Bills Digest no. 62 2009–10
Fair Work Amendment (State Referrals and Other Measures) Bill 2009
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date introduced: 21 October 2009
House: House of Representatives
Portfolio: Education, Employment and Workplace Relations
Commencement: Various dates, although the majority of the provisions commence on Proclamation
or six months after Royal Assent, which ever is the earlier. Complete
commencement details are set out in the table in Clause 2 of the Bill.
Links: The relevant links to the Bill, Explanatory Memorandum
and second reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills have been passed they can
be found at ComLaw, which is at http://www.comlaw.gov.au/.
Where a State
refers all or part of its powers to make laws in relation to industrial matters
to the Commonwealth, the Bill will extend the Fair Work Act 2009 to
cover the State’s unincorporated employers and employees and outworker entities.
The Bill also:
- facilitates the referral of State instruments such as awards and
agreements from those States to the Commonwealth in respect of private sector
workplace relations, and
- allows all States and Territories the option to retain their
public service and local government employees under their own workplace
relations system.
This Bill is introduced consequent to the Fair Work Act
2009 (the FW Act), the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009 (T&C Act) and the Fair Work
(State Referral and Consequential and Other Amendments) Act 2009 (first
referral Act). The first referral Act commenced on 1 July 2009 and primarily
dealt with the referral from Victoria.
The Parliamentary Library’s Bills Digest reviewing the Fair
Work Bill 2008 noted:
The purpose of the [Fair Work] Bill is to ultimately replace
the current Workplace Relations Act 1996 (WR Act) with industrial
legislation designed to promote collective bargaining and broader workplace
rights for employees. At a later time, the Bill may facilitate the referral of
powers from the States to the Commonwealth in respect of private sector
workplace relations laying the basis for a national approach to workplace
relations regulation.[1]
This Bill further progresses the national approach to
workplace relations regulation by facilitating the transfer of state
‘enterprise’ awards and collective and individual agreements to the federal
jurisdiction.
Section 51 (xxxvii) of the Commonwealth Constitution
provides that the Commonwealth Parliament 'may make laws for the peace, order
and good Government of the Commonwealth' with respect to:
Matters referred to the Parliament of the Commonwealth by the
Parliament or Parliaments of any State or States, but so that the law shall
extend only to the States by whose Parliaments the matters is referred, or
which afterwards adopt the law.
This Bill provides for a text base referral[2] in workplace relations matters from States to the Commonwealth. The Bill also facilitates
the referral of State instruments such as awards and agreements from those States
to the Commonwealth in respect of private sector workplace relations laying the
basis for a national approach to workplace relations regulation.
The Bills Digest on the Fair Work (State Referrals and
Consequential and Other Amendments) Bill 2009 provided background on the
progress of the States agreeing to refer workplace powers to effect referral.[3] The main development since then is that Tasmania, South Australia and
Queensland have introduced referral legislation into their Parliaments. Further
to that, on 25 September 2009, Ministers from Victoria, South Australia,
Tasmania, the Northern Territory and the Australian Capital Territory endorsed
and signed an Inter-Governmental Agreement for a National Workplace
Relations System for the Private Sector. New South Wales is yet to make a decision
about its participation in the national system, while Western Australia has not
changed its initial position of deciding against a referral.[4]
If more States do introduce referral legislation it will be
necessary for the Commonwealth to make further amendments to accommodate the
specifics of those referrals.[5]
The Bill has been referred to the Senate Education
Employment and Workplace Relations Committee for inquiry and report by 16
November 2009. Details of the inquiry are at: http://www.aph.gov.au/Senate/committee/eet_ctte/fair_work_state/index.htm
It has been reported that the Coalition parties do not
intend to oppose the passage of this Bill, subject to its inquiry and report in
the Senate.[6]
Submissions to the Senate inquiry generally support and
welcome the Bill for progressing the delivery of a uniform national industrial
relations system.
The ACTU states that it supports the Bill and ‘applauds the
consultative approach adopted by the government in working with the referring
States to determine the scope of their referrals and the transitional
arrangements that will apply to employees and employers transferring from the
State systems’.[7]
Professor Andrew Stewart similarly expresses a supportive view
stating:
If passed the State Referrals Bill will help to create a
clear and consistent delineation between federal and State industrial laws. At
least in referring States, all private sector employers will be subject to the
federal system, including the great majority of non-profit organisations […]
The uncertainty over the status of incorporated local employers, and certain
other incorporated government business enterprises, will also be resolved.’[8]
However ACCI and Australian Industry Group (Ai Group), while
supporting the referral of the State industrial relations powers to the
Commonwealth, raise concerns regarding aspects of the referral provisions. Ai
Group goes so far as to suggest the Bill should not proceed— their preference
being a complete referral of power from the States to the Commonwealth.[9]
Some of the technical issues
raised by interest groups such as Ai Group and ACCI are discussed under the Main
Provisions section below.
According to the Explanatory
Memorandum, the provisions of the Bill will generate extra work for Fair Work
Australia (FWA) and the Fair Work Ombudsman in South Australia and Tasmania and
the cost of the extra work will be absorbed within ‘existing operational
capacity’. The Explanatory Memorandum adds that the financial impact of the
expansion into other States will be considered separately.[10]
As noted above, Victoria was the first State to legislate
for the referral of workplace relations matters to the Commonwealth.[11] The Fair Work (State Referral and Consequential and Other Amendments) Act
2009 (Cth) inserted Division 2A into Part 1-3 of the FW Act which gave
effect to Victoria’s referral. It enabled all the elements of the national
system of industrial relations laws to apply to all employers and employees in
Victoria with effect from 1 July 2009.
The main purpose of Schedule 1 in the Bill is to give effect
to other State references that occur by 1 January 2010.
Item 39 inserts new Division 2B into Part 1-3
of the FW Act. It would give effect to State references of workplace relations
matters to the Commonwealth that take effect after 1 July 2009 but on or before
1 January 2010. To date, South Australia, Tasmania and Queensland have
introduced referring legislation into their Parliaments.[12]
The new Division 2B is largely based on the framework
used for the referral by Victoria as set out in Division 2A. It relies on a number of definitions, including the
definitions of ‘referring State’, ‘referred subject matters’ and ‘excluded
subject matter’, ‘national system employee’ and ‘national system employer’.
These definitions are discussed below.
Proposed section 30L defines ‘referring State’ and is
a key provision. A State is a referring State if its Parliament, after 1 July
2009 but on or before 1 January 2010 refers the matters set out in proposed
subsections 30L(3), 30L(4) and 30L(5) to the Commonwealth
Parliament, to the extent that these matters are not otherwise within
Commonwealth legislative power and are within the State’s legislative power. Proposed
subsections 30L(3), 30L(4) and 30L(5) provide for three referrals of
power, namely the ‘initial reference’, the ‘amendment reference’ and the ‘transition
reference’.
New subsection 30B(3) gives effect to a reference of
matters relating to the text of the ‘referred provisions’[13] in Division 2B. Matters covered by this text will cover the regulation of
unincorporated and public sector employers and their employees, outworker
entities.[14] These are brought into the referral by virtue of the extended definitions of ‘national
system employee’ and ‘national system employer’ (proposed sections 30M and 30N)[15],
and ‘outworker entity’ (proposed section 30Q)[16]. Certain types of adverse action are also brought into the referral through
extending the operation of the FW Act’s general protections in Part 3-1 (proposed
section 30R).[17]
New subsection 30K(4) gives effect to a referral of matters
relating to ‘express amendments’[18] of the FW Act. This would allow the Commonwealth to amend the FW Act in
relation to the referred subject matters.
The ‘referred subject matters’ are defined in proposed
section 30K and amongst other things include:
- terms and conditions of employment (such as in minimum standards
or instruments, or in relation to bargaining or transfer of business), and
- rights and responsibilities of employees and employers and other
persons (such as in relation to freedom of association, industrial action,
unfair dismissal and right of entry).
These correspond with
the matters regulated by the FW Act.
‘Excluded subject matter’ from the referral are also defined
in proposed section 30K and include amongst other things:
- matters dealt with by the States various equal opportunity or
anti-discrimination Acts which are preserved in their application to national
system employees and employers by subsection 27(1A) of the FW Act
- superannuation, workers compensation, occupational health and
safety, public holidays, long service leave, regulation of employee and
employer associations, and workplace surveillance, business trading hours,
enforcement of contracts of employment.
Comment
Ai Group, in their
Senate inquiry submission are critical of this definition, arguing that its
lack of consistency with existing section 27 of the FW Act would create
uncertainty and potentially an increased regulatory burden for employers. Ai Group
state that the definition gives States powers in respect of training
arrangements, long service leave, public holidays and claims for enforcement of
contracts of employment. The submission continues:
It is not appropriate to give States increased powers in the
proposed areas and, accordingly, to undermine the provisions of the Fair Work
Act, modern awards and enterprise agreements relating to these matters.[19]
Ai Group’s preference
is for the definition of ‘excluded subject matter’ currently used in section
30A[20] arguing it ensures consistency with section 27 ‘non-excluded matters’ in the FW
Act.[21]
Proposed subsection 30L(5) gives effect to a referral
of matters relating to the transition to the national system. This would enable
the Commonwealth to transition State employers and employees from regulation by
State industrial relations frameworks to the system created by the FW Act. It
would also enable the transition of unincorporated employers and employees
currently covered by the WR Act (as it continues to apply because of the
T&C Act) to the FW Act regime.
Proposed subsection 30L(2) clarifies that a State is
still a referring State even if the State’s referral law provides for the
reference to terminate in certain circumstances, or if it excludes certain
matters relating to State public sector employment or local government
employment. The effect is that referring States can refer or exclude from
references matters relating to State public sector employment and local
government employment. [22]
The Explanatory Memorandum states that it is anticipated
that none of the Division 2B referring States will refer matters relating to
public sector employment. Victoria (a referring State under Division 2A) on the
other hand, has referred matters relating to its public sector and local
government (subject to certain exceptions set out in its referral Act).[23]
Proposed subsection 30L(6) provides that if a State
terminates any or all of the initial, amendment, or transitional references it
will cease to be a referring State unless subsections 30L(7) or (8) apply. Proposed
subsections 30L(7) and (8) enable a referring State to remain a
referring State if its amendment reference is terminated by the State Governor
by proclamation in the following circumstances:
- with six months notice, if the amendment references of other
referring States all terminate on the same day, or
- with three months notice, if the Governor considers that an
amendment to the FW Act is inconsistent with the fundamental workplace
relations principles as set out in proposed subsection 30L(9)[24].
The effect of proposed
subsections 30L(7) and (8) is that if a State terminated its
‘amendment reference’ it would still be able to remain a referring State.
Comment
ACCI in its Senate
inquiry submission argues that there is no reason why such a provision should
be part of the referral process for a national system.
This may be used as a political tool to styymie further
amendments to the Commonwealth laws and put pressure on the Commonwealth by
threatening to withdraw from the federal system.
[…]
If the termination of an amendment reference is ever invoked
by a State Government, this will cause confusion and unnecessary dislocation
for referral employers, as non-referred employers continue to be bound by the
fair work laws, but their referral counterparts do not. It also appears to
indicate that State Governments are not fully committed to achieving a national
system for the private sector.[25]
ACCI therefore recommends that these provisions (subsections
30L(7) and (8)) be removed from the Bill.
Ai Group also expressed concern about an effective State
Government veto power over amendments to the FW Act and the possibility of
State Governments being able to pressure the Commonwealth into amending or not
amending the FW Act. Such a veto could also cause delays in necessary
amendments to the FW Act and could also result in one or more State Governments
terminating their amendment references, thereby creating different versions of
the national workplace relations system for different groups of employers and
employees.[26]
In response to these concerns, a senior spokesperson for the
Department of Education, Employment and Workplace Relations told the Senate inquiry
that these provisions were worked out in close consultation with the States.
They are aimed at protecting States’ long-term interests in a cooperative
workplace relations system and address States’ concerns that unwelcome changes
to workplace relations laws could be forced upon them without any consultation
by a future Commonwealth government.[27]
As stated above, Division 2A of the FW Act gave effect to Victoria’s
workplace relations reference to the Commonwealth. Many of the amendments in
Schedule 1 of the Bill amend this existing Division 2A to ensure consistency
with the proposed arrangements in new Division 2B. This includes
provisions that enable Victoria (like Division 2B referring States) to
terminate its amendment reference and remain in the national system (items
14, 17, 18, 26 and 31).
Also for consistency with new Division 2B, Schedule 1
inserts new definitions including ‘excluded subject matter’ (item 15), ‘local
government employee’ and ‘local government employer’(items 20 and 21)
and ‘State public sector employer’ (item 25).
There are also a number of
minor technical amendments to Division 2A, including amendments consequential
on the creation of Division 2B (item 11 and items 32-37).
Items 1 to 36 insert new definitions into item
2 (the dictionary) of Schedule 2 to the T&C Act to cross-reference new
definitions and application provisions relevant to new Schedule 3A.
Item 38 amends the general regulation-making power in
item 7 of Schedule 2 of the T&C Act. It provides a new regulation making
power for the transitional purposes of referral.
Items 43, 45 and 47 provide definitions for
the purposes of categorising State reference employers and employees. They are
either Division 2A State reference employers and employees (ie Victoria) or
Division 2B State reference employers and employees (ie other States).
Item 54 inserts new Schedule 3A into the
T&C Act. It deals with the treatment of State awards and State employment
agreements of Division 2B referring States.
Proposed items 2 to 6 of the new Schedule 3A define
Division 2B State awards and Division 2B State employment agreements which are
to be known collectively as Division 2B State instruments. At the referral
commencement, State awards and State employment agreements in operation under a
referring States industrial law become notional federal awards and agreements.
Proposed items 4 and 6 have the effect of
preserving Division 2B State instruments in relation to those employers,
employees, outworker entities and other persons who were covered by the
instrument immediately before the referral commencement as well as new
employees engaged by those employers after that time.[28]
Proposed items 7 to 17 deal with matters
relating to the terms of State awards and agreements on referral commencement.
Proposed item 7 provides that a term of a
State award dealing with dispute resolution procedures would effectively be
replaced in the Division 2B State award with a model dispute resolution clause,
prescribed by regulation. In contrast, State employment agreements dispute
resolution terms would be retained (proposed item 8). The effect is that
where Division 2B State employment agreements confer power on State industrial
bodies (or other third parties), the State industrial bodies or parties will
not be prevented from exercising power.
Other State rules would be preserved at referral
commencement. For example:
- State rules about instrument content would be preserved (proposed
item 10)
- State rules about interaction between instruments would be
preserved (proposed item 11)
- Awards would continue to be subject to the same outworker
interaction rules (proposed item 12).
Proposed items 14 to
16 deal with the transition of employee entitlements at referral
commencement. Generally an employee’s service with an employer before referral
commencement counts as service for the purpose of determining entitlements
under the relevant Division 2B State instrument (proposed item 14).
Proposed item 17 clarifies that there is no loss of accrued rights or liabilities when a
Division 2B State instrument terminates or ceases to apply.
Proposed item 18 sets out the circumstances under
which Division 2B instruments may be varied or terminated. Such instruments may
be varied so as to remove ambiguities (item 19) or on referral from the
Australian Human Rights Commission (proposed item 20); otherwise
they may be varied pursuant to items 8 and 40 of the proposed Schedule 3A of
the T&C Act in relation to dispute resolution under State Employment
Agreements and resolving difficulties between State instruments and the
National Employment Standards); pursuant to Part 6 of proposed Schedule 3A dealing
with the ongoing operation of State laws for transitional purposes and under its
schedules dealing with enterprise instrument modernisation process, variation
of State awards in annual wage reviews and transfer of business. Similarly
Division 2B State instruments cannot be terminated other than under Part 6 of
proposed Schedule 3A dealing with the ongoing operation of State laws for
transitional purposes or arising from an enterprise instrument modernisation
process, or from a transfer of business matter.
Proposed item 21 stipulates that Division 2B State
industry awards terminate 12 months after the Division 2B referral,
notwithstanding any award provision providing for an earlier termination. Proposed
items 22 and 23 allow the termination of collective State employment
agreements under Part 2–4 of the FW Act, either by agreement between the
parties or by the FWA after the agreement’s nominal expiry date.
Proposed items 24 to 26 deal with the termination of
individual Division 2B State employment agreements by written agreement between
the parties; or where the individual agreement is to be superseded by an
enterprise agreement under the FW Act; or by a unilateral application to the
FWA upon the Division 2B agreement reaching its nominal expiry date, subject to
notice requirements. The agreement’s termination takes effect 90 days after the
FWA’s approval.
Proposed item 27 defines the nominal expiry date of
a Division 2B State employment agreement to be either the day expressed in the
agreement or 3 years from the Division 2B referral, if the agreement specifies
a later nominal expiry date than this. Proposed item 28 makes clear that
when a Division 2B State employment agreement terminates it ceases to cover and
can never again cover any employer or employees.
Proposed item 29 obliges FWA to consider varying
modern awards within the first 12 months of referral commencement, to include
transitional arrangements for Division 2B State award employees (but not employees
under State enterprise awards). Any State award term to be included in a modern
award must comply with section 136 of the FW Act and apply to State award
employees. Any such provision made by FWA takes effect after 12 months from the
referral commencement and cease to have affect within 5 years or earlier, if stipulated.
Proposed item 30 obliges FWA to consider the making
of orders to apply State award long service leave, in the 12 months following a
State referral. Any such order would override inferior long service leave
provisions of either an award or enterprise agreement.
Proposed item 31 provides that the termination of a
Division 2B State award is not intended to result in a reduction of take-home
pay for employees and outworkers. Where a reduction in take-home pay does occur
because of a termination of a State award, the FWA may make remedial take-home
pay orders under proposed item 32 on application from an employee or
outworker, an organisation entitled to represent the employee or outworker, or
a person acting on their behalf. Proposed item 33 ensures that any such
order will remedy only the reduction in pay brought about by the termination of
the State award. Proposed item 34 provides that a take-home pay order
continues to apply for so long as the relevant modern award replacing the State
award, continues to apply to the employee.
Where a provision of a State instrument (award or agreement)
is detrimental to an employee when compared to an entitlement under the National
Employment Standards (NES), the State instrument provision is of no effect as
stipulated under proposed item 37.
Certain provisions of the NES have effect under proposed
item 38 in relation to modern award or enterprise agreement, as if
reference to these instruments included reference to a Division 2B State
instrument. These terms of the NES include: the averaging of hours, cashing out
and taking annual leave, cashing out and taking personal leave including
evidence requirements, the substitution of public holidays, employees giving
termination notice, where redundancy pay does not apply and the provision paid
loadings in lieu for school-based trainees and school-based apprentices. Proposed
item 39 provides that a Division 2B State instrument employee is entitled
to the shiftworker annual leave entitlement under the NES.
Proposed item 41 provides that where a Division 2B
State employment agreement and a modern award both apply to an employee, or
employer, or other person, the State employment agreement prevails. Proposed
item 42 ensures that modern award outworker terms will continue to apply
despite the provisions of item 41. Proposed item 43 provides that a
Division 2B State award will apply to relevant employees until its termination
under this Bill. Where a FW Act enterprise agreement or workplace determination
commences to apply to an employee, employer or other person then an otherwise
applicable collective Division 2B State agreement ceases to apply under proposed
item 44; however an individual State employment agreement will continue to
apply. Further, under proposed item 45, a Division 2B State award may
re-apply to an employee, employer or other person at some point in time, if the
FW Act instrument ceases to apply. Outworker terms under a State award will
continue to apply despite the existence of an otherwise applicable enterprise
agreement under proposed item 46.
Proposed item 47 stipulates that an employee is not
award/agreement free for the purposes of the FW Act, if a Division 2B State
instrument applies to the employee. Where an employee’s ordinary hours of work
are determined by a Division 2B State instrument, the hours of work stipulated
therein continue to apply, as provided for in proposed item 48. Where no
hours are agreed and no State instrument applies, ordinary hours of work shall
be 38 hours for full-time employees and the lesser of 38 hours and the employee’s
usual hours of work for other employees. Proposed item 49 applies the FW
Act’s payment of wages provisions under Part 2-9 to referred State instruments
and proposed item 50 applies the FW Act’s guarantee of earnings to
employees under referred State awards under Part 2-9, and also the exclusions
of high income employees from awards under a written guarantee of earnings. Employees
under referred State awards or agreements will be protected from unfair
dismissal under the FW Act’s dismissal provisions by proposed item 51.
Section 26 of the FW Act puts as a general rule that the FW
Act is intended to apply to the exclusion of all State and Territory industrial
laws, while section 27 of the FW Act makes certain exclusions to section 26.
Under this proposed Part 6, FW Act provisions excluding State (or Territory)
laws to national system employees and employers under section 26 are do not
apply in respect of state laws which facilitate the commencement or completion
of an award appeal before referral commencement under proposed item 55.
Similarly section 26 of the FW Act does not apply to a state law facilitating
the completion of an employment agreement proceeding which had commencement
before referral commencement under proposed item 56, nor does section 26
apply in relation to an agreement appeal made before, on or after referral
commencement. Proposed item 58 ensures that any decisions made in
relation to award appeals, agreement proceedings and agreement appeals are not
subject to section 26 of the FW Act. Proposed item 59 applies where a
state agreement, or variation or termination has been approved by a state industrial
body before referral but has not come into effect at the time of referral commencement;
in such a case section 26 of the FW Act does not apply. State laws also
continue to apply under proposed item 60 where a state law relates to
compliance with an entitlement or obligation occurring prior to referral
commencement. Proposed item 61 ensures the ongoing operation of tribunal
or court orders or injunctions preventing industrial action before referral
commencement.
Item 56 inserts at the end of Part 3 of Schedule 4:
Proposed item 16 stipulates as a general rule that an
employee’s service with an employer prior to referral commencement counts as
service for the purposes of determining the employee’s entitlements under the
National Employment Standards, subject to the proviso that no double
entitlement shall occur as a result of the referral.
Where an employee has accrued paid personal/carers’ leave or
paid annual leave, prior to referral commencement, the NES provisions
concerning the taking, payment and cashing out will apply to the accrued leave
under proposed item 17. Proposed item 18 provides that leave being taken
prior to referral commencement can continue to be taken after referral
commencement under the relevant NES provisions for the taking of that leave.
Where an employee’s service prior to referral did not
generate an entitlement to redundancy pay, the NES redundancy schedule commences
from referral commencement; however redundancy pay for service prior to
referral is allowed where a state industrial body makes such orders (as is
generally the case with redundancy pay in the Tasmanian industrial system). Proposed
item 20 however provides that where notice of redundancy was made prior to
referral commencement, but the date of the termination occurs after referral,
the NES redundancy pay liability still applies for the period of service. Proposed
item 19 provides that the NES notice of termination requirements apply only
to terminations occurring on or after referral commencement. Proposed item
21 requires the NES Fair Work Information Statement to be provided only to
employees who commence work after the referral commencement.
Item 68 inserts at the end of Part 4 of Schedule 7:
Provisions under this Part apply to enterprise agreements,
whether these be greenfields agreements or non- greenfields agreements, made or
varied after referral commencement for employees who would otherwise be covered
by a state award. Proposed item 20A relates to new agreements satisfying
the FW Act’s ‘better off overall test’, while proposed item 20B relates
to the requirements for varying agreements.
Item 70 inserts at the end of Schedule 9 a new Part
5—Provisions relating to Division 2B State instruments. It contains:
Provisions under this Part ensure that base rates of pay
under a Division 2B state award or state agreement, after referral, are not
less than the national minimum wage and the FWA may make orders to phase in any
increases in base pay rates. However proposed item 19 provides for
award/agreement free employees, that where application of the national minimum
wage would result in a fall in base rates, the state minimum amount (for
example stipulated by law or order) will apply.
Proposed item 20 allows FWA to vary the wages terms
of a referred state award under the FW Act’s annual wage review.
Item 74 inserts at the end of Part 3 of Schedule 11:
Proposed items 14 to 15 provide for the application
of the FW Act’s transfer of business provisions under Part 2–8 to transferring
employees covered by a Division 2B state instrument. Proposed item 16 determines
that where a state instrument covered an ‘old’ employer and employee,
that instrument continues to cover the employee and the ‘new’ employer.
As noted above, proposed subsection 30L(2) of the FW Act recognises
that referring States can choose the extent to which matters relating to state
public sector or local government employment are included or excluded from
references. This Schedule of the Bill makes further amendments in relation to
public sector and local government employment.
Items 1 to 3 amend section 14 (‘national system
employer’) of the FW Act by adding provisions allowing certain
employers, such as those established for a State/Territory public purpose as
well as local government entities, to be declared under a State or Territory
law not to be national system employers. The effect would be that all States
and Territories would be able to exclude by declaration certain State public
sector and local government employers over which the Commonwealth currently has
jurisdiction (such as constitutional corporations) from the FW Act. Such
declarations could not however be made in relation to universities, nor
electricity, gas, water, rail or port utilities (proposed subsection 14(6)).
To be effective, a declaration would need to be endorsed by
the Minister administering the FW Act (proposed subsection 14(2)). Such
an endorsement (or alternatively a revocation or amendment) by the Minister
would be a legislative instrument for the purposes of the Legislative
Instruments Act 2003 and required to be tabled in Parliament. The
instrument would however not be subject to the disallowance or sunsetting
provisions of that Act (proposed subsection 14(5)).
Comment
ACCI is critical of this amendment noting that it would
effectively allow local governments that are currently subject to the federal
laws to be carved out of the national system. [29] ACCI argues that this ability for States to opt-out of the system would have a
destabilising effect on the national system, particularly for those employers
that have been subject to the federal system for a considerable period of time.
ACCI’s strong preference is for a referral to encompass all employers and
employees and therefore recommends that these amendments to section 14 of the
FW Act be omitted.[30]
The ACTU, on the other hand supports the amendment stating:
This will allow the Commonwealth to retreat from covering any
local government entity or state enterprise that is a trading corporation where
the State has determined (in consultation with the employers and employees in
the local government sector) that it will not refer them. This sensible
approach draws a “bright line” around the sector and avoids the difficulties
that otherwise arise in determining whether a particular council or enterprise
is a trading corporation.[31]
Professor Andrew Stewart also supports this amendment
stating that it will resolve the uncertainty over the status of incorporated
local government employers, and certain other incorporated government business
enterprises.[32]
Submissions from Unions NSW and United Services Union, while
supporting the ability of the States to retain local government and public
sector employment within their industrial systems, question the rationale of
excluding utilities and energy generation.[33]
Other provisions in Schedule 3 of the Bill:
- amend the FW Act to allow State/Territory ministers to make
applications for the suspension of industrial action in a relevant State or
Territory (items 4 to 6), and
- allow State/Territory ministers to intervene in court matters
pertaining to the FW Act as these affect a State or Territory (proposed
section 569A, item 10).
Concluding comments
Along with the Fair Work (State Referral and
Consequential and Other Amendments) Act 2009, this Bill progresses a
significant national reform that will bring Australia to the closest point in
its history of having a single set of workplace relations laws for the private
sector.[34] As the Parliamentary Library’s Bills Digest reviewing the Fair Work (State
Referral and Consequential and Other Amendments) Bill 2009 noted: ‘A revolution
is underway’. This comment reflected the move to a uniform national workplace
relations system for the private sector reflected in the agreements by most
States to refer industrial legislation to the Commonwealth.
While submissions to the Senate inquiry into the current
Bill were generally in favour of progressing the delivery of a national system,
there were genuine concerns raised about some of the Bill’s referral
provisions. Those concerns are indicative of the complexity of achieving a fully
national system.
The Bill was introduced on 21 October 2009, the Senate Committee
inquiry has had a three-week time frame in which to consider it, and the new
system is expected to be operational by 1 January 2010. Parliament may ask why
it has such a short time frame in which to consider such a significant and
complex reform.
Members, Senators and
Parliamentary staff can obtain further information from the Parliamentary
Library on (02) 6277 2463.
- a matter dealt with in a law
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Mary Anne Neilsen
Steve O’Neill
16 November 2009
Bills Digest Service
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