workplace relations mediators and a new mediation adviser to oversee the process.
- Because conciliation is now a competitive industry, parties wanting to stay with the AIRC will now have to pay $500 per application.
The Bill outlines disincentives to the making of "speculative and unmeritorious unfair dismissal claims", the Bill:
- requires the AIRC at the conciliation stage to make a finding as to whether or not a claim is likely to succeed. If the Commissioner believes it won't, the employee can't proceed;
- widens access to costs orders, and allows the AIRC to require the applicants to put up money for costs before the case can go ahead; and
- makes constructive dismissal claims harder.
- limits the discretion of the AIRC and Federal Court to grant extensions of time to lodge both "unfair" and "unlawful" claims;
- reintroduces what the Senate knocked back, removing the right to remedy for employees in the first six months of service, who work for an employer with 15 or fewer employees, or casuals (other than long term casuals);
- limits the AIRC's jurisdiction to find in employees' favour where the employer can show the terminations were required on operational grounds; and
- prevents forum shopping by amending s152(1 A) to specify that the employees can't go to state tribunals if they are covered by the federal dismissal laws via s170CB(l).
Certified Agreements (CAs)
To streamline the CA registration process, the Bill allows for applications to be made to t he Registrar for certification, with no scrutiny by the AIRC provided a number of conditions are met. It also:
- provides that, in cases where an application is considered by the AIRC, no formal hearing should be held unless necessary;
- removes limitations on agreements that apply to part of a single business to prevent multiple-employer deals being certified as single business agreements; and .
- prohibits the certification of agreements that restrict the use of AWAs. This also makes void any such provisions in existing agreements, and provides for their removal. The changes also make it possible for an employer to switch from a s170LJ (union) to a s170LK (non-union) agreement if employees have voted a deal but a union doesn't want it registered.
Australian Workplace Agreements (AWAs)
- Contracts made under the WR Act's individual contract stream will now be able to take effect on the date of signing rather than from the date the Employment Advocate approves them.
- Employers will have 60 days to apply for an approval. If the Employment Advocate refuses to file the agreement, the onus is on the employee to attempt to recover any losses.
- The requirement that the Employment Advocate refer AWAs to the AIRC where there is a concern they don't pass the no-disadvantage test;
- no longer requiring comparable employees to be offered identical AWAs;
- allowing approval without checking of AWAs providing for total remuneration of more than $68,000; and
- allowing AWAs to be made during the life of a CA that undercut the terms of the certified agreement.
The Bill repeals provisions (s.127A) allowing the Federal Court to cancel or vary unfair contracts.
Commentary: Workforce Issue 1216, July 2, 1999
'He is calling it "evolutionary", but WR Minister Peter Reith's latest piece of legislation is a radical document aimed at changing Australian industrial relations landscape. It won't get through the Senate unscathed, as the Democrats now hold the balance of power and their IR spokesperson Senator Andrew Murray has already expressed concerns with many aspects of the More Jobs, Better Pay proposals'
'But the changes are so comprehensive that even if the Govt achieves half of what it has set out to do, the balance of federal IR laws will firmly tip in employers' favour.'
'Meanwhile roundly condemned by unions and strongly criticised by more than 80 industrial lawyers, the legislation has been warmly welcomed by employer organisations. The only big wish Reith denied them was scrapping the awards system in favour of a set of minimum standards. With Parliament now breaking for its winter recess, the Bill is now in committee stage and the Democrats are one again facing a sustained period of lobbying by all sides.'
'The AIG's Roger Boland, who pushed for many of the changes in the wake of the protracted 1997 battles with the metal industry unions, said h e was "unashamedly pleased" with this aspect of the Bill.
Long Service Leave 'The Australian Industry Group (metal industry employers) has said that in the metal industry, for example, the LSL provisions in most state awards were higher than for federal awards, so it could end up costing employers more'.
Industrial action 'As asst sec of the AMWU, Dave Oliver, says, "if they tighten it up too much, then we will have to defy the law". He pointed out that the metal unions' current Ernall campaign was not permitted under the existing WR Act. "Unions have always taken industrial action and we always will," he said.
'Corrs Chambers Westgarth lawyer Breen Creighton told Workforce that under the package as it stood now, it would make it extremely difficult for unions to take protected industrial action with any leverage. That being said though, practitioners acknowledge the gap between black letter law and the real world. WA, for example, has had secret ballot provisions since 1996 but unions have continued to defy the balloting.'
Freedom of Association : 'While employers initially expressed concern that an onus was on them to discourage a closed shop, both Roger Boland from the AIG and Reg Hamilton from the ACCI said that the circumstances under which employers were caught by this would be extremely rare and it was no longer a concern.'
Mediation 'The AMWWs Dave Oliver is highly critical of this aspect of the changes, saying the 1997 manufacturing disputes that large sections of the "second wave" were aimed at preventing were in the end resolved via an extensive conciliation process in the AIRC.'
Nuisance claims for unfair dismissal : ' Breen Creighton from Corrs acknowledges there is a "significant issue which needs addressing" resulting from plaintiff law firms bringing claims that have very limited merit to use as nuisance factors in negotiating settlements. He said, however, that he didn't believe the changes in the Bill would resolve the problem. And, with the AIRC required to make a finding at the conciliation stage if a claim was likely to succeed, he said there was a risk of further complicating proceedings by effectively requiring two hearings.'
INDUSTRIAL RELATIONS AND MANAGEMENT NEWSLETTER (July 1999)
THE 'SECOND WAVE 'IR REFORMS. While the unions are gearing up to oppose the Government's proposed changes—the fact of the matter is that it has been the actions of a few officials—plus the 'misuse of discretion' by some Courts—which have brought about a 'hardening,' of employer and government attitudes.
The battle lines are drawn for a second round of intense negotiations between the Government and the Democrats over a raft of reforms that the Government is seeking in relation to the Workplace Relations Act.
It can be expected that the unions will try and apply considerable pressure on the Democrats to at best reject—or at the very least water down—many of the new provisions that the Government is seeking.
Of particular concern to the union movement, are the changes the Government wants in relation to the taking of industrial action, further simplification of the award system and making AWA's even more attractive to employers by cutting through a lot of the red tape. IRM reviews the major items on the Government's wish list.
Changes to Industrial Action
The Government is retaining the right for unions to take limited protected industrial action for the purpose of making collective agreements but is seeking to amend the Act to ensure that any other industrial action is given better access to common law pr ovisions.
Changes that the Government wants to passed are:
* The Commission to be forced to issue S.127 orders directing unprotected industrial action cease and deal with an application within 48 hours. If the application has not been determined within 48 hours, the AIRC would be required to issue an interim order to stop the action, unless to do so would be contrary to the public interest. The amendment also clarifies that sympathy and political action is unprotected.
If passed, in addition to directing that unprotected action stop, the AIRC will be able to make an order to prohibit impending or planned industrial action. It will also be able to make an order where there has been industrial action in the past three months—and there is a possibility of further action pending. Application for orders can be made by a person either directly or indirectly affected (or likely to be affected). Orders can be made in respect of unions and their officials.
The Commission will also be able to order cooling off periods during protected action if an application is made 14 days after industrial action has commenced. This will require a return to normal work arrangements, a suspension of industrial action and a recourse to alternative approaches such as mediation or conciliation. There will also be provision for the AIRC to terminate a bargaining period if a party is engaged in pattern bargaining.
Where a suspension or termination occurs, the AIRC will be required to inform the parties of the availability of voluntary conciliation and mediation services.
* Employers will be allowed to choose between State Supreme Courts and the Federal Court when taking legal action against unions. The amendments if passed, will require the Federal Court to deal promptly with applications for enforcement of S. 127 orders. State Supreme Courts are to be given the power to enforce S. 127 orders (Including injunctions) via the repeal of S. 166A of the Act.
* Protected action will be preceded by longer five day) notice periods and by a secret ballot process overseen by the AIRC. An application for a secret ballot can be refused on the grounds that the applicant is engaged in pattern bargaining or is not genuinely trying to reach agreement.
With the application for a secret ballot will be the requirement for the union to furnish a range of information, such as the proposed certified agreement to which a secret ballot relates, the group of employees or members who are to be balloted and the question(s) to be asked. The vote would be carried by a majority of valid votes cast with a quorum required of at least 50% of eligible voters. The ballot of paper will be required to include information on a range of matters together with a prescribed statement outlining the implications of taking or not taking industrial action. The Government will refund 80% of reasonable and genuinely incurred costs of a ballot.
Basically what the Government is seeking to do via amendments in this section, is to tighten up on the discretion available to the Commis sion and the Courts. As IRM has written in previous issues, there is considerable concern in the business cornmunity that some Judges in the Federal Court are not applying the law—but are using their discretion to by-pass what they may perceive to be wrongful constraints on unions and employees.
On the other side of the coin, there is a concern that by limiting Court discretion so much, genuine cases may not get the special attention they need. Employers are not always in the right—nor are unions and employees always in the wrong.
What is NOT included among the amendments in this section is some form of code on picketing. Despite the fact that there is now considerable case law on this subject, it is still a matter that is continually being argued in the c ourts—with different judges taking different approaches to the issue.
Apparently in the UK back in the 1980's, there was a code developed on picketing in relation to what was acceptable and what actions were not acceptable. It would be helpful to have some form of code developed over here.
Australian Workplace Agreement Changes
Most of the changes proposed, while on the surface they may appear to be significant, actually are more to do with technical modifications and the cutting away of red tape.
The Government is looking for the following changes:
* Allowing individual contracts (AWA's) to be implemented as soon as they are signed, rather than from the date of approval by the Employment Advocate.
New employees (who account for 30% of AWA's), already have this provision applying. Between 96-98% of AWA's get approved and apparently in a large number of cases, because the agreement contains a wage rise, it is applied as soon as the agreement has been signed by both parties.
Technically, employers and employees who apply the conditions of an AWA prior to its ratification by the Employment Advocate, are breaching the award—which is one of the reasons the Government is seeking this amendment.
While the unions claim that applying an AWA before it has been scrutinised by the Employment Advocate can disadvantage employees, there is provision that if the AWA is found to be defective, the Advocate's office will assist the employee in getting any back pay or other entitlements owing. With the vast majority of AWA's being approved within three weeks of lodgement, there is a belief that the risk to employees is minimal and that the benefits (e.g. a pay rise sooner), outweighs the minuses.
* Removing the requirement that the employer must offer the same AWA to all comparable employees. The Government argument here is that this provision is a deterrent to employees initiating AWA discussions with employers. It is also claimed that it undermines the capacity for individual agreements to provide for different arrangements for various individuals—even if they do similar work.
The provision originally came out of the Weipa dispute. The Democrats wanted to ensure that union members were not discriminated against. Part 10A of the Act provides this protection. This provision is seen simply as red tape which does not add value to the process.
* Removing the requirement for the Employment Advocate to refer an AWA to the AIRC when unsure about whether or not it disadvantages employees. To date, the Employment Advocate has sought undertakings from employers in 15% of individual agreements lodged because of any concerns he might have had about the agreement.
Of the 10,000 (??) odd AWA's which have been ratified, only 2% have been referred to the AIRC for determination. A large percentage of this group have been passed by the Commission as not be ing contrary to the public interest or because special circumstances apply.
Under the proposed changes, the Commission would define the principles it applies to public interest. The Employment Advocate's office would then apply these principles if it had any concern about an AWA.
* Allow AWA's to be made undercutting a collective certified agreement, even while the latter is in operation. In addition to simplifying the agreement-making processes, the Government would also like to see greater scope for the use of AWA's, including them operating alongside Certified Agreements.
The proposal is that AWA's will prevail over Certified Agreements either to the extent of any inconsistency or comprehensively (currently, this may only occur in limited circumstances). In addition, Certified Agreements will not be able to operate to exclude later AWA's—as is the case under current arrangements.
Freedom of Association
The major issues in this sector include the requirement on employers to take positive steps and act against 'closed shops'; further limitations on union's ability to enter an employer's premises to hold discussions with employees or Investigate award breaches; and greater protection for employers and sub-contractors and their employees, against indirect pressure or coercion. In particular, conduct which breaches freedom of association under the guise of 'site agreements' will be banned.
In relation to 'closed shops'—this is defined as an organisation where 60% of employees belong to a union.
As IRM wrote back in our February edition-there are only a very small number of employers who want to rid their operations of unions altogether—alt hough reducing the number of unions on site has (understandably) been a major objective in quite a number of organisations.
Quite a few managers admit privately, that they prefer to have a union on site as 'it keeps management honest' and that it forces them to provide some kind of forum for employee representation. In fact, a number of managers say that if unions do go by the board, they are concerned about what could fill the vacuum their departure creates.
Also, as subscribers who read our highlights on the latest Enterprise Agreement will note, a number of the more far-sighted employers are seeking to develop 'partnership' arrangements with their union—particularly if they have a single union site.
It is not surprising therefore, that many employers—and employer organisations such as AIG—are concerned about this proposed provision.
According to Government sources, the 60% rule is only one indicator. The major concern that the Government has is that in some companies, belonging to a union is a condition of employment. They say that the proposed provision has been developed to stamp out this practice.
In relation to union right of entry, should the changes go through, officials will have to have a written invitation from a union member to enter an employer's premises. To protect the anonymity of individual union members, a system of certificates will be introduced, which will require officials—if so desired by their members—to attain a certificate from the Registrar.
The official will also have to give 24 hours written notice to the employer of their intention to enter the workplace. Officials will only have the right to inspect records which relate to the employment of their members.
Changes to the AIRC
The Government wants the AIRC to be renamed the Australian Workplace Relations Commission (AWRC) in order to reinforce the workplace focus of the system. The President, in conjunction with the Workplace Relations Registrar, would be given greater responsibility and powers for managing the work of the Commission and the Registry—including the training and professional development of members.
Seniority will be removed as a basis for appointment to higher levels and revised tenure arrangements will be introduced for new appointees, which will allow for a fixed term of seven years.
In order to encourage the parties to take greater responsibility for their workplace relations arrangement. The Government wants to limit the Commission's compulsory conciliation powers to:
- disputes over allowable matters;
- demarcation disputes;
- unfair dismissal cases;
- following on the termination of a bargaining period on certain grounds;
- and in exceptional circumstances, other disputes.
Conciliation of private disputes in relation to non-allowable matters (matters over whi ch there can be no arbitration), will be voluntary, with a flat fee of $500 per application to be charged by the Commission.
Mediation to be formally recognised
Mediation will be formally recognised in legislation as an option for dispute resolution prio r to protected action, during suspension of a bargaining period, following termination of a bargaining period, as a step in dispute resolution procedures and in relation to agreement-making generally. The legislation will also ensure that Federal and State Industrial Authorities can be restrained from acting in cases where the parties are undergoing mediation. A facility will be established to accredit mediators and promote the use of mediation.
Extracts from Brad Norington's 'Reith moving in for the ov erkill', Sydney Morning Herald
7 August 1999.
… Reith portrays his legislation in benign terms. It is merely the next, necessary phase of reform, he insists, to give workers and employers more choice and to eliminate unwarranted intervention in the workpl ace by 'third parties'. What Reith will not reveal is his legislation's malevolence.
Except for a couple of initiatives, his legislation has nothing to do with fairness or the very partisan 'more jobs better pay' slogan that is included, amazingly, in the legislation's title. Close examination reveals that it is Reith's most ardent attemp t yet to 'get unions'.
Given Reith's record, it is not surprising that he continues to harbour ill will towards unions, but there is a point at which it can be reasonably asked, 'To what purpose?' Unions are already struggling, with memberships slumping to just one-fifth of the workforce in the private sector…
Reith pays lip service to the ideal supported by most Australians that unions have a role in society and that there should be a right to strike. On the surface, his proposal for compulsory secret ballots appears democratic. Yet there is already provision for ballots, secret or otherwise, and the present law also places notice periods and other conditions on strikes.
The cumbersome lengthy process Reith wants to impose on unions would render strikes useless as a bargaining tool, and a waste of time. If unions bothered to go through all the required steps, it would take 16 days (best estimate) before a strike could legally proceed, but more likely a month. The strike could be about only issues for a wage agreement and an employer could legally terminate it after 14 days.
The list of anti-union measures is long and nasty. In an attempt to wipe out compulsory unionism, workplaces with as few as 60% of employees in one union could be ruled an illegal closed shop. Non-union individual contracts between employer and employee would at all times take precedence over wage agreements covering groups of employees…
To give unfettered control to employers is dangerous. It places total trust in them to do the right thing by workers despite every day examples of companies under-paying workers, forcing impossible hours on them or denying entitlements when they go broke…
The legislation drafted in that office reads as though Reith's advisers have sat around a table with glee and tried to knock out of contention every instance, however minor, where unions have scored a point since 1996.
Australian Chamber of Commerce and Industry
6 May 1999
Modest Reform of Labour Laws
Statement by Mark Paterson, Chief Executive
The Government's new package commits it to a pursuit of a set of modest and incremental changes. It is not radical, nor is it the fundamental reform which is required and which has been proposed by ACCI.
Most of the changes proposed appear to be broadly positive in their nature, including proposals to simplify our complex agreement approval processes, to strengthen the legal responses to unprotected action, to provide some protection to State enterprise agreements, to again attempt to put more balance into the unfair dismissal regime so that it is not such an impediment to new employment, and proposals to protect age based junior rates on a permanent basis.
A lot of the detail remains to be settled but the proposals are, in the main, positive and in the right direction.
Nevertheless, it has to be said that the proposals are modest and do not go far enough.
There will be predictable cries of outrage from trade unions, but that should not be allowed to disguise the fact that the Government is proposing not an overhaul of industrial laws but something more in the nature of a polish or fine-tuning.
A polish or fine-tuning will not address our unemployment problems, but will leave them as they currently are.
For further comment:
02 6273 2311 (B/H)
0419 215 037 (mobile)
A CRITICAL ANALYSIS OF THE REITH PROPOSALS BY 80 LEADING INDUSTRIAL BARRISTERS AND SOLICITORS (Contact Kevin Bell QC 03 9608 8220)
Prior to the substantial amendment of the Workplace Relations Act ("the Act") by the Howard government in 1996 Australia had been well served by a federal industrial relations system that by and large produced fair and equitable outcomes for employers and employees alike.
The integrity of, and adherence to, the system was largely maintained as a result of the recognition on the part of past governments that in implementing and subsequently changing the system a careful balance had to be maintained between the interests of employers and those of employees. Critical to the maintenance of this balance was the pivotal role played by the Australian Industrial Relations Commission ("the Commission"). The Commission fashioned and planted in the Australian psyche the notion of industrial fairness and equitable treatment it restrained the powerful and protected the weak and its influence and authority were well respected by all industrial parties and by the community generally.
However, the Howard government, in amending the Act in the form that it did made it clear that it had little interest in maintaining the careful balance that had been the, hallmark of the system. The amendments were deliberately designed to tip the balanc e in favour of employers. As a result the fundamental and independent role of the Commission has been attacked and the protections that were previously afforded to employees, including the right to establish and maintain fair and comprehensive awards and agreements and the right to take industrial action, have been significantly eroded.
The bias in the current legislation was clearly recognised by the Committee of Experts of the International Labour Organisation (ILO) who determined, after careful examination, that the Workplace Relations Act was m breach of Australia's obligations under Convention No 98 (Right to Organise and Promotion of Collective Bargaining) and No 87 (Freedom of Association and Protection of the Right to Organise).
The Howard government now intends to tip the balance further and markedly in favour of employers by further amending the Act in line with the proposals contained in the Implementation Paper released by the Minister for Employment, Workplace Relations and Small Business on 6 May 1999. These proposals raise issues of fundamental concern and must be the subject of a full public inquiry and we call on all political parties to support such an inquiry. Further we call on the government to submit the bill that has been drafted to implement the proposals to the Committee of Experts of the I1LO for examination.
In broad terms the proposals are designed to:
(i) further reduce the range of matters that may be protected by award;
- further circumscribe the role and function of the Commis sion and undermine its organisational integrity;
- further restrict the right of workers to take industrial action by severely limiting the circumstances in which such action may be taken;
(iv) further curtail the right of employees to pursue unlawful term ination actions against their employers;
(v) place further obligations on trade unions and their officers with the aim
of making it more difficult for unions to function in the system.
The obvious employer bias in the proposals is largely a reflection of their origin. A number. of the proposals are based on reforms previously advocated by employer groups while others appear to have been born out of a reaction on the part of the Minister and employer groups to decisions of the High Court, the Federal Court and the Commission, that they do not like. Rather than accepting the decisions made by these independent institutions, for example, those made during the course of the waterfront dispute, the Minister's response is to seek to overturn them through legislative intervention.
The proposals, if implemented, will ensure that the rights of employees. are deliberately and unashamedly subjugated to the interests of employers and will greatly accelerate the erosion of the protections previously afforded to employees placing many employees in an invidious and vulnerable position. Further, they potentially represent the death of the institution that has traditionally balanced the rights and interests of employees and employers.
What follows is an overview of the Minister's Proposals which amply demonstrates their lack of balance and bias. Recent media reports outlining the contents of the bill that has been drafted to implement the proposals make it clear that the bill not only reflects the lack of balance and bias in the proposals but in some cases would appear to go further than the proposals. For example:
- the new "cooling off"' measures to operate in the context of protected industrial action give the Commission power to suspend a legitimate bargaining period 14 d ays after protected industrial action is taken for the first time irrespective of the nature or duration of that action;
- the empowering of the Commission to suspend a legitimate bargaining period and remove the right of employees to take protected industr ial action where such action is likely to cause "economic damage" to the employer will effectively abolish the right of employees to take protected industrial action as almost any form of industrial action is likely to cause "economic damage" to the employer however slight.
AWARDS AND AGREEMENTS
Awards are relevant to everyone. The Ministers proposals in this area would, if implemented, result in a substantial weakening of awards, and substantial promotion of the role and function of Australian Workplace Agreements ("AWAs") . The proposals have a related effect in that awards continue to be a reference point under the "no disadvantage" tests, for the approval of certified agreements as well as AWAs.
Because of the "no disadvantage" tests, awards have a continuing relevance for practically all employees, rather than just those employees who need a "Safety net". The narrower the range of matters covered by awards, the lower the "no disadvantage" tests become, and the easier it becomes for employment standards to be reduced under certified agreements or AWAs.
The Minister proposes substantial and detailed amendments to the objects of the Act designed to reduce the scope of the Commission to interpret the Act's "award stripping" provisions in term &,at take accou nt of relevant or unusual circumstances in particular cases.
The inevitable outcome, if these provisions are implemented, will be that the Commission will find itself directed to follow a statutory expression of policy, when the plain terms of the Act, the evidence before the Commission and ordinary common sense would lead to a contrary decision.
By seeking to direct the Commission in its execution of the award stripping function, rather than allowing it a realistic degree of discretion, the Government again appears to be expressing a profound unwillingness to accept the decisions of an independent statutory tribunal.
The Minister appears to propose that the Commission should be prevented from entertaining applications for the making of an award where, as in Victoria, employees arc covered by "other forms of regulation" such as "common law contracts underpinned by legislated minimum employment conditions". Victorian employees have, since the reference of that state's industrial powers to the Commonwealth, had their employment conditions underpinned by basic minimum standards in a Schedule to the Act.
The effect of this proposal would be to present a major obstacle to any attempt to improve the working conditions of those Victorian employees whose only existing protection is the set of minimum conditions set out in the Schedule to the Art.
AWAs, secrecy, and the public interest
In general terms, the introduction of AWAs as a feature of industrial law can be seen to satisfy two aims. Th e fast is to elevate the role of individual over collective bargaining. This purpose has been explicitly promoted by the government. The second purpose, related to the first, is that of removing industrial negotiations from the public to the private sphere.
The relationship between Certified Agreements and AWAs
The existing provisions of the Act provide that a certified agreement will operate to the exclusion of an AWA, where the terms of a certified agreement are inconsistent with those for AWA. The Mini ster proposes to reverse this, with the effect that the terms of an AWA would override inconsistent terms in a certified agreement- Such a change would substantially undermine collective agreements. Agreements struck between employers and their employees, with or without the participation of unions, may be eroded over the life of those agreements by employers intent on targeting employees with AWAs.
THE ROLE OF TIM AUSTRALIAN INDUSTRIAL RELATIONS
Title and Tenure
The Commission is an independe nt and impartial tribunal. Its responsibilities include
dealing with industrial disputes and ensuring the of fair minimum wages and conditions. Renaming the Commission the "Australian Workplace Relations Commission" undermines the Commission's broad responsibility and does not accurately reflect its role. The change is an attempt to reduce the Commission's sphere of influence. The proposal would appear to be motivated more by ideology than practical considerations.
Commission members currently hold office until resignation, formal removal or until they attain the age of 65. Such a system of tenure is integral to the of the Commissions independence. Short term, contract or "acting" appointments provide an opportunity for inappropriate intervention by the government of the day. The proposal to review tenure arrangements and provide for 7-year appointments and acting appointments represents an undesirable and unwarranted threat to the Commission's
The Role of Conciliation
The Commission's power to conciliate industrial disputes is integral to its endeavour to do all that is right and proper to assist the parties to a dispute to agree on terms for the settlement of the dispute, Presen tly such conciliation may be compulsory and such disputes are able to encompass any matters pertaining to the relationship between employers and employees. The Minister's proposal is aimed at Uniting the use of compulsory conciliation to only those matters described as allowable matters and other confined circumstances. Such a proposal severely impacts upon the Commission's ability to settle broad-ranging disputes. Given that compulsory conciliation can play a vital and constructive role in the settling of many and varied industrial disputes its role should be encouraged and not limited.
As part of the attempt to reduce the conciliation powers of the Commission the Minister proposes to introduce a voluntary "fee for service" conciliation process. Again undermining the integral role of the compulsory conciliation, this proposal adds the further disincentive of fees to be borne by the parties. There is no information as to how such a system would be implemented. The proposal is inconsistent with &c Minister's desire to make the Commission a simpler and more accessible place.
The Minister's proposals in this area advocate formal legislative recognition of the provision of voluntary mediation services as an alternative to the Commission. Such mediatio n services are proposed to be provided by "private, non AIRC providers". The proposal aims to further undermine the conciliation role of the Commission whilst providing no clear demonstration of the improvements/advantages of the mediation process over the Commission's conciliation process. Parties to a dispute are currently able to meet outside the auspices of the Commission, with the Commission's conciliation process acting as a necessary safety net.
The attempt to legislatively enshrine this right to mediate is said to provide a more "enterprise based focus" on the resolution of disputes. There is no reason why a Commission conciliation process is unable to provide a localised focus. Indeed, it has provided such a localised focus for many years. The proposal aims to reduce the Commission's powers and provides no clear advantage for doing so.
COMPLIANCE AND INDUSTRIAL ACTION
Of all the proposals contained in the Minister's Implementation Paper, those relating to Compliance and Industrial Acti on most clearly evidence the Howard government's complete disregard for the need to maintain a balance between the interests of employers and those of employees in the federal industrial relations system. Stripped of their rhetoric the nature and intent of many of the proposals is to advance, in a substantial way, the interests of employers at the expense of those of employees.
The proposed broadening of s 127 to allow the Commission to issue orders to stop industrial action where there has been industrial action in the recent past and there is a mere possibility of further industrial action represents a further and unwarranted curtailment of the rights of employees to take industrial action. It establishes such a low threshold for the obtaining of such orders that the right of employees to take subsequent industrial action, for example, over an unrelated issue e.g. a health and safety issue, will be clearly imperilled.
The proposal to allow the Commission to prohibit impending or planned industrial action regardless of whether precise details are known to the employer is patently unsound and places the Commission in an impossible position. If precise details of the proposed action are not known the Commission will not, in many cases, be in a position to establish whether the proposed action falls within the definition of industrial action under the Act and is actually caught by s 127.
To require the Commission to make an order under s 127 as soon as it is satisfied that the industrial action is unprotected is an unwarranted curtailment of the Commission's discretion and a further restriction on right of employees to take industrial action. The Commission has determined (correctly) that the issuing of a s 127 order is a serious and important step.. The Commission, as the independent arbiter, is in the best position to determine whether in its discretion, a s 127 order should be made. The Commission's discretion to refuse to issue a s 127 order in appropriate circumstances i.e. because of the unreasonable actions of the relevant employer or because the action was taken in further of a legitimate health and safety concern, should not be disturbed. A requirement that the Commission issue a s 127 order immediately upon determining that the industrial action is unprotected would effectively remove from the Act an important safeguard against unreasonable and inappropriate employer behaviour and would leave employees, in the face of such action and absent a right to take protected industrial action, in an extremely vulnerable and defenceless position.
The Minister proposes to require the Federal Court to act promptly in dealing with the enforcement of s 127 orders. There is, however, nothing to suggest that the Federal Court has acted in anything other than a prompt and efficient manner in dealing with such enforcement proceedings. 71m Federal Court has arranged its business so as to hear s127 proceedings at very short notice and has been willing to hear such proceedings outside of normal sitting hours. Raising a doubt about the Federal Court's willingness to deal expeditiously with the enforcement of s 127 orders would seem to have more to do with providing a justification for providing employers with a right to choose between issuing enforcement proceedings in the Federal Court or State Supreme Courts. It may also have something to do with the Minister's desire to get even with the Federal Court because of the decisions made by the Court during the course of the waterfront dispute.
The Federal Court has a long history of, and considerable experience in , dealing with enforcement proceedings under the Act. There is simply no need for extending the powers of enforcing of s 127 orders to State Supreme Courts. The potential for forum shopping is not in the interests of the legal system or the general community.
The Minister proposes that if an application for an order under s 127 is not determined by the Commission within 48 hours the Commission must issue an interim order to stop the industrial action, unless it forms the view that to do so would be contrary to the public interest This proposal entails an extraordinary reversal of the onus that ordinarily rests on the party seeking an order to persuade the relevant court or tribunal that an order should be made. Under the Minister's proposal however the party opposing the making of a s 127 order would carry the onus of persuading the Commission that an interim order should not be made. No case has been made out by the Minister to justify such an extraordinary change.
Perhaps the most glaring example of the distinct lack of even handedness in the Minister's proposals is that which seeks to expand the scope of s 127 to ensure that orders may be made against unions and their officials, while at the same lime confining the grounds on which an order may be made against an employer to just one, unprotected lockout action. This proposal completely ignores the fact that employers may, and have been found by the Commission to engage in industrial action short of a lockout.
It must be remembered that the proposals in relation to s 127 seek to further curtail the right of employees to take industrial action notwithstanding that the Committee of Experts of the ILO has already found that the Act as it currently stands, is in breach of Australia's obligations under Convention 87 (Freedom of Association and Protection of the Right to Organise).
It is difficult to see how the proposed abolition of s 166A which effectively provides for a cooling off /conciliation period prior to any litigation being commenced in State Supreme Courts, in tort, can be in the community's interest. The overwhelming majority of disputes are settled during this cooling off/conciliation period by the Commission exercising its powers of conciliation. The repeal of this section will only serve to ensure the commencement of legal proceedings involving considerable cost to all parties that would otherwise have been settled by conciliation.
While the Minister mouths the rhetoric that industrial parties should be free to determine their own relationship at the workplace level he nonetheless ensured that s 187AA was included in the Act. This section prohibits an employer from making any payment to an employee for any period the employee is involved in industrial action and as such represents a gross intrusion into the employer/employee relationship. But not content with this, the Minister seeks to broaden s 187AA to ensure that whatever period of a day an employee is involved in industrial action he or she would be docked a full day's pay. The gross injustice and perversity of this proposal is axiomatic. An employee taking industrial action for one hour in a day will be docked a full day's pay. The proposal not only lacks any sense of proportionality or fairness it may well give rise to increased time lost due to industrial action as it will effectively encourage employees to escalate what may in other circumstances have been a 2-3 hour stoppage to a full day's stoppage. The encouragement of such action could hardly be said to be in the interests of employers or the general community.
The Minister's proposals requiring compulsory secret ballots of employees before protected industrial action can be taken would seem to have more to do with making it as difficult as possible for employees to take protected industrial act ion than any concern that employees may be forced to take industrial action against their will. The ballot process proposed is cumbersome, complex and time consuming. Employers, particularly large well-resourced employers will be well placed to challenge procedural steps taken in the ballot process thus further restricting the right of employees to take protected industrial action.
The time and expense involved in conducting secret ballots, coupled with the restrictions they place on the right of employees to take industrial action, mean that they should only be introduced on a compulsory basis where there is a clearly demonstrated need. The Minister has failed to demonstrate such a need, Indeed he ignores the fact that the Commission has, for many years, had the power to order a secret ballot on the application of employees or employers, should it consider it necessary to do so. There have been very few such applications. On past experience there would seem to be little warrant for the expenditure of substantial public funds on compulsory secret ballots.
By seeking to make it more difficult for employees to take protected industrial action the Minister's proposals may well produce a situation that is adverse to the interests of the Australian economy and community. The delays inherent in the proposed secret ballot process coupled with the proposal that the notice period for the taking of industrial action be extended from 3 to 5 days may in practice mean that employees elect at the outset, to take strike action rather than adopt a staged approach commencing with, for example, a ban on overtime. The overwhelming majority of disputes are settled well prior to strike action being taken. The Ministers proposals may mean that a strike becomes the first resort rather than the last.
The proposal to broaden the powers of the Commission to suspend a bargaining period in cases of protracted industrial action would seem to have more to do with breaking a protracted strike by employees by effectively requiring a return to work during the cooling off period than with settling the dispute. If the object was to settle a protracted dispute the Minister could readily give the Commission the power to arbitrate the matters in dispute.
FREEDOM OF ASSOCIATION
The proposals contai ned in the Minister's Implementation Paper in relation to freedom of association, need to be understood in the context of last year's waterfront dispute. This is because, at the heart of the Maritime Union of Australia's (MUA) case against Patrick Stevedores ("Patrick”) and the Commonwealth government was an allegation that Section 298K of the Act had been breached. That provision provides that an employer must not for a prohibited reason or for reasons that include a prohibited reason, dismiss an employee or injure an employee in his or her employment Prohibited reasons are defined to include union membership or an entitlement to the benefit of an Award or Enterprise Agreement.
During the dispute, a leaked document was tabled in the House of Representatives by the Opposition. The document was headed "Waterfront Strategy". It contrasted an 'evolutionary approach" to Waterfront reform with an "interventionist approach". The interventionist approach involved using an event to "bring about a national MUA stoppage", thus enabling Patricks "to use this Opportunity to sack their existing workforce and re-start their operations with a new (non-union) workforce...”
On 21 April, 1997, the Prime Minister, John Howard, wrote to the Minister for Transport, John Sharp stating:
"I support the interventionist strategy you have outlined—It would be appreciated if you and the Minister for Industrial Relations could proceed expeditiously to establish a contingency planning group”
Howard's letter was written within. four mout hs of the introduction of the Act in 1996.
The above simply demonstrates the Federal Government's lack of commitment to the genuine principles of freedom of association. Accordingly, any proposed further changes to the freedom of association provisions must be the subject of great scrutiny and car e.
The second point to note is that although the Office of the Employment Advocate (OEA) is the agency responsible for handling alleged breaches of freedom of association provisions. We are unaware of any action by the OEA in respect of acts of discrimination by employers against those employees who desire to be union members. In other words, the OEA only seems interested in attacking unions in relation to freedom of association complaints rather than to protect those employees wishing to be members of unions.
What is apparent from the Minister's proposals in this area is the lack of balance in the policy approach to freedom, of association. All proposals are thinly disguised attacks on unions and employees who seek to be represented by them.
Perhaps the most disturbing proposal is that which provides "a defence to breaches of freedom of association where the conduct complained of was designed to overcome a closed shop". Again, this proposed defence appears to be motivated by the successful legal proceedings brought by the MUA against Patricks and the Commonwealth government in 1998. The clear policy intent behind the proposal is to legalise the sort of conduct engaged in by Patricks and the Commonwealth in respect of the waterfront dispute. It is also obviously a recipe for conflict and division. If introduced, it could produce a flood of Patricks copycat behaviour, a prospect which can appeal to no-one but the ideologues, of the H.R. Nicholls Society.
The Minister proposes to make it unlawful for a person to establish or maintain a closed shop in which free choice of membership is constrained. However he is strangely silent as to whether the legislation will extend the same protection to employees who wish to join a union but are discouraged or coerced by their employer from doing so.
Similarly, the Minister proposes to prevent employees from passively accepting breaches of freedom of association by requiring them to take positive steps to overcome such closed shops. Again, if such policy was given effect by legislation, it is easy to envisage enormous conflict and division resulting. It is to be noted that the policy fails to mention preventing employees from passively accepting breaches of freedom of association by requiring them to take positive steps to overcome non-union shops.
The Government has stated that it intends to strengthen the accountability of and democracy within registered organisation to ensure they are responsibly managed and fully accountable to their members. In particular, it proposes to make registered organisations' accounting, auditing and reporting obligations consistent with those applying to corporations.
The details of the Government's proposal are not yet finalised but when they are, they should include the implementation of certain protections to ensure that:
(a) the financial and reporting obligations of unions are not more onerous than those applying to similar voluntary associations and they should not be a disproportionate burden on the register ed organisations' finances. There should be a system implemented whereby registered organisations particularly those with a small membership base) can apply for financial assistance grants to assist them in complying with such obligations. Alternatively. the government through the Australian Industrial Registry or some other department should appoint appropriate staff to assist the smaller and the loss financial registered organisations to comply with these obligations, and
(b) unions continue to be able t o report on a branch or divisional basis, where this reflects the organisation structure of the registered organisation.
Right Of Entry
The Government has proposed to expand the already prohibitive limitations on the right of unions to enter the workplac e. The proposed changes will require union officials to obtain an "invitation" from a member of the union before being entitled to enter the workplace. The invitation, once it is issued, will only be valid for a restrictive period of 28 days.
This proposal raises two fundamental areas of concern:
(a) The first is that such limitations on the right of union officials to enter the workplace will seriously prejudice the basic concept of freedom of association in the workplace. Apart from broader issues of union presence/education in the workplace, the reality is that employees who suspect that their employer is breaching an award or agreement if they do not feel confident enough to raise the matter directly with the employer, possibly out of fear of victimisation, are unlikely to take the risk of issuing a written invitation to the union, irrespective of assurances of anonymity; and
(b) The apparent lack of effective resourcing of departmental inspectors charged with enforcement functions combin ed with the proposed new right of entry system will no doubt lead to particular employers being able to maintain continuous breaches of minimum standards set by awards and industrial legislation in situations where groups of vulnerable employees are left to fend for themselves.
If the right to freedom of association is to be protected, there must be a guaranteed and unrestricted right of access of unions to employees in the workplace. The Government must also acknowledge and do something about the apparent ineffectiveness of departmental inspectors in order to ensure that the significantly stripped-back minimum standards still applicable to employees in Australia, are properly observed by employers.
TERMINATION OF EMPLOYMENT
Extensions of Time for late lodgement
Under the Act an extension of time will only be granted where there is an acceptable explanation for the delay (such as hospitalisation of the employee) and the unfair dismissal claim has some merit Ignorance of the law is not considered an accept able excuse. Other less important considerations are whether the employee did (or did not) actively contest the claim with the employer, and whether the employer is prejudiced by the delay. While the Minister may say that he is simply "tightening" the criteria the Commission applies in respect of extension of time applications, the reality is that the proposal on this matter would mean that meritorious claims for which them is an acceptable explanation of delay will no longer be granted an extension of time for filing, thus depriving the applicant of the right to have his or her application dealt with by the Commission. Such a change would severely impact on workers who speak little or no English. By the time they become aware of their rights and seek advice the time for lodging a claim may have expired, On the Minister's proposal they would be, denied the right to pursue that claim. The proposal simply cannot he justified.
Increased Filing Fee
The Minister's proposal to increase the filing fee for unlawful termination applications will operate to filter out claims by die very poor. It has nothing to do with discourage unmeritorious claims. When sacked employees approach the Commission to lodge an unfair dismissal claim they often have very little money and no certainty when their next pay will be received. Any filing fee presents a considerable disadvantage in such circumstances, particularly for the very poor and cannot be condoned.
The test currently enshrined in the Act is that th e termination of the employment of the employee must be "at the initiative of the employer". It is the identical test adopted by the 1LO in both the Recommendation and the Convention Concerning the Termination of Employment at the Initiative of the Employer. Any alteration to that test (as foreshadowed by the Minister) will involve Australia acting in breach of its international obligations under the Convention and Recommendation. The test is well known by practitioners and works efficiently and fairly. Tinkering with the test will simply encourage litigation on the matter,
Currently cogs can he awarded against employees who, in essence, unreasonably commence or pursue unfair dismissal applications, or if they fail to accept a reasonable settlement o ffer. Costs can only be awarded against employers if they fail to accept a reasonable settlement offer. The current provisions are weighted heavily in favour of employers. The Commission and the Federal Court cannot even award costs against an employer who unreasonably presents untenable arguments (such as it was necessary to dismiss the applicant because he or she was an aboriginal or a union member). The Minister now seeks to make these provisions even more unbalanced and unfair by "broadening the circumstances in which costs may be awarded against applicants (or their advisers)". Note; that the broadened categories will not apply to unreasonable actions by employers: or their advisers. There is simply no warrant for such changes.
Arbitration contingent upon positive assessment of the merits
The Minister's proposes that the Commission be required, after conciliation to make a written assessment of the merits of an application, and that arbitration be prohibited if the Commission's assessment is that the application is unlikely to succeed,
If implemented this proposal would be a disaster for two reasons. Currently the parties enter into conciliation with the intention of settling the case. Statistics in the Commission's Annual Reports reveal the admirable success rate achieved by conciliators under the current system. Conciliators encourage parties to briefly state the substance of their complaint (and reply) and to steer away from allegations likely to destroy the goodwill necessary to reach a settlement. For example, an employee who alleges that their former employer is a liar or a fraud is unlikely to engender the goodwill necessary to settle the case at conciliation.
If the applicant runs the risk of his or her case being struck out then it is sensible to present all of the arguments which will ultimately be pursued at the bearing. Furthermore, many unfair dismissal applications require the Commission to resolve factual conflicts which are not able to be resolved on the basis of brief statements of the substance of the allegations on each side. It would also be wise for the employee to present a full explanation (or presentation) of the evidence upon which the Commission should conclude that the employee (and not the employer) should be believed. Both of these matters will considerably lengthen the conciliation process.
Further, if the parties are encouraged to present their full cases, they are more likely to descend into allegations which will destroy the goodwill necessary to reach a settlement. Consequently under the proposed system the conciliations will be longer, involve greater legal costs (as more preparation will be necessary to present the full story to the Commission) and will have less likelihood of success.
Excluding more casual employees
The Minister Proposes to introduce a definition of a 'casual employee' to ensure that only long term casual employees have access to a remedy in respect of the termination of their employment
This proposal will affect the job secu rity of hundreds of thousands of Australians. The Australian workforce is being increasingly casualised and this proposal will only encourage that trend. The proposal is to exclude persons who are paid as casuals, but who are not long term employees (ie over 12 mouths).
By doing so, the Act will afford no job security to employees who are paid a casual rate of pay (usually 15-25% above the base award rate) during the first year of their employment, even if the employee is engaged Monday to Friday from 9am-5pm. The Minister is in effect providing that if an employer pays a 15-25% tariff then they may dismiss their so called "casuals" at any time during the first year of employment Such a development cannot, and should not, be condoned.
The WR Amendment (Unf air Dismissals) Bill
The proposals in the Bill have already been considered by a Senate Committee. For the reasons set out in the reports of the Australian Democrats and the Australian Labor Party these proposals should be rejected.
Repeal of s 127A
Section 127A provides an avenue for independent contractors to have their contracts reviewed if those contracts are unfair or harsh. Many independent contractors are in fact in small business. As such the provisions of s 127A assist small business. Notwithstanding this the Minister's Implementation Paper infers that the provisions of s 127A are being used to the disadvantage of independent contractors and as a result s 127A should be repealed.
It is a phenomenon of recent times that persons who would often in the past perform work as employees, now engaged as independent contractors. Many of these are indeed small business operators, such as track owner/drivers. They are open to exploitation by big business which can use its size and superior bargaining power to impose unfair or harsh contracts on small business operators. Under a 127A the Federal Court is given very limited powers to address grievances of small business operators. Absent s 127A these operators would be unable to have such grievances addressed.
If the Government is considering amending s 127A it should expand its area of operation not repeal it.
Time and Wages Records
The Minister's Implementation Paper provides no details of how the regulations are to be "simplified". However they are not complex at present, and if less detail was required to be kept it will be difficult to detect or prove any breach of awards, agreements or AWAs.
Together with the proposed amendments to the right of entry provisions this will further erode the ability of un ions to:
(a) ensure that their members are receiving their proper entitlements; and
- prosecute employees who may not be complying with their award/agreement obligations.