3.0 THE RECENT HISTORY OF INDUSTRIAL RELATIONS IN AUSTRALIA
It is important to recognise that this Workplace Relations and Other
Legislation Amendment Bill is merely a further step in an ongoing
process of reform of Australia's labour market that began as early as
1986.
The Workplace Relations and Other Legislation Amendment Bill
has repeatedly been described as evolutionary rather than a radical
departure from the current industrial system.
In fact, it was described by Mr Winley, Assistant Director of the Business
Council of Australia, as 'decentralisation not deregulation':
Mr Winley - ...I would have to say that the reforms proposed by
the bill are not in fact deregulating the labour market or the industrial
relations system in Australia. They are decentralising it and making it
more flexible, but an act which, if all the proposals in the bill are
placed into the present act, will have something like 500 sections could
hardly be said to be deregulation of the industrial relations system.
It will still be a significantly regulated field, but much less so, and
much less prescriptively so, than the present situation. [47]
Senator Andrew Murray, Australian Democrats Senator for Western Australia
and a member of the Senate Committee, has been reported as saying that
the changes contained in the current Bill under review are extensions
to the current Act:
...the proposed changes are a 'philosophical extension' of the existing
Act... [48]
In 1986 deregulation of the Australian Financial system and the floating
of the Australian dollar and changes to our tariff arrangements began
a process that directly impacted on employers and employees.
Over time, as Australia moved into more internationally competitive
arrangements all commentators came to agree that it was necessary to
enhance labour market flexibility.
In large part it was recognised that a centralised wage fixing system
was no longer appropriate for a modern Australia.
From 1986, the National Wage Cases handed down by the Australian Industrial
Relations Commission (AIRC) began to focus on restructuring. Amendments
to the Industrial Relations Act also began to place emphasis on enterprise
agreements for the first time. Thus the slow process began of moving
towards a decentralised wage fixing system based on enterprise level
negotiated outcomes.
From 1986 to the National Wage Case of April 1991 the AIRC had focused
on re-structuring Australian awards to provide employers and employees
greater flexibility.
This period is explained by Emeritus Professor I E Isaac
as follows:
3. By 1987 the economic context was beginning to change - the financial
sector had been deregulated, protective tariffs were being dismantled,
and balance of payments difficulties began to loom seriously. Increased
productivity was seen generally as a way of meeting the challenge
of international competition and balance of payments problems.
4. Urged by the main parties in national wage proceedings, the IRC embarked
on a policy of `centrally managed decentralisation', with considerable
emphasis on workplace reform as a condition for national pay increases.
As part of the condition for such increase, unions were required, award
by award, to give undertakings for changes in work practices or commitment
to such changes. However, the Commission repeatedly expressed disappointment
at the slow progress being made in workplace reform. Thus, far from discouraging
improvements in work practices, the Commission was doing the opposite,
but apparently not very successfully.” [49]
The April 1991 National Wage Case rejected the joint approach from
the parties for the Commission to provide much greater emphasis on enterprise
bargaining.
However, the AIRC accepted the notion in October 1991 that promotion
of enterprise agreements should be accelerated.
The October 1991 introduction of the Enterprise Bargaining Principle
by the AIRC provided for a new form of agreement, Certified Agreements,
which had only limited tests for approval.
The then Federal Labor Government in 1992 amended the Act to promote
enterprise agreements by removing the power of the AIRC to refuse to
certify agreements.
The Industrial Relations Reform Act 1993 promoted both union and non-union
agreements, for the first time introducing the Enterprise Flexibility
Agreement stream that allowed agreements between employers and employees
where there were no union members.
This history identifies the changing emphasis but sadly the pace of
reform has been haphazard and slow as explained by ACCI:
In a more general sense, we pointed out in our submission the progression
of the labour relations system in this country. It seems to us that for
the last decade we have been slowly hauling ourselves into a modern labour
relations system. However, this country remains the only developed country
which basically relies on a conciliation and arbitration system which
is compulsory in nature and which operates through a tribunal which oversees
a complex system of pervasive awards. Australia is, in addition, the only
developed country which requires a tribunal to approve an agreement between
employers and employees before it can operate with the force of law. We
are the only developed country which grants unions virtual monopoly coverage
and denies workers freedom of choice in their membership of a union. In
our view, all of this has to change and some of it indeed has been changing
but with painful slowness. [50]
An inquiry by the Senate's Standing Committee for Employment, Education
and Training into the Industrial Relations Reform Bill, 1993,
resulted in a dissenting report by Senators Chapman and Crane which
in its conclusions found that witnesses that had come before the Committee
were in many instances:
..frustrated at the complexity of this Industrial Relations Reform
Bill, the additional power given to the union movement, the fact that
the award system is being made more rigid and that the number of tests
with regard to the establishment of certified agreements has been
significantly increased. They highlighted that the `no disadvantage
test' was a real impediment to the development of genuine flexibility
in the workplace. They said that Enterprise Flexibility Agreements
would not happen because of the necessity for unions to be either
involved in the negotiating process if there are any unionists in
the workplace, or having the power to vet agreements before the Australian
Industrial Relations Commission where no unionists were present at
the workplace.
They could not understand the need for an Industrial Court because
they believe that the Industrial Division of the Federal Court had
the necessary expertise and was independent.
And, last, but certainly not least, they were angry at the decimation
of the boycott provisions at s.45D & 45E of the Trade Practices Act.
[51]
History now shows that the Reform Act of 1993 was fundamentally flawed
as predicted by those witnesses. As ACCI stated to that Committee these
flaws reflected the narrow sectorial basis on which the Workplace
Relations and Other Legislation Amendment Bill was negotiated.
The Industrial Relations Reform Act 1993 was the direct implementation
of a formal document agreed with the ACTU, a preliminary version of which
was Industrial Relations Legislative Reform - Proposal agreed in principle
between the Minister for Industrial Relations and the ACTU's negotiating
Committee, dated 1 September 1993, the final version of which was `Working
Paper on Legislative Reform', dated 6 October 1993. The inadequate process
of developing the Act was reflected in adequate Act. [52]
The Workplace Relations and Other Legislation Amendment Bill,
in part, therefore represents an effort to take account of the flaws
in the current Federal legislation and improve the performance of the
industrial relations system.
It is on this historical background that this Workplace Relations
and Other Legislation Amendment Bill must be considered and on the
background of development in legislation in the various States.
State Governments in Victoria, Tasmania, New South Wales and Western
Australia have all made legislative amendments to their industrial relations
jurisdictions to promote, in various forms agreements as an alternative
to traditional awards.
The approaches have been quite different in the States ranging from
the Victorian Employee Relations Act 1992 which effectively abolished
awards to the establishment of a parallel but alternative system of
Workplace Agreements in Western Australia under the Workplace Agreements
Act 1993 that effectively competes with the continuing awards system.
The Commonwealth Government has had the benefit of viewing the relative
successes of these respective State systems and consequently this Workplace
Relations and Other Legislation Amendment Bill, in part, is an amalgam
of some aspects of all of these systems.
This evolutionary perspective on Australia's industrial relations system
is supported by the evidence of Professor McCallum.
Deregulation has occurred under Liberal conservatives, Labor socialists,
whatever we want to call them--I find it very hard to call any Labor
Government socialist. Deregulation is a fact of life.
Since 1992, every state and federal jurisdiction in this country has
altered their labour laws beyond recognition. This is just a further step
in this process. What I am concerned about is to make sure that we do
it with care and dignity. [53]
Further, Professor Sloan added to this when terming the Bill a 'gradual
transformation' and in response to a statement from the Chair, stated:
Chair--Professor Sloan, as you would be aware, the bill is
extremely complex. We would not like to assume that you have a particular
position on any particular issue. Perhaps it is best if you spend
your time going through the issues that you think are important, and
then we will deal with questions beyond that.
Professor Sloan--Okay. Of course, in 20 minutes I could not go
through the entire bill either. I suppose there are a small number of
points I would like to make in general. The first is that the bill is
300 pages and the explanatory memorandum is about 200 pages, I think.
Perhaps it may not be a convincing proposition to all the senators, but
this bill actually represents quite modest changes. It is a bill which
is basically a gradual transformation. It basically builds on the kind
of patchy progress that has been made in industrial relations towards
enterprise bargaining, and it continues to be based on an opt-out model.
I suppose that, after the days of hearings you have had, you realise what
that means. [54]
Footnotes
[47] Evidence pp 1935
[48] "Democrats to recommend IR changes
in key areas", The Australian, 14 August, 1996
[49] Submission No. 1391
[50] Evidence pp 70
[51] Dissenting Report, Inquiry into the
Industrial Relations Reform Bill, 1993, Senate Standing Committee
for Employment, Education & Training, 1993
[52] Submission No. 905, pp 13
[53] Evidence pp 902
[54] Evidence pp 1761
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