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Minter [Minister] Ellison executive briefing, Adelaide, 22 April 1999: speaking notes.

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The Hon. Peter Reith, MP

Minister for Employment, Workplace Relations and Small Business

Leader of the House of Representatives


Speaking Notes


Minter Ellison Executive Briefing



22 April 1999




The Coalition’s 1998 election policy statement, More Jobs, Better Pay is about pursuing evolutionary changes to build on the achievements of our 1996 legislation.



We are proposing a number of changes to the Workplace Relations Act which will entrench the benefits of structural reform, encourage employment growth and further develop a flexible and adaptable labour market.



1998 Legislation



We have already initiated legislative action in relation to unfair dismissals, junior wage rates and superannuation.



In relation to unfair dismissals, we have introduced a bill to exclude new employees of small businesses from the federal unfair dismissal provisions, and to require six months continuous service before any new employee can make a federal unfair dismissal application. Its pleasing to see that the South Australian Government’s recently introduced workplace relations bill includes similar measures.



Our bill is currently before the Senate, which earlier this year disallowed regulations to the same effect, and has previously rejected small business exemption legislation.



Although the Senate’s track record is less than encouraging, reform of the unfair dismissal laws remains a high priority for the Government.



Our 1996 legislative changes restored some much needed balance to the system, and have resulted in a major reduction in the number of unfair dismissal applications being made. Nationally, the number of federal applications in 1998 was 44 per cent lower than the 1996 figure. The combined State and federal figure for 1998, again on a national basis, was 20 per cent lower than the 1996 figure.



In South Australia, federal applications dropped by 56 per cent and the combined federal and State total reduced by 33 per cent.


However, the clear and consistent message from employers and employer organisations is that unfair dismissal laws remains a major disincentive to recruitment. Job creation is a national priority and we owe it to Australians seeking employment to press ahead with our commitment to removing the barriers to employment that these laws create. If the Senate rejects the bill, we’ll introduce it again.



In relation to junior wage rates, in November last year I introduced a Bill to amend the Workplace Relations Act by providing for the inclusion of junior rates of pay in award s and agreements on a permanent basis and requiring the AIRC to have regard to the objects of promoting youth employment and reducing youth unemployment. Again, it is pleasing to seek complementary initiatives in the South Australian bill.



Our bill has been rejected by the Senate. This puts the jobs of many young people in jeopardy, including up to 220,000 in the retail industry alone. The Senate rejection has created an environment where youth unemployment could jump to over 30%. It has already prevented the creation of new jobs for young people in those industries where junior rates do not currently apply. Preliminary research by my Department indicates that the introduction of junior rates in the building industry alone would create up to 6000 new jobs.



We’re committed to protecting the competitive position of young people in the labour market, and will be reintroducing the bill at a later date.



In relation to superannuation, we have introduced a bill to remove superannuation from the allowable award matters. The aim here is to move away from the dual regulatory system now in place which requires employers to meet different sets of obligations under awards and the Superannuation Guarantee legislation. We had introduced a bill to remove super from the allowable award matters in late 1997, but it was still before the Senate when the Parliament was prorogued in August 1998.



More Jobs, Better Pay


I will be presenting further reform measures to the Parliament towards the middle of this year.


These measures will deliver on a range of commitments in More Jobs, Better Pay including award simplification, agreement-making, industrial action, mediation and freedom of association.



Award simplification



The award simplification process has dramatically overhauled the federal award system. About 450 awards have now been through the simplification process, and of those, around 230 have been set aside or incorporated into other awards. A further 400 awards have been set aside under an administrative review process under section 151 of the Act, and simplification proceedings are underway at present for around 1300 awards.



We will be pursuing further simplification and will seek to ensure that the simplification process moves more quickly than it has done so far. The Government will continue to take an active role in award simplification matters with the aim of ensuring that the provisions operate as intended. Last year we sought the review of 35 simplified awards, and as a result of that review process a Full Bench of the Commission ordered further simplification of almost all of the awards concerned to bring them into line with the requirements of the Act.



Our 1996 amendments included the introduction of section 111AAA, a provision designed to ensure that employers and employees would have greater freedom to operate within the jurisdiction of their choice. The Act will be amended to further strengthen the presumption in favour of existing forms of regulation of employment relationships to the exclusion of proposed new federal award coverage.



Agreement making and approval process



The first two years of the operation of the Government’s new agreement-making provisions have delivered over 12,000 certified agreements, including over 1000 non-union agreements, and over 53,000 AWAs.



These are excellent results, but there is still room to further simplify the agreement-making and approval process. Our aim is to make agreement options more accessible, to encourage more innovative and better quality agreements and to reduce red tape. This will allow agreements to be implemented more quickly, allow organisational change to be implemented without long procedural delays and to reduce delays and barriers to engaging new employees under these agreements.



Industrial Action



We will also be introducing some important changes to the protected action provisions of the Act.



Protected action will not be able to commence until employees have been able to express their wishes by way of a secret ballot. Employees, not union officials, should be accountable for, and have the final say in, decisions on taking industrial action. Secret ballots of workers will provide a fair and democratic process for determining employee support for industrial action.



Options which we are now considering include enabling the AIRC to oversee the use of compulsory pre-industrial action secret ballots; providing that members of organisations seeking agreements are eligible to vote in the ballot and a vote being carried by a majority of valid votes passed (subject to an appropriate quorum); the Commission being able to determine who should conduct the ballot (including a body such as the Australian Electoral Commission), and the applicants being responsible for the funding of the ballots with the Commonwealth providing reimbursement of some costs.



Ballots authorising industrial action will need to be accompanied by prescribed notices to employees, such as notices drawing employees’ attention to the anti-coercion provisions of the Act relating to an individual employee’s decision to take or not to take protected action and to the fact that strike pay is prohibited. In addition, earlier notification of an intention to take industrial action will be required so employees, unions and employers have a genuine opportunity to discuss the matters subject to a claim before any potentially damaging industrial action commences.



Cooling off periods and mediation options will be introduced in circumstances where protected industrial action during the making of workplace agreements is protracted or costly.



The Workplace Relations Act has proven much more effective than the previous legislation in preventing and stopping unlawful industrial action — days lost through industrial action in 1997 dropped to a record low level, and the figure for 1998 was lower again.



Experience with the relevant provision of the Act — section 127 — shows that it can be extremely effective in achieving the prompt cessation of industrial action.



Over 600 applications for orders under section 127 have been made to date, and in most ca ses, a return to work has been achieved without the need for the Commission to make orders.



However, there have been some Court and Commission decisions that have resulted in section 127 not operating entirely as intended. For example, there were some instances of in the coal industry where strike action was taken in protest against award simplification. The Commission declined to make section 127 orders, taking the view that not making an order would assist the parties in the circumstances.



Factors such as whether a s127 order might escalate industrial action or damage relations at the workplace level are factors that employers might want to weigh up in deciding to apply for a section 127 order or continue with an application. It shouldn’t be for a third party to make those sort of judgements. Once an application is made and the jurisdictional basis for making an order is established, an order should normally be made.



Another issue in relation to the operation of section 127 is that the Federal Court has held that an order made by the Commission under section 127 must identify precisely the conduct that it seeks to prohibit. In practice, employers seeking orders are not always able to specifically identify in their applications the industrial action to be stopped or prevented. This is particularly so where the industrial action is ‘impending, threatened or probable’, or where the action takes place in the context of an industry-wide campaign.



In a decision last week, the Federal Court ruled that section 170MN of the Act, which prohibits industrial action during the life of a certified agreement, only prohibits industrial action taken to support or advance claims for a replacement agreement. This limitation was certainly not intended — the provision is intended to prohibit all forms of industrial action during the life of an agreement.



More generally, there have been concerns about delays in getting access to injunctive relief from the Federal Court where section 127 orders have been breached.



These are examples of the types of issues we will be seeking to address to ensure that the legislation operates as originally intended.






Formal legislative recognition will be given to the provisions of mediation services in industrial disputes, for use on a voluntary basis, as an alternative or supplement to the quasi-legal processes of the Commission. Mediation services will be provided by bodies or persons external to the Commission with an accreditation system recognised by law. The formal recognition of mediation will provide parties with a wider choice where they wish to utilise the services of a third party to assist them with workplace relations matters.



Freedom of Association



The Government remains strongly committed to ensuring that union membership is voluntary and based only on the free choice of the individual. Stronger laws will prevent the establishment and maintenance of closed shops, make direct or indirect preference to unionists over non-unionists unlawful and prohibit discrimination or victimisation against workers who choose to join or not join unions or who make workplace agreements.



In addition, the Government will amend the right of entry provisions of the Workplace Relations Act to ensure that the proper role of unions is as a service provider to their members, not as an uninvited quasi-inspector at the workplace.






The process of consultation on further federal reforms has already begun. Last year I released a number of discussion papers on a range of particular reform issues, including many of those I have just mentioned. These were circulated widely in order to obtain the views of stakeholders and the wider community on the issues raised.



I will be consulting formally with employer organisations and unions through the National Labour Consultative Council’s Committee on Industrial Legislation. I also intend to consult directly with State Governments, key employers and employer organisations, small business representatives and key community groups.



Wider reform issues



In an address to the National Press Club in Canberra on 24 March, I raised for discussion the prospect of utilising more widely the corporations power — section 51(20) — of the Constitution to underpin workplace relations legislation.



The 1996 High Court decision in Victoria v The Commonwealth confirmed that the scope to enact workplace relations legislation in reliance on the corporations power is very wide indeed.



The corporations power would permit a coherent national framework of minimum standards to be established for the conduct of workplace relations in corporations. In those workplaces, it could end the dual regulation of federal and State industrial relations systems.



It would provide a basis for much more clearly understood and enforceable rights and obligations.



And it would free the system of the bewildering and outmoded concepts of paper disputes, ambit logs of claim, dispute findings and notional interstateness.



These are powerful arguments in support of a shift to a corporations power based system, and the issue is clearly one that merits serious debate, and I welcome your views on the matter.




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