Chapter 2 - Consideration of the issues
General comments
2.1
The Committee has noted in previous reports that
the most vociferous opposition to bills come from organisations and individuals
opposed to modernising change. Such was the case with the New Tax System. It is
also evident in the opposition of trade unions to this legislation which is
intended to tidy up loose ends of the Workplace Relations Bill. The amendments
proposed in this package of bills is intended to make the legislation work more
effectively. The changes proposed are entirely consistent with the broad policy
intentions of the parent act and follow logically the path already traced in
that act.
2.2
Evidence submitted by organisations which have
seen benefit from the current legislation support the proposed amendments.
Opponents of the original legislation are equally opposed to improvements made
to it, presumably on the grounds that anomalous or otherwise deficient
provisions identified over the three years of its operation should remain in
force not despite of, but because of these defects. The perpetuation of
unintended consequences in the law has the purpose, it would seem, of creating
difficulties for governments and their supporters and should not therefore be
lightly amended. The Committee majority regard this view as an abuse of the
Senate’s role to review legislation on its merits, and of a legislative
committee’s role in securing workable legislation aside from broader policy
considerations.
2.3
For the most part, therefore, the evidence dealt
with in this chapter presents a range of views about the importance of having
these bills passed by the Senate.
Evidence
Workplace Relations Amendment
(Australian Workplace Agreements Procedures) Bill 2000
2.4
The Committee received evidence, including case
studies, from the Australian Chamber of Commerce and Industry which highlighted
the need for the amendments proposed in relation to the administration of
Australian Workplace Agreements (AWAs). Although there is strong support for
AWAs in the private sector it appears that the process of implementing AWAs is
seen as unnecessarily bureaucratic. Some of the technical provisions intended
to protect employees have turned out to be hindrances to employment, or are now
considered, with the benefit of experience, to be of no real benefit to
employees who made AWAs. These comments relate particularly to time delays in
having AWAs approved. The ACCI submission gave an instance of the difficulties
presented by timeframes:
A recent and not isolated case occurred where a manager
recruited twenty three recruits with the intention of offering them AWAs.
However, the manager was not aware of the timeframes required by the WR Act.
The recruits had already commenced when the offer of the AWA was made. They had
to be employed under Award conditions for several weeks until the offer was
made and fourteen days had elapsed. Both the manager and the recruits found
this situation convoluted and absurd. We receive regular complaints from
managers that the timeframes associated with offering AWAs makes rapid
recruitment difficult.[1]
2.5
The Committee also received evidence of support
for the amendments which remove the requirement for employers to offer
identical AWAs to employees who may be doing comparable work. ACCI advised the
Committee that one of the most frequent complaints received by Telstra from
staff members is their inability to tailor their AWAs. The complaint was that
an AWA ‘was not an individual contract but a mass contract with different
peoples’ name on it. Employees at Telstra were known to reject AWAs because
there was no flexibility to align the contract to their own needs. Staff morale
has been damaged in some workplaces because of the limitations posed by current
legislation. As ACCI reported:
Recently a manager negotiated with the staff members in his team
and agreed to alter some of their AWAs to suit their mutual needs. The parties
were distressed when they were advised that this contravened the WR Act, and
the manager was required to offer the same terms to all the comparable
employees. They were required to renegotiate back to standard terms and the
positive spirit associated with the offer of AWAs in this workplace was
seriously affected.[2]
2.6
The overly bureaucratic nature of the current
arrangements for filing and approving AWAs has also been described in the ACCI
submission. One large corporation explained that each time it files an AWA for
an employee two separate forms need to be completed by hand, each form
comprising 45 questions, which can only be transmitted to the Employment
Advocate by post. The corporation believes that it is overly bureaucratic to
require an individual approval for a generic AWA that has been approved many
times previously.[3]
Workplace Relations Amendment
(Secret Ballots for Protected Action) Bill 2000
2.7
In its majority report on the More Jobs Better
Pay Bill 1999, the Committee concluded that legislation was needed to require a
secret ballot prior to protected industrial action, in order to ensure that
employees in the workplace, rather than union officials from outside, could
decide whether matters were serious enough to warrant industrial action. The
Committee majority remains convinced of this view.
2.8
The submission from the Business Council of
Australia strongly supported the amendments in this bill on the grounds that
industrial action should not be seen as a substitute for genuine discussions;
that final decisions to take protected action should rest with employees
directly affected; and that employees should not be directed to undertake
action that results in loss of pay.
2.9
The Business Council submission also points out
that strikes are seen as votes of confidence in union leadership. There is an
understandable reluctance to stay out of a strike regardless of how an employee
may feel about an issue. The BCA believes that the secret ballot clause is
likely to encourage employees to consider the merits of the cause of action
rather than consider the more extraneous issue of whether to support the union
out of feelings of ‘solidarity’.[4]
2.10
The importance of secret ballot provisions in
workplace relations law was highlighted in a submission to the Committee from
Denso Manufacturing Australia. The company lodged an application pursuant to
section 135 on 16 August 2000 to encourage a secret ballot among its employees
as part of its negotiation with the AMWU under the shadow of Campaign 2000. The
purpose of the secret ballot was to measure the resolve and the view of the
company’s employees to its proposals. The company was unable to secure a
direction from the Australian Industrial Relations Commission for a secret
ballot, for the likely reason – though this was not given – that the Commission
regarded secret ballots as a last resort. As the Denso submission described it:
During our negotiations, the union has refused to engage in a
secret ballot of their members, preferring to use a show of hands when voting.
The show of hands approach can be intimidating to employees who may wish to
view their opinion in favour of the company proposal or against a union position.
It is this form of intimidation that prevents people from voicing their true
opinion at union mass meetings. Unions do not prefer secret ballots because it
may limit their psychological influence when key decisions are being voted on.[5]
2.11
Master Builders Australia also supported the
bill, referring to the lack of adequate provisions in current legislation when
dealing with a recent dispute in the Victorian building industry. In this
dispute the CFMEU claimed to have issued 2853 separate bargaining notices in
Victoria. Most of those employers had also been served with notices of
intention to take industrial action. MBA claims that by acting in this way, the
CFMEU would have been able to take protected industrial action against
employers in circumstances in which: employees at the workplace were never
consulted; where no negotiation between the CFMEU and employers had been held;
and, where the object was to enforce a pattern bargaining arrangement between
the union and all employers.[6]
2.12
The Committee considered arguments put by unions
like the CPSU/SPSF,[7]
and supporting comment from academic workplace relations authority Mr Keith
Hancock[8]
that restricting the scope for industrial action would reduce the bargaining
powers of unions and make last-minute compromises (on the expectation of strike
action) less likely. The Committee majority does not believe that industrial
action taken under the new laws would be less likely to result in a resolution
of the dispute. The Committee majority notes that the Australian Industry Group
(Ai Group), formerly sceptical of the value of secret ballots, now agrees that
this process, overseen by the Industrial Relations Commission is an appropriate
precondition for the taking or organising of protected industrial action.[9] The Committee majority believes
that the bill will make union leadership more accountable to their members. For
this reason alone it commends the support of the Senate to this bill.
Workplace Relations Amendment
(Tallies and Picnic Days) Bill 2000
2.13
The Committee notes in its consideration of the
evidence on this bill that there remains in the Workplace Relations Act an
accumulation of obsolete provisions. It notes that they remain despite previous
efforts at modernisation. The issues of tallies and picnic days are textbook
examples of residual industrial practices which appear to have no justification
for remaining in existence apart from their appeal to union conservatism. They
appear in this package of amending legislation as rallying points for
nostalgia. The Committee found evidence given in defence of the retention of
these practices particularly unconvincing.
2.14
The Committee noted evidence submitted by the
Australasian Meat Industry Employees Union that claims for the inefficiency of
the tally system were erroneous given that Australia Meat Holdings, the largest
meat processor, uses tallies in establishing balanced teams for the
slaughtering and boning of beef, thus ensuring properly distributed work as the
sides of beef move down the processing chain.[10]
It was argued that tallies bring their own kinds of efficiencies to bear on
meat production. The National Farmers’ Federation denied that tallies were
inherently efficient, and that the reality was exactly the reverse. The
National Farmers’ advised the Committee that the issue of whether tallies
continued in individual abattoirs was not the point at issue. What was at issue
was the retention of tallies as an allowable award matter.
If agreement is reached about a tally system that suits a
particular meatworks in order that production can be guaranteed to reach a
minimum...then that is a function of enterprise bargaining. What we are talking
about is eliminating tallies from the safety net, the tally system as reflected
in the award which has, in the evidence of the Commission, not properly changed
for 30 years. ...What we are talking about is taking them out of the safety net.[11]
2.15
Tallies were described as a constraint on
inputs: a system where the benefits of new technology, introduced to increase
productivity, do not flow to those making the investment because of the
formulae in the meat industry processing award. The Australian Industrial
Relations Commission has described tallies as unfair and as a drag on
productivity, but there was no indication that the Commission would scrap the
tally system. This would best be achieved through legislation.
2.16
The Committee also heard that time was running
out for the tally system. Ultimately the meat processing industry would have to
become world competitive, or there would be two consequences. The first would
be an increase in the export of live-stock bound for off-shore abattoirs. The
second would be that local abattoirs that were now competitive would increase
their business and others would close. The Productivity Commission has advised
that there was a 30 per cent overcapacity in the industry.[12]
2.17
Like the tallies issue, that of picnic days
appears relatively minor compared to matters which are the subject of other
amendment bills in this package. Their importance is only diminished because of
the relatively small numbers of people affected by their provisions. Picnic day
is only an issue when its existence as an allowable matter gives a small
minority of unionists an additional public holiday over and above the standard
entitlement. The amendment proposed will not itself result in the demise of
picnic days. Such a day would remain provided it was negotiated as a workplace
agreement.
2.18
Evidence from The ACTU and individual unions
suggests that removing picnic days as an allowable matter would be tantamount
to abolishing the Good Friday holiday because of the decline in religious
observance.[13]The
amendment is seen as a symbolic ‘cultural’ attack on unions. The Committee
cannot see any basis for this, and points to the obvious distinction that can
be drawn between public holidays which are commonly observed across the whole
community, and which are officially recognised, and those which are observed by
particular groups. Thus, the day of the Chinese New Year and the feastday of
the Epiphany are significant days for particular cultures without being
recognised as public holidays The Committee heard evidence that:
The lack of significance of union picnic day is highlighted by
the fact that under the National Building and Construction Industry Award, which
applies in all States of Australia, a union picnic day is only recognised as a
public holiday in New South Wales and Western Australia. Even then there is a
provision which allows for an employer to hold a regular picnic for their
employers on some other day other than union picnic day and that day may be
taken as a holiday in lieu of the union’s picnic day. The status of the union’s
picnic day is thereby further diminished. Quite simply, union picnic day is
only in the award in relation to New South Wales to bring that State into line
with the number of public holidays which exist in other States covered by the
award.[14]
2.19
All of the unions appearing before the Committee
opposed this amendment, even though it no longer applied to their members. The
Committee noted the strong opposition from the Construction, Forestry, Mining
and Energy Union (CFMEU) but rejects its claim that there is any particular
merit in claims that picnic days are ‘family days’, or that they ‘serve as a
rare opportunity for building workers from across the state to gather and
socialise.’[15]
If there is merit in such claims, the Committee believes that it can be tested
at the level of enterprise bargaining.
Workplace Relations Amendment
(Termination of Employment )Bill 2000
2.20
The unfair dismissal provisions of the current
act, which have been the subject of two other inquiries by this Committee over
the past twelve months, continue to be a matter of concern to small business.
During this inquiry, the Committee received representations on this issue from
a number of employer organisations, notably the Australian Industry Group, the
Australian Business Council, the Australian Chamber of Commerce and Industry
and the Victorian Automobile Chamber of Commerce.
2.21
The submission from the Australian Chamber of
Commerce and Industry (ACCI) dealt quite fully with a number of provisions
subject to amendment in this bill. ACCI gave strong support to the provision of
restricted access of federal award employees to remedies under state
legislation. It was argued that exposing employers to both federal and state
laws was to place them in ‘double jeopardy’, or at least had the potential to
subject employers to state remedies which could not have been anticipated under
federal laws.[16]
2.22
According to the Victorian Automobile Chamber of
Commerce (VACC) the high number of unfair dismissals claims in Victoria
presents a misleading picture of the problem. VACC evidence was most persuasive
and should put an end to claims by those opposed to government reforms that
there is no evidence to justify these sensible measures. VACC gave evidence of
a multitude of cases where they have had first hand experience of difficulties
with the jurisdiction. Very few matters proceed to a hearing. The majority of
cases are settled during conciliation at the insistence of the respondent
because of the time and cost involved in settling a claim.[17] Relatively few claims have any
merit basis, being intended for the most part to ‘try out’ the system for
compensation. Interesting evidence was also given by VACC in relation to
inflated costs of proceedings before the Commission: an issue addressed in the
amendment bill in relation to curbing the role of advisers and the disclosure
of contingency fee arrangements.
2.23
In Victoria the practice has grown for legal
firms to solicit business from dismissed employees, whom they represent at up
to $1200 for each appearance before the Commission. In the event of a
successful claim against an employer, only a very small proportion of damages
is retained by the applicant. Most goes to the legal firm. The Committee is
satisfied that proposed amendments will curb the enthusiasm of legal firms
chasing business from vexatious or unmeritorious litigators.
2.24
Another problem identified by the Victorian
Automobile Chamber of Commerce is the number of claims that are lodged out of
time with the Australian Industrial Relations Commission. These claims are
costly and time consuming to an employer as it appears to be the view of the
Commission that out of time applications should be allowed in most
circumstances. The Committee agrees that the Commission appears to have
exercised an overly wide discretion in allowing out of time claims. The act
prescribes a period of 21 days in which applications must be filed. In one
case, the Commission allowed a lapse of 267 days between a termination and a
decision to lodge an application.[18]
The Committee notes that the bill will tighten the test for accepting
out-of-time applications.
2.25
The Committee heard compelling evidence in
support of amendments allowing the Industrial Commission to dismiss an
application where the applicant does not attend proceedings. There have been
cases where an employer has been obliged to attend proceedings, often at great
personal inconvenience and to the detriment of his or her business, and where
an applicant has not appeared, giving no good reason for failure to do so.
There have been cases where resolution has not occurred because of an
applicant’s lack of cooperation, or where the system is abused by an
unscrupulous applicant. As a VACC representative told the Committee:
In the instance we have at the moment, the employer has taken
the whole day out to prepare witness statements. He has gone through excessive
cost to ensure that his other witnesses are available for an arbitration
hearing that is due to commence on Monday. We now have the lawyers frantically
ringing to try and resolve the matter at the last minute. What happens if they
simply withdraw? And it was without merit – another case of where the applicant
had physically assaulted another employee. ...It has been twice for conciliation.
It is now scheduled for arbitration. The employer has been involved in the
preparation of this case, in appearances before the Commission, and it just
really is unfair. ...There should be a process through which this situation can
be rebalanced. ...a lot of employers are very concerned about the effects of
receiving an unfair dismissal claim and how they will cope in defending it. It
puts them off engaging employees.[19]
2.26
This evidence brings into focus the main purpose
of this amendment, which is to rebalance the operation of the jurisdiction to
ensure a fair go all round and to remove hindrances to employment which the
jurisdiction creates. Over the past two years the Committee has taken evidence
on termination of employment issues on three separate occasions. On each
occasion the evidence pointed to the difficulties faced by small business,
particularly single employer operations, in managing termination processes
involving unmeritorious claimants. The bill does not substantially alter rights
of access to the jurisdiction, rather, it makes sensible changes to prevent the
jurisdiction being brought into disrepute by unmeritorious or vexatious
claimants.
Conclusion
2.27
The four bills considered by the Committee
present a modest and well-considered package of important amendments to the
Workplace Relations Act. The intention of the legislation is to ensure that
current legislation works more effectively in the light of three years of
experience which employers, employees and other interested parties have had.
Few if any submissions devoted any space to criticising the substance and
principles of the Workplace Relations Act. Its supporters are critical of some
of its detail, and the Committee majority is largely satisfied that the
problems which have been identified are properly amended in these bills. This
legislation contains most of the substance of the so-called second wave
legislation considered by the Committee late in 1999. The report on the far more
extensive More Jobs Better Pay Bill provide a more detailed summary of evidence
on a wider range of issues than is to be found in this report.
2.28
The passage of these four bills will see a quite
marked improvement in the operations of the act and would lead to much greater
efficiencies in both its administration and in the consequences of its
application to the workforce and to industrial productivity. The Committee
majority is sometimes struck by the fascination with which opponents of
workplace reform have for the forms and traditions of the old industrial
relations regime, with all its residual complications and restrictions, and the
prevailing notion that workplace relations represent some kind of final outcome
rather than being a facilitative framework for employers and employees. The
outcome from good workplace relations legislation is improved employment growth
and higher productivity. It is noteworthy that in none of the evidence given to
the Committee by trade union representatives were these matters mentioned.
Recommendation
2.29
The Committee majority recommends the Senate
pass all four bills without amendment.
John Tierney
Chair
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