Chapter 12 - Schedule 14 - Freedom of association
12.1
This Chapter deals with amendments to the
freedom of association provisions in Schedule XA of the WR Act. The amendments
are set out in Schedule 14 of the Bill.
Outline of proposed amendments
12.2
The amendments are directed at closing gaps in the coverage of
the existing provisions as well as additional measures in relation to closed
shops. The major changes are:
- the prohibition of ‘indirect or implied threats’;
- re-enactment, in a single provision, of the list of ‘prohibited
reasons’ for conduct by industrial associations, employers, employees,
independent contractors and people who engage independent contractors, and
extension of the list to cover additional matters such as conduct aimed at
forcing people to pay fees to a union in lieu of union dues and other union
membership related matters;
- express prohibition of discrimination by an employer against an
employee or independent contractor for a ‘prohibited reason’;
- consolidation into a single provision of all conduct for a
‘prohibited reason’ by industrial associations against employers, independent
contractors and employees;
- prohibition of the establishment or maintenance of a ‘closed
shop’;
- prohibition of indirect conduct to bring about a contravention of
the freedom of association provisions;
- vesting jurisdiction in State courts to deal with breaches of the
freedom of association provisions, and allowing the courts to grant injunctions
to prevent an apprehended breach of the Act; and
- expanding the definition of ‘objectionable provision’ to include
union encouragement and discouragement clauses, and preventing these types of
clauses being included in awards or certified agreements.
12.3
The provisions
that attracted most attention in this Inquiry were the closed shop provisions,
the amendments relating to ‘objectionable provisions’ and the amendments to
prevent coercion into restrictive arrangements. The rest of the amendments were
fairly uncontroversial, either because the amendments were generally agreed, or
because the amendments simply re-enacted many of the existing freedom of
association provisions in a simplified, consolidated form.
Closed shop provisions
Evidence
12.4
There are already provisions in the Workplace
Relations Act which would prohibit employees from being coerced to join a
union, for instance, section 298K prohibits employers from refusing to employ a
person because they are not a union member. Other provisions relate to coercion
by unions.
12.5
The new provisions introduce the concept of a
‘closed shop’ to the Act, and give more guidance as to when a closed shop is in
existence. The Bill does not exhaustively define ‘closed shop’. However, the
Bill inserts a new section 298SB, which provides that a closed shop is presumed
to be in existence where a number of conditions are fulfilled.
12.6
Unfortunately a number of witnesses
misinterpreted how the provisions would operate:
My workplace has 80 per cent
union membership. This has nothing to do with anyone being forced to join;
rather, young people cannot help but see how useful and helpful it is to have a
union represent them. In a situation such as this with 80 per cent membership,
under the proposed legislation, my workplace, and any workplace with over 60
union membership will be deemed a closed shop...Do the last 20 per cent who
joined the union have to revoke their membership and therefore their rights?[1]
12.7
The Department
provided supplementary submissions on notice emphasising that this is not the
way that the proposed provisions would work:
The circumstances described
(workplaces with 60% union membership) would not on their own indicate a
contravention of the proposed closed shop provisions...At least three things
would need to be shown in order for there to be a contravention of the closed
shop provisions...The first is that a closed shop is in existence or is intended
to be brought into existence. The second is that a person has established or
maintained the closed shop (alone or with others), or engaged in conduct with
intent to establish of maintain a closed shop. The third is that that person
has been found to have engaged in other contravening conduct as described in
proposed section 298VA.
12.8
In other words,
union membership at levels of 60% or more does not automatically mean that a
closed shop exists. There would need to be additional evidence that it is a
condition of employment that employees join a union or that employees would be
disadvantaged if they did not join a union.
12.9
Employer groups
generally supported the policy intention behind the provisions, but some were
concerned by the reverse onus of proof created by proposed subsection 298VA(4)
– this subsection provides that if a person (including an employer) has been
found to have breached the freedom of association provisions relating to
coercion to join an industrial association, then it is presumed that the person
was engaged in conduct with intent to establish or maintain a closed shop, or
was knowingly concerned in the establishment or maintenance of a closed shop,
unless the person can prove otherwise.
...this reverse onus creates a
situation where it is very difficult for persons to successfully defend
applications for interim injunctions, where the test for such injunctions are
that there is a serious issue to be tried and balance of convenience. Once an
interim injunction is made it can remain in place for many months and
detrimentally impact on the injuncted party to the extent there is little
choice except to settle the matter.[2]
12.10
The Australian
Industry Group stated:
The word ‘maintain’ could
refer to passive situation of allowing a situation to continue. This could mean
that an offence may be committed where an employer allows 60% of employees in a
particular group of employees to continue to belong to a union in circumstances
where it may be argued that it is reasonably likely that the employer may
prejudice an employee’s employment for not being a member of the union...[3]
12.11
Some unions and
employee associations, academics and the Queensland Government opposed the
provisions. The following comment is representative of these submissions:
A more fundamental concern
is that these provisions make an assumption that a high level of union
membership is prima facie evidence of a closed shop. They fail to acknowledge
that in a number of workplaces both employers and employees recognise the
benefits of a highly unionised workforce. Rather than promoting an artificial
conception of unions as ‘third parties’, it should be recognised that unions
can and do play an integral role at the workplace and industry level to promote
improvements in productivity, innovation, employment and equity outcomes. To
suggest otherwise is purely an ideological viewpoint.[4]
12.12
Some witnesses
expressed concern about how the provisions would be enforced:
...to police this, somebody,
presumably government inspectors or perhaps employers, would have to compel
workers to indicate whether or not they were members of a union. How else can
you obtain the evidence that is needed to establish the so-called 60 per cent
rule? We would have the spectre of government inspectors...compelling workers to
provide evidence of their union status.[5]
12.13
Some witnesses
questioned why there would be no converse presumption that a non-union shop
existed if union membership was below a certain rate.[6]
12.14
The Department
provided supplementary information on notice addressing this point, explaining
that:
...closed union shops are more
likely to exist and become entrenched through some form of explicit or implicit
arrangement between unions and employers in certain industries. Additional
measures are seen by the Government as being necessary to address this more
systematic restraint of freedom of association.[7]
12.15
The need for
further action to address ‘systematic’ restraint of freedom of association in
some industries was put to the Committee in evidence about the continuing
impact of a union ‘closed shop’ on non-union subcontractors in the construction
industry. Employees of Western Ceilings, a small family company, generally do
not join a union because of their religious beliefs. The company submitted:
In the period from October
1996 to February 1997, our presence on commercial sites provoked industrial
action on a number of occasions, following visits to these sites by an
organiser from the CFMEU. We took these disputes to the Arbitration Commission
and in each case we received a favourable decision which enabled us to complete
our contracts...However, we have become painfully aware that these disputes have
damaged our goodwill with a number of builders who once awarded us regular
work...It is also significant that the contracts which have been won since the
disputes are for work inside completed buildings, which are no longer regarded
as construction sites. We know that each of these builders would be happy to
use our services more frequently, but they are restricting the work awarded to
us to those sites that are unlikely to attract attention from the unions.[8]
Conclusion
12.16
A majority of the Committee is satisfied that
the legislative provisions as drafted will ensure that workplaces will not be
investigated simply because of high union membership. The OEA would also
require evidence that union membership is a condition of employment, or that
people would be disadvantaged if they did not join the union.
Recommendation
12.17
That the proposed new provisions relating to
closed shops be enacted.
Objectionable provisions
12.18
‘Objectionable provisions’ must be removed from
awards and agreements under existing section 298Z of the Workplace Relations
Act. Subsection 298Z(5) defines ‘objectionable provisions’ as ‘provisions that
require or permit...or have the effect...of requiring or permitting any conduct
that would contravene (the freedom of association provisions).’
12.19
This encompasses clauses that express preference
in employment for people who are or are not members of a union. The Bill
proposes to expand the definition of ‘objectionable provisions’ so that awards
and agreements cannot include any provisions that encourage or discourage union
membership, or indicate general support for employees being a union member or
non-member, even if these clauses fall short of a preference clause.
Evidence
12.20
The Department suggested that the proposed
amendments were designed to ensure that awards and agreements do not indirectly
express preference for union membership or non-membership ‘through statements
of encouragement or discouragement or service fee arrangements. Such statements
can require the employer to pursue an active role in the encouragement or
discouragement of union membership. Such action on the part of an employer will
inevitably impact upon the freedom of choice of some employees.’[9]
12.21
The Business Council of Australia supported
these amendments, considering that union encouragement clauses should be
proscribed because:
They...offend the principle of freedom of association...[and because]
Enterprise bargaining and agreements should be about working arrangements
between the employer and employees – not about the self-interests of the
bargaining agent.[10]
12.22
The Business Council of Australia provided an
example of a clause in the KFC National Enterprise Agreement:
It is the policy of the employer that all its employees subject
to this agreement shall join the union. Accordingly, the employer undertakes to
positively promote union membership by strongly recommending that all employees
join the Shop, Distributive and Allied Employees Association...All employees,
including new employees at the point of recruitment, shall be given an
application form to join the union together with a statement of the employer’s
policy.[11]
12.23
It would appear from the evidence of the
Business Council of Australia that in some cases employers agree to union
encouragement clauses in their certified agreements at the insistence of a
union, not because the employers believe that this will promote a harmonious
and productive workplace.
12.24
The Australian Mines and Minerals Association
expressed their concerns this way:
It is naive in the extreme or misleading to suggest that the
presence of so-called ‘encouragement clauses’ within agreements do not lead to
the placement of unreasonable pressure on employees or prospective employees to
join or remain a member of a particular industrial organisation. The current
Act has been interpreted as permitting such clauses. Pressure through
‘encouragement clauses’, direct or implied, runs counter to the principles of
freedom of association. AMMA therefore strongly supports the above provision as
doubt will be removed as to what constitutes an unlawful provision.[12]
12.25
Other employer groups, such as the Australian
Catholic Commission for Employment Relations also supported the amendment:
...we say you have the right
to join or not to join a union, free from coercion or duress or influence...when
we looked at the encouragement clauses, we felt that was providing an influence
in one direction that would be inconsistent with our principles.[13]
12.26
Witnesses
representing unions and submissions from unions opposed the proposed
prohibition of union encouragement clauses. The SDA submission stated:
The union encouragement
clauses do no more than create an environment in which organisers and delegates
can actively recruit union members without the employees being fearful that
they may be victimised or discriminated against by the employer if they choose
to join the union.[14]
12.27
However, the
Office of the Employment Advocate, which has responsibility for the freedom of
association provisions of the Act, gave evidence that some employers do
interpret award encouragement clauses as requiring them to coerce employees to
join the union:
Certainly we have had
experience of employers telling us, when we say we are concerned about their
conduct, ‘Oh no, we have to make everyone join the union.’ What they then do is
point to an encouragement clause. I believe they are not understanding what the
clause says. The clause does not require them to make people join; it only
requires them to perhaps encourage people to join. As long as you do that
properly you can do that without breaching the freedom of association laws.[15]
12.28
Aside from this
issue of misinterpretation or misunderstanding, the Employment Advocate was not
opposed to employers encouraging or discouraging union membership in a manner
that did not infringe on an employee’s right to
choose. [16]
Conclusion
12.29
A majority of the Committee notes that union
encouragement clauses, in their implementation, probably result in employees,
particularly new starters, believing that they must join the union in order to
keep their jobs. The Committee majority believes that union encouragement
clauses do operate in some cases to restrict employees’ freedom of association.
Recommendation
12.30
That the provisions to prohibit union
encouragement clauses in awards and agreements be enacted.
Restrictive arrangements
12.31
The Bill prevents action being taken against a
person because they have refused to enter into a ‘restrictive agreement or
arrangement’ (see paragraph 298BA(m)). Subsection 298BA(4) would define
‘restrictive agreement or arrangement’ to mean:
...a written or unwritten
agreement...or arrangement that requires a person to provide the same, or
substantially the same, terms or conditions of employment or engagement...to some
or all of the person’s employees or independent contractors that work at a
workplace or in an industry as they are provided to another person’s employees
or independent contractors who also work at that workplace or in that industry.
Evidence
12.32
There were two
main concerns about this proposal:
-
it could limit the ability of
multi-employer projects (particularly in the construction industry) to be
conducted with similar terms and conditions of employment applying to all
contractors involved in the project; and
- it could outlaw the
Homeworkers’ Code of Practice.
12.33
The Department
submitted that the purpose of the amendments was to prevent independent
contractors from being coerced to enter into multi-employer ‘site arrangements’
requiring them to provide similar terms and conditions of employment as their
head contractors and other contractors.[17]
12.34
Some employer
groups suggested that the proposed amendment did not take into account the
practical reality of conducting large multi-employer projects in Australia. The
Australian Industry Group submitted:
A specific site or project
agreement is designed to create necessary common conditions on a specific site
where numerous sub-contractors are employed. An example would be a site
agreement for construction of a city building which specifies common safety
practices applicable at the site, or common rostered days off which will avoid
delays in work due to staggered absences of sub-contractor staff...It is
submitted that major sites or projects will be unworkable without there being
the right to make site specific requirements of sub-contractors.[18]
12.35
The Australian
Chamber of Commerce and Industry agreed, citing the findings of a recent
Productivity Commission report, Work Arrangements on Large Capital Building
Projects:
While a greater enterprise
focus in negotiations is desirable, it needs to be recognised that if all work
arrangements were negotiated at an enterprise level, head contractors could
lose important elements of control over building sites. Coordinating and
planning work could be problematic if work arrangements negotiated individually
by subcontractors differed significantly.[19]
12.36
Master Builders
Australia also opposed the proposed changes which it saw as putting in jeopardy
the use of site based agreements which have been generally accepted by those in
the industry as contributing to improved industrial relations on major
projects.[20]
12.37
The Australian Mines and Metals Association
expressed similar concerns regarding resource sector projects:
Certainty and security of an investment on a project is a key
consideration. To that end, the capacity to ensure stability in employee
relations is fundamental. AMMA expresses reservations regarding the above
provision if a consequence of its passage is to further limit the capacity to
use project agreements on major projects. This area is particularly vexing
given the need to ensure certainty and security in employee relations when
considering large financial investment.[21]
12.38
Several witnesses questioned the impact of the
proposal on the Homeworkers Code of Practice . For example:
We are...concerned at the
possible implications of the Freedom of Association provisions in the proposed
Bill for operation of voluntary codes and arrangements such as that for the
Homeworkers’ Code of Practice developed through the Fair Wear Campaign which is
crucial for (Non- English Speaking Background) women. While this campaign
operates only in the area of textiles, clothing and footwear work, it is a
model of community, union and private sector cooperation to ensure that
manufacturing and subcontracting arrangements do not act to exploit vulnerable
workers...Many of our members come from countries where Governments have colluded
to act against their constituents for narrow ends. We entreat you to
demonstrate that this does not occur here.[22]
12.39
Another submission
stated:
Any changes that affect the
code will directly affect one of the main tools by which industry exploitation
is challenged. Good Shepherd notes Minister Reith’s assurances that making the
Code illegal was ‘certainly not intended’, and further that should his advice
confirm that the code would indeed become illegal, he would intend to make an
appropriate amendment. We would applaud such an amendment, but note however
that it is yet to become a reality.[23]
Conclusion
12.40
A majority of the Committee notes that the
Government did not intend that the new provisions to prohibit restrictive
agreements and arrangements would affect the Homeworkers’ Code of Practice, and
has undertaken to make an appropriate amendment to exclude the Code from the
operation of the proposed provisions if necessary.
12.41
Regarding the impact of the proposed provisions
on multi-employer site agreements, the Department’s evidence demonstrates that
it is these particular types of arrangements that the provisions seek to outlaw
(along with pattern bargaining outcomes). A majority of the Committee notes
concerns amongst employers that these provisions would have an adverse impact
on the ability of contractors to efficiently conduct large scale construction
projects, and the potential negative impacts on securing investment in
Australia’s resource sector.
12.42
However, a majority of the Committee considers
that the potential impact of these amendments on the viability of important
sectors of the Australian economy, and has reached the conclusion that these
concerns are outweighed by the importance of ensuring that independent
contractors are not coerced into providing the same conditions of employment as
their head contractors.
Recommendation
12.43
That the amendments to prohibit employers,
contractors and industrial associations from exerting pressure on other persons
to enter into restrictive site agreements or arrangements be enacted.
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