Australian Democrat Senators' Report
SUPPLEMENTARY
REPORT ON THE WORKPLACE RELATIONS LEGISLATION AMENDMENT (MORE JOBS, BETTER PAY)
BILL 1999
SENATOR ANDREW
MURRAY: AUSTRALIAN DEMOCRATS:
November 1999
1 Introduction
Workplace Relations reform often
generates great passion from unions of employers, and unions of employees, and
individual workers and employers. This is also reflected in the ranks of
politicians, particularly if they come from those unions of employers and
employees.
The Workplace Relations
Legislation Amendment (More Jobs, Better Pay) Bill 1999 (WRLAB) is notable
for having drawn great passion from unions of employees, but relatively little
from their employer counterparts. It does not seem to be a bill that has
excited employers as much as previous industrial relations legislation.
The Democrats are beholden to
neither unions nor business. Our policies are strongly supportive of a fair
balance between the rights of unions and employers, and of ensuring a strong
award safety net, particularly for workers in a disadvantaged bargaining
position. We support access to the independent umpire in the Australian
Industrial Relations Commission, we support productivity-based enterprise
bargaining where employers and employees genuinely wish to bargain, and
promoting industrial democracy.
These background principles guide
our approach to this legalisation.
This bill is part of a process,
the third in a row. This is the third wave of workplace relations legislation.
The first wave, with probably the
greatest assault to date on the arbitral powers of the AIRC, was Labor’s
Brereton reforms of 1994. These laws severely restricted the capacity of the
Commission to vet enterprise agreements if they met the global no disadvantage
test. As a forerunner to allowable matters, Labor’s reform blue print in the
‘Working Nation’ White Paper in 1994 envisaged awards being pared back to eight
to ten core conditions, and enterprise agreements becoming the principle means
for advancing industrial causes.
The second wave was the
Coalition’s Reith reforms of 1996, which picked up Labor’s ‘Working Nation’
blue print, and threw in some old-fashioned Coalition anti-union sentiment. It
produced an overhaul of the award system, the introduction of freedom of association,
the regulation of industrial action and secondary boycotts, and it proposed
Australian Workplace Agreements. The Democrats insisted on more than 170
amendments to this bill to shift it from an anti-union bill to a more even
handed reform. Our intention was to allow for more flexibility in conditions
upwards and sidewards, but not downwards in terms of reducing wages and
conditions.
This Committee has been asked to
look at the effectiveness of the 1996 reforms, and it is worth restating some
of the evidence on the efficacy of the 1996 reforms. In doing so, it is
instructive to use the five tests that Labor’s shadow industrial relations
spokesperson set down in Parliament in 1997:
Industrial disputation:
First, he asked, will there be
fewer disputes than under the previous regime?
The answer is yes. The
average number of days lost fell from 61.5 days per 1000 employees per month in
Labor’s last two years to 41.5 days per 1000 employees now.
Employment:
Two, will there be more jobs?
In the last eighteen months of
the Labor government, 124,000 new jobs were created, of which 43,600,or 35%,
were fulltime jobs. In the eighteen months of the Coalition Government
following the 1996 Workplace Relations Act, 290,000 new jobs were created, of
which 150,000 or 52%, were full time.
Wage outcomes:
Three, will the distribution of
wage outcomes and benefits be fairer after than before?
Answer, yes and no. In
the last two years of Labor, real wages increased by 0.9% and 0.3%
respectively, compared to increases of 4.2% and 2.5% respectively in the last
two years.
National Wage Case Increases
awarded by the AIRC under the new Act for the lowest paid over the last three
years have totalled $36 a week, 50% more than the $24 a week awarded in the
last three years of the Labor Government. Despite these real increases at the
bottom end, the ABS reports that the distribution of income in Australia grows
more unfair each year. This unacceptable trend remains unchanged from Labor's
years.
Productivity:
Again, more good news. In the two
years to June 1996, under the old Act, labour productivity rose by an average
of 1.7% a year. In the last two years under the new Act, productivity has
risen by 3.4% a year.
Outcomes:
Five, will the overall wage and
salary outcomes be more consistent with a low inflation, low interest rate
environment than the outcomes of the present system?
Answer, yes. It is well known
that all of this – rising employment, rising real wages, rising productivity,
has come in a period of low inflation and low interest rates.
So, on the key economic criteria
set by Labor for the 1996 law, it has been clearly a success in delivering
better economic outcomes. That is evidenced by higher real wages, employment
and productivity.
In contrast, it should be noted
that union membership continues to fall, from 50% of the workforce when Bill
Kelty took over the ACTU in 1982, to 40% by 1992, to 31% by 1996 and down to
28% by 1998. Only one in five private sector workers are now union members.
Interestingly, the decline in
union membership is slowest among women, with membership falling 6.5% over the
last four years, compared to the 13.6% fall in membership of men.
Dealing with a few other points.
The Office of the Employment Advocate has been criticised for its policing of
freedom of association claims. It is to be noted that the freedom of
association provisions the Democrats agreed to in 1996 were tested and were
crucial to the legal victories of the MUA during the waterfront dispute last
year.
It should also be noted that the
International Labor Organisation has criticised the 1996 law's restriction on
industrial action, arguing that they breach ILO conventions on collective
bargaining. Labor's 1993 legislation also breached ILO conventions.
On an operational level, the
problem with federal unfair dismissals so complained about by employers under
Labor's laws has been largely resolved. Claims are down by 50% in the Federal
system under the 1996 Act.
The Australian Industrial
Relations Commission has asserted its independence. Sometimes unions have been
pleased with the results, sometimes employers and sometimes neither. That is
the function of an umpire - to make decisions without fear or favour. Some
examples are its rejection of Minister Reith's low Safety Net wage increase
offers, and its decisions on the Coal Industry and Tallies.
The award simplification process
appears to be proceeding smoothly, with around 50% of all Federal awards either
simplified, set aside or deleted, and a further 30% currently being reviewed by
the Commission. It has been a time-consuming process, but there have been some
good results. The Metal Industry Award, for example, has been reduced from 447
pages to 202 pages, with 132 clauses deleted and 7 related, but unnecessary,
awards, set aside.
This is a standard that the
Federal Parliament itself can never hope to reach. Minister Reith's third wave
workplace relations bill ‘simplifies’ the law by increasing its length by at
least 50%.
The Democrats do not believe that
a strong or compelling case has been made out on the need for major further
reform. The 1996 reforms, whilst not all positive in their effects, have, in a
macro sense, assisted in delivering higher real wages, higher productivity,
higher employment, and National Wage Case safety net increases, while also
assisting in reducing industrial disputation.
Yet, those reforms are not yet
fully bedded down. In particular, the enormous undertaking of award
modernisation and simplification is only half completed.
Many important provisions of the
new Act are yet to be tested in the courts or by the Full Bench of the
Commission.
The Democrats are not opposed to
improvements and technical changes to the Act. But it is just too soon for
major change. We are also prepared to consider clearly identified operational
deficiencies in the Act. Some are indeed addressed in the Government’s bill,
while others have been raised in submissions to the Committee.
However, in many respects the
1999 bill goes much further than the 1996 bill. Amongst other things, the bill
proposes a further watering down of the scope of awards (and another round of
award simplification when the current one is incomplete), restrictions on
access to the Commission’s arbitral powers, reductions in the vetting of
enterprise agreements, restrictions on access to industrial action and the
ability of unions to organise, recruit and represent members. The Democrats do
not believe that a case has been made out for such broad ranging changes.
Following the major changes
introduced by Ministers Brereton and Reith in the space of a few years, we
believe further changes to the Act should be evolutionary. They should be
specific and limited, not wholesale and general.
This bill as it stands is too
harsh, too regressive and too unfair to attract our support in its current
form.
In this minority report, I deal
with the amendments in the bill schedule by schedule. My comments make it clear
that the vast majority of the major provisions in the bill are unacceptable to
the Democrats, while many of the remaining parts of the bill are likely to need
substantial amendment to remove harsh, repressive or unnecessary additions.
2 'Just say no' or 'Just say yes'
There has been a strong ‘just say
no’ campaign waged on this bill by the unions, and a weaker ‘just say yes’
campaign waged by a few employer organisations. During my time in the Senate
the Australian Democrats have been subject to a number of 'just say no' or
'just say yes' campaigns, by absolute opponents or absolute supporters of
proposed Government legislation. At times the Government itself, the
Executive, have been guilty of the 'just say yes' mantra, and the Opposition,
the Executive-in-waiting, have been guilty of the 'just say no' chant.
At its worst such attitudes deny
the right of the people at large, through their parliamentary representatives,
to consider matters on their merits.
At the heart of such demands is a
denial of the duty of parliamentarians, particularly Senators, to examine all legislation
on its merits. At the heart of such demands is a desire to bypass
parliamentarians altogether, both in their representative capacity, and in
their responsibility capacity.
These sorts of demands are
foreign to the two decades of Australian Democrat tradition of responsible and
democratic Senate review. Every Government, whatever its philosophy, whatever
its proposal, has the right to put its legislation forward and to have it
properly considered by Parliament.
There are a number of business groups
who have been at the forefront of demanding that the Senate be a rubber stamp.
Indeed, some submissions from business have been to the effect that this bill
should be rubber-stamped without amendment or due consideration of the merits.
On the other side the unions have recommended that the bill be rejected in full
without amendment or due consideration of its merits.
The ACTU, for effective
campaigning reasons, have promoted the 'just say no' campaign, with a demand
that the WRLAB be rejected at the second reading - in other words before any
schedule, any clause, can be voted on. This demand has been taken up by some
members of the parliamentary wing of the Union movement, the Labor party.
In this report, I propose to
consider the merits of the various aspects of the WRLAB. The Democrats party
room will determine our final position, assisted by this report.
My conclusions on the merits of
each schedule highlight the most serious of the flaws of the bill. My overall
conclusion is that major provisions of the bill should be rejected as harsh,
unfair, unbalanced and unnecessary. The analysis highlights that, of the
acceptable schedules and clauses left, quite a number in my view would need
substantial amendment and modification to form the basis of good law. It is
evident that only a minority of clauses are non controversial.
3 WRLAB overview
The Inquiry has convinced me that a number of schedules have
very little merit overall, and should be rejected outright.
| Schedule |
Subject |
| |
|
| 1 |
Objects |
| 4 |
Conciliation |
| 5 |
Mediation |
| 6 |
Awards |
| 8 |
Certified Agreements |
| 9 |
AWA'S |
| 12 |
Secret Ballots |
| 16 |
Independent Contractors |
| |
|
| There are five Schedules of relatively low importance (except No 15), which are worthy of due consideration. In its submission, the ACTU, despite its 'just say no' campaign, did not even comment on these five schedules of WRLAB. I can only conclude that this is because these schedules either contain good legislation for employees, (Schedule 15 contains clauses which materially and beneficially assist Victorian employees), or are quite modest in effect. These Schedules are: |
| |
|
| 3 |
Employment Advocate |
| 10 |
Relevant and Designated Awards |
| 15 |
Victoria |
| 17 |
Miscellaneous Amendments |
| 18 |
Amendments of other Acts |
| |
|
| The remaining Schedules have major provisions that should be rejected, and other clauses, which need amendment. These schedules nevertheless retain substance worth considering further. |
| |
|
| 2 |
The AIRC |
| 7 |
Termination of Employment |
| 11 |
Industrial Action |
| 13 |
Right of Entry |
| 14 |
Freedom of Association |
4 Schedule 1: Object of the Workplace Relations
Act
This Schedule, in my view,
detrimentally alters the direction of the Workplace Relations Act
(WRA). In addition, any view of the Objects of the Act should await the
outcome of discussions and determinations between the Government and the
International Labour Organisation (ILO), whose Committee of Experts have made
some criticisms of the WRA, which need resolution.
5 Schedule 2: Renaming of the Australian
Industrial Relations Commission etc. and restructuring of the
Commission
Much of this schedule deals with
the renaming and restructuring of the Commission and Registry. While I do not
personally see the need for a name change (to the Australian Workplace
Relations Commission, and the Australian Workplace Relations Registry), it is a
measure that has not generated much heat. The Government also intends to
restructure the Commission, in a manner that appears acceptable.
The Democrats should not,
however, agree to give members of the Commission fixed terms of limited
tenure. As has been clearly shown in this Government’s life, controlling the
appointment process, controlling the dismissal process, and putting employees
on short-term contracts, results in a significant and regrettable loss of
independence. We opposed the loss of tenure of the Clerks of the two Houses of
Parliament (which was supported by the Labor party and the Coalition), and we
oppose the way in which senior bureaucrats have been made subject to political
control. This attempt to put Commissioners on limited tenure should also be
opposed.
Consideration should be given to
the now standard Democrat amendment that appointments, (to the Commission in
this case), be made on merit. Democrat Senators have now attempted to have
this amendment accepted for numerous Government appointments, in many bills.
Even the majoritarian British Parliament could accept such a principle. No
doubt the Coalition and the Labor party will distinguish themselves by voting
against this yet again. I will not detail the case for this proposed amendment
here, because I have detailed it in other Reports, most recently for the
Corporations and Securities Committee.[1]
6 Schedule 3: Employment Advocate
The seven clauses of this
Schedule are relatively modest and technical in nature, and only one may be of
concern.
Addressing this Schedule may
provide the opportunity to address a number of amendments needed to the WRA
itself, as suggested by witnesses. For instance, the ACTU want the Employment
Advocate to examine proposed agreements to ensure they properly consider work
and family responsibilities, and in particular whether flexible hours
provisions contravene the no disadvantage test, if they result in disadvantages
to employees with family responsibilities.
Several unions have complained
that the Employment Advocate is less than even handed in dealing with Freedom
of Association rules, targeting unions for allegedly inappropriate recruiting
behaviour, but doing little to prevent de-unionisation strategies by
employers. It may be appropriate for the Act to be amended to require the
Advocate to be even handed in these matters.
7 Schedule 4: Conciliation
The Australian Industry Group
(AIG), the ACTU, and other key witnesses are opposed to this Schedule, and I
agree with them. The existing system of conciliation is accessible, relatively
uncomplicated, and is widely supported by experienced practitioners of
industrial relations.
8 Schedule 5: Mediation
Union input on this Schedule was
weak, and of all the witnesses the AIG gave the most detailed critique. The
AIG do not support the Schedule, and their alternative proposal deserves
serious consideration, and actually increases the power of the Commission in
this area.
The Government proposes setting
up an alternative regime to that of the AIRC. I do not recommend supporting
that proposal. Mediation should be built into the existing system, build on
the strengths of the existing system, and where legislated for, should be
publicly funded. That obviously does not preclude the existing and continuing
use of private mediation.
9 Schedule 6: Awards
This is one of the least
attractive schedules in the bill. It has the effect of watering down the award
safety net and launching a further round of award changes when the current
exercise of award simplification is only half complete. In 1997, there were
3197 federal awards. As at 31 October 1999 359 awards had been simplified, a huge
number (1245) had been set aside or deemed to have ceased operation, 1172 were
undergoing simplification, and 363 were still to begin simplification.
I oppose this Schedule. There
are very few clauses worth considering, and a number of the Government’s
proposals are frankly regressive.
However, one of the clauses that
would otherwise be worth considering, (although it would need substantial
amendment), concerns the practice of serving logs of claims to initiate paper
disputes. These can frighten the life out of small business, quite
unnecessarily.
Much has been made of the fact
that awards still contain anomalies in them. For instance, I agree there is
little to justify keeping union picnic days in awards. However, the fact is
that the award simplification and modernisation process begun under the WRA is
only half way through. There is little point proposing further
rationalisation, simplification, or amendment until that process is bedded
down, and its consequences fully understood.
As it is, it is regrettable that
Labor and the Coalition have already this year made a major regressive change
to awards by entrenching discriminatory wage rates for Australian adults under
the profoundly unfair system known as youth rates. How Australians who are legally
adults above the age of 18 years can be obliged to accept lower wages for doing
adult work still amazes me.
10 Schedule 7: Termination of Employment
The Democrats have consistently
opposed removing the right to access unfair dismissal provisions, but have
always supported improvements to process. There are clearly still problems
associated with time, cost and process issues, and the SDA submission for
instance, gave support to some of the clauses in the bill.
The evidence of the Queensland
Government added further to debunking the myth propagated by COSBOA, the ACCI
and the Government that taking away unfair dismissal provisions will create
significant numbers of jobs for small business. In the years that Queensland
small business were exempt from state unfair dismissal provisions, no extra
jobs were created.
I agree with Jobwatch that
certain categories should in fact be added to those who can access unfair
dismissal provisions – such as trainees on registered training agreements. I
am also concerned that probationary periods be properly integrated into the
Act’s provisions.
A significant number of clauses
need amendment, but some should be rejected completely, such as those concerned
with constructive dismissal, and those which provide unnecessary further
restrictions for small business operational requirements. While this Schedule
seeks to attend to some of the procedural problems with the conciliation phase
of unfair dismissals and compensation agreements, the proposals in some
respects go too far to reduce the rights of the parties and would need
significant amendment.
11 Schedule 8: Certified Agreements
Although there are a few
technical amendments that are supportable, and a number of clauses that could
be considered if amended, on balance it is better to oppose this Schedule
altogether, than attempt to gut it. A large number of provisions are
objectionable and would reduce the protections for employees.
12 Schedule 9: AWA’s
There are a number of positive
matters dealt with in this Schedule, such as better provisions for recovering
money due to employees, but the major changes proposed are regressive in that
they seek to reduce the level of scrutiny of AWAs by the Employment Advocate
and the Commission, and water down the protections for employees. I recommend
the Democrats oppose the Schedule.
13 Schedule 10: Relevant and Designated Awards
While aspects of this schedule
are essentially technical in nature, some of the clauses would need amendment.
In particular, the revised and more restrictive definition of the relevant
award clause would need to be opposed.
14 Schedule 11: Industrial Action
In my view, it is difficult for
the Government to advocate a much greater tightening up of this area of
industrial disputes, when it is simultaneously boasting that Australia has the
lowest level of industrial disputation in eighty years.
Industrial disputation is an
essential part of the bargaining and market process, and parties to disputation
must be given the opportunity to work matters through. The system we now have
seems, by and large, to serve Australia well.
This schedule is about seeking to
restrict access to industrial action and increase access to penalties in
respect of such action. As such, it seeks to respond to what, in an objective
sense, is a non-existent problem. Section 127 does not need to be changed.
The existing section 127 provides a strong deterrent to disruptive industrial
action, and the Government has failed to make out a case that the provisions
are not working and need these reforms. Nor has the Government made out a case
for extending the notice period for industrial action from 3 to 5 days, or for
broadening the already too broad definition of prohibited strike pay. Indeed, I
believe that the current definition of strike pay needs to be revised to move
to a less restrictive approach.
In terms of the provisions on
dealing with pattern bargaining, I note that the ACTU and the AIG have made a
number of constructive comments in dealing with pattern bargaining which are
worth further consideration, although the amendments as they stand go too far.
15 Schedule 12: Secret ballots for protected action
This Schedule introduces a
rigorous secret ballot regime for industrial action. As a principle, the
Australian Democrats are generally strongly supportive of direct democracy. Democrats
are also strongly supportive of the democratic protections afforded by secret
balloting processes. These are available under the WRA. At present pre-strike
ballots are available to employees under section 136 of the Act, and the
Commission can order secret ballots at its discretion under section 135. And
of course, elections of union officials are by secret ballot. The provisions
of section 135 and 136 have apparently been rarely used, suggesting that there
maybe little real demand from employers or employees for further access to
secret ballots.
However, the new provisions pose
great dangers of actually escalating conflict, lengthening disputes, and making
for more litigation. (see submissions from Professors Isaac and McCullum.) The
committee heard evidence concerning the poorly designed Western Australian
secret ballot laws, forced through their compliant upper house before the
Coalition lost control of it. They have been an utter failure.
In short, the provisions of this
Schedule add little to industrial democracy and add greatly to impediments to
unions to undertake legitimate industrial action, while opening up the prospect
of longer disputes and litigation.
This schedule should be opposed
outright. It does not add to industrial democracy.
16 Schedule 13: Entry and inspection of premises by organisations
This Schedule seeks to replace
the right of entry provisions inserted by the Democrats and replace it with a
variant of the right of entry scheme we rejected in the 1996 bill. It is an
unnecessary and unacceptable impediment on the rights of unions to meet and
recruit members, and as such is contrary to the general principle of freedom of
association. The Democrats support unionism, whether of employees or
employers. Collective representation is effective representation.
The Schedule also contains
provisions to deal with breaches of the right of entry scheme by union
officials. Evidence from the Master Builders Association indicates that
intimidation and unacceptable behaviour still bedevil the practice of entry and
inspection of premises.
It is vital for industrial
democracy and good workplace practice that search and entry provisions are
retained, but better practice is desirable. Unions are in a unique position,
since they are the only private sector bodies allowed search and entry rights
by law. Unions need to adopt best practice in search and entry as exemplified
by the best of the Government authorities that have this power. As a start in
this direction, I believe a code of practice on search and entry ought to be
developed by the Commission, in conjunction with employer and employee
organisations.
17 Schedule 14: Freedom of association
In the context of the WRA,
freedom of association is a fundamental guarantee of the right of employees to
join or not to join employee organisations. Resistance to this principle,
which at its extreme wishes to force employees to be members of unions,
indicates an authoritarian and conformist attitude best associated with by gone
days of fascism and communism. Modern resistance to the practice in
Australia however, often reflects a fear that this principle is being perverted
to encourage employees not to join unions. That, in its turn is
anti-democratic, and contrary to the best interests of working people.
There is nothing wrong, (and much
that is right), with union encouragement clauses being included in agreements.
Better workplace practices, greater equity, and better productivity often
result when workplaces have strong union representation. The fact that some
strong unions can also behave badly and counter-productively in some workplaces
does not negate the general point.
Some of the clauses in this
Schedule advance the principle of freedom of association and others retard it.
Many unions have expressed
concerns that the Employment Advocate has been less than even handed in the
application of freedom of association provisions, targeting union recruiting
activities more heavily than deunionisation activities by employers. Were this
Schedule passed in full, I believe that it would have the effect of tilting the
freedom of association provision more heavily against the rights of unions to
organise effectively. The proposed new closed shop rule is particularly
offensive in this regard.
There are a small number of
clauses in the schedule which appear to be technical in nature. But other
clauses, such as the new list of prohibited reasons in section 298BA appear narrower
than the current protections for legitimate union activities, and as such
should be viewed sceptically. I am also not readily encouraged to allow the
moving of the jurisdiction for these provisions from the specialist judges of
the Federal Court to the more generalist State courts.
In short, while some provisions
of the Schedule might be acceptable, the schedule as a whole needs drastic
surgery.
18 Schedule 15: Matters referred by Victoria
Although there are a couple of
clauses which would affect Victorian employees negatively, and should be
opposed, and some that need amendment, this Schedule is essentially beneficial
to the interests of Victorian employees because it expands the rights of
Industrial Inspectors and broadens out access to minimum conditions. As such,
the schedule has much to recommend it. Indeed, I would go further to suggest
that the Federal Government should be now discussing with the Victorian
Government means of improving access of the 700,000 award free Victorian workers
to the Federal awards system, and this schedule might need to be amended
further to achieve such a goal.
19 Schedule 16: Independent contractors
These seven clauses overturn
provisions which presently confer jurisdiction on the Federal Court to review
contracts for services made by independent contractors.
The Democrats supported the
passage of these provisions in 1992 and opposed their removal in 1996.
They should be retained, and the Schedule opposed.
20 Schedule 17: Miscellaneous amendments
No submissions have been received
on this Schedule. These clauses are mostly technical, facilitative, or
uncontroversial.
20 Schedule 18: Amendments of other Acts
This Schedule includes another
name change, which I see no point in refusing. Other clauses are mostly
technical, facilitative, or uncontroversial.
Senator Andrew Murray
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