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Workplace Relations Amendment (Genuine Bargaining) Bill 2002

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2002

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

Workplace Relations AMENDMENT (Genuine Bargaining) Bill 2002

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment and

Workplace Relations, the Honourable Tony Abbott MP)

 

 



Workplace Relations AMENDMENT (Genuine Bargaining) Bill 2002

 

 

OUTLINE

 

This Bill will amend the Workplace Relations Act 1996 (the WR Act) to:

 

·          provide guidance to the Australian Industrial Relations Commission (the Commission) when it is considering whether a party is not genuinely trying to reach agreement with other negotiating parties, particularly in cases of so-called ‘pattern-bargaining’;

 

·          empower the Commission to make orders preventing the initiation of a new bargaining period, or attaching conditions to any such bargaining period, where a bargaining period has been withdrawn; and

 

·          empower the Commission to order ‘cooling-off’ periods in respect of protected industrial action to facilitate resolution of the issues in dispute.

 

FINANCIAL IMPACT STATEMENT

 

The measures in this Bill will have no significant impact on Commonwealth expenditure.

 



REGULATION IMPACT STATEMENT

 

S uspension and termination of bargaining periods, and provision for ‘cooling-off’ periods

 

Background

 

Under section 170MW of the Workplace Relations Act 1996 (the WR Act) , the Australian Industrial Relations Commission is empowered to suspend or terminate a bargaining period (and thus protected industrial action) on a number of grounds, including that a party is not genuinely trying to reach agreement or that industrial action is threatening to endanger the life, personal safety, health or welfare of the population or a part of it, or to cause significant damage to the Australian economy or a significant part of it.

 

Termination

 

If a bargaining period is terminated on the ground of danger to life, health or the economy the Commission must conciliate and if necessary arbitrate an award under section 170MX to settle the differences between the parties.

 

Suspension

 

The power of suspension under section 170MW has been used in a limited number of cases by the Commission and parties as a means of establishing a cooling-off period during the bargaining process to assist the resolution of disputes by enabling parties to negotiate in a less charged atmosphere. 

 

Problem identification and specification of regulatory objectives

 

The WR Act does not currently contain any direct provision for cooling-off periods to address cases of stalemate or to act as a circuit breaker in cases of protracted industrial action. While section 170MW provides some scope for the Commission to establish cooling-off periods, it generally can only be invoked in defined and limited circumstances, for example when industrial action is threatening the national economy.

 

Cooling-off periods can play a valuable role in the negotiation process and would allow the parties, in the specified circumstances, further time to negotiate without the pressure of continued industrial action.  Cooling-off periods would also give the parties time to investigate and consider the use of alternative means for resolving a stalemate situation, for example with the assistance of voluntary conciliation.

 

The lack of any direct arrangements for the establishment of cooling-off periods may also encourage parties to continue with industrial action, for example, to establish the basis for termination on grounds which result in arbitration, as the means to resolve disputes rather than encouraging them to step back from industrial action and settle their differences by negotiation.

 

The Government’s broad objective is to provide legislative arrangements that encourage and assist parties to negotiate at the enterprise level without recourse to industrial action and to settle their disputes without arbitral intervention.

 

Options

 

Option 1:  Status quo

 

Retain the current procedures for suspension of bargaining periods which enable the Commission to grant an informal cooling-off period in situations where the requirements of section 170MW for suspension can be met.

 

Option 2:  Provide for cooling-off periods

 

Clear provision for cooling-off periods could be included in the WR Act by allowing the Commission to suspend a bargaining period on application from a negotiating party.  In deciding if a suspension of the bargaining period would be appropriate, the Commission would have regard to whether or not suspending the bargaining period would assist the negotiating parties to resolve the matters at issue, the duration of any protected action that is being taken (or has been taken) in respect of the proposed agreement, whether or not suspending the bargaining period would be contrary to the public interest and any other matter the Commission considers relevant.

 

If an order were made, the Commission would specify the length of the suspension period.  A negotiating party could apply to have the suspension of the bargaining period extended.  The Commission would have regard to the same matters listed above.  An extension of a suspension of a bargaining period could only occur once. 

 

In addition, to assist the resolution of the dispute, the Commission would be required to inform the negotiating parties that they may voluntarily submit the matters at issue to an agreed mediator for the purposes of mediation or to the Commission for the purposes of conciliation. 

 

Parties’ views

 

Employer associations have supported the concept of cooling-off periods, although they have expressed some differing views on their implementation.

 

The ACTU has stated that ‘widening the ability of the IRC to suspend a bargaining period in cases of protracted action  ...is an attempt to tilt the balance in negotiations even further towards employers, without giving unions and employees any additional access to arbitration of their claims’.

 

Impact analysis

 

Option 1:  Status quo

 

Costs

 

Because the WR Act does not formally establish provision for cooling-off periods, application of the suspension powers under s.170MW to establish cooling-off periods is at the discretion of individual members of the Commission with only limited legislative guidance as to how and when these powers should be invoked.  As the suspension powers of s.170MW were not designed for the purpose of providing scope for cooling-off periods, they cannot be easily used in that role and so cannot be invoked in many circumstances.

 

Maintaining the existing provisions would prevent many parties from accessing the benefit of cooling-off periods as a circuit breaker in cases of stalemate or protracted disputes.  More businesses are therefore likely to experience situations in which reaching agreement is made more difficult because of the continuation of industrial action during negotiations.  Such protracted action can result in substantial long-term costs to employers and to productive workplace relationships.

 

Similarly, little legislative guidance is provided as to whether the Commission should suspend or should terminate a bargaining period when the relevant criteria are met.  This results in some uncertainty amongst the parties as to what consequences their actions will bring and may also provide incentive for some parties to escalate industrial action in order to obtain access to the arbitration powers of the Commission under s.170MX.

 

Benefits

 

In some cases the Commission has been able to utilise the powers available to it to establish cooling-off periods, and it could continue to do so to this limited and informal extent even if the legislation were not amended.

 

Option 2:  Providing for cooling-off periods

 

Costs

 

The introduction of cooling-off periods will mean that the WR Act contains another regulatory mechanism.

 

Benefits

 

The current limited use of s.170MW to establish informal cooling-off periods is recognition of the benefits that can be gained by such an approach. Introducing formal arrangements for cooling-off periods will extend the potential benefits to a much wider range of parties in a wider range of circumstances which have been clearly defined.  Cooling-off periods will assist parties to resolve disputes over certified agreements by enabling them to negotiate in a less charged environment than that which is likely to exist when prolonged industrial action is continuing.  This will tend to improve the parties’ ability to negotiate agreements to their mutual benefit and will concomitantly assist in reducing the overall extent and duration of industrial action and associated costs to employers and employees. 

 

Drawing parties’ attention to voluntary mediation and conciliation will assist to resolve disputes without further industrial action.

 

Conclusion and recommended option

 

The Government believes that the WR Act should explicitly provide for cooling-off periods by amending the current provisions for suspension of bargaining periods.  Explicit provision for cooling-off periods will allow the opportunity for parties to resolve issues directly (or with the assistance of voluntary conciliation and/or mediation) and will have particular value in cases of protracted action or where a stalemate has arisen.

 



NOTES ON CLAUSES

 

Clause 1 - Short title

 

1.         This is a formal provision specifying the short title of the Act.

 

Clause 2 - Commencement

 

2.         This clause specifies when the various provisions of the Act are proposed to commence.

 

3.                   Sections 1 to 3 will commence on Royal Assent.  Schedule 1 will commence on a day to be fixed by Proclamation.  However, if it has not commenced within 6 months after the Royal Assent, it commences on the first day after the end of that period.

 

4.                   Schedule 2 will commence immediately after the commencement of item 2 of Schedule 1.

 

Clause 3 - Schedule(s)

 

5.                   Clause 3 provides that an Act specified in a Schedule to this Act is amended or repealed as set out in the Schedule, and that any other item in a Schedule operates according to its terms.



SCHEDULE 1 - Bargaining Periods

 

Part 1 - Amendments

 

Workplace Relations Act 1996

 

Item 1 - After subsection 170MW(2)

 

1.                   Section 170MW of the Workplace Relations Act 1996 enables the Australian Industrial Relations Commission to suspend or terminate a bargaining period in specified circumstances, including the circumstance where a negotiating party is not genuinely trying to reach agreement (paragraph 170MW(2)(b)).  The aim of the proposed subsection is to provide guidance to the Commission by clarifying the meaning of ‘not genuinely trying to reach an agreement’ within the context of paragraph 170MW(2)(b), rather than changing it. 

 

2.                   This item would insert a new subsection 170MW(2A) which would list a number of factors that the Commission would have to consider when it is determining whether, for the purposes of paragraph 170MW(2)(b), a negotiating party is not genuinely trying to reach agreement with the other negotiating parties.  These factors are not exhaustive nor are they determinative of the issue.  They are drawn from the decision of the Commission in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union & Ors [Print T1982].  In that case, Munro J terminated Campaign 2000 bargaining periods at a number of workplaces on the basis that the parties were not genuinely trying to reach agreement.

 

3.                   Proposed paragraphs (a), (b) and (c) describe behaviour that has been called ‘pattern bargaining’, although the phrase is not actually used.  Pattern bargaining refers to a situation where parties organise bargaining campaigns with a view to obtaining standardised (or ‘pattern’) outcomes in respect of terms and conditions of employment across a number of employers or an industry, in lieu of genuine workplace-level bargaining. 

 

4.                   Proposed paragraph (a) refers to a circumstance where a negotiating party’s conduct indicates an intention to reach agreement on an industry-wide basis and not on the basis of a specific enterprise or workplace only.  Proposed paragraph (b) covers a circumstance where the negotiating party’s conduct is indicative of an intention to bargain across an industry on an ‘all or none’ basis.  Proposed paragraph (c) targets a circumstance where the focus of the negotiations is primarily on obtaining agreement beyond the other negotiating party.

 

5.                   The factors in proposed paragraphs (d) and (e) deal more generally with behaviour that is indicative of a failure to negotiate or attempt to reach agreement.  Proposed paragraph (d) requires the Commission to consider whether the behaviour of the negotiating party is indicative of a refusal to meet and confer.  Proposed paragraph (e) focuses on behaviour that is indicative of a refusal to consider or respond to proposals made by the other negotiating parties.

 

6.                   The proposed subsection would require the Commission to have regard to all factors in proposed paragraphs (a) to (e), to the extent relevant, when considering whether a party was not genuinely trying to reach agreement with the other negotiating parties for the purposes of paragraph 170MW(2)(b).  No single factor is determinative of the issue and it is open to the Commission to take other factors into account. 

 

7.         It is a matter for the Commission to determine whether the existence of any or all of these factors amounts to a finding that a party is not genuinely trying to reach agreement for the purposes of existing paragraph 170MW(2)(b).  Even if the Commission reaches such a conclusion, it is not obliged to suspend or terminate the relevant bargaining period.  Rather, this conclusion is a matter to be taken into account and accorded appropriate weight by the Commission when it is considering whether to exercise its discretion to make an order under subsection 170MW(1) to suspend or terminate the relevant bargaining period.

 

Item 2 - After section 170MW

 

New section 170MWA - Power of Commission in relation to new bargaining periods

 

8.                   This item would insert a new section 170MWA, which would empower the Commission to make orders to prevent the initiation of a new bargaining period or to order that conditions attach to any such bargaining period, even if an earlier bargaining period has ended because of paragraph 170MV(b) of the Act.

 

9.                   Proposed subsection 170MWA(1) provides that the Commission may make orders of the type referred to in proposed subsection 170MWA(2) even if a bargaining period (the former bargaining period) has ended under paragraph 170MV(b).  Section 170MV describes the circumstances in which a bargaining period ends.  Paragraph (b) provides that a bargaining period ends where a party provides notification to other negotiating parties that an agreement with those parties under Division 2 or 3 is no longer desired.

 

10.               Where a bargaining period ends in these circumstances, proposed subsection 170MWA(2) would enable the Commission to order that any subsequent bargaining period not be initiated within a particular period of time or that any such bargaining period be initiated only on certain conditions.  The Commission may make similar orders under existing subsection 170MW(10) in the context of an application under subsection 170MW(1) for orders to suspend or terminate an existing bargaining period.  The intention is to ensure that negotiating parties do not manipulate bargaining periods to deny the Commission jurisdiction under section 170MW while also taking advantage of the WR Act’s statutory immunities for protected industrial action. 

 

11.               Proposed subsection 170MWA(3) sets out the factors to be taken into account by the Commission before making an order under proposed subsection 170MWA(2).  Before issuing an order the Commission must give the former negotiating parties the opportunity to be heard.  The Commission must also conclude that the making of the order is in the public interest.

 

12.               Proposed subsections 170MWA(4) and 170MWA(5) describe the circumstances in which applications may be made for orders under proposed subsection 170MWA(2) and the circumstances in which orders may be made.  These circumstances, and the persons who may apply for orders in various circumstances, are drawn from existing section 170MW.

 

13.               Proposed subsection 170MWA(4) enables the Commission to make an order under subsection (2), if, but for the bargaining period ending under paragraph 170MV(b), the Commission could have made an order under existing subsection 170MW(1) to suspend or terminate a bargaining period because a circumstance described in existing subsections 170MW(2), (4), (5), (6) or (7) exists or existed.  An order in this case requires an application from a former negotiating party.

 

14.               Proposed subsection 170MWA(5) enables the Commission to make an order in the similar case, where a circumstance described in subsection 170MW(3) exists or existed.  An order in such a case can be made on the Commission’s own initiative, or on application by a former negotiating party or the Minister. 

 

15.               These parallel the requirements of existing subsection 170MW(8), indicating who can apply for an order on the basis that a circumstance specified in section 170MW exists or existed, as described in subsection 170MW(1).

 

Part 2 - Application

 

Item 3 - Application of item 1

 

16.       This item proposes that the amendment in item 1 is to apply even if any relevant bargaining period began before the item commences.  This will assist the Commission to deal with genuine bargaining issues where disputes are already underway. 

 

Item 4 - Application of item 2

 

17.       This item proposes that the amendment in item 2 is to apply even if any relevant bargaining period began before the item commences.  This will assist the Commission to deal with genuine bargaining issues where disputes are already underway.

 



SCHEDULE 2 - Cooling-off periods

 

Workplace Relations Act 1996

 

Item 1             After section 170MWA

 

New section 170MWB - Power of Commission to suspend bargaining period to allow for cooling-off

 

1.                   This item proposes to insert new section 170MWB which would provide that the Commission may, in certain circumstances, exercise a discretion to suspend a bargaining period to allow for a ‘cooling-off’ period during which negotiating parties could attempt to settle the matters at issue between them.  A suspension under proposed section 170MWB would differ from a suspension under existing section 170MW in that the latter is intended to put a stop to industrial action because of the existence of circumstances set out in existing subsections 170MW(2)-(7).

 

2.                   Proposed subsection 170MWB(1) would give the Commission discretion to suspend a bargaining period for a specified period, on application by a negotiating party (proposed paragraph 170MWB(a)), in circumstances listed in proposed paragraphs (b)-(c) of this proposed subsection.

 

·          Proposed paragraph 170MWB(1)(b) requires that there be protected action being taken in relation to a proposed agreement.

 

·          Proposed paragraph 170MWB(1)(c) requires the Commission to have regard to a number of factors for the purpose of determining whether the suspension is appropriate.   These factors include:

 

o    whether suspension of the bargaining period would be beneficial to the negotiating parties because it would assist in resolving the issues between them (proposed subparagraph 170MWB(1)(c)(i));

 

o    the duration of protected action (proposed subparagraph 170MWB(1)(c)(ii)).  In considering this factor, it is anticipated that the Commission could order suspension of the bargaining period following a protracted period of industrial action.  However, ultimately this is a matter for the Commission to determine;

 

o    whether suspending the bargaining period would be contrary to the public interest or inconsistent with the objects of the WR Act (proposed subparagraph 170MWB(1)(c)(iii));

 

o    any other matters the Commission considers relevant (proposed subparagraph 170MWB(1)(c)(iv)).

 

3.                   Proposed subsection 170MWB(2) makes it clear that the duration of a suspension period is a matter to be left to the Commission’s discretion.  In considering the application, the Commission must give the negotiating parties the opportunity to be heard (proposed subsection 170MWB(5)). 

 

4.                   The Commission may extend the period of suspension on the application of a negotiating party (proposed paragraph (3)(a)), after hearing the other negotiating parties.  In determining whether to extend a period of suspension, the Commission is to have regard to:

 

·          the matters referred to in paragraph 170MWB(1)(c); and

 

·          whether the negotiating parties genuinely tried to reach an agreement during the period of the initial suspension.

 

5.                   Only one extension of the cooling-off period is allowed (proposed subsection 170MWB(4)).  The period of any extension has been left to the Commission’s discretion.  There is no prescribed period for a cooling-off as the appropriate length of a suspension or extension will vary according to the nature of the dispute and the industry in which the dispute occurs.

 

5.         Proposed subsection 170MWB(6) provides that if the Commission suspends the bargaining period under this section (or extends the initial suspension) the Commission must inform the negotiating parties that they may choose to attend mediation or ask the Commission to conciliate.

 

6.         Any industrial action taken in relation to a proposed agreement while the bargaining period is suspended would not be protected action (proposed subsection 170MWB(7)).

 

Item 2             Application of amendment

 

7.         This item proposes that the amendment in item 1 is to apply even if any relevant bargaining period began before the item commences.  This will assist the Commission to order a cooling-off periods where disputes are already underway.