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Wednesday, 30 August 1989
Page: 555


Senator LEWIS(10.15) —On behalf of Senator Chaney, 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-

The Opposition has decided to reintroduce this Bill to give the Government and the Australian Democrats another opportunity to ensure that there are effective sanctions for those who defy the orders and decisions of the Industrial Relations Commission. The current pilots dispute provides a perfect illustration of the powerlessness of the Industrial Relations Commission to enforce its directions. The only sanction available to the Commission was to cancel the pilots award-something which predictably did nothing to bring about a cessation of industrial action.

Two weeks ago, when this Bill was last brought before the Senate, I pointed out that no amount of jawboning by the Minister for Industrial Relations could hide the fact that the Government had deliberately and knowingly left itself virtually powerless in the face of a sustained campaign of industrial action such as that being pursued by the pilots. I pointed out that, given the lack of effective compliance provisions, there would be little else the Government could do other than seek to tough out the dispute, which I predicted would cause major disruption to the lives of thousands of Australians and seriously damage the Australian tourist industry. My prediction has been borne out totally by the events of the last two weeks. Tourism-this country's major earner of foreign exchange-has been dealt a massive blow by the dispute, a blow from which it may take years to recover. The senior analyst from Moody's, Roger Nye, in explaining why that agency has yet again downgraded Australia's credit rating, has referred to the current pilots dispute as an example of Australia's failure to achieve structural adjustment.

This Bill offers an alternative to the current debilitating dispute. It contains effective compliance provisions that would ensure that directions of the Industrial Relations Commission to stop industrial action, such as the one made earlier in the pilots dispute by Justice Coldham, are properly enforceable. The Bill is still very relevant to this dispute. The mere cancellation of the pilots award does not remove the jurisdiction of the Industrial Relations Commission to deal with the industrial dispute.

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. The chief advantage of this approach is that it would provide a quick and effective remedy to unacceptable industrial action. Speed is of the essence in any effective sanctions procedure, as the primary aim should be to bring about the cessation of the conduct in question, not penalise those taking part in the action months or years later. 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 organisa-tion 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'. Two weeks ago I said that the Government had no real argument against the need for effective compliance provisions. I quoted Mr Willis, who pointed out when introducing the 1987 Industrial Relations Bill:

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.

Since then the Government has openly backed the use of legal remedies against the pilots. Senator Aulich, who spoke in the debate two weeks ago will have to eat his words:

the worst possible thing to do to improve industrial relations in this country is to get people into the courts and the common law system.

Indeed, it is ironic that the Government has opposed the introduction of effective legal sanctions into the conciliation and arbitration system-yet supported the use of external remedies such as the common law and the Trade Practices Act-an astounding reversal from its position in 1987 when it took the view that there should be no sanctions available outside the system.

The truth is that any 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 Australian Council of Trade Unions, which 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. 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 to pursue their ends through industrial blackmail.

The Government and the Australian Democrats in the debate on this Bill two weeks ago raised a number of issues concerning the detailed drafting of this Bill. The principle underlying this Bill is that there should be an effective directions and injunctions procedure which would provide a quick and effective remedy for those who are suffering from industrial action in defiance of the Industrial Relations Commission. If the Government or the Democrats have concerns about the detail of the Bill it would be proper to consider these in the committee stage, after the Bill has received a second reading. It would be quite inappropriate to throw out the principle underlying the Bill for the sake of details of the sort raised in particular by Senators Cooney and Maclean. I indicated, for example, during the debate on this Bill two weeks ago, that I would wish to consider some of the points raised by Senator Cooney, such as the breadth of penalties that would be imposed for contempt of court. It might be appropriate for example totally to exclude any question of possible imprisonment.

This Bill seeks to implement an important element of the Coalition's industrial relations policy. Our policy is based on the principle that where employers and their employees see a mutual benefit in doing so, they should be free to sign legally binding voluntary agreements on pay and conditions. Those agreements will have the force of awards and will contain a provision that no industrial action be engaged in during the course of the agreement. We believe this approach will enable pay and conditions to be related directly to the circumstances of the individual enterprise, something which is not possible under an across the board approach. It is not part of our policy to permit one side of the industrial fence to use industrial muscle to coerce the other into reaching an agreement against their own wishes and interests. That is why our policy is explicit in requiring effective legal sanctions when parties are abusing their industrial strength.

Where a mutually satisfactory agreement is not possible, employers and employees remain within the conciliation and arbitration system. We do not seek to dismantle that system, though we would expect that as the advantages of voluntary agreements come to be appreciated, more and more people will move in that direction. But it will not be an overnight change. Because the Industrial Relations Commission will remain and will continue to play a major role in wage determination and dispute settlement it is essential for it to have the power to enforce its decisions and directions. This Bill seeks to rectify a major defect in our industrial relations system. It is a defect that both the Government and the Democrats have been willing to acknowledge in the past. Both the Government and the Democrats can show they are serious about improving the operation of our industrial relations system by supporting this Bill.

Debate (on motion by Senator Jones) adjourned.