Consideration of the Workplace Relations and Other Legislation Amendment Bill 1996
Table of Contents

CHAPTER ONE

Overview

Introduction of the Workplace Relations Bill 1966

1.1 The Workplace Relations and Other Legislation Amendment Bill 1996, was introduced into Parliament on 23 May 1996, just over two months after the Government was elected. The Bill was passed by the House of Representatives on 26 June 1996 and introduced into the Senate on 27 June 1996. The terms of reference for this inquiry were passed by the Senate on 23 May 1996 and appear at page (iv) of this report.

1.2 The Workplace Relations Bill represents a significant remodelling of Australia's industrial relations system. The Bill proposes the reshaping of bargaining arrangements, the confinement of awards to that of a minimum safety net, and a reduction in the role of the Australian Industrial Relations Commission and registered organisations. [1] While there have previously been moves towards a more 'enterprise' focus in industrial relations, this Bill represents a major step towards a deregulated labour market.

The Industrial Relations Debate

1.3 Industrial relations policy has been a significant area of difference between the major and minor parties during the last three Federal elections. In the 1996 Federal election campaign, the Coalition released its industrial relations policy (Better Pay for Better Work). The Coalition claimed that 'a more flexible industrial relations system will increase productivity, achieve faster real growth in wages and profits and, most importantly, create more real jobs'. [2] The main features of this policy were:

• the introduction of a new type of non-union enterprise agreement (Australian Workplace Agreements) to replace Enterprise Flexibility Agreements;
• a 'rock solid guarantee' that the take-home pay of workers who enter into AWAs will not be less than that they would receive under the relevant award;
• the retention of the award and certified agreements system, overseen by the AIRC. (However, the 'no-disadvantage test' prevents the certification of agreements which provided for lower terms and conditions than under the award, would be abolished and replaced by 10 minimum conditions).
• the continuation of the AIRC's role in granting safety net wage increases;
• the establishment of an Employment Advocate to receive AWAs, advise the parties as to their rights and responsibilities and to assist employees to recover unpaid entitlements;
• the reintroduction of sections 45D and 45E of the Trade Practices Act 1974;
• the introduction of freedom of association (meaning the freedom to join or not to join a union, and to join the union of one's choice); and
• the revision of provisions relating to unlawful termination.

1.4 In contrast, the Australian Labor Party's policy endorsed the existing arrangements of continuing workplace reform through the extension of enterprise-level bargaining and the reform of awards whilst maintaining and strengthening the award safety net to ensure basic protection for disadvantaged groups. The former Government and the Australian Council of Trade Unions (ACTU) had entered into Accord Mark VIII which:

• contained a union commitment to genuine workplace bargaining and responsible wage outcomes consistent with inflation and employment objectives;
• sought to keep the focus on workplace reform and productive performance;
• supported a modern awards system; and
• included a number of social wage measures (ie. superannuation and the maternity allowance).

1.5 Following release of the Workplace Relations Bill, the ALP indicated its opposition to considerable aspects of the proposed legislation. As part of its response, the ALP introduced into the House over three hundred and fifty amendments to the Bill, covering every schedule.

1.6 The Australian Democrats' industrial relations policy (Getting the Balance Right) endorsed a continuing role for the Industrial Relations Commission in 'overseeing and maximising employment justice while delivering the best possible economic outcomes' and supported a 'comprehensive and up to date award system' to provide an adequate safety net for enterprise bargaining. [3]

1.7 Upon coming to Government, the Coalition elaborated on its industrial relations policies in a number of areas. The most far-reaching of these was the proposal to limit the matters which could be included in awards. Eighteen matters were identified, including rates of pay, hours of work, various types of leave, allowances and loadings. All other matters currently in awards would be removed. The AIRC was no longer to have the power to include such matters in awards.

1.8 Section 152 of the Industrial Relations Act 1988 would be amended to allow State employment agreements to override Federal awards, regardless of the minimum conditions underpinning such State agreements. Two separate types of certified agreements would be established - union agreements and non-union agreements. Unions would only be entitled to negotiate a certified agreement if they had at least one member at the enterprise.

1.9 Significant changes to the regulation of registered organisations were also proposed. It would be a requirement that unions amend their rules to allow for 'autonomous enterprise branches'. Provisions for the disamalgamation of previously amalgamated unions would be introduced as well as changes to the requirements for registration. The right of entry of union officials to ensure compliance with awards and agreements was to be restricted.

1.10 During the drafting of the Bill, the Government consulted widely over the proposed changes. These consultations included discussions with all state and territory governments, various employer groups, individual businesses, unions, women's groups, ethnic councils, and welfare, community and church organisations. [4] However, while the employer groups in general welcomed the government's initiative, unions in all cases immediately opposed the legislation. In addition, concern was expressed by a number of community groups that certain provisions of the Bill could potentially have a deleterious impact on low income and minority groups, and that few changes had been made as a result of the consultations.

Reaction to the Bill

1.11 The Committee's inquiry attracted 1414 submissions from employer and employee groups, community organisations including youth groups, religious groups, women's organisations, ethnic groups and professional organisations which in turn included lawyers, and academics.

1.12 A large number of submissions were received from individuals. The interest that this inquiry generated was evidenced by the extent to which individuals were willing to come before the Committee and give their impressions of the Bill and share with the Committee first hand experiences, especially in relation to State jurisdictions.

1.13 During the conduct of the Inquiry, it became apparent that most employers supported the Bill though there was disagreement over the utility of some aspects of the legislative package. These groups included the peak body, the Australian Chamber of Commerce and Industry (ACCI) and various State Chambers of Commerce and Industry.

1.14 Other Industry groups indicated general support for the Bill. These included the Tasmanian Farmers and Graziers Association, the National Farmers' Federation, the Victorian Automobile Chamber of Commerce, the Confederation of ACT Industry, the Housing Industry Association, the Australian Hotels Association, Master Builders Australia, and the Business Council of Australia.

1.15 A number of these groups argued that the Workplace Relations Bill 'will be a crucial link in overall policies to encourage growth, competitiveness and productivity', and that 'Australian businesses urgently need the greater decentralisation, flexibility and freedom of choice which the legislation will bring'. [5]

1.16 Some employers saw the Bill as a continuation of past reform, others saw it as not about the past but about equipping the nation to 'prosper in the current and emerging world political economy'. [6] The National Farmers Federation said that this change was inevitable indicating that '[I]f the political system is incapable of providing necessary change, then market forces will ultimately force change'. [7]

1.17 Provisions of the Bill that attracted most attention from employers were the recognition of individual as well as collective agreements. While a large number of employer groups saw benefit in relation to these proposals, some organisations, including some who represent small businesses, claimed otherwise.

1.18 The explicit recognition of individual agreements was described by ACCI as a positive step towards simplifying awards without compromising employee protection. The agreements offered an incentive for increasing the scope for varying entitlements which would improve efficiency and performance; a true promotion of bargaining with the role of Commission intervention being reduced. Other employers saw benefit in the items that are to be excluded from awards. While companies such as Australian Business Limited suggested that these proposals would assist small business, a number of small business representatives indicated satisfaction with the existing award system and concerns that would result from restrictions to its protection of junior wage rates. Retaining junior rates was seen as a way of promoting employment among youth.

1.19 Other areas that attracted generally positive comment included:

• limitations to right of entry of union officials;
• limitations to 'closed shop' and 'preference' for union members;
• improvements to the unfair dismissal system;
• proper protection of employers against industrial action outside formal bargaining periods; and
• more cooperative arrangements with the states in regard to awards, workplace agreements and unfair dismissal arrangements. [8]

1.20 In relation to removal of union monopoly rights and removal of the 'conveniently belong' rule, there were a number of employer groups who expressed concerns about the freeing up of registration and increasing overlap of union coverage. The Australian Road Transport Industrial Organisation [9] and the Metal Trades Industry Association, [10] for example, considered that these changes could have a deleterious effect on business efforts towards reducing the scope of the award system.

1.21 A large number of union organisations gave evidence in writing or verbally. Submissions were made by unions covering a broad range of industry sectors and occupational categories. Each of these organisation expressed grave reservations about the impact of the Bill. Between them, the unions objected to most of the central features of the legislation.

1.22 In an overall sense, the concerns were summed up by Ms Jennie George, ACTU President. Ms George argued that the Bill's reliance on 'choice', especially in relation to the mode of bargaining was flawed because employees, especially the most vulnerable, are in no position to exercise choice or even to influence the choice made by the employer because individual workers generally need the job more than their employer needs those particular individuals. [11] She stated that: 'this fundamental inequality in bargaining power between the employer and the individual worker means that workers must have effective and accessible protection against exploitation. The Bill does not provide that protection'. [12]

1.23 In a recent review article Ms George stated: 'It is imperative that we retain a system that gives sufficient power to the Industrial Relations Commission and, where appropriate, trade unions, to ensure that workers do not have their wages and conditions reduced and that there is a system in place to ensure that rights and entitlements are protected.' Ms George further argued that: 'In many industries, however, unions are reliant on the existence of the commission and enforceable awards in order to protect their members'. [13]

1.24 In more general terms, Ms George noted that unions in Australia have played an important role in protecting workers and in endeavouring to ensure they receive fair treatment. Proposals such as restricting the ability to obtain award coverage, the restriction of a unions' right of entry, the proposed retention of section 118A which allows employer influence in the choice of workers' representatives and the prohibition on agreements relating to union membership, all compromised this role. [14]

1.25 Referring to figures from a recent issue of the OECD publication, Employment Outlook, Ms George stated: 'There is no evidence that Australia is lagging behind the economic achievements of New Zealand, the US or the UK, all of which have moved to a more deregulated labour market'. [15]

1.26 Many unions told of the impact of the legislation in the context of their particular industries. They relied, in part, on the experience of a number of State jurisdictions which have introduced systems with similarities to the Bill ,to demonstrate the potentially deleterious impact of the proposals on workers working conditions and lives.

1.27 In addition to unions, 78 community organisations made submissions to the Committee criticising various aspects of the proposed legislation. Many women's groups, the major churches and welfare organisations, and many organisations representing migrants expressed considerable concern about the effect of the Bill. The concerns ranged over a large number of areas: from the day to day effect of individual contracts on a person with limited English or bargaining skills, to the systemic bias that the system created against the move to equal pay, on the extent to which the Bill infringes moral standards as was argued by the Catholic Commission for Justice, Development and Peace.

1.28 In addition, 14 law firms and other organisations of lawyers made submissions, all except one raising significant concerns with the Bill. Similarly, 12 academics made submissions to the Committee all of which, except one, expressed reservations regarding key areas of the Bill.

1.29 Finally, the Committee noted the number of submissions from individuals and the depth of concern expressed about the Bill. Of the 1431 submissions received, over 1000 were from individuals. All but a few of these individuals expressed opposition to the Bill and deep concerns about its consequences.

1.30 A substantial number of submissions given in public hearings were from individuals. Many spoke of exploitation under existing State industrial relations systems. While each of these systems differ, many of the aspects of those systems, especially those in Western Australia and Victoria with lesser protections, are also provided for in the Federal Bill. As a result, these experiences provided a real dimension to some of the changes proposed by the Government.

1.31 Other individuals drew upon their experiences in their particular industries to put the view that many of the proposals in the Bill will have a deleterious effect on them and their work. In this regard, individuals from a wide range of occupations and industries were heard; from coal miners and railway workers to teachers, nurses and public servants. Many not only dealt with the extent to which they believed that the Bill would affect their working conditions but also how it would adversely affect the service that their employers provided; the example of the use of right of entry to ensure and maintain proper health standards was an illustration of this point.

1.32 Labor members of the Committee felt that the number of submissions received reflected widespread public concern. Government members of the Committee hold the view that previous Senate Committee inquiries show there are generally fewer submissions from supporters of any proposed change than there are from opponents to the change. Bearing this in mind, Government members of the Committee are not surprised at the number of submissions received.

Industrial Relations in Australia

Historical Perspective

1.33 To fully examine the impact that the Workplace Relations and Other Legislation Amendment Bill 1996 will have on the Australian industrial relations system it is relevant to briefly consider how that system evolved. A more detailed history of industrial relations in Australia is given in Appendix IV.

1.34 Until recently, Australia's industrial relations system has been firmly based on industry awards, institutionalised arbitration and conciliation, and the regular and committed involvement of registered organisations (unions) in the settlement of claims for wages and conditions of employment. This system had its foundation in the period of great strikes during the 1890s which spread across the boundaries of the colonies and prompted a call for a Federal mechanism to settle 'interstate' disputes.

1.35 The first national industrial relations legislation was passed in 1904 (the Conciliation and Arbitration Act 1904). This Act established the Commonwealth Court of Conciliation and Arbitration (CCCA) with extensive powers to prevent and settle industrial disputes. Many of the central elements of the 1904 Act are still present in the current Industrial Relations Act 1988 including an independent tribunal with powers to conciliate and where necessary, to compulsorily arbitrate on industrial disputes, and the provision of a system of voluntary registration of employer and employee organisations.

1.36 With the advent of the Harvester Judgement in 1907 came centralised wage fixation and the adoption of the concept of the 'basic wage'. The Federal system exerted a substantial influence on the State systems, primarily through the operation of national wage cases, and by 1920 all States had similar systems of compulsory conciliation and arbitration. This approach has remained, until very recently, the predominant method by which the basic terms and conditions of employment for the vast majority of Australian employees are set.

1.37 Through the 1960s and 1970s the approach of the Commission towards wage setting and indexation changed, although during this time a centralised system remained. In 1981, the Commission formally abandoned its wage indexation principles, and unions and employers moved to negotiate wage increases outside the system. When, in mid-1982, this led to significant disparity in the level of wage increases across industries, and in the face of an economic downturn, the Commonwealth and States jointly agreed to a wage freeze which was implemented by the Commission.

1.38 In 1983, the ALP and the trade union movement negotiated a 'Prices and Incomes Accord' which sought the re-introduction of centralised wage fixation to enable all workers to maintain and improve living standards. The Commission agreed to adopt a centralised system based on prima facie full indexation. In this system, the bulk of wage increases were to come from national adjustments (CPI movements and national productivity). In return, unions had to give firm 'no-extra claims' commitments (both award and over-award).

1.39 At the same time the Government commissioned Professor Keith Hancock to examine the operation of the existing industrial relations system and to make recommendations as to its future direction. The consequent 'Report of the Committee of Review into Australian Industrial Relations Law and Systems' was presented to the Government in 1985. The report provided a comprehensive assessment of Australian industrial relations and made a large number of recommendations regarding changes to the system.

1.40 Many of the Hancock Committee's recommendations, including some of the more controversial ones such as the establishment of a Labour Court and new enforcement provisions, were adopted by the Industrial Relations Bill 1987 which was introduced into Parliament in May 1987. However, with the subsequent dissolution of Parliament, this Bill lapsed and a revised Bill (the Industrial Relations Bill 1988) was introduced after the Government was returned. The revised Bill became the Industrial Relations Act 1988 and did not differ much in substance from the previous Act.

Recent Developments

Restructuring and Efficiency Principle (National Wage Case, March 1987)

1.41 The Commission's 1986 National Wage Principles provided for the prima facie adjustment of wages based on movements in the consumer prices index (CPI). However, in light of the serious economic situation facing Australia, [16] this method of wage adjustment was considered unsuitable. Thus, in March 1987, the Australian Conciliation and Arbitration Commission (ACAC) handed down its National Wage Case decision which established a new principle of wage fixation - the restructuring and efficiency principle.

1.42 This involved the adoption of a two-tier wage fixing system, with a general increase to all wage and salary earners (the first tier) and the second providing for adjustments in wages and salaries on the basis of measures implemented to improve efficiency. Changes to work and management practices were identified as an integral part of such measures. Other initiatives that were suggested were: action to reduce demarcation barriers, advance multi-skilling, training and retraining, broad-banding and changes to work patterns.

1.43 A limit on wage increases was set, and any changes to the work taken into account in assessing the second tier wage increase could not be considered in any claim under the 'work value change' principle.

Structural Efficiency Principle (National Wage Case, August 1988)

1.44 In 1988 the ACAC reviewed the operation of the Restructuring and Efficiency Principle and concluded that while it had 'been reasonably successful in meeting the Commission's objectives…attention must now be directed toward the more fundamental, institutionalised elements that operate to reduce the potential for increased productivity and efficiency'. [17]

1.45The Commission's new 'Structural Efficiency Principle' provided that increases in wages and salaries would be justified if the union parties to awards formally agreed to cooperate positively in a fundamental review of the award, with a view to improving the efficiency of industry and providing workers with access to more varied, fulfilling and better paid jobs.

1.46The Commission then outlined issues for consideration:

• establishing skill-related career paths which would encourage ongoing training;
• eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform;
• creating appropriate relativities between different categories of workers within the award and at enterprise level;
• ensuring that working patterns and arrangements enhance flexibility and the efficiency of the industry;
• including properly fixed minimum rates for classifications in awards;
• updating and/or rationalising the list of respondents to awards; and
• addressing any cases where award provisions discriminate against sections of the workforce.

1.47 The Commission reviewed the operation of the Structural Efficiency Principle (SEP) in February 1989 and decided the principle should continue to operate.

Enterprise Bargaining Principle (National Wage Cases April & October 1991)

1.48 In the April 1991 Wage Case, the Commission elected to continue with a system similar to that already in place. This decision was made despite submissions from the major employer groups, the Government and the ACTU to adopt some form of enterprise bargaining as a method by which wage increases could be achieved. There was dissatisfaction with this decision among all parties, and a subsequent application for wage adjustments in relation to the Metal Industry Award triggered a review of the April 1991 principles.

1.49 In its October 1991 decision, the Commission adopted an 'Enterprise Bargaining Decision' to:

• place the primary responsibility for achieving successful enterprise bargaining results on the direct parties;
• require parties to abide by mutually agreed outcomes for a set period and to accept an on-going responsibility for reviewing the effectiveness of their agreement and for its renewal or replacement;
• enable the Commission to have a conciliation role in disputes over enterprise bargaining and a role in testing the substance of agreements reached; and
• give enterprise bargaining agreements the same legal status as awards.

1.50 The Commission would approve enterprise bargaining agreements made between parties to awards on the following conditions:

• the parties met the SEP requirements;
• the agreement was consistent with the continuing implementation of the SEP, and any wage increases provided for in the agreement were based on the actual implementation of efficiency measures to achieve real productivity gains;
• the parties demonstrated they had considered a broad agenda in developing the agreement;
• the agreement was negotiated by a single bargaining unit;
• where the agreement operated with an award, it specified the wage increase for each classification and all agreed efficiency measures;
• the agreement had a no extra claims clause (other than National Wage cases); and
• the agreement did not result in decreased ordinary time wages or from accepted Commission standards for hours, annual leave and long service leave.

1.51 The ability to bargain was augmented by new certified agreement provisions which contained their own criteria for approval by the Commission which excluded the wage case principles.

Safety Net Adjustments

1.52 Following the repeal of sections 112 and 115, and the introduction of Division 3A, the Commission conducted a review of its wage fixing principles (National Wage Case, October 1993). In this decision, the Commission indicated its support for a safety net of minimum rates awards as 'an essential element in moving towards a decentralised system'. The Enterprise Bargaining Principle was retained. However, in light of the new agreement provisions, it was renamed the Enterprise Awards Principle.

1.53 Qualified support for a flat increase of $8 for minimum rates awards (from 1 December 1993) was given, subject to further submissions from the parties. In the same week that this decision was handed down, the Government introduced its Industrial Relations Reform Act 1993 (the Reform Act).

The Industrial Relations Reform Act 1993

1.54 The Reform Act made significant amendments to the Industrial Relations Act in 5 principal areas:

• the explicit identification of awards as providing a safety net of minimum wages and conditions to underpin direct bargaining;
• new arrangements for direct bargaining at the workplace level, including a new stream of agreements (Enterprise Flexibility Agreements) to be negotiated between employers and their employees and establishment of a sanction free bargaining period during the negotiation of certified agreements;
• a revised regime for the regulation of industrial action, including amendments to the secondary boycott provisions of the Trade Practices Act 1974;
• the provision of certain entitlements in line with international obligations;
• the establishment of a separate Industrial Relations Court; and
• promoting the formation of industry consultative councils, and restructuring of the National Labour Consultative Council.

1.55 In light of the legislative changes, the Commission again reviewed its wage fixing principles (Review of the Wage Fixing Principles, August 1994). The review took into account the changes made by the Reform Act and sought to ensure the wages system operated in a manner consistent with the new framework established by the Act.

1.56 Given the emphasis on the use of enterprise bargaining as the method by which wage increases were to be obtained, the Commission determined that it would not arbitrate in favour of a claim for increases above the safety net without establishing a special case. The exact content of the safety net was not decided in this Review, but would be determined in further proceedings. In the interim, and subject to the Principles, the existing award terms and conditions constituted the safety net.

1.57 The issue of the content of the safety net, and any increase to it, was considered in the Safety Net Adjustments and Review Decision, September 1994. In this decision, the Commission rejected employer submissions which argued that the safety net of awards should be limited to a set of core conditions. Such an approach, it held, 'would be inconsistent with the Commission's statutory obligation to ensure that employees are protected by awards that set fair and enforceable minimum wages and conditions of employment that are maintained at a relevant level'. [18]

1.58 The Commission awarded two further $8 safety net increases (in addition to that awarded in the October 1993 Review) and stated that these increases represented an appropriate balance between maintaining an award system that provides for secure, relevant, and consistent wages while maintaining an incentive to bargain. [19] The decision also assisted in ensuring modern and flexible award arrangements by tying safety net adjustments to award revisions which included facilitative provisions and majority clauses.

Award Simplification - section 150A Review

1.59 In the Safety Net Adjustment Review Decision, September 1994 (discussed above), the Commission also set out its approach to the requirements of section 150A which requires the Commission to review each award in force every three years. If, after reviewing an award, the Commission considers it deficient in any of the following respects, the Commission must take the prescribed steps to remedy the deficiencies:

• the terms are no longer appropriate given the requirement that the award system provide secure, relevant and consistent wages and conditions;
• the award contains discriminatory provisions (for reasons of race, colour, sex, age, marital status, etc);
• the award contains obsolete provisions or provisions that need updating;
• the award is not expressed in plain English;
• the award is not structured in a way that is easy to understand; or
• the award prescribes matters in unnecessary detail.

1.60 The Commission determined that the best method for developing the principles by which awards could be reviewed would be to conduct a pilot award review program. Fourteen awards were selected to be a part of the review program. The review was to examine the following issues:

• the removal of discriminatory provisions;
• the removal of obsolete provision or provisions which need updating;
• ensuring that the award is expressed in plain English;
• restructuring the award so that it is as easy to understand as the subject matter allows;
• ensuring that the award does not prescribe matters in unnecessary detail;
• inserting enterprise flexibility clauses; and
• inserting majority clauses.

1.61 The Commission produced a Resources Book 'Making Federal Awards Simpler' in October 1995 to provide award parties with information on review techniques (drawing on the experience of the pilot reviews). The Resources Book gives examples to assist the parties in identifying the clauses of their awards which would benefit from review and suggesting how such clauses might be amended.

1.62 The Commonwealth (as employer) participated in the section 150A review program with the review of two clerical awards and the General Conditions of Service Award. The Department of Industrial Relations had already identified similar concerns about the structure and content of Australian Public Service (APS) awards, as those contained in section 150A (such as obsolete provisions and the need for awards to be expressed in plain English).

1.63 As a result of the section 150A review process and the Department of Industrial Relation's own efforts, over 117 separate APS awards were reduced to just nine. This demonstrates what can be achieved to make awards simpler and more relevant where unions and employers have a commitment to work together. In evidence, Roger Boland, Industrial Director of the Metal Trades Industry Association, agreed that a degree of success had been achieved in restructuring awards under section 150A. [20]

The Federal System and its Relationship to State Industrial Relations Systems

1.64 Australia has seven different industrial relations systems, the Federal system and each State's system. [21] All States, other than Victoria, still have (to varying degrees) systems of conciliation and arbitration whereby employees' wages and conditions can be determined by awards. Appendix V provides details of the differences between the States in terms of the provisions for the making of awards, regulation of bargaining, minimum conditions, and unfair dismissal procedures.

1.65 Federal awards override inconsistent State awards and agreements. Workers whose employment is covered by State awards or agreements have whatever protection is afforded by that particular State system. Non-award workers (which is now all non-Federal award workers in Victoria) have whatever protections are afforded by 'minimum entitlements' legislation under State laws.

1.66 The extent to which an award may prevail over State arrangements depends on the readiness of the Commission to make an award. Section 111(1)(g) and section 111(1A) are relevant to this decision.

1.67 Where the State system does not provide for compulsory arbitration, the Commission's discretion to refrain from hearing a matter in the public interest is not available. This is only relevant to Victoria at present (section 111(1A)).

1.68 In all other circumstances, the party applying to the Commission to have it cease or refrain from dealing with a dispute in the public interest bears the onus of proof. In Re QEC; Ex parte ETU, the High Court held that Parliament intended the Commission to have a wide latitude in making decisions of fact and law under the Act, and that determining the public interest may require a balancing of different interests. [22]

The Workplace Relations Bill 1996

Documentation

1.69 The main supporting documentation for the Workplace Relations and Other Legislation Amendment Bill 1996 (House of Representatives Third Reading Print) is the Explanatory Memorandum, which has been circulated by authority of the Minister for Industrial Relations and which takes into account the amendments made by the House of Representatives. This document is available from Government publications outlets. In addition, the Department of Industrial Relations has produced a plain English document entitled 'Reform of Workplace Relations - Legislation Guide', published in May 1996. However, for the convenience of readers, the following section of this report gives an overview of the major changes proposed.

Title and Objects

1.70 The Bill seeks to rename the Industrial Relations Act 1988, the Workplace Relations Act 1996. References to the Industrial Relations Act in other legislation will be replaced with a reference to the Workplace Relations Act. Schedule 1 of the Bill will replace the principal 'Object' section of the Act with a new section. The Commission, in performing its functions, must take into account the public interest and in doing so, must have regard to the principal Object of the Act (section 90).

The Role of the Australian Industrial Relations Commission

Preventing and Settling Industrial Disputes

1.71 The Australian Industrial Relations Commission (AIRC, or the Commission) has a broad power to prevent and settle industrial disputes by conciliation, as far as possible, and arbitration, where necessary. Industrial disputes within the Commission's jurisdiction must be notified, and the Commission must then make a finding of a dispute and identify the parties to and the matters in dispute. It may then proceed to exercise its powers of conciliation and, if that fails, arbitration to settle the dispute.

1.72 Where faced with an industrial dispute, the Commission can:

• by consent or by arbitration, make an award;
• certify an agreement or approve the implementation of an enterprise flexibility agreement; or
• in certain circumstances, dismiss the matter.

1.73 In the Workplace Relations Bill, the Commission's arbitral powers are to be exercised 'as a last resort' rather than 'where necessary', and are confined to the limits specified in the Act (see Paragraph 4.128ff).

Awards - Access to the Safety Net

1.74 Under the Industrial Relations Act, access to the Federal award safety net is limited to those who are covered by Federal awards. While only members of a respondent union are bound by the award, non-unionists will usually still have their conditions of employment regulated by the award because their employer is bound.

1.75 The Commission does not have the power to make 'common rule' awards which apply generally across an industry or occupation to all employees regardless of whether their individual employer is named in the award. [23] There is an exception in the Territories because of the reliance on the Territories power of the Constitution.

1.76 Workers whose employment is covered by State awards or agreements have whatever protection is afforded by that particular State system. Federal awards override inconsistent State awards and agreements. Some non-award workers may have protections afforded by 'minimum entitlements' legislation under State laws.

1.77 A union may seek to gain award coverage for non-award workers in a particular industry providing it can demonstrate the existence of an interstate industrial dispute. This may be by seeking a new award to cover those workers or by roping the employer into an existing award.

1.78 The Commission has the power to dismiss or refrain from hearing or determining an industrial dispute on a number of grounds including that:

• the dispute is trivial;
• the dispute or part of it has been, is being or would properly be dealt with by a State arbitrator; or
• it is not desirable or necessary in the public interest for there to be further proceedings in connection with the dispute.

1.79 Section 128 of the Industrial Relations Act permits the Commission to make an order restraining a State industrial authority from dealing with an industrial dispute (within the jurisdiction of the Commission); a matter provided for in an award or order of the Commission; or a matter that is the subject of proceedings before the Commission.

1.80 The Workplace Relations Bill extends the range of reasons for which the Commission can refrain from hearing a dispute, including where it appears that the dispute has been dealt with, is being dealt with, or is proper to be dealt with by a State industrial authority (as opposed to simply a State arbitrator). In addition, the Commission will be under no special obligation to consider making an interim award to cover employees who no longer have access to a system of compulsory arbitration.

1.81 Proposed section 111AAA of the Workplace Relations Bill will give primacy to the continuation of State award regulation of employment. This section will require the Commission to cease dealing with a dispute if satisfied that a State award governs the wages and conditions of the relevant employees, unless the Commission is satisfied that so ceasing would not be in the public interest. This reverses the existing burden of proof.

1.82 Amendments will prevent an inconsistent Federal award from regulating an employee's wages and conditions if those wages and conditions are already regulated by a State employment agreement. A new provision will also allow any subsequent State employment agreement to override an existing Federal award.

1.83 The Commission will be prevented from restraining a State industrial authority where the State industrial authority is dealing with the dispute or matter by facilitating the making of a State employment agreement or approving such an agreement. This is consistent with amendments which permits State employment agreements to override Federal awards.

Awards - the Safety Net

1.84 Under the Industrial Relations Act, awards are intended to provide a safety net of wages and conditions designed to protect employees and provide the basis for enterprise bargaining:

• employees are protected by awards that set fair and enforceable minimum wages and conditions of employment that are maintained at a relevant level; and
• awards (other than paid rates awards) act as a safety net of minimum wages and conditions of employment underpinning direct bargaining.

1.85 The Commission must ensure that the system of awards provides for secure, relevant and consistent wages and conditions of employment. There is no limitation on the issues which can be addressed by awards, provided that they are matters which are capable of being the subject of an industrial dispute. Section 150A requires the Commission to review each award in force every three years to ensure that the awards are not deficient in a number of specific ways.

1.86 The Workplace Relations Bill changes the role of awards. They are confined in their scope to one of providing a safety net of fair minimum wages and conditions of employment. The specific requirement that awards be 'maintained at a relevant level' has been omitted. In addition, the requirement for the Commission to ensure that awards provide 'secure, relevant and consistent wages and conditions' has been removed (see existing section 90AA).

1.87 Instead, the Commission is required to ensure that the safety net is established and maintained having regard to:

• the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community;
• economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment;
• when adjusting the safety net, the needs of the low paid; and
• the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which work is to be performed.

1.88 Most importantly, the Bill limits the power of the Commission to make an award in settlement of an industrial dispute. Proposed section 89A provides that an industrial dispute (and therefore the award made in its settlement) may include only 18 allowable matters. Eighteen months after commencement (or possibly earlier on application), each award ceases to have effect to the extent that it provides for matters outside the 18 allowable matters.

1.89 The Commission's award making powers will be limited to the making of minimum rates awards (that is, the Commission will be unable to set or prescribe the actual entitlements of an employee.) Provisions for Paid Rates Awards are repealed, and transitional provisions provide for the conversion of paid rates awards to minimum rates. The Commission will be able to vary such awards so that the rates of pay they contain are expressed as minima. Where the Commission varies a paid rates award it may structure the award so that the overall entitlements to pay under the award are not reduced.

1.90 Awards may contain provisions on the type of employment, including part-time employment. However, the Commission's powers will be limited when dealing with types of employment. In particular, the Commission's power does not include the power to set quotas on different types of employment or to set the maximum or minimum hours of work for regular part-time employees. Although this section prevents the Commission from limiting the number of hours offered to regular part-time workers, the precise scope of the Commission's powers is unclear.

Enterprise Bargaining

1.91 The Industrial Relations Act provides for two formal types of enterprise level agreements - certified agreements and enterprise flexibility agreements (EFAs). To access agreements, employees' terms and conditions of employment must first be covered by an award, for certified agreements either a Federal or State award and for EFAs, a Federal award.

Certified Agreements

1.92 Certified agreements, as provided for in the Act, are made between an employer and relevant unions to tailor working arrangements to specifically meet the needs of the employer and employees covered. Each agreement must be scrutinised by the Commission to certify that it:

• does not disadvantage the employees covered by it (there is a statutory test of 'disadvantage' [24]);
• contains dispute resolution procedures and, unless the parties specifically agree otherwise, a consultation process for changes to work organisation; and
• has been arrived at after the relevant unions have consulted with the employees affected by the agreement and informed members to be covered by the agreement as to its terms and conditions and the meaning of the agreement.

1.93 In determining whether there is a disadvantage, the Commission will consider if there has been a reduction in any entitlement or protection which the employees covered by the agreement enjoy under an award or any other relevant law of the Commonwealth and if there is such a reduction, whether it is contrary to the public interest.

1.94 Multi-employer certified agreements are available under the Act. However, unlike single-business agreements, the Commission retains the discretion to refuse to certify such an agreement if it thinks that certifying the agreement would be contrary to the public interest.

1.95 The Workplace Relations Bill makes some significant changes to Certified Agreements. There is to be more than one stream of Certified Agreement (agreements with constitutional corporations or the Commonwealth, and agreements about industrial disputes and industrial situations). Certified agreements are able to be made between an employer and a union or an employer and a group of employees.

1.96 To make such an agreement with unions, every union who wishes to be a party to the agreement must have at least one member at the enterprise. To submit the agreement for certification, it must have been approved by a valid majority of the employees.

1.97 Agreements with employees may be made between an employer and a valid majority of employees. The employer must take reasonable steps to ensure that every employee is given five working days notice of an intention to make the agreement. The employees must have or have ready access to a copy of the proposed agreement.

Certification of Agreements

1.98 The 'no disadvantage test' is to be repealed. Instead, the agreement must not provide less than the minimum conditions. The Commission may certify an agreement which does not satisfy these conditions if it is satisfied that the agreement is part of a reasonable strategy to address a short-term business crisis, and that certifying the agreement is not against the public interest. Greater restrictions are placed on the certification of multi-employer agreements than currently apply.

Termination of Agreements

1.106 Under the existing Act, Certified Agreements and EFAs remain in force after their period of operation expires until either a new agreement is certified or the Commission varies the agreement. The Bill proposes, both in relation to CAs and Australian Workplace Agreements (AWAs) that an agreement continues after the nominal expiry date until either a new agreement is reached or one month after the giving of notice by either party to the agreement. In the latter instance following the termination, the employee's terms and conditions of employment would revert to those of their previous award. If the employee was not covered by an award, it is not clear what would happen to their terms and conditions of employment.

Enterprise Flexibility Agreements

1.99 Enterprise Flexibility Agreements may be made under the current Act directly between an employer and his or her employees. The Workplace Relations Bill repeals provisions for EFAs and provides for transitional arrangements.

1.100 There are two forms of non-union enterprise agreements available under the Bill, non-union certified agreements and AWAs. Non-union certified agreements are discussed in the preceding section. AWAs are discussed below.

Australian Workplace Agreements

1.101 AWAs are individual agreements between an employer and an employee or a group of employees, though they are signed individually by each employee. There are certain constitutional limitations on access to AWAs. The provisions rely on the corporations power, and the trade and commerce power. In addition, the Commonwealth may make AWAs with its own employees. Either party may appoint a bargaining agent to represent them in negotiations. A union may be a bargaining agent.

1.102 The Bill specifies certain minimum conditions which must be satisfied by an AWA. Each of the conditions included in the AWA must not be less favourable that the relevant minimum condition (the conditions are the same as those for certified agreements). In addition, every AWA must contain a disputes resolution procedure. There is, however, no vetting process.

1.103 An AWA has no effect until it is filed with the Employment Advocate (EA) and a filing receipt issued. The EA will only issue a receipt if the AWA is signed by both parties and it is accompanied by a declaration that the AWA complies with the statutory requirements. The EA is prohibited from disclosing information contained in an AWA. This does not prevent other persons (including the parties) or organisations from disclosing information about AWAs. There may be other limitations however, such as a contractual requirement of confidentiality in the AWA itself, which could prevent a person from disclosing details of the AWA.

1.104 An AWA has a maximum term of 3 years. However, even after a 3 year period has passed, the AWA will continue to govern the terms of conditions of employment until either the AWA is terminated or a new AWA is made.

1.105 During its period of operation, an AWA overrides any Federal award or any State award or agreement that would otherwise apply. A certified agreement prevails over an AWA (to the extent of any inconsistency) if the CA is already in operation and has not expired and it does not expressly allow a subsequent AWA to operate.

Enterprise Flexibility Clauses

1.106 An award must establish a process for agreements to be negotiated, at the enterprise or workplace level about how the award should be varied so as to make the enterprise or workplace operate more efficiently. Such provisions are referred to as 'Enterprise Flexibility Clauses'.

1.107 Enterprise flexibility clauses are retained by the Bill. However, unions which are party to the award are no longer entitled to be heard on the application to vary the award before the Commission unless they have at least one member whose employment would be regulated by the variation.

Protections for Particular Classes of Employees

1.108 Currently, the Commission must refuse to certify an agreement if it thinks that a provision of the agreement discriminates against an employee because of, or for reasons including, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibility, pregnancy, political opinion, national extraction or social origin. In addition, the Commission must identify any employee who is covered by the agreement but whose interests may not have been sufficiently taken into account during the negotiations.

1.109 In the Workplace Relations Bill, the Commission must refuse to certify an agreement if it thinks that a provision of the agreement discriminates against an employee. However, a provision of an agreement does not discriminate against an employee merely because it provides for a junior rate of pay (that is, junior rates of pay will be continued).

1.110 In addition, there is no equivalent to the existing requirement that the Commission consider whether there are any groups of employees covered by the agreement whose interests may not have been adequately considered (eg. women or young people).

1.111 Employees who will be covered by the agreement must have been given, or have access to, a copy of the agreement at least five days before they are asked to approve it. The Commission must also be satisfied that a majority of the employees have 'genuinely approved' the agreement. There is no indication in the Bill as to what constitutes 'genuine approval' and it will therefore be up to the Commission to develop principles on this issue.

Independent Contractors

1.112 Independent contractors are, by definition, not employees and are therefore not capable of being covered by an award, a certified agreement or an enterprise flexibility agreement. However, an independent contractor may apply to the Industrial Relations Court for a review of a contract for the performance of work on the grounds that the contract is harsh or unfair. The Industrial Relations Court may order that the contract be varied or cancelled. The Workplace Relations Bill will repeal these provisions.

Unfair Dismissal

1.113 As provided by the Act, there are certain grounds on which an employer must not terminate an employee's employment and there are minimum periods of notice for termination. Employers must not dismiss an employee for a reason not connected with either the performance of the employee or organisational requirements and that reason must not be harsh, unjust or unreasonable. If an employee's employment is to be terminated for reasons associated with the performance of the employee, he or she must have the opportunity to respond to an allegation. The current Act gives universal protection against unfair dismissal to all employees in Australia regardless of award coverage or the type of award (provided they do not have an adequate alternative remedy available).

1.114 The Industrial Relations Act attempted to preserve the operation of State unfair dismissal systems where they provided an 'adequate alternative remedy'. However, the Industrial Relations Court's fairly strict interpretation of the alternative remedy test has led to the situation where no State system (other than Queensland's) has been held to provide an adequate alternative remedy.

1.115 The Workplace Relations Bill provides a revised regime regarding termination of employment. The Bill deals differently with terminations which are 'harsh, unjust or unreasonable' and unlawful terminations. A new jurisdiction for the Commission will be created enabling it to consider whether a termination was harsh, unjust or unreasonable, and to create new entitlements (eg. an order of reinstatement) which will be enforceable in the courts.

1.116 The Bill proposes to limit access (for harsh, unjust or unreasonable dismissal claims) to the 'traditional Federal area of coverage' (that is, employees covered by Federal awards or agreement, Federal Government employees and employees in the Territories). The Bill seeks to do this, in part, by allowing the states to confer certain powers on the Commission and the Court in relation to termination of employment to ensure that Federal award employees have access to remedies for harsh, unjust or unreasonable termination. All other employees will be reliant on the remedies provided by the states. A $50 filing fee will is proposed.

Registered Organisations

Registered Organisations and Bargaining

Representation Rights

1.117 Under the current Act, only registered organisation (unions) are entitled to be a party to a certified agreement with either an employer or an employer organisation.

1.118 Under the Bill, unions could still be parties to awards, although the matters which awards can deal with will be limited. A union will only be entitled to make a certified agreement if it has a member at the enterprise concerned and the union becomes bound by the agreement (as a party).

1.119 In addition, in relation to non-union certified agreements, the union may also be bound at the request of an employee who would be covered by the agreement provided that before the agreement was certified, the union notified the Commission and the employer that it wishes to be bound by the agreement and the Commission is satisfied that the organisation has at least one member at the enterprise who requested the union become bound. In non-union certified agreements, union members will be entitled to have their interests represented by their union if they so wish.

Industrial Action

Certified Agreements

1.120 As discussed above, unions (and employers) seeking to make a certified agreement may take protected industrial action in support of their claims. Such industrial action is not subject to action under State law. In addition, bans clauses do not apply to such action. Certain conditions apply to engaging in protected action.

1.121 A similar regime of protected action applies in relation to certified agreement under the Bill. However, a new section provides that industrial action which amounts to a secondary boycott is not protected action. Whereas the Act required 72 hours' written notice, the Bill will require three working days' notice thereby excluding weekends and public holidays from the notice period.

Secondary Boycotts

1.122 The 1993 Reform Act removed sections 45D and 45E from the Trade Practices Act 1974 (to the extent that they related to industrial relations matters) and transferred them to the Industrial Relations Act. The operation of section 45D was confined to secondary boycotts. Primary boycotts (strikes by employees against their own employer) were no longer directly prohibited.

1.123 The Workplace Relations Bill substantially returns the law to that prevailing prior to the commencement of the Reform Act although increased penalties will apply for conduct in contravention of the provisions. The Commission could still attempt to conciliate boycott disputes. However, a party's ability to commence judicial proceedings for damages or injunctions is not restricted.

Representative Role of Registered Organisations

Conveniently Belong

1.124 There are certain criteria which must be met before an organisation may be registered under the Act. One of these conditions is that there is no other organisations to which the members of the organisations could 'conveniently belong'. This criterion may prevent the registration of organisations which compete for the same coverage as unions that are already registered.

1.125 The provision for 'conveniently belong' will be repealed by the Workplace Relations Bill thus permitting the registration of several unions with the same or similar eligibility rules.

Demarcation Disputes

1.126 A 'demarcation dispute' is defined in the Industrial Relations Act and the Commission has a number of powers that it may exercise in relation to a demarcation dispute.

1.127 The Workplace Relations Bill repeals the requirement on the Commission to consider consulting peak councils, and limits the Commission's power to make orders concerning organisational coverage to orders made in settlement of a demarcation dispute. In addition, the Commission must not make an order regarding organisational coverage unless satisfied that the conduct of one of the unions is preventing the performance of work or is harming the business of an employer, or such consequences having ceased, are likely to recur or are imminent.

Representative Organisations and Individual Choice

Compulsory Unionism

1.128 This term is sometimes referred to as 'closed shop'. It may take either pre- or post-entry forms. Under the former, only union members are considered for employment. Under the latter, employees are required to join a specific union on or soon after being employed.

1.129 There is no formal recognition of compulsory unionism under the Industrial Relations Act. The High Court has indicated that the section dealing with preference does not authorise the granting of compulsory unionism. [25] While such a requirement is not capable of being enforced as an award condition, it does exist in certain Federal industries as an informal arrangement between employees and their unions and employers.

1.130 Schedule 16 (Freedom of Association) of the Workplace Relations Bill has as one of its objects to ensure that employers, employees and independent contractors are free to join industrial associations of their choice or not to join industrial associations. The use of this term (rather than 'registered organisation') means that unions outside the Federal system, such as State registered unions or non-registered associations will be subject to these provisions. The provisions seek to give employers, employees and independent contractors protection against any form of discrimination based on their employment status, membership or non-membership of industrial associations, or conduct in relation to the taking of industrial action.

Preference

1.131 Section 122 of the Industrial Relations Act gives the Commission the power to make an award granting preference to unionists (for example, through engagement in employment, promotion, regrading, transfer, retention in employment, taking of annual leave, overtime, and vocational training).

1.132 The Workplace Relations Bill repeals section 122 of the Act thereby removing the power of the Commission to make awards or orders granting preference to union members. In addition, a new section is to be included which provides that the Commission does not have power to include terms in an award that require or permit, or have the effect of requiring or permitting, any conduct which would contravene Part XA (Freedom of Association). In addition, existing preference clauses are to be rendered unenforceable.

Freedom of Association

1.133 There is currently no single part of the Act which is devoted to 'Freedom of Association.' Rather there are a number of provisions (developed in a piecemeal fashion over a number of years) which could be said to provide protection to the concept of freedom of association. It should be noted, however, that the meaning of this term is not necessarily agreed. In the Workplace Relations Bill amendments contained in Schedule 16 (Freedom of Association) are stated to give effect to the principles of "freedom of association" (which is described as the choice to be in a union, the choice of which union and the choice not to be in a union), and equal treatment before the law.

Internal Structure of Trade Unions

Enterprise Unions

1.134 Australian unions have historically been organised along occupational lines. Enterprise unions, where membership is based on employment for a particular employer, are not widespread. This has meant that employers (especially those of a larger size) may have to deal with a large number of unions. In the 1980s, the ACTU committed itself to restructuring unions into larger, broad based units, initially setting a target of 20 industry-oriented groupings.

1.135 If a union currently has coverage of work that is performed at an enterprise, it is unlikely that a new separate enterprise union could obtain registration to represent the industrial interests of workers at that enterprise because of the requirement that there be no existing organisation to which the members could conveniently belong.

1.136 With the repeal of the 'conveniently belong' rule, the Workplace Relations Bill will remove one of the major hurdles to the registration of new enterprise unions. In addition, the requirement that the members of an organisation be capable of being engaged in an industrial dispute (ie, an interstate industrial dispute) before an organisation is capable of being registered is to be repealed. This will permit the registration of smaller, enterprise based unions.

Autonomous Enterprise Branches

1.137 Section 195 of the Act sets out what the rules of a union must provide. There is no particular reason why a union could not currently organise its branches along enterprise lines, and give those branches a significant degree of autonomy. Indeed, section 271 of the Act provides that where an organisation is divided into branches, the accounts and audit division of the Act applies in relation to each of the branches as if the branch were itself an organisation. That is, it treats a branch as if it were an 'autonomous branch'.

1.138 The Workplace Relations Bill will require the rules of unions to provide for the following:

• the establishment of enterprise branches of the organisation;
• the autonomy of each enterprise branch of the organisation in relation to such matters as are prescribed;
• the way in which members of an enterprise branch may adopt and vary the rules of the branch;
• the election of the holder of each office in an enterprise branch by the members;
• a fund for each enterprise branch; and
• the dissolution of an enterprise branch of the organisation by the members of the branch.

1.139 If a union does not alter its rules in accordance with the above, the Industrial Registrar has the power to amend the rules to bring them into conformity. While the explanatory memorandum states that the matters to be prescribed 'will concern matters which affect only the members of the branch', it is not clear precisely what autonomy means. Will 'autonomous branches' each have a separate legal personality and be able to enter into contracts, own property, sue and be sued separately from the organisation? If not, will the organisation remain liable for the debts and other liabilities of an autonomous branch over which it has no control?

Disamalgamation

1.140 There are currently no provisions of the Act to facilitate disamalgamation of previously amalgamated unions. This is primarily because the principal object of the Act (prevention and settlement of industrial dispute) is to be achieved, inter alia, by encouraging and facilitating the development of organisations, particularly by reducing the number of organisations in an industry or enterprise. In addition, it is an object of Part IX of the Act (Registered Organisations) to encourage and facilitate the amalgamation of organisations.

1.141 The Workplace Relations Bill proposes to insert a new division to allow for the disamalgamation of an amalgamated union where a part of the amalgamated organisation wishes to withdraw. The object of the new Division is stated to be the reconstitution and re-registration of certain amalgamated unions in a manner that is fair to members of the organisation concerned and the creditors of the organisation.

Accountability Arrangements

1.142 The Act imposes detailed obligations on a registered organisation regarding financial accountability. Only slight amendments are made by the Workplace Relations Bill. A new section is to be introduced to give the Industrial Registrar a more general power of investigation into organisations' finances. In addition, the income level below which organisations may seek reduced accounting and audit requirements has been increased from $10,000 to $20,000.

The Employment Advocate

1.143 The Employment Advocate is a completely new concept. A statutory office holder, the Employment Advocate will have a range of functions, primarily in relation to AWAs:

• provide assistance and advice to employees and employers (and especially employers in small business) about their rights and obligations under the Act;
• provide advice to employers and employees, in connection with AWAs, about the relevant award and statutory entitlements and about the relevant provisions of the Act;
• perform the allocated functions in relation to AWAs (that is, receiving AWAs and ancillary documents, issuing filing receipts; issuing verified copies of AWAs);
• investigate alleged breaches of AWAs, contraventions of Part VID (such as duress);
• investigate alleged breaches of Part XA (Freedom of Association);
• provide free legal representation to a party, if it is considered this would promote the enforcement of provisions.

1.144 Staff of the Employment Advocate are to be provided from the Department of Industrial Relations. The Explanatory Memorandum to the Workplace Relations Bill indicates that the Employment Advocate will be funded at $12 million per year.

Compliance

Awards Management Branch (AMB)

1.145 The Awards Management Branch comprises inspectors appointed under section 84 of the Act. The powers of inspectors are set out in section 86 of the Act. The Workplace Relations Bill does not change the powers of inspectors.

The Employment Advocate

1.146 The authorised officers of the Employment Advocate have powers that are almost identical to those currently conferred on Inspectors. The authorised officers of the Employment Advocate may exercise its powers for the following purposes of ascertaining whether:

• the terms of an AWA have been complied with or are being complied with;
• the provisions of Part VID or Part XA have been complied with or are being complied with; and
• other provisions of the Act that are prescribed by the regulations have been complied with or are being complied with.

Registered Organisations - Right of Entry

1.147 Section 286 of the Act provides that an authorised union official may enter a workplace to ensure the observance of an award to which the union is a party (including agreements) or orders of the Commission. This right may be exercised at any time during working hours but is subject to any conditions contained in the award or order. In addition, awards will usually contain right of entry provisions allowing for the recruitment of new members and discussion with members.

1.148 In the Workplace Relations Bill, union right of entry is not one of the 18 allowable award matters and therefore the Commission will be unable to make an award giving union's right of entry under any circumstances. In addition, current award provisions giving union right of entry will be unenforceable.

1.149 New provisions for right of entry are that an authorised union official may enter premises in connection with compliance with an award, order or certified agreement:

• only if there is a written invitation by an employee who is a member of the union;
• the invitation specifies the premises (which must either be the premises at which the employee works or at which the employee has reasonable grounds to believe there is relevant information regarding compliance);
• the invitation is to conduct inspection and interviews for compliance purposes; and
• the union gives the employer at least 24 hours notice before entry onto the premises.

1.150 If these conditions are satisfied, the official may enter the premises in the 28 day period after the invitation was issued during working hours and inspect or view anything on the premises and interview any employee who is a member or is eligible to be one.

Training and Skill Formation Arrangements

1.151 Apprenticeships are substantially regulated by State laws. While it is possible for Federal awards to override such laws, it is usual for the majority of matters to be left to State regulation. However, section 96 of the Act requires the Commission, in determining an industrial dispute in which the pay or conditions of apprentices are in question, to take into account any scheme of apprenticeship provided by State laws.

1.152 Similarly, the Industrial Relations Act does not specifically deal with trainees. However, individual awards may make provision for traineeships. In the majority of traineeship arrangements, the wages are indirectly age based (increasing in proportion with the time away from school). section 150A which requires regular reviews of awards to, inter alia, remove discrimination based on age, does not require the Commission to address the question of 'junior rates' until 22 June 1997. This delay was to permit an orderly transition from age-based junior rates to an alternative wage structure based on skill and competency.

1.153 In the Workplace Relations Bill, the Commission, in performing its award making function must have regard to 'the need to support training arrangements through appropriate trainee wage provisions'. [26] Rates of pay generally, rates of pay for juniors, trainees or apprentices and rates of pay for employees under the supported wages system are included under the 18 allowable award matters.

The Relationship Between Federal and State Systems

1.154 The effect of the Workplace Relations Bill is reintroduce the Commission's discretion to refrain from hearing disputes in the public interest even where the employees involved do not have access to a system of compulsory arbitration. The Bill reverses the onus of proof so that where a union seeks to move from a State to a Federal award, the Commission must not make a Federal award unless it is satisfied that not doing so would not in the public interest. Third, the Bill requires the Commission to consider the views of the employers and employees and the history of the employment regulation in determining the public interest.

Footnotes

[1] Note: throughout the text of this report any reference to 'awards' refers to Federal awards, unless otherwise specified as 'State awards'.

[2] Reith P, Shadow Minister for Industrial Relations, Better Pay for Better Work - the Federal Coalition's Industrial Relations Policy, 18 February 1996, p. 1.

[3] Australian Democrats, Getting the Balance Right - Industrial Relations Statement, February 1996, p. 3.

[4] For a full listing of the groups consulted see Submission No. 1016, Department of Industrial Relations, Attachment 1, pp. 18-22.

[5] Submission No. 905, p. 3, ACCI.

[6] Submission No. 212, p. 3, Australian Business Council.

[7] Submission No. 1025, p. 2 National Farmers' Federation.

[8] Submission No. 905, p. 3, ACCI.

[9] Evidence, p. E 779.

[10] Evidence, p. E 788.

[11] Evidence, p. E 2062, Ms Jennie George.

[12] ibid

[13] 'Howard's widening wage gap', Australian Financial Review, 1 August 1996.

[14] ibid.

[15] ibid.

[16] Principally identified as a substantial depreciation of the exchange rate, highly adverse balance of payments, sharp deterioration of terms of trade and enormous rise in the external debt.

[17] (1988) 25 IR 170 at 173.

[18] See subsection 88A(a).

[19] 1994 AILR 335.

[20] Evidence, pp. E 796-797.

[21] The Northern Territory and the ACT come under the Federal system.

[22] (1987) 72 ALR 1 at 3.

[23] See Australian Boot Trade Employees' Federation v. Whybrow & Co. (1910) 11 CLR 311.

[24] Usually referred to as the 'no disadvantage test'.

[25] See R v. Holmes; Ex parte Altona Petrochemical Co. Ltd (1972) 126 CLR 529.

[26] Bill, Schedule 5, section 88B(2)(e).