APPENDIX 5

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

APPENDIX 5

Comparison of State Industrial Relations Systems

A. ACCESS TO AWARDS

All States, other than Victoria, still have systems of compulsory conciliation and arbitration whereby employee's wages and conditions can be determined by awards.

Because the States do not have the constitutional restrictions which apply to the Commonwealth, it is possible for State awards to apply as a 'common rule'. That is, that awards apply generally to the industry, occupation or class of employees concerned and are not dependent on respondency. In Tasmania, for example, all awards have a common rule effect. In other States, this is the general position although more specific awards may be made and in yet others, awards are binding only on those persons expressed to be bound.

Western Australia has introduced provisions which attempt to limit the ability of employees covered by State awards from moving to Federal awards. The Minister has the power to suspend all or part of a State award where a number of employees bound by that award are also bound by a federal award. The Commission is then prevented from making an award or order which extends to employees to whom the award would usually apply. If the whole of the award is suspended, the Minister may apply to the Commission to cancel the award (section 37A).

All State systems also provide for enterprise bargaining whereby employers, employees and their unions can negotiate particular terms and conditions to apply at the enterprise level. However, the interaction between the award system and enterprise bargaining and the minimum conditions applying to the bargaining vary between all States.

B. AWARD MAKING

New South Wales

The Commission may make an award on its own initiative or on application setting fair and reasonable conditions of employment. Section 21 provides that the Commission must, on application, make an award setting any of the following conditions of employment:

Victoria

Under the Employee Relations Act 1992, all existing awards ceased to operate other than as a source for certain minimum conditions of employment. In 1995, further amendments completely abolished awards and separately provided for the minimum conditions (Employee Relations (Amendment) Act 1994).

Employers and employees are now unable to have the Employee Relations Commission of Victoria make an award to regulate the terms and conditions of their relationship. The two options are an employment agreement (collective or individual) or by common law contracts of employment.

Queensland

The Queensland Industrial Relations Commission has the power to 'regulate the conditions of any calling or callings by an award'. In addition, section 37 of the Act allows a Full Bench of the Commission to make general rulings relating to any industrial matters in order to prevent a multiplication of enquiries into the same matter.

Western Australia

The Western Australia Industrial Relations Commission retains the power to make awards regulating the terms and conditions of employment. Alternatively, employers and employees may enter into workplace agreements. Certain conditions of employment (whether dealt with by an agreement or award) must comply with the minima established by the Minimum Conditions of Employment Act 1993.

If a workplace agreement is made, any otherwise applicable award or agreement is excluded and the Commission no longer has jurisdiction while the agreement is in force.

South Australia

Section 90 provides that the South Australian Industrial Relations Commission may make an award 'about remuneration and other industrial matters'. Remuneration is defined as 'wages, salaries, piece work rates, penalty rates, shift premiums, special work rates and allowances'. 'Industrial matters' is very broadly defined.

Certain minimum standards, which apply to contracts of employment and agreements as well as awards, are set out in sections 70 - 72 and in the Schedules to the Act (these are discussed below under Minimum Standards).

Tasmania

An award is usually made following an application to the Commission by an interested organisation although the Commission could make an award on its own motion. Tasmanian awards have a common rule effect, applying generally to the industry, department or class of employees concerned and are not dependent on any respondency or citation (section 38).

C. REGULATION OF BARGAINING

New South Wales

The system described is that under the Industrial Relations Act 1996 which becomes law on 2 September 1996.

The Act provides that agreements may be made between an employer and relevant unions or directly between an employer and employees where at least 65% of employees have approved the agreement by secret ballot.

The Commission may only approve an agreement if it meets the statutory requirements; the agreement does not, on balance, provide a net detriment to the employees when compared to the aggregate package of conditions of employment under relevant awards which would otherwise apply to the employees; the parties understand the effect of the agreement; and the parties did not enter the agreement under duress.

Victoria

The Employee Relations Act 1992 provides for collective and individual employment agreements. Collective agreements are negotiated between an employer and at least two employees. Individual agreements are negotiated between an employer and an employee. In both cases, the employees may authorise representatives to negotiate on their behalf. In the case of collective agreements, a committee of employees may negotiate.

In 1995, all awards were abolished and all employees who had not negotiated employment agreements, were deemed to be covered by individual employment agreements the terms of which were those of the relevant abolished award.

Section 25 provides that a provision of an employment agreement or any other contract of employment is of no effect if its terms and conditions are less favourable that the minimum conditions set out in Schedule 1.

Those minima are: 4 weeks paid annual leave; 1 week paid sick leave, a minimum hourly wage as set by the Employee Relations Commission or that equal to the base award rate; 52 weeks unpaid maternity leave; 52 weeks unpaid paternity/adoption leave; minimum notice of termination; 13 weeks paid long service leave after 15 years continuous employment and 10 public holidays per year.

Queensland

The Queensland system is very similar to that currently contained in the Industrial Relations Act. It provides for both certified agreements, entered into between employer(s) and union(s), and enterprise flexibility agreements, made between an employer and his or her employees. The same no-disadvantage test applies to the certification/approval of agreements.

Western Australia

Workplace Agreements may be made either collectively or individually. Collective agreements may be made between an employer and all or some of the employees. Unions may represent an employee (if authorised in writing to do so) but are not parties to the agreement.

An individual agreement is made between an employer and an individual employee, and override a collective agreement to the extent of any inconsistency.

The minimum conditions applying to agreements are set by the Minimum Conditions of Employment Act 1993. In brief, these are a prescribed minimum weekly wage, 4 weeks' annual leave, 10 days sick leave, 2 days bereavement leave, 10 public holidays, up to 52 weeks parental leave and long service leave.

South Australia

Three types of enterprise agreement are available. An agreement may be made between an employer and a group of employees, an employer and a group of employees represented by a union or at 'greenfield' sites, an agreement between an employer and the Employee Ombudsman or a union.

In the first type of agreement, the majority of the employees must approve the agreement. A union may become a party to an agreement provided than there is written authorisation by the majority of the employees for them to act.

Certain minimum conditions apply to the making of an agreement:

The Commission must approve the agreement once satisfied that: it was negotiated without coercion; a majority of employees genuinely agreed to be bound by it; reasonable steps were taken to inform employees of the terms of the agreement; it provides for consultation between employers and employees concerning organisational change and it does not provide for minimum conditions that are inferior to those in the applicable award.

The Full Bench may nevertheless approve an agreement which does not meet this last requirement if the enterprise is in financial difficulty and at least two thirds of employees are in favour of it.

Tasmania

Enterprise agreements may be made between an employer and a union or unions representing persons employed in the enterprise or at least 60% of individuals employed in the enterprise or an employee committee representing the employees.

Agreements must comply with certain minimum conditions; namely, the hourly rate for the lowest paid classification in the award (a percentage of this rate applies for those under 21), annual leave, sick leave, and parental leave calculated on the basis of the lowest amount of leave specified in any award.

Agreements are lodged with and registered by the Employment Commissioner. The Commissioner holds a hearing at which he/she must be satisfied that the employees are aware of their current entitlements and the changes to those entitlements made by the agreement. It must be registered by the Commissioner unless satisfied that the minimum conditions are undermined; the bargaining process was unfair; or the agreement was made under duress.

D. REGULATING MINIMUM CONDITIONS

This section examines the provisions, if any, in the various State legislation establishing minimum wages and conditions other than by awards.

New South Wales

Apart from annual leave and long service leave, NSW does not have any universally applicable minimum conditions (outside the award system). However, it should be noted that awards of the NSW Commission be generally operate as a 'common rule' award so that all employers and employees within that industry are automatically bound by that award, whether they were notified of the proceedings or not (section 12). In addition, all employees have access to parental leave (other than casual or seasonal employees).

Victoria

In 1992, awards were abolished. The Employee Relations Commission may set and adjust minimum wages for employees within a work classification (section 21); however, an initial minimum wage can be set only after application by the Minister. In settling the level of a minimum wages, the Commission must consider:

(a) the needs of workers and their families, taking into account the general level of wages in Victoria, the cost of living, social security benefits and the relative living standards of other social groups; and

(b) economic factors, including the requirements of economic development, levels of productivity, and the desirability of attaining and maintaining a high level of employment (section 23).

Section 25 provides that a provision of an employment agreement or any other contract of employment is of not effect if its terms and conditions are less favourable that the minimum conditions set out in Schedule 1.

Those minima are: 4 weeks paid annual leave; 1 week paid sick leave, a minimum hourly wage as set by the ERC or that equal to the base award rate; 52 weeks unpaid maternity leave; 52 weeks unpaid paternity/adoption leave; minimum notice of termination.

Queensland

Under Part 4 of Division 4, the Commission has the power, on application, to make an order setting the same minimum wages for all employees in a specified group. Such an order can only be made for employees who do not have a minimum wage rate set by an award or agreement.

In setting such minimum wages, the Commission must consider:

Western Australia

The Minimum Conditions of Employment Act 1993 established certain minimum conditions which underpin both awards and workplace agreement.

Prior to this Act, the WA Commission had the power to make General Orders under section 50 which could specify minimum conditions of employment for award and non-award workers. The Commission still retains this power; however, it cannot make an order on a matter already covered by the Minimum Conditions of Employment Act.

The conditions established under the Minimum Conditions of Employment Act are as follows:

South Australia

Section 69 specifies that the minimum rate of remuneration payable for award employees is the hourly rate prescribed in the award. For non-award workers, it is the minimum rate fixed by the Commission.

Subsection 62(2) requires the rate of remuneration fixed by a contract of employment, an award or an enterprise agreement 'must be consistent with the Equal Remuneration Tribunal'.

Schedule 3 of the Act sets out the minimum sick leave entitlements (5 days per year). Schedule 4 provides for 4 weeks annual leave for each year of service. Schedule 5 provides for 52 weeks unpaid parental leave for those with 12 months continuous service.

Tasmania

While Tasmania does not have any generally applicable minimum conditions legislation, awards made by the Tasmanian Commission have a common rule effect.

E. UNFAIR DISMISSALS

New South Wales

The NSW Industrial Relations Commission determines whether a dismissal is harsh, unjust or unreasonable. The Commission may take into account a number of matters to determine this question, including whether a reason for dismissal was given, whether the employee had an opportunity to respond to allegations, and whether warnings of unsatisfactory performance were given.

The Commission may order reinstatement or, if this is not practicable, re-employment. In addition, the Commission may order that the employer pay an amount that the employee would have earned but for the dismissal. If neither reinstatement or re-employment is practicable, the Commission may order compensation of an amount not exceeding 6 months pay.

Victoria

The Victorian Employment Relations Commission must determine whether a dismissal is harsh, unjust or unreasonable. However, the employee must first have attempted to resolve the matter directly with their employer. In addition, the employee must first establish a prima facie case that their dismissal was harsh, unjust or unfair before the Chief Commission Administrative Officer.

The Commission may order reinstatement and compensation for lost earnings. However, no compensation is payable unless re-employment is ordered (section 42).

Queensland

The Queensland law substantially mirrors the existing Commonwealth provisions, under which the Queensland Industrial relations Commission determines whether a dismissal is unlawful (where there is not a valid reason or where it is for a prohibited reason).

The Commission may order reinstatement or where this is not practicable, compensation which is limited to a maximum of 6 months remuneration.

Western Australia

For employees covered by the Industrial Relations Act (ie award employees), the Western Australia Industrial relations Commission determines whether the dismissal is harsh, oppressive or unfair. For employees covered by state employment agreements, a magistrate determines whether the dismissal is in breach of an implied term in the agreement which prohibits harsh, oppressive or unfair dismissals.

The Commission or the Magistrate may order reinstatement or where this is not practicable, compensation which is limited to a maximum of 6 months remuneration.

South Australia

The South Australian Industrial Relations Commission determines whether a dismissal is harsh, unjust or unreasonable having regard to the matters set out in International Labour Organisation (ILO) Convention 158. The Commission may order reinstatement, or where this is not practicable, re-employment. If neither of these options is appropriate, the Commission may award compensation limited to 6 months remuneration or $30,000, whichever is the greater.

Tasmania

The Commission deals with unfair dismissal as part of its dispute settling function. It is required to take ILO Convention 158 into account when settling an industrial dispute arising out of the dismissal of an employee.

The Tasmanian Supreme Court has held that the Commission does not have jurisdiction to award monetary compensation for dismissal unless reinstatement has also been sought. [1]

Footnotes

[1] New Town Timber & Hardware Pty Ltd v. Gurr and Anor [1995] AILR 15-021.