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

Supplementary Report by Senator Andrew Murray for the Australian Democrats

INTRODUCTION

The Australian Democrats recognise that because modern industrial relations in Australia is continually evolving and maturing it is appropriate that legislative provisions keep pace with changes in workplace relations. We therefore accept the need for further legislation in this field. The question we are faced with is whether this Workplace Relations Bill will advance the interests of both employers and employees, to the overall benefit of the Australian community.

To answer that question we have to first identify what any Federal Industrial or Workplace Relations Bill should provide. The Australian Democrats say that the Bill should

• comply with the Australian Constitution (this affects implied and actual powers, freedoms, and obligations, as well as conciliation and arbitration)
• comply with Australia's International obligations (this affects our treaty and ILO obligations and commitments)
• provide for the needs of employees and employers within Commonwealth Government entities
• provide for the needs of employees and employers within an enterprise who freely and jointly wish to be on the Federal and not a State system
• provide for the needs of employees and employers in States, and particularly Territories, where there are no separate systems available
• set minimum standards and an appropriate model example for the States and Territories

In our view the Bill should also ensure it will apply to

• Any employees within an enterprise, who want to be on the Federal system, where the AIRC has found that the State or Territory does not meet critical minimum standards of the Federal system

The Bill necessarily focuses on employers and employees, but any Industrial Relations legislation must have as an essential consideration those not yet in the workforce. Industrial Relations legislation must help facilitate new entrants to work - the unemployed, and those not registered as unemployed who still wish to be employed.

KEY AUSTRALIAN DEMOCRATS' PRINCIPLES

It is proper that our remarks in this report are set against the background of our 1996 Election statement on Industrial Relations : 'Getting The Balance Right'. This Statement included the following Key Australian Democrat Principles :

• Support for an industrial relations system that ensures that the rights of Australian employees continue to be protected, while giving those employers and employees who want to engage in fair and productive enterprise bargaining the flexibility and freedom to do so.
• Support for a safety net for employees who are unable to protect their interests and the extension of the net to give a fairer balance between work and family responsibilities.
• Support for a strong Industrial Relations Commission with responsibilities for overseeing and maximising employment justice, while delivering the best possible economic outcomes.
• Support for a comprehensive and up to date award system which provides an adequate safety net for enterprise bargaining. Test cases to keep awards and agreements up to date with community expectations and standards should also continue.
• Support for enterprise bargaining where employers, employees and unions are capable of negotiating and reaching a fair and economically responsible outcome, with access to compulsory arbitration when they cannot.
• Support for industrial democracy and the maximisation of employee participation. We support maximising cooperation between management and labour and encouraging employee share ownership.
• Recognition of the legitimate role of trade unions in protecting minimum conditions, but improving the internal democracy and accountability of unions to their members.
• Support for freedom of choice on union membership, but we believe a strong case can be made out for non-members paying unions a 'fee-for-service' if they wish to work under conditions achieved by unions.
• Opposition to common law penalties for secondary boycotts and opposition to the re-introduction of sections 45D and 45E of the Trade Practices Act. Secondary boycotts should continue to be dealt with promptly as industrial matters by industrial tribunals.
• Support for a fair balance between employers and employees on unfair dismissal claims, and a less legalistic and less costly resolution of dismissal claims.
• Support for additional measures to help small business deal with the complex industrial relations issues of enterprise bargaining.
• Continued support for the right of employees to transfer from State jurisdictions to the protection of Federal awards under legal provisions approved by the Democrats in 1992.
• Support for the inclusion of Democrat amendments to the Industrial Relations Act which would prevent age discrimination in all other Commonwealth legislation. We support an end to compulsory retirement ages.

THE COMMITTEE'S REPORT

The Australian Democrats have been strongly influenced by the Committee Hearings and Submissions, and this is exhibited in the conclusions we have drawn.

There have been a very high number of individual and group submissions to the Senate Economics References Committee. Substantial numbers of employers are optimistic at the outcomes they expect from the Bill. However very many submissions from employees, employee organisations, and from community groups have reflected not only intense interest in the provisions of the Bill, but also intense anxiety at potentially detrimental outcomes. In our view this deep concern mirrors a profound disquiet in many sections of the community. Many Australians are experiencing a most anxious and insecure time in our economic history, characterised by high unemployment, worrying underemployment, high redundancies and layoffs, and insecure jobs tenure.

We have not chosen to write a dissenting or minority report. This report rather qualifies the Committee Report, by summarising the conclusions we have drawn from this committee process of review and consultation. We endorse many of the conclusions drawn from the Report. The time frame for presentation of the Committees Report in the Senate prevents us expanding our arguments with additional evidence. We have chosen instead to react to, and reflect on, the chapters and conclusions of the Committee Report.

CHAPTER TWO - OBJECTS

The Majority report highlights some of the most important omissions from the proposed objects of the Act. The Democrats share the concern of the Majority report that the proposed objects give insufficient attention to the need to promote fairness in the labour market, restrict the jurisdiction of the Commission to an arbitrator of 'last resort', reduces the level of protection to be provided by awards to a minimum safety net, and fail to sufficiently promote the concept of collective bargaining.

The Democrats believe that the objects as a whole should reflect the stated policy of the amended legislation to progressively encourage better industrial relations at a workplace level. While supporting some of the suggested amendments of the Majority report, we do not support maintaining an overly privileged place for trade unions or the entrenching of an adversarial orientation to industrial relations.

The objects clause is important in that it provides an aspirational and a motivational effect, as well as providing the vital philosophical and conceptual framework for the operation of the bill. The proposed objects clause is too narrow and fails to fully encapsulate all the factors which need to be considered in the proper regulation of workplace relations. I propose the following alternative recommendations:

It is recommended that the objects clause in the bill be broadly supported, but that it be further amended to take into account the concerns expressed in the majority report, to ensure that employees maintain the protection of an up to date award system and access to the independent umpire in the AIRC, that the bill encourages collective bargaining as a means of evening up the otherwise dominant bargaining position of employers, and that the processes and procedures of the AIRC be kept as user friendly, practical and non-legalistic as possible.

CHAPTERS THREE - FEDERAL STATE ARRANGEMENTS

(a) whether the various State industrial jurisdictions can or will provide adequate protection for workers employed under state agreements.

The Democrats share the concerns of the Majority report that the proposed bill could undermine the longstanding constitutional supremacy of Federal laws and awards over State laws and awards. We are concerned that the proposed amendments to section 111, combined with the proposed section 111AAA, could unnecessarily hamper the rights of employees, unions and employers to choose the appropriate jurisdiction for the regulation of their industrial rights. This would be contrary to the Government's stated policy which said:

'As a general principle, employees and employers should have the right to choose the jurisdiction and nature of the legal relationship that they wish to enter.' [1]

Fundamental to that should be the right to determine whether they wish to be regulated by an award, and whether that should be a State or a Federal award. Where both parties cannot agree on the nature of the form of regulation, there should be an implied assumption that the employees should be entitled to the protection of an adequate award, buttressed by compulsory arbitration. The guarantee of that protection is presently found in the provisions of section 111 (1A to 1H). If the Victorian and West Australian legislation were modified so as to remove the potential threat of the denial of award coverage, these provisions would not be necessary. But while that State legislation threatening workers with the loss of award protection is in place, the contingent guarantee of Federal award protection must remain.

In the making of Federal awards, the Democrats would be prepared to support an evidentiary provision requiring some evidence from employers or employees for the Federal application, but not one which is so open-ended as to indefinitely delay the making of an award, as we believe the proposed 111AAA is. Therefore, I endorse the Majority report's recommendation that the onus, process and criteria used to determine public interest not be altered in the way proposed by the bill.

However, consistent with the principle that employers and employees should have the right to choose the appropriate jurisdiction, I dissent from the Committee's recommendation that AWAs be confined to areas of Federal award coverage.

Given the lower minimum conditions in state agreements, employees could be forced into entering into State agreements with inferior conditions. The Federal Parliament should not sanction the exemption of workers from rules set by it where the rules by which those workers would then be regulated are much less rigorous. The Democrats support the Committee's recommendation that section 152 not be enacted in the form proposed by the Government.

CHAPTER FOUR - CHANGES TO THE SYSTEM AND ITS INSTITUTIONS

(l) whether the bill provides a fair balance between the rights of employers and organisations of employers, and the rights of workers and unions

The Democrats agree with the analysis of the Majority report of the committee on the effects of the inequality of bargaining power of employees and employers in relation to employment conditions. The evidence before the committee - particularly from individual workers describing the conditions in which they were asked to enter into employment agreements - highlights the even stronger bargaining position which employers enjoy in a depressed labour market. Because of this, it is essential that the institutional arrangements regulating industrial relations reflect and correct this imbalance, and to ensure that the strong cannot take advantage of the weak.

The institutional arrangements must not be so inflexible that they deny employers, employees and their unions who are capable of reaching a fair bargain from indeed reaching such an agreement. But, where an employer or a union is in a position to dictate terms to the other, then agreement on fair terms becomes impossible.

A: AWARDS:

I. Content of Awards:

The Democrats share the concern of the Majority report in relation to the restrictions on the content of awards. Awards must be capable of regulating all important conditions of employment. In particular, we believe that matters such as meal breaks, rostering, occupational health and safety, anti-discrimination, superannuation and training are fundamental parts of the employment relationship and should be capable of determination by the AIRC.

However, we share the concern of the Government that the award modernisation process under section 150A of the current act has failed to deliver a more simplified and flexible award system. The Act should include a positive duty on the parties and on the AIRC to develop an award system that is simple and easy to understand and use, which avoids unnecessary detail and which allows to the greatest extent possible the determination of the application of award conditions at the enterprise level. Indeed, this was what was foreshadowed in the Coalitions election policy, which said [2]

'Where employees jointly decide that they wish their award-governed relationship to continue, they will be encouraged to restructure the relevant awards on a more flexible basis.'

But we do not support the widespread repeal of award conditions. The Government's 'sudden death' solution of deleting a wide range of award conditions in 18 months would breach the clear commitment of the Prime Minister in the lead up to the election when he clearly stated that [3]

'No worker in Australia under the Howard industrial relations policy can have his or her Award conditions taken away.'

The Committee received conflicting advice on whether the proposed section 89A picked up all of the most important components of the employment relationship. For example, does paragraph (b) 'ordinary time hours of work and the times within which they are worked' include rostering arrangements and the ability to access rostered days off? Does it cover the right to have meal breaks? Does paragraph (j) 'allowances' including clothing allowances or travelling allowances? The Government needs to clarify the extent of the restrictions proposed to be contained in section 89A or whether it intends allowing a broad and flexible interpretation.

It is recommended that section 89A to more accurately reflect the Government's pre-election commitments.

Section 88B of the bill proposes to direct the Commission in the performance of its functions to take into account a range of factors. The provision as it is currently drafted appears to confuse the need to develop a fair safety net with a range of other issues. The provision needs to be redrafted to better reflect the range of different ideas contained in it.

It is recommended that section 88B be amended to establish that the maintenance of a safety net of fair minimum wages and conditions of employment is one objective of the Act, but not necessarily the overriding objective for the use of AIRC award making powers.

II. Powers of Arbitration:

A key concern the Democrats have with the bill its proposals to limit the power of the AIRC to arbitrate. It does this in two ways. First, section 89 restricts arbitration by the Commission to a device 'of last resort'. Second, the Commission's arbitration on industrial matters is to be restricted exclusively to the matters contained in section 89A. Many protracted industrial disputes would deal with matters outside of this list. It is an inappropriate response to say that these matters cannot be resolved by the Commission but would have to be resolved by the common law courts in tort action. That is to turn industrial relations practice back to the nineteenth century and is a litigious and costly route to take.

It is recommended that even if section 89A is to be retained, the AIRC must retain the power to arbitrate on matters outside of the section 89A list where agreement cannot be reached and resolution of the matter by arbitration would be in the public interest.

III. Superannuation:

The Democrats endorse the conclusion of the Majority report that the removal of superannuation as an award matter will substantially disadvantage a large number of employees, particularly those on low incomes. It is particularly difficult to support this removal when the details of the legislation to establish the Government's proposed 'freedom of choice' regime have not yet be tabled. Industry funds have a strong record of providing high growth, low cost services to their members. Any legislation seeking to remove such funds as the preferred source of employees' accounts must ensure that workers with little financial knowledge are not enticed into sub-standard investments. [4] Similarly, a proliferation of funds would create administrative costs for employers. It would be poor policy to delete the current award preference for industry funds until an adequate legislative regime is established to regulate 'freedom of choice' in superannuation.

It is recommended that current award regulation of superannuation continue, and that any review of the continuation of the Award regulation of superannuation be deferred until the Senate considers the Government's full package of superannuation reforms.

IV. Paid Rates Awards:

The Democrats fully concur with the reasoning and conclusions of the Majority report that paid rates awards must be allowed to continue to operate. To deny workers in public sector and community employment access to paid rates awards would be to substantially reduce the probability of fair, reasonable and consistent conditions of employment being established in these sectors of the workforce. The Democrats, however, do believe that the criteria for establishing paid rates wards need to be tightened up to ensure that paid rates awards are not continued in operation beyond a time at which they were needed.

V: Right of Entry Clauses:

The Democrats support in general terms the analysis and conclusions by the Majority report in relation to the exclusion of 'right of entry' clauses from awards. There was very little evidence to the committee that the current regulation of right of entry to workplaces by award clause was in any way inadequate. However, very strong arguments were presented by unions [5], workers and industrial lawyers [6] to the committee that the impact of the Government's proposed changes would be to unnecessarily restrict the access of union officials to workplaces for the purposes to talking to members and prospective members.

Business has raised concerns about whether union officials should have unfettered access to wages books, as this can be used as a means of harassing employers without good cause. While sympathetic to these concerns, the Democrats do not believe that the proposals presented in the bill provide an appropriate balance between the right of employers to lawfully go about their business and the public interest represented by unions in ensuring that their employees are paid their lawful entitlements. The South Australian legislation deals with the potential of union officials bullying employers or workers at the workplace, by making it an offence to harass an employer or an employee, or to hinder or obstruct an employees in the carrying out of a duty of employment (section 140(3). The Act also gives the Commission the power to withdraw the authority of any person who has abused their entry authority.

B: CERTIFIED AGREEMENTS:

Certified Agreements have been the most successful device in the country for encouraging parties to enter into enterprise bargaining. More workers are now working under Federal certified agreements than under all State and Federal enterprise agreements combined [7]. The Democrats are basically satisfied with the progress in the development of the Certified Agreements stream. We note that the Coalition's pre-election policy pledged to maintain Certified Agreements: [8]

'CAs will continue to be available as one option for the parties, subject to the 'no disadvantage' test outlined in this policy. The process of entering into a CA and having it certified by the AIRC will be retained.'

Yet the bill makes massive changes to the procedure for entering into and registering certified agreements. These amendments are in clear breach of the Government's pre-election commitments. Nor do they flow from strong evidence of problems or concerns with the current Certified Agreements processes. Indeed, the rapid acceptance and growth of Certified Agreements suggest that there is little need for widespread reform of this stream.

One area where the Democrats accept that there is need for reform is strengthening the evidentiary provisions to ensure that agreements are genuinely approved of by employees. The onus should fall primarily on the union to show that the majority of employees have validly approved the agreement. A second area where reform of certified agreements could be made is to repeal the right of unions to be heard in the certification of an agreement where they have no members in the workplace.

The Coalition foreshadowed in its policy the replacement of the 'no disadvantage' test in section 170MC(1)(b) with the same no disadvantage test proposed for AWAs. Even if this amendment were supported, the Democrats could see no reason to drop the other vitally important conditions for certification contained in section 170MC. The rapid growth of Certified Agreements does not suggest that these provisions have created an insurmountable hurdle for the certification of agreements.

We share the concern expressed in the Majority report about the repeal of the 'consultation' requirements in certifying agreements. No strong case has been made out by the Government or in the evidence to the committee that the current consultative arrangements are inappropriate. By contrast, there has been extensive evidence from migrants' and women's groups that the arrangements must be retained.

It is recommended that the Coalition be required to abide by its election policy of retaining Certified Agreements and the existing processes for registration, but that the registration provisions be tightened up to ensure evidence of genuine agreement by the majority of employees to the agreement and to delete the right of unions to be heard in certification hearings where they have no members.

The Democrats are not opposed to the extension of the coverage of certified agreements using the corporations power to pick up workplaces not currently covered by Federal awards, provided current registration arrangements are maintained.

C: AUSTRALIAN WORKPLACE AGREEMENTS

The Australian Workplace Agreements stream will replace the barely utilised Enterprise Flexibility Agreements stream as the means by which the largely un-unionised largely private sector workforce can engage in enterprise bargaining. The Democrats recognise that the low take-up rate of EFAs demonstrates that current arrangements are largely failing to fulfil the needs of this sector of the workforce. However, we also note that evidence to the committee shows that the take-up rate of State based agreements has also been extremely low. This suggests that the Government's claims of a massive demand for such agreements is largely over-stated.

The Democrats accept the need for a new industrial instrument to deal with the largely un-unionised workforce. The fact that this sector of the workforce is largely un-unionised workforce highlights the crucial importance of ensuring that procedures for developing and approving AWAs are rigorous and adequately protect the interests of employees. The Majority report has adequately summarised much of the evidence of problems which have and could arise with workplace agreements. The Federal legislation should seek to avoid the problems encountered under the Victorian, West Australian, South Australian and Tasmanian agreements streams.

I. Individual vs. Collective:

The greatest scope for exploitation of employees would occur because AWAs are able to be offered on an individual as well as a collective basis. Yet, conversely, the greatest scope for modification of work practices - particularly for high skill employees - could occur as a result of individual agreements. As Professor Isaac made clear in his evidence, there is already widespread use of individual contracting above award in the small business sector. There is certainly an arguable case that individual AWAs could formalise and indeed deliver greater benefits from this segment of the workforce.

However, offering individual AWAs to low wage workers, particularly casual employees, could be used as a device to reduce conditions. The Democrats are not persuaded that reviewing the fairness of bargaining after the fact provides adequate protection of such workers. The interests of such workers would be better served in a collective rather than an individual AWA, although the lack of bargaining power even then would not preclude an employer from taking undue advantage of their workers.

It is recommended that the bill seek to expressly encourage collective over individual bargaining, but allow for individual bargaining of AWAs where the conditions of the AWA as a whole are superior to the award, and that the employee genuinely and freely agrees to the AWA.

Similarly, we are concerned that the use of individual agreements could result in discrimination, with employees denied access to better conditions of service without good reason. A provision similar to section 79(3) of the South Australian Act (see Appendix) could ensure that discrimination in the offering of AWAs is prevented.

II. No Disadvantage Test:

While the proposed no disadvantage test is more comprehensive than that provided under State legislation in Victoria, West Australia, and Tasmania, the lack of vetting makes the 'no disadvantage' test almost toothless. This point is dealt with in the next section. The proposed no disadvantage test is not as strong as that provided in the South Australian legislation. Employers in South Australia in evidence to the committee expressed few problems with the South Australian provisions. Section 79 of the South Australian Industrial and Employee Relations Act 1994 sets out the registration requirements for an enterprise agreement in South Australia. These provisions provide a reasonable balance between the need to protect the employee's interests and the need to ensure there are no unnecessary hurdles placed in the way of making enterprise agreements. Section 79 is attached as a schedule to this report.

It is recommended that the 'no disadvantage' test for collective AWAs be modified in line with section 79 of the South Australian Industrial and Employee Relations Act 1994, requiring a consideration not just of compliance with the minimum conditions, but also whether the conditions of employment in the agreement, considered as a whole, are inferior to those provided in the award.

It is recommended that the minimum conditions in Schedule 13 be modified to take into account the technical concerns identified by the Law Council [9] in relations to casual employees and by the ACTUQ [10] and HREOC [11] in relation to calculation of wages, the operation of the make-up clause on pay, piecework, the ability to accumulate recreation and sick leave, equal remuneration and amending the conditions for carer's leave to reflect the AIRC test case decision.

The 'minimum condition' in relation to take-home pay is particularly inadequate because it is determined by reference only to the relevant award. With most employees in the Federal system now under certified agreements or enterprise agreements, this means that the benchmark for determining the fairness of an agreement in relation to pay is actually much lower than their actual rate of pay. Given the Government's intention to reduce award rates to a 'fair minimum safety net', it would be entirely legal for an employer to reduce the wages of employees paid above the award - even on a certified agreement - in an AWA or new certified agreement. This is in clear breach of the Prime Minister's pre election commitment: [12]

'I give you this rock solid guarantee. Our policy will not cut your take home pay.'

It is recommend that the 'minimum condition' in relation to take home pay be based on the relevant pay rate in the relevant award, certified agreement, Enterprise Flexibility Agreement or Australian Workplace Agreement to ensure that the Coalition's election commitments are fully kept.

III. Vetting of AWAs:

(f) whether any proposed powers exercised by the AIRC would be better exercised by another federal government body, and whether further consequential amendments will be needed to other Acts to achieve this.

The Democrats endorse the recommendation of the Majority report that AWAs must be vetted by the AIRC before approval. We believe that the case for pre-vetting of agreements before they come into force is compelling and overwhelming, and is provided for in four of the five conservative States in varying forms. The AIRC's procedures for approving AWAs should be as simple but effective as possible (see discussion under Office of Employment Advocate).

IV. Termination:

The Democrats endorse the Majority report recommendations rejecting the termination provisions for agreements. AWAs should continue to remain in force after their expiry until both parties agree or the Commission orders otherwise. The termination of an AWA should not be used as a 'bargaining chip' for a new AWA..

V. Duress in the bargaining process:

The Democrats endorse the findings of the Majority report that the proposal to challenge an AWA made under duress only after it is approved is inadequate. An employee who was forced to make an agreement under duress is unlikely to have the confidence to complain about it afterwards. [13] Duress has a very precise legal definition which is difficult to prove, even where the employee could freely agree [14].

The State jurisdictions in all States but Victoria require an industrial authority to be satisfied that the employees have genuinely agreed to the agreement before it is registered. The West Australian legislation (section 31(2)(a)) requires the Commissioner to refuse to register an agreement if satisfied that an employee does not genuinely wish to have the agreement registered. The Western Australian Commissioner of Workplace Agreements, Mr Robert Cooper, has, however advised the committee that the clause does need some tightening up [15].

The Tasmanian legislation requires the Commissioner to satisfy himself or herself that the parties to the agreement are aware of their obligations and understand any changes (61I(2)), that over 60 per cent of employees voted for the agreement in a secret ballot, that the bargaining process was fair and appropriate (61J). The Tasmanian Chamber of Commerce and Industry said these provisions - combined with the 14 day cooling off period - provided extensive protection for employees, and that the level of protection is 'adequate and appropriate in the context of the business environment in Tasmania'. [16] However, the Tasmanian Enterprise Commissioner has expressed concern about the narrowness of the test, suggesting that the Commissioner be vested with a power to refuse to approve an unfair or unconscionable agreement. [17]

The South Australian legislation also provides for protection of the bargaining process, requiring reasonable steps to inform employees, to involve unions if the employees are members of unions, to negotiate 'without coercion', to ensure that the majority of employees have 'genuinely agreed' and to ensure that employees whose interests have not been adequately taken into account are properly taken into account (s. 79). The South Australian Employers' Chamber of Commerce and Industry described the system as working 'exceedingly well in South Australia', and provided 'a comprehensive protection regime for all employees '. [18]

It is recommended that the pre-approval vetting arrangements of AWAs include an investigation of whether the employees genuinely understood their obligations and any changes to conditions in the agreement, that they genuinely agreed to the agreement and that consideration was given to the special needs workers in a disadvantaged bargaining position (e.g. young workers, workers from a non-English speaking background, women, casuals).

VI. New Employees:

The Democrats endorse the views of the Majority report that the ability to enter into individual AWAs with new and prospective employees is a matter of concern. I re-iterate our view that individual AWAs while being permitted, should be subject to a higher threshold test of providing conditions which, as a whole, are superior to the award. Such AWAs should also be required to be approved by the AIRC.

VII. Secrecy:

The Democrats believe that AWAs should not be secret documents. The importance of transparency of employment arrangements in promoting pay equity and in identifying discrimination in wage rates was spelt out clearly by HREOC [19] , ACOSS [20]and others in evidence. The state legislation in Queensland, New South Wales and South Australia requires that state agreements to be available at the Industrial Registry for inspection. The South Australian Act (ss 80(4)) allows the Industrial Commission to require all or part of an enterprise agreement to be kept confidential if it is 'justified by the exceptional nature or circumstances of the case'.

VIII. Bargaining Division of the AIRC:

The Democrats do not have a view as to whether the approval of AWAs should be conducted by any member of the AIRC or only by members of a separate bargaining division. We note that in each of the conservative States, a separate bargaining commissioner has been established. While we are of the view that approval of agreements should be done by the AIRC, there may be some merit in maintaining a bargaining division to ensure specialisation in dealing with agreements.

D. OFFICE OF THE EMPLOYMENT ADVOCATE

The Democrats do not agree with the conclusion of the Majority report on role of the Employment Advocate, although we share the concern that the role and the independence of the Office are not properly refined in the bill. Professor Ron McCallum argued that the office is being given two largely incompatible roles of advising employers and employees on AWAs and investigating breaches. He concluded that these two roles would be difficult to operate together. [21] He advocated the adoption of the Employee Ombudsman model from the South Australian legislation, which has the function of advising employees only.

The Democrats see merit in this approach. The South Australian Employee Ombudsman, unlike the proposed Federal Office of the Employment Advocate, advises employees not just on enterprise agreements, but also on award entitlements. It further has a specific obligation to investigate the conditions of out-workers and to assist award-free home-based workers (s. 62 S.A. Act). Importantly, the Ombudsman is independent of ministerial direction and reports direct to Parliament.

It is recommended that the Government consider establishing a separate Office of the Employee Ombudsman by merging the employee advisory and prosecuting functions of the DIR Awards Management Branch with the employee protection sections of the Office of the Employment Advocate.

The splitting of the role of the Employment Advocate would involve the deletion of functions (e), (f), and (g) from proposed section 83BB, while the approval of AWAs by the AIRC would result in the modification of function (d). However, the Democrats believe that the remaining functions, including giving the Employment Advocate a role in the development and pre-approval scrutiny of AWAs, are vitally important roles. We place great importance on the process of bargaining in ensuring that the final outcome is fair and acceptable to both sides. In the largely un-unionised predominantly small business employment environment, employers and employees often don't have a detailed understanding of their rights and obligations.. The Tasmanian Enterprise Commissioner, in recognising the need for training programs to assist in the development of enterprise bargaining, noted that [22]:

'Generally speaking, there is a very low level of knowledge regarding enterprise bargaining skills among employers and employees at the enterprise level.'

In such an environment, a pro-active Employment Advocate, offering an advisory and mediation service, could play an important role. The Committee has received little evidence on the importance of such a role. However, small business organisations such as the Australian Small Business Association, have proposed the establishment of a Small Business Industrial Relations Ombudsman to [23]:

'...ensure that all small business and their employees contemplating entering into a voluntary employment agreement are aware of their rights and responsibilities. The office would assist the parties with information, advice and a pro forma agreement if required.'

The Democrats believe that some of the unfortunate industrial situations detailed to the Committee could have been avoided if the parties were educated from the outset about the nature of entering into an employment agreement. This pro-active role of 'mediation' is very different from the AIRC's roles of 'conciliation' and 'arbitration'. This essential difference was summarised by the President of the Victorian Employee Relations Commission [24]:

'...Mediation is directed to assisting the parties to reach their own resolution of the matter as distinct from a conciliation where the conciliator will make a recommendation which the parties agree to accept While the latter may at first glance appear to be a more efficient use of time, mediation has a greater capacity to optimise the preferred outcomes for the parties involved and to extract a greater degree of commitment to the resolution of the immediate matter and to the ongoing industrial relationship between the parties.'

The President noted that while mediation is an increasingly accepted and acknowledged viable alternative in the first step of dispute resolution, it is not the panacea for all industrial disputes which might require conciliation or arbitration. She also noted that mediation is a much more time consuming exercise than traditional conciliation. Given the different cultural environment within which mediation occurs as opposed to conciliation and arbitration, the Democrats believe that it would be a role more appropriately used by the Employment Advocate on request by the parties.

The Employment Advocate could also play a pro-active role in seeking to encourage the parties to improve their employment practices. Eliminating all forms of discrimination [25], improving the productivity of work practices, encouraging a 'skills culture' in the workplace, and improving the balance between work and family responsibilities might be four areas where the Employment Advocate could be given specific obligations to encourage the parties to incorporate into their agreements. Encompassing such a role, the Employment Advocate could be a very positive reform.

Where the Employment Advocate was involved in the development of an AWA, and certifies that the agreement meets the criteria set down by the Act for registration, the AIRC should be required to certify the agreement unless there is some compelling public interest consideration as to why they should not approve it. This 'fast track approval process would act to encourage employers to utilise the Employment Advocate's services in the development of AWAs.

It is recommended that the function and duties of the Employment Advocate be amended to reflect the role outlined above, and be given a particular object of catering to the needs of the small business sector.

E. THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

(i) the extent to which the proposed Budget cuts will reduce the capacity of the AIRC to perform its role

The Democrats share the concerns of the Majority report about the extent to which the very heavy cuts to the AIRC Budget - particularly to the Industrial Registry - since the March election will affect its ability to perform its duties. It is our understanding that 51 staff of the registry have accepted voluntary redundancy, a cut in registry staff of about 28 per cent. Over the last three Budgets, the funding for the AIRC rose from $38.5 million (1992/3) to $46.2 million (1995/6), a rise of just under 11 per cent in real terms. Following the 1993 reforms and the introduction of the unfair dismissals jurisdiction, the work of the AIRC has increased exponentially, with applications to the Commission rising by 145 per cent in two years. Over half of the work performed by the AIRC is now unfair dismissals work. The proposed bill will increase the involvement of the AIRC in unfair dismissal work, removing much of the jurisdiction of the Court over dismissals. The Democrats are extremely concerned that the current ability of the Commission to deal expeditiously with disputes and unfair dismissals could be constrained by the Budget cuts.

It is recommended that the impact of the Budget cuts to the AIRC and the orderly conduct of its processes be reviewed by the Senate Economics References Committee not less than twelve months after the commencement of the bill.

The AIRC must seek to ensure that its processes and procedures are kept as low cost, as time effective but as fair as possible. The provisions in the current Act might need to be strengthened to give greater prominence to avoiding unnecessary procedural and legalistic aspects to AIRC processes. The role of legal representation might also be reviewed to ensure that the AIRC remains a predominantly 'layperson's' tribunal.

The Democrats, while supporting the maintenance of a strong, independent and effective AIRC, recognise the importance of ensuring that independence and impartiality must be clear and entrenched. Appointments to the Commission should maintain a fair balance between employer and employee representatives. While this has informally occurred in the past, we could see some merit in formalising the appointment arrangements.

It is recommended that the Government consider amending the legislation to ensure that appointments to the AIRC are drawn equally from employer and employee representative backgrounds, and that consultation occurs with industry and union representatives before appointments are made, as is guaranteed in the South Australian legislation.

F. THE INDUSTRIAL RELATIONS COURT:

The Democrats supported the establishment of the Industrial Relations Court, and see merit in the maintenance of a separate court. But, we would be prepared to support the incorporation of the Court back into a separate Industrial Division of the Federal Court. There remains a strong case for having industrial law issues dealt with in a specialist jurisdiction rather than under the general powers of the Court.

G. UNFAIR DISMISSALS:

(k) the extent to which state legislation on unfair dismissals complements the bill

The Democrats support the basic thrust of the Government's reforms. It is in our view appropriate that the test of whether an employee is re-instated should be whether the employee can prove that the dismissal was harsh, unjust or unreasonable. Indeed, this benchmark test was provided in all state jurisdictions and open to all employees with adequate remedies of reinstatement or remuneration right up until 1992.

The Victorian Government reduced access to re-instatement, and moved to deny compensation in lieu thereof. To override this poor policy, the Democrats supported the 1993 reforms utilising the external affairs power. We are of the firm view that all employees have access to proper, low cost remedies for unfair dismissal, consistent with our international obligations. The bill does not deliver this, with substantial holes in coverage for Victorian workers not under Federal awards, and West Australian workers under State employment agreements.

It is recommended that the Commonwealth seek to ensure that these employees are provided with access to the Federal unfair dismissal jurisdiction if the States fail to amend their laws to reflect the Federal provisions, and that the exclusions to the Federal jurisdiction be kept to an absolute minimum.

There is a need to ensure that frivolous and vexatious claims are discouraged in the Commission. However, the proposed filing fee and costs arrangements are, in our view too onerous. A nominal filing fee might be acceptable, as might the ability to award costs in exceptional cases. But these provisions should not be allowed to act as disincentives to employees from pursuing their rights to a fair hearing.

The Democrats question the need for some categories of unfair dismissal based on anti-discrimination grounds to commence in the Federal Court. This split of jurisdiction has the potential to cause enormous problems in practice [26]. It is recommended that all unfair dismissal claims should commence in the AIRC.

We can understand the concerns of small business to avoid the costs associated with vexatious and speculative unfair dismissal claims. But, given our preparedness to consider a small filing fee and the awarding of costs in exceptional cases of vexatious and frivolous claims, we can see little justification for the mitigation of damages on the grounds of the employer's economic viability. A wrongful dismissal is still a breach of the contract of employment by the employer. The Act provides employees with a low cost, fast track statutory route for redressing that breach of contact. But, in exchange, the Act also provides statutory limits on the amount of compensation. Damages should not be mitigated to any greater extent than they would be in a common law action for breach of contract. Indeed, as the bill stands it is discriminatory in that it allows employers to mitigate damages for breach of contract involving unfair dismissals, but does not allow employees to mitigate damages for breach of contract involving industrial action on the grounds of economic viability.

It is recommended that any mitigation of damages for compensation for unfair dismissal on the grounds of economic viability be limited to the extent of mitigation that would have been available under common law for breach of contract.

CHAPTER FIVE - IMPACT ON CERTAIN CLASSES OF EMPLOYEES

(l) whether the bill provides a fair balance between the rights of employers and organisations of employers, and the rights of workers and unions

A. PART TIME AND CASUAL EMPLOYEES

The Democrats support the general reasoning of the Majority report as to the adverse effect that the proposals on part-time employment might have. But the Majority report fails to take into account the need to open up access to part-time employment in those industries where the award does act as more of a constraint to part-time employment rather than a bona fide protector of the rights of part-time employees. The ACTU Submission contained an extensive list of the restrictions on part-time work. While most of these restrictions are eminently reasonable, some are not. For example, several awards have a minimum requirement of not less than 19 or 20 hours per week, that is, half the hours a full time employee. [27] Quite a number of wards have restrictions on the quota of part time to full time workers in a workplace, ranging from 8 to 25 per cent, and commonly around 10 per cent. [28] These restrictions were often negotiated outcomes as 'tradeoffs' for pay rises for full-time staff.

The AIRC has developed broad principles for the review of current part-time employment clauses in its second stage decision in the Personal/Carers' Leave decision. [29] We note that the AIRC expressly rejected the submission from the ACCI to delete all quotas, maximum and minimum hours in relation to part-time employment. The Democrats endorse the broad thrust of that decision and support the continued review of part-time clauses under the auspices of the Commission However, we believe that the Parliament should send a clear message to employers, unions and the Commission that the review process must be taken seriously and must result in greater access to genuine part-time employment. Awards should not be able to unduly restrict the take-up of part time employees. While the exact limits are a matter of judgement, we believe that the powers of the AIRC to set minimum and maximum hours should be within a band.

It is recommended that the AIRC be entitled to set the minimum and maximum hours for part-time employees, but that the minimum hours should not be more than 20 per cent of the hours of a full time employee, or less than 3 consecutive hours on any given day. The maximum hours should not be more than 80 per cent of the hours of a full time employee. Award provisions restricting the number or proportion of part-time employees should be deleted by the AIRC unless the AIRC determines there is a strong public interest or exceptional requirement of the industry or nature of the work which justifies a quota.

A further important issue in relation to part-time employment which has arisen in the course of the inquiry has been the importance of regular hours for part-time employees. [30]. The Commission made the strong point that part-time work needs to be clearly distinguished from casual employment. [31] The very essence of part time as distinct from casual employees is the ability to access regular hours. For workers with family responsibilities, regularity of hours makes the arrangement of child care arrangements simpler. The Democrats believe that the AIRC should be required to ensure that where part-time employment is incorporated into awards or agreements, that the provisions also require that the hours be regular. Part-time employees should also be entitled to full pro-rata conditions of full-time employees.

It is recommended that the AIRC ensure that where part-time employment provisions are included in awards or agreements, that they provide for regularity of hours and pro-rata entitlements to full time employees.

These requirements should also apply to AWAs as well as awards and certified agreements, and the minimum conditions for both should be amended accordingly.

B. WOMEN

(f) whether any proposed powers exercised by the AIRC would be better exercised by another federal government body, and whether further consequential amendments will be needed to other Acts to achieve this.

The Democrats endorse the Majority report recommendation that the AIRC retain its jurisdiction to deal with equal remuneration for work of equal value issues. We are opposed to the repeal of sections 170BA to 170BI dealing with this issue. We note that the Government's contention that equal remuneration issues could be adequately dealt with by the Human Rights and Equal Opportunity Commission were explicitly rejected by the Commission in evidence to the Committee [32].

C. WORK AND FAMILY RESPONSIBILITIES:

(n) the impact of the legislation on the balance between work and family responsibilities

The Democrats welcome the stated commitment of the Government that industrial relations reform should lead to a better balance between work and families [33]. Like the Coalition, the Democrats have been critical that current working arrangements often do not adequately balance work and family responsibilities [34]. However, we share the concerns expressed by a wide range of witnesses that deregulation of the labour market and the move towards more enterprise bargaining will not necessarily improve the situation. Indeed, reports on the impact of enterprise bargaining so far suggest that often the opposite is the case. [35] The Democrats believe that the bill needs to be amended to give proper operation to the proposed new object (I) on work and family responsibilities. Specifically, the bill goes backwards in two respects:

1. removing the ability of the AIRC to regulate part-time employment; and
2. removing the section 170NE(10) requiring the AIRC to refuse to certify agreements (e.g. AWAs or certified agreements) if they contain a provision which discriminates against an employee with family responsibilities, or if it breaches section 93A by failing to encourage the implementation of the ILO Family Responsibilities Convention.

It is recommended:

1. That the changes to part-time employment conditions be amended as recommended, particularly in relation to guaranteeing regularity of hours.
2. That the pre-approval consultative arrangements for certified agreements and AWAs take into account whether workers with family responsibilities have been adequately consulted and their issues taken into account.
3. That the Office of the Employment Advocate be given an express obligation to promote a better balance between work and family responsibilities.

C: WORKERS FROM A NON-ENGLISH SPEAKING BACKGROUND

The Democrats endorse the concerns expressed by the Majority report in relation to the impact of the bill on workers from non-English speaking backgrounds. We believe the recommendations made earlier will redress these concerns.

D. YOUNG PEOPLE

(o) the impact of the bill on youth employment and training

The Democrats endorse the view of the Committee that the interest of young people should be adequately taken into account in the consultation and pre-approval vetting of agreements. We also endorse the Majority report's recommendations on youth rates of pay. While the evidence on the possible impact of youth wages on unemployment was mixed [36], over the last few decades, youth unemployment has risen despite falls in the real wages paid to young people [37]. Clearly, the causes of youth unemployment are far more complicated than the simple issue of youth wage rates.

In recent years, a great deal of progress has been made in moving towards wages being determined on the basis of skills rather than on the basis of discriminatory criteria such as age. We have been particularly pleased with the pick-up rate of traineeships under the National Training Wage Award which provide a matrix of the level of school education, years of experience and training courses completed. While we acknowledge that this award has a defacto age-based base implicit in it, it provides a closer approximation of skill to wages than age-based wages does alone.

The adoption and implementation of skill-based salary structures in awards and agreements has been fairly slow in some industries. However, we believe that employers and unions must continue with strident efforts to make this change. The Government proposal to remove the impetus by allowing the indefinite continuation of age-based wages is a massive breach of faith with the young people of Australia who deserve the right of equal remuneration for work of equal value.

It is recommended that age based discrimination in relation to wages cease as from 1 July 1997 as set out in the current Act. However, the parties may be able to approach the AIRC on an award or agreement basis to seek an extension of up to two years at a time provided they can demonstrate special circumstances and that they intend and are making progress in replacing age-based wages with wages based on skill.

E. INDEPENDENT CONTRACTORS:

(f) whether any proposed powers exercised by the AIRC would be better exercised by another federal government body, and whether further consequential amendments will be needed to other Acts to achieve this.

The Democrats endorse the conclusions of the Majority report that there is a need for protection for independent contractors from unfair contracting arrangements. We also endorse the view that the provisions of the current Trade Practices Act provide an inadequate remedy in relation to dealing with the issue of unfair contractors.

Independent Contractors in the States of New South Wales and Queensland have access to the Industrial Court for the varying of unfair contracts. These provisions were enacted by the Greiner Coalition Government in 1991 (section 275 of the former Industrial Relations Act 1991) and the Bjelke-Petersen National Party Government in Queensland (section 123 of the former Industrial Conciliation and Arbitration Act). Both provisions have been continued in the new Industrial Relations acts enacted by the subsequent State ALP Governments.

Given the rapid growth in recent years of contract employment, the Democrats believe that all workers in Australia should have access to a cost effective means of having harsh and unfair contracts overturned. Such a procedure might more appropriately come under the Trade Practices Act as the law regulating :'commercial' relationships than the Industrial Relations Act. The ACCC might be empowered to appoint a mediator to assist the parties resolve their problems in a cost effective an prompt manner, and to provide for the ACCC to develop industry codes of practice as appropriate to provide guidance on what is and is not a fair contracting arrangement.

It is recommended that the Government give consideration to establishing a new low cost dispute resolution procedure for independent contractors under the Trade Practices Act, based on the NSW model.

F. SMALL BUSINESS

(h) the impact on small business

The evidence in relation to the impact of the bill on small business is adequately summarised by the Majority report. However, the Democrats dissent from the Majority report conclusions and recommendations for the reasons set out below.

The extensive research on small business attitudes to industrial matters by Professor Joe Isaac found that small businesses were supportive of the award system. [38] Other submissions also showed a strong desire by small business to retain the award system. These included the West Australian Council of Retail Associations [39], the Victorian Automotive Chamber of Commerce [40], and the Australian Road Transport Industry Organisation [41]. The following exchange between Senator Allison and Mr Keith Rice, Director, Industrial Relations, Tasmanian Farmers and Graziers Association highlights the likely attitude of the sector to AWAs and awards [42]:

Senator ALLISON--My question is more about this legislation and what impact that will have, in terms of the uptake level of Tasmanians.

Mr Rice--I beg your pardon. I think it will be as I said: that it would not be dramatic; it would be marginal. There would be many that would choose to stay under the award and utilise the systems of the award. There would be some that would go into enterprise agreements. But the two are going to run parallel, and one would expect that it would be a long time, if ever, before enterprise agreements would take over from the award system.

The Australian Chamber of Commerce and Industry identified two key benefits from the bill for small business. First, it argued was the reform of unfair dismissal provisions should lessen some of the problems small business has perceived in relation to procedural requirements an speculative claims. Second it argued that the provisions of individual as well as collective contracts and the award simplification process would benefit small business. [43] ACCI also tabled a survey of 2500 of its members published in the February edition of ACCI Review on the key priority issues sought by employers. Reform of unfair dismissals rated very highly - 8th out of 30 listed items. However, award issues rated very lowly, with complying with award regulation rating 28th out of 30 and employee productivity rating 27th. [44]

Similarly, a 1994 Yellow Pages survey of small business attitudes to industrial relations showed that 75 per cent of small businesses were content with current industrial arrangements. 80 per cent of respondents were working under awards, but 70 per cent were paying above award. 48 per cent indicated that they would prefer a system of individual contracts, and 41 per cent indicated a preference for staying with the award system. The high incidence of above award payments suggested a considerable degree of informal individual bargaining was already occurring, [45] a conclusion also reached by Professor Isaac [46]. The same survey suggested that 90 per cent of workplaces had no employees who were union members, and that 69 per cent of small business employers were not members of any employer association.

The Democrats have concluded that, while there is strong support in the small business community for reform of the unfair dismissal provisions, the support for the other components of the reform package is lukewarm at best. We see some merit in allowing the formalisation of the above award individual bargaining occurring in the sector. We see merit in encouraging the modernisation and simplification of the award system to make it a more useful and flexible system for small businesses. In both cases, however, we need to ensure that the final product is a fair balance between the needs of small business employers and their employees. The recommendations made earlier in this report we believe will provide such a balance.

Our recommendations for a stronger and more pro-active role for the Employment Advocate in relation to assisting small businesses with their industrial relations needs would also assist the 69 per cent of small businesses who are not members of employer organisations in improving their industrial relations practices and maximising the potential for flexibility and fairness under the new bill.

It is recommended:

1. That the thrust of the unfair dismissal reforms be supported by the Committee, with the modifications proposed earlier in this report.

2. That the Office of the Employment Advocate be supported by the Committee, with the modifications proposed earlier in this report, particularly that the Office ensure it caters to the needs of the small business sector.

3. That individual AWAs with above award conditions be supported.

4. That the award system be simplified, allowing for maximum flexibility in implementation at an enterprise level, as proposed earlier in this report.

CHAPTER SIX - EMPLOYMENT, TRAINING AND SKILL FORMATION

(e) impact on national skills accreditation, traineeships, apprenticeships and vocational education systems

(o) the impact of the bill on youth employment and training

The Democrats endorse the analysis and recommendation in relation to youth training and AWAs in Chapter six of the Majority report.

CHAPTER SEVEN - CHANGES TO REGISTERED ORGANISATIONS

(l) whether the bill provides a fair balance between the rights of employers and organisations of employers, and the rights of workers and unions

A. 'CONVENIENTLY BELONG' AND S.118A

The Democrats endorse the views of the Majority report in relation to the continued usefulness of the `conveniently belong' rule. We believe that the Government's proposals to move to 'open slather' competitive unionism - while retaining the right of employers to challenge a union's right to represent its employees under section 118A - will provide the worst of both worlds in terms of preventing workers from being represented by the union they want while encouraging heightening industrial tensions over union coverage.

Employees in a workplace should not be forced to join a union which they do not want to. Where the majority of employees genuinely and freely wish to join another union, the AIRC should be entitled to amend union rules accordingly.

B. ENTERPRISE UNIONS:

The Majority report notes that there are three key determinants in the bill encouraging the establishment of enterprise unions. First is the reduction of 100 to 20 in the number of minimum members for union registration,. Second, is the removal of the requirement that a union be capable of engaging in an interstate industrial dispute. Third, is the removal of the conveniently belong rule. The Democrats believe that the Majority report committee has laid out strong reasons for opposing these changes.

The Democrats would support the establishment of enterprise unions as an exception to the 'conveniently belong' rule and the inter-state requirement where:

1. the union will be viable (with 100 members or more), and completely independent of any financial assistance from the employer;
2. the registration of the union is supported by at least 60 percent of the employees in the enterprise.

C: AUTONOMOUS ENTERPRISE BRANCHES:

The Democrats endorse the analysis and conclusions of the Majority report that the creation of autonomous enterprise branches would create massive political, industrial, financial and legal wrangles for unions and their members. The legislative proposals are fraught with legal uncertainty.

We would support amendments to ensure that unions rules are fully democratic and give workers at an enterprise level the greatest possible say in the conduct of their industrial affairs. How this is achieved should be a matter for the union's internal rules, possibly with the Industrial Registry playing a facultative role.

D. DISAMALGAMATION:

The Democrats broadly endorse the views of the Majority report in relation to union disamalgamations. A legally and financially appropriate means should be developed to allow a union to disamalgamate to their pre-amalgamation constituent parts. But, allowing State branches to disaffiliate from Federal unions would serve no public policy purpose whatsoever in a national industrial relations system.

E. PREFERENCE OF EMPLOYMENT:

The Democrats support the general thrust of the proposals in the bill to establish freedom of association, including the right to join or not to join a union. In this, we are prepared to support the abolition of preference clauses. However, consistent with our view that the objects of the act should include the encouragement of collective bargaining,. we would support inclusion of clauses by agreement in awards and agreements whereby unions and employers agree to promote the value of participation in responsible unionism, provided, at all times, employees have a right not to join a union. [47] In establishing freedom of association, the Government must ensure that impediments to the right of employees to be represented by the union of their choice are not impeded by adopting the other recommendations in this report.

CHAPTER EIGHT: INDUSTRIAL ACTION

(f) whether any proposed powers exercised by the AIRC would be better exercised by another federal government body, and whether further consequential amendments will be needed to other Acts to achieve this.

A. SECONDARY BOYCOTTS:

The Democrats broadly endorse the view of the Majority report that where a secondary boycott is in relation to an industrial issue, it is more appropriate that it be dealt with at first instance by the AIRC rather than the Federal Court. Experience clearly shows that the use of legal sanctions tends to sour even further the industrial relationship and ensure that the underlying dispute is broadened and unresolved.

However where it is clear that the AIRC will be unable to resolve the dispute quickly, particularly where the union openly defies AIRC orders or recommendations, then employers should be entitled to access legal sanctions to resolve disputes. The key debate in this bill is how quickly that should occur. The current Act sets a maximum period of 72 hours, but allows even earlier access to the Courts where the AIRC certifies it cannot resolve the dispute(s. 163D). These provisions are adequate to cover most circumstances, but not where immediate heavy losses are being incurred.

The use of injunctions against workers and unions is a very blunt and effective 'weapon' in the armoury of employers. The injunction weapon is not, for example, available to unions against employers. This weapon should be available when appropriate, but not necessarily automatically. The Court, in determining whether to grant a injunction, should be required to take into account the behaviour of both the employer and the employees. Where an employer has refused to resolve the dispute or aggravated it, they should be sent back to the AIRC. Where a union has refused to comply with AIRC orders or recommendations, an injunction should be available against them. What is important is that 'balance of convenience' test for the granting of an injunction should not rest solely on commercial considerations, but into account industrial and human rights considerations as well.

The Government should also consider placing a cap on possible damages which can be awarded against employees and unions, as has occurred in the UK and other legislation. Actions by employers to prevent secondary boycotts which are genuinely motivated obviously have our support, but secondary boycott actions should not be used to 'bust' unions or employees financially, and the threat of damages should not in itself be allowed to become the cause of prolonging a 'do or die' dispute.

The Democrats note that the current Industrial Relations Act section 162 is (with some material drafting amendments) very similar to the new section 45D the bill proposed for the Trade Practices Act. In terms of the ultimate legal effect, the two sections are fairly similar. Both provisions, for example, would be likely to be criticised by the ILO Committee of Experts as in breach of ILO Conventions [48].

But the proposed new section 45DB of the Trade Practices Act goes much further than the current provisions and is capable of being applied against primary boycotts (i.e. normal strike activity) and consumer and environmental boycotts. As the Australian Consumers Association said in their submission [49]:

'Re-introducing secondary boycott provisions, especially the new proposed section 45DB, suggests that trade is more important than the rights of people to protest against unacceptable corporate behaviour - It is not more important.'

The Democrats endorse these sentiments.

It is recommended that the Government review its secondary boycott provisions to take into account the concerns expressed above.

B. INDUSTRIAL ACTION AND INJUNCTIONS:

The Democrats broadly endorse the analysis and conclusions of the Majority report. Our comments in relation to secondary boycotts and the use of injunctions would apply similarly to the use of injunctions to prevent industrial action.

CHAPTER NINE: BROADER EFFECTS ON THE ECONOMY AND THE COMMUNITY

(b) the implications for the Australian economy

(d) the effects of similar provisions in other countries

The Democrats endorse the analysis of the Majority report. There is little evidence that labour market deregulation delivers significant benefits to an economy. Australia has had the highest jobs growth rate in the OECD in the last 10 years [50]. Our labour market costs are highly competitive. The high levels of temporary work, mobility and overtime suggest considerable flexibility within our labour market. This has been achieved within an institutional framework which has also maintained reasonable wage levels for low income workers, and also achieved pay equity relativities between male and female workers far more favourable than in more deregulated labour markets. While our productivity performance has been low, this has been the result of rapid employment growth. The key potential for productivity growth lies at the top end of the labour market.

We support the expansion of scope to encourage freeing up of labour market practices at the top end of the labour market to improve productivity, allowing relaxing or exclusion of creation award restrictions. But, we reject the view that we should free up the bottom end of the labour market allowing real wages for low-skilled workers to fall as has happened in the US and New Zealand.

CHAPTER TEN: CONSTITUTIONAL ISSUES

(j) whether the bill as a whole or in part is constitutional

The Democrats share the reservations of the Majority report in relation to the constitutionality of the bill.

CHAPTER ELEVEN: AUSTRALIA'S INTERNATIONAL STANDING:

(c) whether the provisions of the bill will fulfil Australia's international obligations and whether the provisions of the bill will affect Australia's international relations

The Democrats endorse the concerns of the Committee about whether the bill as a whole complies with our international obligations, particularly in relation to secondary boycotts, union right of entry provisions, the promotion of collective bargaining, the coverage of termination of employment provisions and the deletion of AIRC powers over equal remuneration for work of equal value. The recommendations that I have made will go some way to ensuring that we meet these obligations.

Whether or not the Act has an object requiring compliance with international conventions, the High Court has clearly established in Brandy's case that a ratified convention becomes part of our domestic law. If the Government wishes to enact a bill which falls short of its obligations as an exercise of its domestic sovereignty, it should first renounce the international convention. It should not pledge one thing in Geneva but implement the exact opposite in Canberra.

OTHER TERMS OF REFERENCE:

(g) whether any proposed powers exercised by another Federal Government body would be better exercised by the AIRC, and whether further consequential amendments will be needed to other Acts to achieve this.

The bill proposes moving much of the determination of unfair dismissal claims from the Industrial Relations Court to the AIRC. The Democrats, while holding reservations about the constitutionality of these provisions, would support these changes. It would seek a commitment from the Government that should the provisions be found to breach the separation of powers doctrine, that the Government amend the bill immediately to establish a legally defendable unfair dismissal jurisdiction.

(m) reporting mechanisms on enterprise bargaining

The Democrats were responsible for the insertion of section 170RC in the Industrial Relations Act. This section requires the Minister to report each year on:

1. developments in Australia during the period in bargaining at the enterprise and workplace levels for the making of agreements under this Act; and
2. in particular, the effects of such bargaining has had in Australia during that period on the employment (including wages and conditions of employment) of women, part-time employees and immigrants.

The Democrats believe that Governments should not be afraid to conduct the follow up research to determine whether their 'grand' reform plans actually deliver the outcomes which they promised [51]. This is an important part of the political accountability process. We are appalled that the Government proposes to delete this section and require only triennial reporting.

It is recommended that section 170RC be retained, but that subsequent reports look at the impact of enterprise bargaining, including AWAs, on casual workers, workers with family responsibilities and young workers as well as women, part-time employees and migrants. The report might also specifically look at the implementation of reports in small businesses.

APPENDIX:

Extract South Australian Industrial and Employee Relations Act 1994

Approval of Enterprise Agreement

79. (1) Subject to subsection (6), the Commission must approve an enterprise agreement if, and must not approve an enterprise agreement unless, it is satisfied that -

(a) before the application for approval was made, reasonable steps were taken -

(i) to inform the employees who are covered by the agreement about the terms of the agreement and the intention to apply to the Commission for approval of the agreement; and

(ii) to explain to those employees, the effect the agreement will have if approved and, in particular -

- to identify those terms of an award (if any) that currently apply to the employees and will, if the agreement is approved, be excluded by the agreement: and

- to explain the procedures for preventing and settling industrial disputes as prescribed by the agreement; and

- to inform the employees of their right to representation in the negotiation, and proceedings for approval, of the agreement and, in particular, that an employee may be represented by the Employee Ombudsman, an agent of an employee's choice, or an association of employees; and

(b) the agreement has been negotiated without coercion and a majority of the employees covered by the agreement have genuinely agreed to be bound by it; and

(c) if the agreement is entered into by an association as representative of the group of employees bound by the agreement - a majority of the employees currently constituting the group have authorised the association, in writing, to act on behalf of the group and their written authorisations have been delivered to the Commission as required by regulation; and

(d) the agreement provides for consultation between the employer and the employees bound by the agreement about changes to the organisation and performance of work or the parties have agreed that it is not appropriate for the agreement to contain provision for such consultation; and

(e) the agreement -

(i) is, on balance, in the best interests of the employees covered by the agreement (taking into account the interests of all employees); and

(ii) does not provide for remuneration or other conditions of employment that are inferior to the scheduled standards; and

(iii) does not provide for remuneration or conditions of employment that are (considered as a whole) inferior to remuneration or conditions of employment (considered as a whole) prescribed by the award (if any) that applies to the employees at the time of the application for approval; and

(f) the agreement is consistent with the objects of this Part; and

(g) the agreement complies with the other requirements of this Act.

(2) The Commission must refuse to approve an enterprise agreement if a provision of the agreement discriminates against an employee because of, or for reasons including, race, colour, sex, sexual preference, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

(3) The Commission must not approve an enterprise agreement if the agreement applies to part of a single business or a distinct operational or organisation part of a business and the Commission considers that -

(a) the agreement does not cover employees who should be covered having regard to -

(i) the nature of the work performed by the employees whom the agreement does cover; and

(ii) the relationship between that part of the business and the rest of the business; and

(b) it is unfair that the agreement does not cover those employees.

(4) In deciding whether to approve an enterprise agreement, the Commission must identify the employees (if any) who are covered by the agreement but whose interests may not have been sufficiently taken into account in the course of negotiations and must do whatever is necessary to ensure that those employees understand the effect of the agreement and their interests are properly taken into account.

(5) Despite subsection (1)(e)(ii) and (iii), the Full Commission may, on referral of an enterprise agreement by a member of the Commission who considered the agreement in the first instance, approve the agreement if the Full Commission is satisfied that -

(a) a majority of at least two-thirds of the total number of employees to be covered by the agreement is in favour of making the agreement; and

(b) the enterprise is suffering significant economic difficulties; and

(c) the agreement would make a material contribution to the alleviation of those difficulties; and

(d) there are reasonable prospects of the economic circumstances of the enterprise improving within the term of the agreement; and

(e) having regard to any relevant award (which should be considered as a whole), the agreement does not substantially disadvantage the employees covered by the agreement.

(6) An enterprise agreement must also be referred to the Full Commission for approval if the member of the Commission before whom the question of approval comes in the first instance is in serious doubt about whether the agreement should be approved.

Senator Andrew Murray
Australian Democrats - Western Australia

Footnotes

[1] 'Better Pay for Better Work' February 1996 p. 13

[2] 'Better Pay for Better Work' February 1996 p.7

[3] John Howard, Freight Congress, 6/10/95

[4] Association of Superannuation Funds of Australia submission no. 1291

[5] ACTU submission pp. 40-2

[6] submission by Professor Ron McCallum (no.341) pp.11-12

[7] DIR Enterprise Bargaining in Australia - Annual Report 1994 AGPS

[8] 'Better Pay for Better Work' February 1996 p.4

[9] Law Council of Australia submission no. 1293

[10] ACTUQ submission no. 332 pp. 22-26

[11] HREOC submission no.923 p.13

[12] John Howard, speech to Young Liberals conference 8/1/96

[13] submission by Prof. Andrew Stewart (no. 1307 p.3)

[14] Women for Workplace Justice submission no. 1020 p.5, SDAEA submission no. 367 pp.116-7

[15] see evidence of Mr Robert Cooper, Perth 25/7/96

[16] TCCI Submission p.4

[17] Report of the Enterprise Commissioner The Development and Operation of Enterprise Agreements November 1993 p. 21

[18] SAECCI Submission no. 567 p. 8

[19] HREOC submission p.46

[20] ACOSS submission no. 303 p.9

[21] Professor Ron McCallum submission no. 341 pp.9-10

[22] Report of the Enterprise Commissioner ibid p.6

[23] 'Small Business Agenda' in Small Business News Australian Small Business Association Adelaide Summer 1995 p.11

[24] President of the Victorian Employee Relations Commission Annual Report Year Ended 31 December 1995 p.3

[25] HREOC in its submission (no. 923, pages 10-11), contains a range of recommendations which should be considered by the Government in this regard.

[26] Law Council of Australia submission no. 1293 pp.5-6

[27] ACTU Submission no.1017 Appendix 3

[28] ACTU Submission Appendix 4

[29] AIRC Decision - Personal/Carer's Leave Test Case - Stage 2 pp. 36 - 42

[30] see also submission no. 927 by the National Pay Equity Coalition

[31] ibid p.37

[32] see evidence of Ms Sue Walpole Canberra 31/7/96

[33] 'Better Pay for Better Work', February 1996 p.10

[34] for example, see National Pay Equity Coalition submission no.927

[35] for example, see DIR Enterprise Bargaining in Australia -1994 Annual Report AGPS pp. 222-7

[36] for example, see Australian Retailers Association submission no, 512

[37] Australian Youth Policy and Action Coalition submission no. 1410

[38] Isaac J.E. et al A Survey of Small Business and Industrial Relations, Industrial Relations Research Series No 7 University of Melbourne, May 1993

[39] submission no. 1366

[40] see evidence in Melbourne 5/7/96

[41] submission no 1292

[42] Evidence, Launceston 9/7/96

[43] ACCI Submission pp.23-4

[44] ACCI Review February 1996 No. 18 p. 3

[45] Yellow Pages Small Business Index A Special Report on Industrial Relations September 1994 pp.10-11

[46] Evidence of Professor Joe Isaac, Canberra 1/8/96

[47] see Shop, Distributive and Allied Employees Association submission no. 367 p. 46-50

[48] Department of Industrial Relations submission p.57

[49] Australian Consumers Association submission no. 1219

[50] OECD Economic Outlook June 1996

[51] ACOSS submission no. 303 p.9