Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 24 November 1993
Page: 3580

Senator SHERRY (Parliamentary Secretary to the Minister for Primary Industries and Energy) (5.48 p.m.) —I seek leave to move a motion relating to the application of the order of the Senate of 18 August 1993 to these bills.

  Leave not granted.

Senator SHERRY —I table the revised explanatory memorandum relating to the bills. I move:

  That these bills be now read a second time.

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

  Leave granted.

  The speeches read as follows


  The industrial relations debate since the March Federal election has served to contrast the markedly different approaches of the Government and the Opposition. Fortunately for Australia, the approach endorsed by the people in March this year was that of Labor, and it is Labor policies that will be implemented.

Fundamental to the Labor approach are both flexibility and fairness. This bill incorporates both. It marks the most significant step yet, in the Government's process of labour market reform, which is transferring the centre of gravity in industrial relations to the enterprise.

It does so in a manner consistent with the Australian tradition of a fair go. Strong protections for workers are integral. If we are to foster constructive partnerships in industry, such protections are essential. Workers must have security if they are to take part in achieving more productive businesses.

Already, under this Government, Australia's industrial relations have been transformed. We have moved the system from the old adversarial model of `them and us' to a far more co-operative approach, where all sides recognise the need for improved productivity and competitiveness. A generation ago such change would have been unthinkable; today it is an accepted part of the environment, an environment created by the Accord partnership.

Under the Accord, there has been an orderly and effective transition to a more decentralised system, with close to 40% of employees in the Federal jurisdiction now under enterprise level agreements. Simultaneously, we have seen awards modernised and union coverage rationalised.

For over a decade, the system has consistently delivered responsible overall wage outcomes. Indeed, that decade has featured significant wage restraint, with real unit labour costs falling almost 7.8 per cent. The profit share has improved to the level of the early 1960s and the annual inflation rate is now 2.2 per cent.

All this has been achieved without divisiveness and with a dramatic reduction in industrial disputation. Indeed, the level of industrial disputes over the life of the Accord is 62 per cent lower than during the Opposition's last period in office.

Through this bill, Australia can move further along the reform path, consolidating what has been achieved while providing the springboard for further progress.

The Opposition, in contrast, would have put Australia in reverse thrust. They would have cast aside the valuable gains made so far and destroyed the co-operation of recent years.

Theirs is essentially a "back to the future" approach. Back to the sterility of social divisiveness—them and us. Back to the "good old days" of Victorian England when their version of flexibility was in vogue.

We may all agree on the broad goal of increasing labour market flexibility. But it is the definition `flexibility' that divides us—and on this there are crucial and fundamental differences.

The Opposition's vision of flexibility is ideologically inspired. Yet that very ideology is the antithesis of any acceptable and effective flexibility. Under it there is simply the flexibility to cut wages and conditions and to treat workers not only as robots but also as a cost to be minimised.

In contrast, our approach focuses on achieving fair and constructive workplace flexibility and dynamic productivity growth. This approach encourages an effective partnership at work and a highly skilled, adaptable and committed workforce. This is the flexibility that modern Australia is looking for.

In moving enterprise bargaining from adolescence to maturity, our new arrangements provide that flexibility. They put the onus on the industrial parties to take responsibility for their own industrial relations. In short employers, employees and their unions are encouraged to negotiate their own agreements—with less reliance placed on third party intervention by the Industrial Relations Commission. This is underlined by the establishment of a more effective framework for the promotion of direct bargaining.

Unprecedented access to formal enterprise bargaining is provided through either certified agreements or enterprise flexibility agreements. The new stream of enterprise flexibility agreements is particularly significant, as they open the way for employers to make agreements directly with employees. It will

be an opportunity lightly unionised or non-unionised businesses should not miss.

The scope for innovation is already being exhibited through certified agreements that are generating an impressive range of productivity measures. With this form of agreements now supplemented by enterprise flexibility agreements, our industrial relations system can truly be said to provide employers with a multiplicity of opportunities to enact workplace change.

This is especially so when one considers that the bill includes proposals aimed at making awards more streamlined and modern regulatory instruments. Awards will become simpler, easier to understand, up to date and have greater flexibility in their application.

The protections which are an integral part of our approach are also essential to fostering a more productive and cooperative workplace culture. They mean that workers will support and want to be involved in workplace reform.

Fairness is woven throughout this bill, ensuring its strength and viability. The bill:

maintains an effective award safety net, extended through the guarantee of key minimum entitlements for all workers;

continues the no disadvantage test as a basis for enterprise bargaining;

provides a framework for fair and effective bargaining; and

protects workers against discrimination.

The proposals strike the right balance between enhancing flexibility and ensuring an adequate safety net of employee protection.

This bill has been framed following an extensive consultation process. The views of business, unions, State and Territory governments, community organisations and academics have been taken into account in its development.

This consultation process continued after the bills introduction into Parliament by the Minister for Industrial Relations on 28 October.

The views put by employers, unions and state and territory governments have been reflected in a number of the amendments made in the House of Representatives.

The reforms are richer for that process.

I now turn to the detail of the Legislation.

New Objects and Restructuring of the Industrial Relations Act 1988

Under a broad aim of securing the economic prosperity and welfare of the people of Australia, these new objects will focus on:

the facilitation of enterprise bargaining;

the protection of wages and conditions of workers through awards and by ensuring that labour standards meet Australia's international obligations; and

the provision of a framework of rights and responsibilities consistent with the move towards a more decentralised system.

A new anti-discrimination object will help to prevent and eliminate discrimination on the basis of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

The Act will also be restructured to reflect the revised framework, with distinct Parts dealing with the award system; minimum entitlements; and the promotion of bargaining and agreements.

The Safety Net

The bill contains a number of amendments aimed at maintaining and strengthening the award system, with the Commission given responsibility to ensure secure, relevant and consistent wages and conditions of employment.

The award framework will be maintained so that it provides an effective safety net underpinning direct bargaining, while having proper regard to the interests of the parties and the wider community. In determining safety net increases in wages and conditions, through test cases for example, public interest considerations will continue to be of particular importance.

While the emphasis is on a consistent framework of minimum award rates, provision is made for paid rates awards to continue and be maintained in areas where employees have customarily had access to them. However, if the integrity of such awards is not maintained, they will be able to be cancelled or varied appropriately. The Government expects that many presently covered by paid rates awards will progressively move to comprehensive certified agreements.

The amendments are also directed at making awards more streamlined and modern, with detailed prescription about the organisation of work increasingly being a matter for agreements. The Commission will have an important responsibility to keep awards up to date and easy to understand.

The more widespread insertion of enterprise flexibility clauses into awards will be encouraged. This will allow agreements to be reached at individual enterprises or workplaces to vary award provisions in line with their particular needs, subject to the employees concerned not being disadvantaged.

The Commission will also be required to have regard to internationally recognised principles under the ILO standards concerning workers with family responsibilities.

Minimum entitlements

The award safety net will be extended by guaranteeing to all workers without adequate protection access to minimum entitlements relating to minimum wages, equal pay for work of equal value, termination of employment, and unpaid parental leave.

In the case of minimum wages, the Commission, on application, will be able to establish minimum wages for groups of employees, where they do not have access to adequate protection based on compulsory arbitration. These provisions give effect to Australia's obligations under the ILO Convention on minimum wages.

For equal pay, the Commission will be able to make orders to ensure that equal remuneration, including overaward payments, is established without discrimination directly or indirectly based on sex. This does not prevent differential rates of pay based on genuine job related grounds. The Commission must defer to other jurisdictions which give an adequate alternative remedy. These provisions give effect to Australia's obligations under the ILO Convention on Equal Remuneration and certain other international treaties.

The termination provisions will apply where necessary for employees who have no protection that adequately meets our international obligations. For some, this exists, for example, under the job protection standards established by the Australian Industrial Relations Commission in the 1980s. The new Industrial Relations Court will be able to order reinstatement or other appropriate relief, including compensation, for employees dismissed in breach of the legal obligations placed on employers as required by our treaty obligations. Conciliation before the Commission will be available prior to Court determination. The Commission will also be able to make orders regarding severance allowance.

Provision is made for cases of termination for economic, technological or structural reasons. Where an employer decides to make redundant 15 or more employees, the Commission will be able to order consultation with relevant unions. There will also be a statutory obligation to notify the Commonwealth Employment Service. These provisions give effect to Australia's obligations under the ILO Convention on Termination of Employment.

There will be a legislative entitlement to unpaid parental leave along the lines of the existing parental leave test case standards. All workers will be guaranteed twelve months unpaid parental leave which can be shared between the parents of a child. The regulations will provide for such leave to also be available to adoptive parents. These provisions give effect to Australia's obligations under the ILO Convention on Workers with Family Responsibilities.

Taken as a whole, the measures will ensure that all workers have access to basic protections. In States where the standards, as outlined in the legislation, are adequately met, the federal provisions will not apply.

Direct Bargaining

The package of reforms will accelerate the spread of enterprise agreements and make formal workplace bargaining more widely accessible.

A separate Part of the Industrial Relations Act will deal with direct bargaining. The use of agreements at the workplace or enterprise level will be encouraged.

A new Division of the Australian Industrial Relations Commission is to be established to deal with the promotion of bargaining and agreements.

Appointments to this Division will be made directly by the Governor-General. There will, however, be full consultation with the President of the Commission before any recommendations are made to the Governor-General.

Two forms of agreements are provided for: certified agreements and enterprise flexibility agreements.

Both types of agreements must not disadvantage employees in relation to their terms and conditions of employment considered as a whole. To gain access to these agreements, employees' terms and conditions of employment must be covered by an award, providing the benchmark for the no disadvantage test.

The no disadvantage test has been an important innovation. Applying as it does to the overall package of employee entitlements, it allows for a wide range of variations to award conditions. It also allows for agreed reductions if these are judged not to be against the public interest, for example, as part of a strategy for dealing with a short term business crisis and revival.

However, as the Government has consistently stressed, the provision is intended to protect well established and accepted standards which apply across the community, standards such as maternity leave, hours of work, parental leave, minimum rates of pay, termination change and redundancy provisions and superannuation.

Neither type of agreement will be able to be certified or approved if it contains discriminatory provisions, or is inconsistent with an order under the minimum entitlements arrangements.

Parties will be able to include a provision in their certified agreement that in some circumstances, enables them to vary it in a manner set out in the agreement. This will encourage longer term agreements.

On their expiry, agreements continue to apply indefinitely as awards, unless replaced by another award or agreement. The legislation provides new procedures for the variation of agreements after expiry, in order to increase certainty and provide an incentive for the parties to negotiate further workplace agreements.

To provide access, particularly for the non-union sector, enterprise flexibility agreements will operate for employers who are incorporated and their employees at the enterprise who are subject to federal award coverage. The agreement will be able to cover any matters pertaining to the employment relationship. It will not be restricted to matters under the award or awards concerned.

Such agreements should be for a specified term, and be closed and non-variable during their term unless the parties specify otherwise in the agreement. As is the case for certified agreements, their provisions would not be able to flow automatically into awards.

The operation of enterprise flexibility agreements will be based on the use of the corporations power. This removes the requirement for an interstate dispute and makes the arrangements more accessible. However, we are not seeking to intrude on areas of State jurisdiction by this mechanism. Enterprises will have access to such agreements where they are already covered by one or more Federal awards to ensure that there is an appropriate benchmark for the `no disadvantage' test and to avoid intrusion into state jurisdictions. Only employees under those awards will be able to be covered by such an agreement.

There will be strong protections for employees, including the same `no disadvantage' test included in certified agreements provisions; the right to union representation for union members; a requirement for consent by a majority of employees; the protection of unionists from discrimination in an agreement's negotiation; and rights for relevant unions to be given the opportunity to be party to an agreement and to be heard on whether an agreement should be ratified. Unions will not be able to veto an enterprise flexibility agreement.

The legislation recognises that non-unionised employees require further protection. Accordingly the Commission may refuse on public interest grounds to approve an enterprise flexibility agreement because of exceptional circumstances. Agreements are not to be taken to be contrary to the public interest merely because they are inconsistent with general principles established by the Commission in relation to awards.

To promote efficient bargaining, the new Bargaining Division of the Commission will be given the power to make orders that a party take actions consistent with its bargaining in good faith. There is guidance in the legislation as to what constitutes good faith. This includes attendance at agreed meetings; disclosure of relevant information; compliance with agreed bargaining commitments; not withdrawing or adding bargaining items capriciously; and not refusing to bargain with an organisation entitled to negotiate on behalf of employees.

The promotion of good faith bargaining is a development of the Commission's conciliation responsibilities and is intended to be applied in a manner which is non-legalistic and facilitates the speedy resolution of disputes.

Industrial Action

The development of a better framework for bargaining emphasises the need for a fairer and more effective regime to regulate industrial action and sanctions.

A right to take action in the negotiation of agreements, and a distinction between the negotiation phase and the period when the agreement is in force, is the norm in most OECD countries.

Industrial action—including strikes and lockouts—which take place during a bargaining period for a proposed, single business certified agreement will be immune from sanctions. Action involving personal injury, wilful or reckless damage or the unlawful taking of property, or defamation, will, however, not be immune. This aspect of the legislation will give effect to Australia's international obligations in respect of the rights of workers to engage in industrial action, subject to reasonable restrictions.

For access to the bargaining period, a party must give notice to the other party of an intention to seek an agreement and must comply with directions from the Commission regarding bargaining in good faith. The parties must attempt to reach an agreement by negotiation before industrial action is taken in the bargaining period.

The Commission will be able to terminate a bargaining period on application if it considers a party is not genuinely trying to reach an agreement or is not complying with directions related to bargaining in good faith. The Commission may also end the bargaining period if the industrial action is threatening to endanger the safety, health or welfare of the public or cause significant damage to the Australian economy.

In such cases, the Commission will be required to make a paid rates award, with it to operate for a fixed term, be `closed' and subject to higher monetary penalties which are to apply to breaches of agreements. This requirement will not apply if the parties agree otherwise, preferring to fall back to the award safety net and its provisions relating to consistent, minimum rates.

Recognising the importance of parties abiding by the terms of their agreements, maximum penalties for breaches in this area will be significantly increased to $5000, and $2500 for each subsequent day on which a breach occurs. The parties will be able to vary the daily penalty by agreement.


Sections 45D and 45E of the Trade Practices Act 1974 will be transferred in their industrial relations application to the Industrial Relations Act. This new equivalent to section 45D will apply to secondary not primary boycotts.

The defences currently available under section 45D will be clarified and made more effective. Remedies of injunctions and damages arising from prohibited industrial secondary boycotts will remain. The pecuniary penalty of $250,000 now applying under the Trade Practices Act will, however, not apply to industrial boycotts covered by the Industrial Relations Act. This penalty has never been applied in the industrial relations context since its inclusion in the Trade Practices Act in 1977.

The prohibition on anti-competitive boycotts currently in the Trade Practices Act will remain in that Act, but will be reframed so that it does not apply to boycotts which do not have the purpose and the effect of lessening competition. This prohibition, the form of which was developed after consultation with the minor parties in the Senate, will not apply to genuine environmental or other protest action which, does not have the purpose and effect of lessening competition. The concerns of environmental and civil liberties groups about the application of section 45D to genuine environmental and other protests has been met.

There will be a requirement for pre-litigation conciliation by the Commission where, in relation to an industrial dispute, there is a contravention of the secondary boycott prohibition by a federally registered union or its members, officers or employees. This will be for a maximum of 72 hours, before legal action may be taken before the new Industrial Relations Court. It will be available once only in respect of a particular boycott, but will be cumulative for repeated boycotts. Access to the Court must be allowed before the expiry of that period in cases where the Commission cannot resolve the dispute or stop the boycott or if the Commission decides that substantial injustice would be caused by delaying that access. Any award of damages arising from the application of the legislation will be calculated from the time the harm commences.

These provisions are intended to meet a number of objectives. An effective remedy is to be available to deal with secondary boycotts. It is efficient and desirable to have industrial problems addressed in the first instance by industrial tribunals. Furthermore, the legislation has taken account of the ILO's Committee of Experts concerns that section 45D has been too wide in its application to primary boycotts and sympathy action.

The Government has also sought to address the views of the majority in the Senate Standing Committee of Employment, Education and Training about the scope and operation of sections 45D and 45E.

The Australian Democrats have raised issues relating to the coal industry in this area. After the Minister has finished consulting with those concerned, he will be giving careful consideration to the appropriate institutional framework for this industry and the question of integrating the Coal Industry Tribunal with the Commission. The Australian Democrats can be assured that the coal industry is not intended to be treated any differently from other sectors in relation to secondary boycotts.

There is also to be a 72 hour pre-litigation period where tort actions are proposed to be taken against federally registered unions or their officers, members or employees for matters arising in relation to an industrial dispute.

New Industrial Relations Court

The bill provides for a new specialist federal court, the Industrial Relations Court of Australia. As a result, the industrial relations jurisdiction of the Federal Court of Australia will be absorbed into the new Court. This will include:

the enforcement and interpretation of awards and orders of the Commission;

certain matters concerning registered organisations and their members; and

actions brought for the contravention of the prohibition on industrial secondary boycotts.

The Court will enforce employees' entitlements under the new minimum entitlements provisions that are based on international conventions.

The Court will have responsibility for reviewing and rectifying unfair and harsh contracts for services which have been entered into by independent contractors.

The Chief Judge will be able, like the other Judges of the new Court, to hold office as a Judge of another Court.

An important initiative, to assist in the exercise of the Court's powers, particularly in relation to termination of employment or smaller claims for unpaid amounts under awards, is the creation of Judicial Registrars who will be able, under the supervision of a Judge, to deal with matters which might otherwise be dealt with by a Judge.

Institutional Arrangements

In addition to the establishment of a new court, the bill makes some other changes to existing institutional arrangements. The Commission will be required to encourage the establishment and use of Industry Consultative Councils, which are already provided for in the existing Industrial Relations Act, but seldom used. These Councils will provide a forum for parties in an industry to develop measures to improve efficiency and address barriers to workplace reform.

In line with the findings of the International Labour Organisation in relation to our current registration requirements for unions, the bill provides that the 10 000 minimum membership requirement for federally registered unions will be repealed and replaced with a 100 member requirement.

The bill also provides for the restructuring of the National Labour Consultative Council to increase its effectiveness. The Council's membership will be reduced from 18 to 11, employer representation broadened and the minimum number of meetings required reduced from four to two each year.


In essence, Mr President, this bill will create an effective framework for enterprise bargaining and build on the reforms of the last decade. By tailoring those reforms to the needs of 21st century Australian workplaces, it will give our firms the ability to compete with the best companies in the world, many of whom are located in the Asia-Pacific region, the region we have only recently begun to call our own.

The legislation treats as sacred the principle that flexibility should not compromise employee entitlements. The challenges and ever increasing demands of modern economies leave us all a little insecure. If we deny employees protection, that insecurity can easily translate into fear, and into poor performance. Those are not the sorts of workplaces we want to create.

In a decentralised system, the role of the Government is necessarily small, necessarily facilitative. With the enactment of this bill, the onus will be on the industrial relations players—it is their opportunity.

Financial Impact

In finishing, Mr President, I should make clear that the proposals in the bill could result in an increased workload for the Australian Industrial Relations Commission. Running cost supplementation may therefore be sought, if required. The resource implications of establishing the Industrial Relations Court of Australia have not yet been fully assessed. It is proposed that the Industrial Relations Court share Registry and other facilities of the Federal Court, wherever possible. Such an arrangement would help to minimise the establishment and recurrent costs of the new Court.

I commend the Government's proposals to the Senate, and I present the explanatory memorandum to this bill.


  This bill is associated with the Industrial Relations Reform Bill 1993 and addresses certain financial considerations arising from the government's reform initiatives.

The bill will amend section 358 of the Industrial Relations Act 1988 in order to appropriate money to pay the remuneration of judges of the new industrial relations court of Australia.

The bill will have no financial impact on Commonwealth expenditure beyond the payment of the judges' salaries and allowances.

I commend the bill to the Senate and present the explanatory memorandum.

  The ACTING DEPUTY PRESIDENT (Senator West)—Pursuant to the order of the Senate agreed to on 18 October 1993, the resumption of the debate shall be made an order of the day for the first day of sitting in 1994.

  Debate resumed.