CHAPTER TWO
Objects of the Bill
2.1 Schedule 1 of the Workplace Relations and Other Legislation Amendment
Bill 1996 changes section 3, the 'Objects' of the Industrial Relations
Act 1988.
2.2 The Government states that the new principal object focuses the system
on: 'giving primary responsibility for industrial relations and agreement
making to employers and employees at the enterprise and workplace levels,
with the role of the awards system confined to providing a safety net
of minimum wages and conditions; ensuring freedom of association; the
avoidance of discrimination; and assisting employees to balance their
work and family responsibilities effectively'. [1]
2.3 The Australian Industrial Relations Commission, in performing its
functions, must take into account the public interest and, in doing
so, must have regard to the Objects of the Act (section 90). As described
by the Department of Industrial Relations in evidence to the Committee:
The objects of any piece of Federal legislation are very important
for those people who have to exercise powers and functions under the
legislation because they give guidance to the nature, purpose and
scope of the legislation. This is very important, particularly where
there are tribunals or decision makers who have wide discretions.
The objects of the Industrial Relations Act, like the objects of the
proposed workplace relations act, will continue to be very important
for all decision makers under the legislation. For the commission,
in particular, there is an express requirement under section 90 of
the Industrial Relations Act (the 1988 Act), as you describe it which
requires the commission to take into account the public interest and,
for that purpose, to have regard to the objects of the act. So it
is an express statutory requirement that the commission, whenever
it is exercising a power or performing a function, must take into
account the objects. Of course, the commission does consistently do
that. [2]
2.4 Mr Vernon Winley of the Business Council of Australia supported
this view:
Anyone who has read the key decisions of the full benches of the
Industrial Relations Commission, particularly over the last few years,
will have seen how the objects of the Act frame, give guidance, and
direct the way the Commission has been dealing with the Act - interpreting
it, implementing it and coming to key decisions on matters of principle.
[3]
2.5 Whilst the Commission must have regard to the objects of the Act
in performing its functions, if the express powers of the Commission
do not allow it to do justice to the principles embodied in the 'Objects',
their existence in the legislation may have no practical effect. The
'Objects' clause of any legislation does not make a primary contribution
to the functioning of that legislation, rather it provides a general
direction as to what the legislation is about. The courts, which have
the final say as to the meaning of the Act, have held that the role
of objects clauses is as an aid to interpretation in the event of an
ambiguity, thus the 'objects' of an Act are not relevant to judicial
interpretation where the meaning of the section in question is clear
and unambiguous. [4]
2.6 This point can best be seen in the debate surrounding proposed
Object (i) which refers to the role of the legislation in 'assisting
employees to balance their work and family responsibilities … '.
Some witnesses argued that it was not sufficient to have such an aim
stated in the objects of the Bill, there needed to be supporting provisions
in the legislation. Not only had this not happened, it was argued, those
powers of the Commission which had enabled it to give effect to this
object (for example, by allowing the Commission to set minimum and maximum
hours for part time employees) were to be removed by the Bill. [5]
2.7 Employer groups noted that changes to the objects of the Act would
appropriately reflect the changing needs of employers and employees.
The Business Council stated in evidence to the Committee that the most
significant improvements were: firstly, changing the focus from adversarial
issues of bargaining to a more productive, cooperative approach in the
formation of enterprise agreements; secondly, changing the focus from
processes (award formation involving the Commission and unions) to outcomes;
and thirdly, placing emphasis on balancing work and family responsibilities.
[6]
2.8 However, a number of witnesses before the Committee criticised
the proposed change to the Objects of the Act, both from the point of
view that previous protections had been left out and that the effects
that some of the new Objects would have on employees was at variance
with the objects as stated in Schedule 1.
2.9 Thus, as described further in Chapter 5, it was argued by unions
and individual employees that a number of provisions in the Bill would
actually make it harder for employees to balance work and family responsibilities.
The provisions involved were, firstly, removing the constraints on minimum
and maximum hours for part-time and casual workers and, secondly, removing
award entitlements that ensured security of working hours, such as rostering
arrangements. Furthermore, these changes would particularly affect the
most vulnerable part of the workforce.
2.10 The National Union of Workers (the NUW) and the Australian Liquor,
Hospitality and Miscellaneous Workers Union argued that the new 'Objects'
ignored the need for a fair system to under-pin cooperative relations
in the workplace. It was fairness, the union argued that had assisted
in establishing constructive relations and had reduced the propensity
for disputes between employee and their employers. [7]
2.11 Similarly, Ms Larissa Andelman of the Association of Non-English
Speaking Background Women of Australia (ANESBWA) expressed concern that
while the objects provided a framework for the Bill, there was no clear
emphasis on 'fairness'. Instead, the Bill was focussed on economic requirements
and what the market could bear. [8]
2.12 On this point, the NUW argued that the emphasis on economic objectives
ignored 'the traditional role of labour law in attempting to provide
a balance between the respective positions of employer and employee'.
[9]
2.13 The new requirement that the Commission only exercise its arbitration
powers 'as a last resort' rather than 'where necessary', as is currently
the case, was seen as having the potential to encourage the parties
to escalate disputes as quickly as possible or to leave damaging disputes
continuing without resolution. [10]
In the words of the ACTU:
[The Commission's] capacity to intervene early in a dispute and prevent
its escalation has been restricted substantially. The clear effect
of these changes is that disputes that may otherwise have been solved
through well established processes will in many cases not be resolved
other than by a trial of strength between the parties. [11]
2.14 The question also arises of whether there be countless appeals
to the Full Bench of the Commission or the Federal Court by employers
against the making of awards or orders claiming that a Commissioner
had exercised arbitral powers before the time of 'last resort' had arrived?
This requirement could leave the Commission unsure at any particular
time as to whether it has the ability to intervene to settle the dispute.
2.15 Ms Barbara Pocock, a Lecturer at the Centre for Labour Studies,
University of Adelaide, pointed out to the Committee that the reference
to Australia's international obligations had been removed from the objects
of the legislation. [12] Ms Pocock
recommended in her submission that 'the bill should retain in the objects
of the bill the provisions of a framework for industrial relations which
includes providing the means for ensuring that labour standards meet
Australia's international obligations'. [13]
2.16 The Human Rights and Equal Opportunity Commission argued that
critical ILO conventions, such as the anti-discrimination convention
(ILO 111) should be part of the Act and that the objects of the Act
should be clearly linked to those conventions. [14]
The absence of this reference would mean that the Commission's ability
to deal effectively with discrimination issues would be lessened. [15]
2.17 One area that was the subject of some debate was the effect that
changes to objects have on the Commission's award making powers. section
90 requires the Commission to have regard to the objects of the Act
and, in particular, the objects of Part VI (Dispute Prevention and Settlement)
when exercising its functions which provide that:
- employees are protected by awards that set fair and enforceable
minimum 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;
and
- awards are suited to the efficient performance of work according
to the needs of particular industries and enterprises, while employees'
interests are also properly taken into account;
- regard is had, in connection with the making, reviewing and varying
awards, to stable and appropriate relativities based on skill, responsibility
and the conditions under which work is performed, and on the need
for skill based career paths; and
- the Commission's functions and powers in relation to the making
and varying awards are performed and exercised in a way that both:
(i) gives employees prompt access to fair and enforceable minimum
wages and condition of employment, so far as they do not already have
them; and
(ii) encourages the prevention and settlement of industrial disputes
by the making of agreements under Part VIB.
2.18 In addition, section 90AA requires the Commission in performing
its functions, to ensure, so far as it can, that the system of awards
provides for secure, relevant and consistent wages and conditions of
employment.
2.19 Proposed new section 88A of the Workplace Relations Bill provides
that the new Objects of Part VIA are to ensure that:
- wages and conditions of employment are protected by a system of
enforceable awards; and
- awards are confined in their scope to providing a safety net of
fair minimum wages and conditions of employment;
- awards are suited to the efficient performance of work according
to the needs of particular workplaces or enterprises; and
- the Commission's functions and powers in relation to making and
varying awards are performed and exercised in a way that encourages
the making of agreements between employers and employees at the workplace
or enterprise level.
2.20 The changes made to the Objects of this Part, it is claimed 'water
down the Commission's obligations to awards' in 5 ways:
- awards will no longer be required to provide for fair minimum wages
that are maintained at a relevant level;
- awards are no longer required to provide a safety net of relevant,
consistent and secure wages and conditions;
- awards are no longer used to underpin direct bargaining;
- the Commission is no longer required to ensure that employees' interests
are properly taken into account when assessing whether awards are
suited to the efficient performance of work; and
- the Commission is no longer required to have regard to stable and
appropriate relativities. [16]
2.21 Finally, it has been argued that by placing some of the criteria
for the exercise of the Commission's powers in a provision that is proscriptive
rather than a guideline in an object's section (the effect of section
88B), the Commission has no jurisdiction to deal with matters outside
the parameters. If this is correct, and the Commission's jurisdiction
is so limited, it is a worrying development. There seems to be some
support for this concern in the Weipa Comalco decision.
Conclusions
2.22 The majority of the Committee has come to the conclusion that
the Principal Object provisions and the Award Objects provisions in
the Workplace Relations Bill have some important flaws.
2.23 The majority of the Committee does not, however, believe that
these flaws are so fundamental that the provisions of the Bill should
be deleted in their entirety. There is no warrant for a wholesale return
to the Principal Object provisions in the existing Act, or to the existing
award Objects provision.
2.24 Rather, in the case of the Principal Object, the majority of the
Committee recommends that the provisions in the Bill be amended so that
reference is made to the following matters.
- The majority of the Committee believes a reference to the pursuit
of better pay should be included. The Government's policy was expressly
entitled 'Better Pay for Better Work' and the majority of the Committee
believes that a reference to better pay would be consistent with that
policy.
- The majority of the Committee believes that a reference to the
need for 'fairness' in the labour market should be included. The majority
Committee believes that the Industrial Relations Act should encourage
the pursuit of a 'flexible and fair' labour market.
- The majority of the Committee accepts the statement that the
primary responsibility for determining employment matters should be
at the workforce. In order to emphasise that this must occur within
the framework of the act, and subject to the protection's provided
by the Industrial Relations Commission, a reference to this effect
should be included.
- The majority of the Committee believes that a reference to awards
providing 'relevant, secure and consistent' wages and conditions should
be included. For reasons that will be discussed below, the majority
of the Committee does not believe it is sufficient for awards to provide
a safety net of minimum wages and conditions.
- The majority of the Committee accepts the statement that the
Act should ensure freedom of association. The majority of the Committee
is concerned, however, that this may be interpreted to mean that this
should be at the expense of the right of employees to organise and
bargain collectively. The majority of the Committee believes that
an additional reference should be included to make it clear this is
not the case.
- For reasons that will be discussed below, the majority of the
Committee does not believe arbitration should only be available as
a last resort within specified limits. The majority of the Committee
believes arbitration should be available where necessary, and there
should be a reference in the Principle Objects to that effect.
- The majority of the Committee is very concerned that the Principal
Object do not require the Act to ensure that Australian labour standards
meet international obligations. A reference to this effect should
be included.
2.25 In the case of the Objects of the Award-making provisions,
the majority of the Committee recommends amendments to include reference
to the following matters:
- As in paragraph 4 above, the majority of the Committee believe
the Object of the Bill should include a reference to awards providing
'relevant, secure and consistent' wages and conditions.
- The majority of the Committee accepts the statement that awards
must be suited to the efficient performance of work. However, the
majority of the Committee believes that there should also be a reference
to the need to also take into account the interests of employees.
- The majority of the Committee accepts that the statement that
the Commission's award - making powers should encourage the making
of workplace agreements. However, the majority of the Committee believes
that there should be a reference to the need for the Commission to
prevent and settle industrial disputes.
2.26 The Australian Democrats Member of the Committee agrees in
principle with these conclusions and recommendations but has additional
concerns that are outlined in his Supplementary Report.
2.27 The Government members of the Committee disagree with the conclusions
and oppose the recommendations.
Footnotes
[1] The Reform of Workplace Relations, Legislation
Guide, May 1996.
[2] Evidence, p. E 2213.
[3] Evidence, p. E 1936.
[4] Pearce, DC & Geddes, R S 1988 Statutory
Interpretation in Australia, Third Edition, Butterworths, p. 90.
See also Southern Centre of Theosophy Inc. v. South Australia
(1979-80) 27 ALR 59 per Gibbs J.
[5] See for example, Evidence, pp. E 236,
243 & 1068.
[6] Evidence, p. E 1936.
[7] Submission No. 459, p.3, National Union
of Workers.
[8] Evidence, p. E 747, Ms Larissa Andelman,
ANESBWA.
[9] Submission No. 459, p.3, National Union
of Workers.
[10] Evidence, p. E223.
[11] Submission No.1017, p. 5, Australian
Council of Trade Unions.
[12] Evidence, p. E 1287.
[13] Submission No. 1024, p.2, Ms Barbara
Pocock, Centre for Labour Studies, University of Adelaide.
[14] Evidence, p. E 2004.
[15] Submission No. 923, p. 16, Human Rights
and Equal Opportunity Commission.
[16] Submission No. 1017, p. 7, Australian
Council of Trade Unions