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Wednesday, 26 April 1972
Page: 2002

Mr LYNCH (Flinders) (Minister for Labour and National Service) - I move:

That the Bill be now read a second time.

The Conciliation and Arbitration Bill 1972 contains the most significant amendments to the Act since 1947. This Bill is being brought down when our system of conciliation and arbitration has been undergoing severe strain against a background of increasing industrial unrest and serious wage-induced inflation. In December last year, I made a comprehensive statement to this House outlining proposals for amendment of the Act designed to improve and strengthen the system. I stated then that our aim was to ensure that the Act would provide for the orderly conduct of industrial relations in this country, benefit both workers and employers and protect the interests of the entire community.

Since that time, I have had the opportunity of considering a wide range of representations from many individuals and organisations. This was in accordance with what I indicated in December - that my statement would 'provide the opportunity for the development of an informed public mind'. Indeed, the whole intent of the statement was to encourage the presentation of views so that the Government would have available to it a broad crosssection of opinion before determining its final position. It was most desirable, Mr Speaker, that the far-reaching, amendments I am now proposing should have been the subject of consideration in depth by the Government and interested parties. The Conciliation and Arbitration Act is one cf the most important statues of this Parliament. The Bill will be recognised by the community as evidence of the objective, balanced and constructive approach taken by this Government. That the review of the Conciliation and Arbitration Act undertaken by the Government has been comprehensive will be evident from the provisions of the Bill itself. The Bill deals with every significant Part of the Act.

Before outlining to honourable members the salient features of the Bill, it must be seen in its proper context. A speech of I his nature should not simply be a catalogue of what the Bill itself contains. Its provisions are part of a total approach to conciliation and arbitration. Our system of conciliation and arbitration does not exist simply to serve the parties to industrial disputes. The Act gives a special position to organisations of both employers and workers. That arrangement serves many purposes. In the ultimate, however, the system cf conciliation and arbitration exists to serve the community. It follows, therefore, that the behaviour of the organisations which use that system to assist them in the resolution of their differences should not be contrary to the interests of the community as a whole.

In many respects our system is a unique one. A heavy responsibility rests upon those who take part in its functioning. Although the Government is not directly involved in the day to day affairs of the system as are the immediate parties, the Government's role is no less important because it represents the community and not simply the immediate parties. The Government cannot be merely an interested bystander. Employers and unions simply cannot be permitted to resolve their differences without regard to the effect on those groups who are not themselves directly involved. Moreover, the role of the Government in this area certainly has become more significant in recent years than at any time since federation. With its responsibility for the management of an increasingly sophisticated economy, the Government cannot leave entirely to the immediate parties to industrial relations the settlement of industrial disputes, even though its intervention may be seen on some occasions as unwelcome. There are 3 parties to the industrial relationship - employers, trade unions and government, representing the community interest.

Our system of conciliation and arbitration has been subject to considerable criticism. As I emphasised in my statement to the House in December, no institution can be free from criticism or from the need for change. Largely, the operation of the system will be as satisfactory as the parties themselves permit it to be. In one sense, they are the system. The Government, however, has a total responsibility for the economy of the country. What happens in the field of industrial relations between employers and unions can be of profound significance for the community. The Government must, therefore, seek to ensure that in the prevention and settlement of disputes and in the determination of wages and conditions of employment, proper account is taken of the national interest. The achievement of this aim is conditioned by a number of factors. Only 40 per cent of employees are covered by Federal awards and there are separate industrial tribunals in each of the States. There are limits placed on the Commonwealth by the Constitution. There is the need to preserve the statutory independence of the industrial tribunals. There is the need to ensure freedom of action by unions and employers, consistent with the need to protect the public interest.

It would be a mistake to overlook the fact that every action taken within our system of conciliation and arbitration affects individuals. I am not speaking here simply of the results that flow from decisions of bodies such as the Conciliation and Arbitration Commission. The legislation is concerned also with the activities of union and employer organisations in relation to their members and the activities of members within those organisations. Union and employer bodies exist primarily to protect and advance the interests of their members. It is the members who must determine the affairs of these organisations. Honourable members will note, therefore, that this Bill pays particular attention to the provisions of the Act which aim at ensuring democratic processes and affect membership control in organisations registered under the Act.

Productivity growth determines the improvement in the level of our standard of living. It is essential, therefore, that there be a minimum of interruption to production of goods and services through industrial action. With our system of conciliation and arbitration there need be no interruption. It is essential that employers and trade unions resolve their differences by means which do not disrupt production. The inescapable fact is that there are far too many strikes in this country and far too many man-days are lost as a direct consequence of them. My statement of 7th December indicated the deplorable loss in working time and wages because of the upsurge in industrial unrest during the 2 preceding years. The official figures show that working days lost in 1971 increased by 28 per cent over the loss for 1970 and wages lost increased by 46.5 per cent. Already, this year has seen several serious disputes such as that inflicted on the State Electricity Commission of Victoria. That dispute undoubtedly contributed heavily to a very substantial loss in man-days for the month of February.

The effects of industrial disputes on the community are not simply measurable by the loss of man-days. This only represents the tip of the iceberg. Strikes and other forms of industrial action cause hardship to workers not directly involved. This is graphically illustrated by the SEC strike in Victoria. While only 11,000 SEC workers were actually involved in industrial action, the strike resulted in up to some 200,000 workers in Victoria and some thousands in other States being stood down for varying periods of time. Furthermore, many employees who were not stood down were not productively employed for long periods as a result of power restrictions and other adverse effects of the strike. These losses are not reflected in the Commonwealth Statistician's figures of man-days lost because he records only the losses in establishments where strike action takes place. Nor do the statistics reveal the disruption to business and commerce, including the effect on employment caused by direct industrial action, such as the loss suffered by businesses within the Sydney metropolitan area as a result of the Atlantean bus dispute in the latter part of last year.

Then there is a danger to the economy from the wage-induced inflation associated with industrial unrest. This can pose a long term threat to economic growth, the balance of payments and full employment. This wage-induced inflation derives from industrial unrest brought about by union militancy and by employers who are unable or not prepared to resist union tactics and claims. Together, these are important factors in the acceleration which has occurred in the field of prices in recent years. The Government has taken positive economic steps to deal with the problem of cost-push inflation in this country - the most important economic problem facing Australia - and I do not need to dwell in detail on the action that has been taken to determine this question. An important element of the Government's policies in relation to inflation has been to encourage wage restraint. As part of this approach, it has intervened in hearings before the Arbitration Commission and it will continue to do so in cases with major economic implications. There are those who for their sectional interests may resent this intervention. The Government makes no apology whatsoever for exercising its statutory right to place its views before the Commission in appropriate cases. The Bill is an integral part of the steps this Government has taken and is continuing to take to ensure a sound and well balanced economy.

I now outline to the House the salient features of the Bill. The amendments to the Act can be classified under 6 main headings: Firstly, the prevention and settlement of industrial disputes, including the structure of the Conciliation and Arbitration Commission, the separation of the conciliation and arbitration functions of the Commission, and appeals and references; secondly a strengthening of the sanctions provisions of the Act, including a review of all penalties provided by the Act; thirdly, the regulation of registered organisations established by the Act to ensure more effective democratic control of those organisations, including provisions as to secret ballots in relation to industrial bans and stoppages; fourthly the role of the Conciliation and Arbitration Commission in dealing with matters of particular significance to the economy of this country; fifthly, the amalgamation of organisations; and sixthly, a wide range of other provisions of the Act which are not without their own special importance to the operation of our system of conciliation and arbitration.

The Government believes that it is important to enhance the influence of the Conciliation and Arbitration Commission. The Bill provides for the separation of the Commission's functions of conciliation and arbitration with a view to making more attractive to the parties to industrial relations the prospect of settling their differences within the system. Honourable members will note in particular the clause in the Bill which would insert a series of new sections dealing with the role of the Commission. These proposed sections deal with the functions of Conciliation Commissioners, Arbitration Commissioners and Presidential Members. Honourable members will note that the Bill will expand the role of Presidential Members of the Commission. No longer will these members of the Commission be mainly concerned with reserved matters (section 33 of the existing Act) and appeals and references (sections 34 and 35). They will now play a greater role in the day to day activities of the Commission. Along with the Commissioners, they will be intimately involved in settling individual disputes and will be responsible for what might be referred to as 'task forces' within the Commission. The proposed new section 23 will enable the establishment of these task forces of the Commission or panels as they are termed in the Bill. The President will assign an industry or a group of industries to a panel of the Commission consisting of a Presidential Member, at least one Arbitration Commissioner and at least one Conciliation Commissioner. As far as practicable, the functions of the Commission in relation to that industry or group of industries will be exercised by members of that panel. This will bring about more speedy attention to disputes arising in industries and a broadening of the Commission's familiarity with the affairs and problems of industries coming within the scope of the panels.

When a dispute is reported to the Commission, it will go before a Conciliation Commissioner. He will have the power to call a compulsory conference if this be necessary. If the parties can reach agreement they will be able to make a memorandum of their agreement and request the Conciliation Commissioner to certify that memorandum as an award or, alternatively, request him to make an award or order giving effect to their agreement. The Conciliation Commissioner will be required to satisfy himself that the agreement reached by the parties is in the public interest. That provision, therefore, continues a like provision to that in the existing section 31 of the Act. If the parties do not reach agreement, a Conciliation Commissioner will report that to the Presidential Member responsible for the panel. An

Arbitration Commissioner or a Presidential Member will then proceed to deal with the dispute or matters remaining in dispute by arbitration. Nevertheless, we recognise that parties may even resolve their differences at this late stage. If they are able to do so at the arbitration stage, an award can be made by the Commission as if it were made pursuant to the conciliation process I have just outlined.

The Bill widens the criteria for appointment of Presidential Members of the Commission. Except for the office of President, for appointment to which legal qualifications will be required, it will be possible, on the Bill becoming law, to appoint as a Deputy President a person who is or has been a barrister or solicitor of the High Court or of the Supreme Court of a State or Territory of the Commonwealth of not less than 5 years' standing; has had experience at a high level in industry, commerce, industrial relations or the service of a government or an authority of a government; or has, not less than 5 years previously, obtained a degree of a university or an educational qualification of a similar standard, after studies in the field of law, economics or industrial relations or some other field of study considered by the Governor-General to have substantial relevance to the duties of a Deputy President. The Government believes that these new provisions will greatly assist in bringing to the Presidential Bench of the Commission men of the widest range of experience and practical knowledge. The Bill also provides for the retirement of future Presidential Members at age 65 instead of 70 as now. The tenure of office and the existing standing of the Presidential Members of the Commission who now hold office will not be affected. The House will note that the Bill contains provision for an increase in salaries for the Commissioners. I have no doubt that this provision will be supported by all members of this House as a warranted recognition of the valuable service given to the community by the holders of that office.

By the proposed new section 31, the Bill will extend the matters which, under the Act as it now stands, may be determined only by a Full Bench of the Commission. We believe that there are certain matters which arise in industrial disputes that, because of their very nature, should not be determined on a piecemeal basis. They are matters which can have wide ramifications for the whole of industry. There should be a co-ordinated approach to them and every opportunity given to parties, including the Government, who may not be direct parties to a particular dispute to express their views to the Commission. Only in this way will the Commission be able to form the best judgment on how disputes over these particular matters should be settled. The proposed new section 31 will, therefore, reserve for determination by a Full Bench the questions of standard hours of work, national wage cases, the minimum wage, equal pay except where an alteration in rates of pay is in accordance with principles determined by a Full Bench, annual leave and long service leave.

At this point, it is convenient for me to refer to the provisions of the Bill as to Full Benches of the Commission. The Bill has rationalised these provisions so that a Full Bench will consist of at least three members of the Commission, each of whom is either a Presidential Member or an Arbitration Commissioner, and shall include at least 2 Presidential Members. In respect of the reserved matters mentioned already, at least three Presidential Members will be required to sit on a Full Bench. The Government has taken the view that there should be a widening of the provisions relating to appeals. The proposed new section 35, therefore, provides for appeals against awards, certain decisions in relation to awards and agreements and it extends appeal rights to the whole of section 41(l.)(d) of the Act. At present, the Act does not permit appeals against decisions made under the whole of that paragraph of that section. The Bill will extend the time in which appeals may be lodged from 14 days to 21 days. There will be provision for appeals where the Commission has made an award that affects or supersedes a previous award and that new award is binding only on some of the organisations or persons who were bound by the previous award. An organisation or person bound by the previous award but not bound by the new award will be permitted to appeal against the new award, provided the Commission is satisfied that the organisation or person has a sufficient interest to justify the institution of the appeal and that the matter is of such importance that in the public interest an appeal should lie.

In my statement of 7th December, I indicated that the Government intended to provide that a Full Bench of the Commission must review a conciliated award if the Commonwealth referred such an award on the issue of public interest. After careful consideration, the Government has decided not to proceed with this proposal. This clearly indicates the responsible manner in which the Government has undertaken the task of reviewing the Conciliation and Arbitration Act. We have decided that, on balance, the earlier proposal could have been detrimental to the proposed new conciliation process. We are of the view that the public interest will be adequately protected by the Commonwealth's statutory right of intervention before full benches and by the expanded appeal provisions I have outlined. Moreover, I shall be referring later in this speech to the provision in the Bill which will require the Commission to pay regard to the state of the national economy. The Bill proposes a new section 20 of the Act which will encourage parties to agree on procedures for preventing and settling further disputes between them by discussion and agreement and to have those procedures incorporated in awards or agreements. The parties will have for guidance the principles agreed to in May 1970, by the ACTU and the National Employers Policy Committee.

In December, I outlined the Government's philosophy on the question of industrial sanctions. It is important to remind the House of the principal features of that part of my earlier statement. I stated:

The central element of our system is that industrial disputes as to remuneration and other conditions of work should be the subject of settlement by an impartial tribunal, the decision of which shall have the force of law. Arbitration is a form of legislation. No law can be effective unless it is enforceable. No law can be enforceable unless there be a sanction for its breach. Any system of industrial relations such as ours which provides for industrial awards to regulate with the force of law the relations between employers and employees and the conditions under which workers may be employed must also provide judicial support for these awards to have legal force. The Australian system aims to prevent direct action in industrial disputes by providing for conciliation and arbitration. The basis of the sanctions is that the terms of awards must be capable of being upheld at law. Awards of the Commission grant benefits but they also place obligations upon the parties. Employers are bound to apply the provisions of awards to their employees. Both unions and employers are bound to observe the settlement of the disputes which awards bring about.

I indicated then that we did not propose to make changes in the level of penalties provided by section 119 of the Act. I also indicated, however, that we would strengthen the provisions of what is now section 32a of the Act by stressing that the first obligation of a presidential member in dealing with a notification to him under that section would be to bring about a cessation of the conduct which has given rise to the notification. If he could not achieve this, he would be required to issue a certificate unless he was clearly of the view that a prompt settlement of the dispute was likely. That proposal of the Government is given effect to in the Bill by the proposed new section 33.

Beyond this, I would draw particular attention to the fact that in this clause of the Bill it is provided that presidential members to whom, as now, applications under the section are reserved, will be able to exercise the functions of both conciliation and arbitration despite the general separation of these functions. This clearly indicates the Government's consistent policy that sanctions are a last resort and that every reasonable endeavour should be made to settle disputes by the traditional methods of conciliation and/ or arbitration. Only when these processes have been of no avail should sanctions proceedings be instituted. I believe the sanctions process of the Bill demonstrates a restrained but vigorous approach on the part of the Government to this question. I emphasise, therefore, that, if organisations find themselves the subject of sanctions proceedings in the Industrial Court they have only themselves to blame. Even at the late stage of proceedings under the proposed new section 33, an organisation will still have the opportunity of withdrawing from industrial action in favour of the processes of conciliation and arbitration. The Government realises that on some occasions industrial action takes place before Federal and State officials of organisations are aware of or are able to control it. The legislation will give officials who find themselves in that position an opportunity to rectify the situation. They have a clear responsibility under our system to meet that obligation. If they are not prepared to accept the responsibility, their organisations must accept the consequences. They will have been given every opportunity to avoid proceedings in the Court by behaving in a responsible manner. lt is because of this that 1 re-emphasise the Government's clear intention indicated by me in my statement of December last that the Government will ensure that all future fines imposed under the sanctions provisions of the Act are collected. There are now none owing under the provisions inserted in the Act in 1970. As further evidence of our determination in this respect, I draw attention to those provisions of the Bill which require registered organisations in future to keep the Industrial Registrar informed of the location of their bank accounts. The Bill contains provisions giving effect to the intention announced in my statement last year that there would be a general review of the penalties provided in the Act. The Bill updates those penalties in the light of changed money values.

The Bill includes new provisions as to the holding of court controlled ballots in relation to industrial disputes. I believe that, in very many instances, industrial stoppages do not have the support of rank and file trade unionists. Consistent with our aim of ensuring maximum membership control of organisations, we believe that the rank and file should have every opportunity of being consulted on the fundamental question of whether they should withdraw their labour by striking and so suffer loss of wages with consequent hardship to their families. At present, the Act only empowers the Commission to order that a vote be taken of the members of an organisation where it considers that this would assist the settlement of a dispute. This Bill will develop this provision so as to enable the Commission to order a ballot where a strike or ban is threatened or exits. There are detailed provisions in the Bill as to the conduct of such ballots and for penalties on persons who may commit offences in relation to them. 1 have already emphasised the implications that decisions of the Commission can have for the national economy. Therefore, the Bil] proposes an amendment of section 39 of the Act to ensure that, when the Commission is constituted to deal with appeals and references and with the reserved matters under the new section 31, it shall, in considering the public interest, have regard in particular to the state of the national economy and the likely effects on that economy of any award that it might make.

The Bill contains provisions designed to assist in the democratic control of registered organisations by their members. The Act already contains many provisions towards this end. I instance those provisions as to the holding of what are commonly called court controlled ballots, inquiries into elections conducted by organisations and provisions as to the rules and to the enforcement of the rules of organisations. We believe that these provisions need to be developed further. Thus, the Bill proposes amendments to sections 140 and 141 of the Act which deal with the requirements as to rules and to directions by the Industrial Court for the performance of rules.

We have provided that where, under section 140 of the Act, the Commonwealth Industrial Court makes a declaration as to the rules of an organisation, those rules should be amended in a manner which, in the opinion of the Registrar, in light of the Court's judgment, brings them into conformity with the requirements of the Act. The Bill goes on to provide that, if the organisation concerned does not attend to this within 3 months of the Court's declaration, the Registrar may, after inviting the organisation to consult with him, determine such alterations of the rules as will bring them into conformity. The existing provisions of the Act will apply as to appeals from a decision of the Registrar. The Government has decided to bring down this amendment because it believes there is presently a weakness in this respect in section 140 of the Act.

Similarly, we believe there is a need for amendment of the section because it does not permit the Court to make interim orders when proceedings have been instituted under the section. It is clear that, if a member claims before the Court that the rules of his organisation are oppressive, unreasonable or unjust, he should be able to secure, if he can satisfy the Court, an interim order from the Court which would preclude some action being taken by the organisation before the Court has had a full opportunity to examine in detail the complaint brought against the rules. A like provision is made in the Bill in relation to section 141 for precisely the same reasons.

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