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Wednesday, 16 August 1989
Page: 107

Senator CHANEY (Leader of the Opposition)(10.12) —I move:

That this Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

This Bill is being introduced at a time when a small but extremely powerful union-the Federation of Air Pilots-is conducting a campaign of industrial action which is in open defiance of the Industrial Relations Commission and which has the potential to blow the Government's wages policy apart.

No amount of jawboning by the Minister for Industrial Relations can hide the fact that the Government has deliberately and knowingly left itself virtually powerless in the face of such a campaign.

Given the current lack of effective compliance provisions there is little else the Government can do than seek to tough out the dispute, which as a result is likely to cause major disruption to the lives of thousands of Australians and serious damage to the Australian tourist industry.

Today's Bill offers the Government an alternative. It contains effective compliance provisions that would ensure that directions of the Industrial Relations Commission to stop industrial action, such as the one made last week by Justice Coldham, are properly enforceable.

The Bill would insert a new Division into the Industrial Relations Act 1988. Under this Division, the Commission would be empowered to issue directions to stop or prevent industrial action.

Such a direction could be given to any party to the industrial dispute, a member, officer or employee of an organisation that is a party to the industrial dispute, or any other person engaged in industrial action in relation to the industrial dispute.

Where, on the application of the Minister or a party to the industrial dispute, the Federal Court is satisfied that a person has breached or is intending to breach a direction of the Industrial Relations Commission, the Court may issue an injunction enforcing the direction.

Failure to comply with such an injunction would constitute contempt of court and would be punishable with the same power as is possessed by the High Court in respect of contempt of that Court. This would enable the Federal Court to issue heavy fines to any union or other body or person in breach of an injunction, and could lead to the eventual sequestration of assets, if the fines were not paid.

Experience has shown repeatedly that when organisations which are acting illegally are faced with the reality of such heavy fines for defying court orders they quickly come to their senses.

In addition, any person who suffers loss or damage as a result of conduct in breach of a direction, may sue the person or organisation concerned in the Federal Court. This could have obvious relevance to disputes such as the current airlines dispute, where many innocent third parties are caught up in a struggle between a union and an employer.

Action taken in breach of a direction by an officer, employee, member or agent of an organisation is deemed to have been taken by the organisation, unless the organisation establishes that it took all reasonable steps to prevent the person from taking the action.

These provisions would replace the existing bans clause provisions which were described by the former Minister for Industrial Relations, Ralph Willis, as having ``fallen into disrepute'' and as being ``substantially moribund''.

The Government has no real argument against the need for effective compliance provisions.

Indeed, Mr Willis pointed out, when introducing the 1987 Industrial Relations Bill that:

``An essential element of any industrial relations system which provides benefits and protections to registered organisations and their members is that there should be an effective means of ensuring adherence to the principles on which the system is founded and compliance with the decisions of its institutions.''

A system of conciliation and arbitration whereby the decisions of the arbitrator effectively only bind one side of the employer-employee equation is clearly defective.

The Government recognised this, and its 1987 legislation contained provisions that would have provided a directions/injunctions procedure along the lines contained in this Bill. Those provisions were flawed, containing as they did the potential for lengthy delay. And of course they were eventually withdrawn, under pressure from the ACTU, who would not accept any improvement in the compliance powers of the Industrial Relations Commission, that were not accompanied by the emasculation of common law and Trade Practices Act remedies.

As a result the existing Act contains the ``moribund'' provisions referred to by Mr Willis.

Nevertheless it is very hard for the Government to argue now against the need for more effective provisions.

This Bill would provide Government, employers and the Commission real teeth to ensure that Commission decisions are adhered to and would provide real protection against those who try and pursue their ends through industrial blackmail.

The Bill I am introducing today is similar to the one I introduced into the Senate in November 1987.

That Bill received widespread support from employer organisations. The Metal Trades Industry Association's Chief Executive, Bert Evans, had this to say about the Bill:

``The Opposition's Bill has obviously been carefully drafted with the practicalities of day-to-day industrial relations in mind. It contains no provisions which any fairminded person prepared to abide by the rules of compulsory conciliation and arbitration could object to. On the other hand, it clearly would remove the imbalances which presently exist and which favour recalcitrant unions at the expense of employers who are trying to work within the system.''

The Bill also received support from the Confederation of Australian Industry, the Business Council of Australia, and the Australian Chamber of Commerce.

The introduction of effective compliance provisions has a major role to play in ensuring the effective implementation of an economically appropriate wages policy. At present the Commission knows that its decisions will be adhered to by employers. However compliance on the part of the unions is effectively voluntary.

This inevitably introduces an element of `bias' into its decisions in favour of the unions' claims. As a result, the Commission has regularly awarded pay rises above the growth in productivity, thereby undermining international competitiveness, and leading to inflation and a higher level of unemployment than would otherwise exist.

The issue of compliance should also be seen in a broader context. The aim of compliance provisions is not to punish or penalise-or to brow beat. However it is important in any industrial relations system that there are rules which one can safely predict will be followed. This is essential if we are to move towards a system based on mutual trust.

The OECD in a major comparative study of the industrial relations systems of its member countries (OECD Report on Structural Adjustment and Economic Performance 1987) found that those countries with the worst industrial relations records over a two decade period were precisely those countries with the weakest framework of sanctions for illegitimate behaviour.

Those countries which the union movement likes to laud, eg. Sweden, West Germany and Austria, all have effective sanctions for illegal industrial action. Those sanctions are rarely invoked because all participants understand the need to comply with the rules of the industrial relations system.

Australia remains a strike plagued country. The Accord has totally failed to change this fact. We suffer from a far higher level of industrial disputation than all our major international trading partners (with the possible exception of New Zealand). Moreover we have a pattern of industrial action characterised by relatively frequent and unpredictable disputes which causes the maximum of inconvenience and economic damage.

Australia's industrial relations system is crying out for reform. The Government can help Australia make a start, by supporting this Bill.

Debate (on motion by Senator Robert Ray) adjourned.