Chapter One - Majority Report
1.1
The three bills propose to amend the Workplace
Relations Act 1996 (WR Act) by:
- Codifying the current generic criminal contempt offence provision
in relation to the Australian Industrial Relations Commission (the Commission);
adding a new offence of giving false evidence to the Commission; and,
increasing the penalty provisions of the WR Act.
- Providing the Minister for Employment and Workplace Relations
(the minister) with the ability to seek financial penalties for non-compliance
with Commission and Federal Court orders; and, providing automatic
disqualification from office of officials and employees of registered
organisations who are so fined.
- Seeking to encourage the Commission to hear and determine
applications to stop or prevent strikes in a timelier manner.
1.2
These bills reinforce the Government’s
determination to have a fully functional industrial relations system by
ensuring that the integrity of the Commission is maintained. Damage to
Australian industry results from activities which are not only illegal but
which are intended to hold the Commission in contempt. There have been a number
of instances, particularly in Victoria where unions have sought to defy court and Commission orders and
not paid fines. These bills will ensure that unions and employer organisations
that disregard the law in the industrial relations system are penalised
appropriately.
The inquiry process
1.3
The compliance bill and codifying contempt offences
bills were introduced into the House of Representatives on 13 February 2003 and 26 June 2003, respectively. The Senate
referred the provisions of the bills to the committee on 14 and 20 August 2003, respectively.
1.4
The Improved Remedies for Unprotected Action
bill was introduced to the House of Representatives on 26 June 2002. The Senate referred the bill to the
committee on 17 September 2003.
1.5
The committee received 11 submissions and
conducted a public hearing in Canberra on 22 October 2003.
In preparing this report the committee has drawn on evidence it received at
that hearing and from the submissions received. Lists of submissions and
witnesses are found in appendices to this report.
Codifying Contempt Offences
1.6
This bill repeals the catch-all contempt of
court clause of the Act and specifies other criminal offences. The criminal
offences include contravening an order of the Commission, publishing a false
allegation of misconduct affecting the Commission, inducing another person to
give false evidence to the Commission and giving false evidence to the Commission.
It also increases penalties for Part XI offences including intimidation or
prejudicing another person assisting the Commission, failure to appear or
cooperate with the Commission, offences relating to the application for and
conduct of secret ballots, and employment agencies making agreements on behalf
of employers on terms that do not meet the minimum legal requirements.[1]
1.7
In his second reading speech of 26 June 2003 the then Minister for Employment and
Workplace Relations stated:
The Commonwealth has a duty to the Australian people and nation
to ensure that its laws are upheld, in this case when unlawful industrial
action threatens business performance, international competitiveness, and jobs.
It also has a duty to protect the integrity of the Australian Industrial
Relations Commission and its procedures.
...the Commonwealth will take a much more active role in
instigating legal action and pursuing penalties against people and
organisations that fail to comply with Federal Court or Industrial Relations
Commission orders. The government will make full use of existing laws to seek
penalties where there is strong evidence that a person or organisation has
defied orders and it is in the public interest to take legal action.[2]
1.8
Union concerns about the bill focused on two
main aspects – the changes to contempt offences and the increased penalties to
be applied to these offences. Unions, such as the Liquor, Hospitality and
Miscellaneous Workers’ Union (LHMWU) argue that the current WR Act, through
section 299(1)(e), already provide adequate protection against contempt thus
the codifying contempt offences bill is unnecessary.[3] Likewise the Shop Distributive
and Allied Employees’ Association (SDA) noted that there is currently ‘no
problem’ with the current contempt provisions and as such there is no
justification for making the changes proposed in this bill.[4]
1.9
The committee majority notes that the Australian
Chamber of Commerce and Industry (ACCI) supports the proposed amendments in this
bill.[5]
1.10
The Australian Industry Group (Ai Group) also
supports the bill. In its submission the Ai Group notes that a strong and
respected Court and Commission are essential components of Australia’s workplace relations system. If
parties disregard Commission or Federal Court orders the objectives of the
Workplace Relations Act will not be achieved[6]
and disruption will damage industry.
1.11
The Department of Employment and Workplace
Relations (DEWR) notes in its submission that catch all provisions such as
those in section 299(1)(e), which the bill will repeal, are common in
Commonwealth and State and Territory government legislation. However,
importantly, DEWR gave evidence that the government considered that the
amendments are necessary in order to make legal obligations clearer and more
specific, in line with government policy[7].
DEWR argues that there are difficulties with catch all contempt provisions as:
These catch all contempt provisions rely on importing common law
contempt as it applies to courts of record and applying it to the various commissions
and tribunals. The CCO Bill’s codification of the generic criminal contempt
offence provisions implements the approach recommended by the ALRC [Australian
Law Reform Commission] that “deemed” contempt provisions like current paragraph
299(1)(e) should be replaced with specific statutory offences that identify
contemptuous conduct.[8]
1.12
The committee majority notes the difficulty in
apply ‘deemed contempt’ provisions to tribunals and believes that the new
provisions will more clearer articulate contempt of tribunal provisions for
parties involved in Commission activities.
1.13
In relation to penalties, ACCI supports the new
penalties proposed in the bill, stating that the increased level of financial
penalties are consistent with the penalties provided for in previous amendments
to the WR Act for the Registration and Accountability of Organisations[9]. ACCI notes that the bill is
not breaking new ground but simply codifying what is already understood and
expected to be contempt. Additionally, these offences are drawn from the current
body of common law dealing with contempt. In summary ACCI considers:
Given that these proposed offences do not break new ground the
real issue for consideration is whether they should be codified. There seems to
be good reason to do so. The offences referred to in the Bill are arguably at
least as serious as the offences already codified in s299. It is anomalous that
some are codified but other equally obvious forms of contempt are not.
Codification would give clearer direction to parties and persons in knowing
what their rights and obligations are[10]...
1.14
The LHMWU is concerned that the proposed penalty
increases exceed the penalties provided under other Commonwealth legislation.
In its submission the LHMWU stated:
The codified offences and accompanying penalties are in addition
to other contempt offences and penalties provided for in the Crimes Act and the
Criminal Code, which will continue to apply.[11]
1.15
A concern about cumulative penalties was also
expressed at the public hearing by the SDA:
The structure of these bills provides for up to three specific
penalties to be imposed for a single offence...in trade practices matters
cumulative penalties can apply and they specifically endorse the approach that
there can be, and it is proper to have a concept of criminal and civil
penalties being imposed for the same offence. In an industrial relations
environment, it is very clear that this is the most draconian form of dealing
with breaches of orders of the court or of the tribunal:[12]
1.16
On the other hand, DEWR indicated that the
proposed penalties are within the range of penalties for similar offences that
apply in other Commonwealth legislation, and that:
They reflect the seriousness of the conduct and enable a court
to impose an appropriate penalty that is proportionate to the conduct that has
occurred in each case. Maximum penalties are only imposed by courts for
offences which are of the most serious kind.[13]
1.17
DEWR in its submission stated that the proposed
bill:
...reflects the Government’s policy that the Rule of Law should
prevail and that the processes and orders of the Courts and Commission should
be respected. In particular, this Bill will enhance certainty about, and
accessibility of, the criminal law that operates to protect the integrity of
the Commissions proceedings. It will also amend the applicable maximum
penalties consistent with Commonwealth criminal law policy for offences of this
kind.[14]
1.18
The Ai Group supports the provisions of the bill,
including the update of penalty provisions.[15]
1.19
The committee majority supports the provisions
that seek to codify contempt of court and tribunal offences in this bill. The
main concerns arise from their view that the measures in the codifying bill are
unnecessary. Tightening the contempt provisions, particularly ensuring that
Commission orders are obeyed, is central to having a fully functional
industrial relations system. The committee majority also considers that the
penalties proposed in this bill are fair and proportionate to the nature of the
offences being undertaken. The committee majority notes that the penalties are
similar to those in other Commonwealth legislation.
Compliance with Court and Tribunal Orders
1.20
In his second reading speech of 13 February 2003 the then Minister for Employment
and Workplace Relations stated that the proposed bill would:
...amend the principal act to provide more effective sanctions
against those who flout the authority of the Australian Industrial Relations
Commission and the Federal Court...
The bill will establish duties on officers and employees of
registered organisations to comply with orders and directions of the Australian
Industrial Relations Commission and Federal Court. Where those duties are
breached, the minister can seek orders from the Federal Court that financial penalties
be imposed. Where court orders are breached, these new powers do not affect the
existing powers of the court to deal with contraventions of its orders and
directions.[16]
1.21
This bill will amend Schedule 1B of the WR Act
to provide duties to officers and employees of registered organisations
in relation to orders or directions of the Federal Court or the Commission,
ensure the disqualification from holding office in register organisations of
persons whom certain prescribed pecuniary penalty orders have been imposed,
allow the Federal Court to order that a register organisation recover
compensation from an officer or employee as a consequence of a breach of a
civil penalty provision by that person where the organisation took reasonable
steps to prevent the actions, and make various consequential amendments.[17]
1.22
The Ai Group, the ACCI and DEWR in their
submissions all support the proposition that:
...a minority of unions and union officials currently display a
lack of respect for, and a lack of compliance with, Commission and Court orders[18]...
1.23
Unions, such as the CPSU, stated that there is a
lack of evidence of non-compliance[19],
arguing that as there is little evidence of non-compliance with orders there is
no need for further legislative amendments.
1.24
The DEWR, in evidence, indicated that although a
minority of registered organisations disobey Commission and court order, this
was not satisfactory and that all registered organisations should comply
because it is the law. DEWR stated at the hearing that:
But the issue is that, at the point the commission makes an
order, it is a legal requirement – it is the law – that you must comply with
it. So it seems to beg the question: why at a later stage, when the court made
an injunction, is it then complied with? The point is that it is an obligation
under law to comply with it the moment the commission makes a section 127 order.[20]
1.25
ACCI and others noted in their submissions that
the law must be upheld otherwise the integrity of the workplace relations
system, including the integrity of the Federal Court and Commission, were in
jeopardy:
An effective regulatory system requiring mandatory compliance
requires effective deterrents and penalties on those who adopt a stance of
optional compliance. Given that there is some evidence of non-compliance or
optional compliance, it is proper and prudent for the Act to be amended for the
purposes outlined.[21]
1.26
The Ai Group also supports the bill and notes
that it is consistent with the approach adopted under Schedule 1B of the WR Act
relating to registered organisations.[22]
1.27
DEWR, at the hearing, rebutted criticism of the
compliance bill stating:
...The Workplace Relations Act expressly requires a person bound
by a section 127 order of the commission to comply with that order. To not
comply breaches the law. The assertions seem to acknowledge that, at least in
some cases, some parties consider the commission’s orders are not sufficiently
serious to be complied with and that only the Federal Court orders should be
taken seriously. Trivial or short-term instance of non-compliance can cause
enormous damage to a business or an industry.[23]
1.28
Unions were concerned that the proposed bill allows
officer holder and employees of registered organisations to be disqualified from
holding office for a period of up to five (5) years, if they are fined by the
Federal Court as non-comply with a court or Commission order. There was also some
concern about ministerial involvement in pursing officials of registered
organisations that were fined.
1.29
The committee majority notes this concern but
considers that officials of registered organisations who disobey Court or
Commission orders should be punished through both a financial penalty and
disqualification from office. It is known that more militant union leaders have
been known to make a career out of militancy rather than responsible
leadership. They bring unions into public disrepute and do not truly represent
union rank and file.
1.30
The ACTU, among other organisations stated that
disqualification from office was ‘automatic’ and does not apply to other
legislation. The ACTU’s concerns about disqualification include that the
disqualification may occur for minor technical matters.[24]
1.31
DEWR assured the committee that disqualification
only occurred for serious acts:
....Disqualification is limited to a breach of the duties imposed
by the proposed part 3 of chapter 9, requiring an officer or employee not to
contravene orders or directions of the commission or the Federal Court.
Disqualification can only occur for breach of these duties where the Federal
Court, in its discretion, considers that the conduct warrants the imposition of
a pecuniary penalty. The proposed disqualification provisions will not apply to
breaches of other civil penalty provisions under section 306(1), such as those
relating to record keeping and reporting, other than where an order is made to
enforce lodgement and that order itself is ignored.
...The proposed provisions require deliberate and knowing
involvement in the contravention. The contravention in each case requires an element
of intent to be present and proved[25]....
1.32
The Ai Group, although it supports the bill,
expressed concern about necessity of continuing to take legal action once a
dispute was settled.[26]
1.33
DEWR assured the committee that the
disqualification period mirrors provisions in the WR Act and that appeal
provisions are available against disqualification as outlined below:
The disqualification period does not
take effect for 28 days to enable an organisation to reorganise its affairs and
to allow an affected officer time to lodge an appeal against the
disqualification. The role given to the minister under the bill reflects his
overarching responsibility for maintaining the integrity and effectiveness of
the workplace relations system and protecting the public interest[27]...
1.34
DEWR also pointed out that the disqualification
principles are the same as those provided under section 215 of the WR Act and
are similar to provisions in the New South Wales Industrial Relations Act 1996.[28]
1.35
ACCI in its submission supports the proposed disqualification
penalty and indicates that disqualification from office is a strong practical
sanction.[29]
1.36
Further, ACCI supports the provisions of the bill,
but indicates in its submission that two amendments could be made to enable the
Senate to endorse the bill - by limiting automatic disqualification to certain
types of non-compliance or by providing for a general discretion to order
disqualification.[30]
1.37
The committee majority supports the bill. It
finds that although there are provisions within the current WR Act that address
compliance, these provisions need to be strengthened to ensure that serial
non-compliers of Court and Commission orders can be dealt with effectively. Non-compliance
jeopardises the integrity of the workplace relations system. The committee
majority also found that the penalties proposed under this bill are
necessary given the on-going non-compliance by some unions, particularly in the
construction and manufacturing industries.
Improved Remedies for Unprotected Action
1.38
Section 127 of the WR Act allows the Commission
to make orders to stop or prevent industrial action. The main amendments to
section 127: require the Commission to hear and determine applications within
48 hours, where possible, provide the Commission with a specific power to issue
an interim order at its discretion, and provide ‘factors’ to consider when
making an interim order.
1.39
The then Minister for Employment and Industrial
Relations his second reading speech stated:
The proposed amendments will require
the commission to deal with section 127 applications within 48 hours of their
lodgement, if at all practicable. If an application for an order cannot be
determined in 48 hours, the commission will have the discretion to issue an
interim order to stop or prevent industrial action. The commission in
exercising its discretion, will have to consider factors...[31].
1.40
The committee notes that the WR Act currently
provides for the Commission to hear and determine applications for section 127
‘as quickly as practicable’ (s.127(3)). The committee also notes that section
127(7) provides the court with the ability to order interim
injunction pending determination of an application[32]. The committee majority also
notes that similar provisions have been proposed in earlier bills, Workplace
Relations Legislation Amendment (More Jobs, Better Pay) Bill 1999 and the Workplace Relations
Amendment Bill 2000.
1.41
However, the committee notes the difference
between this bill and those proposed earlier. This bill will require the
Commission to hear and determine applications in 48 hours. Additionally the
Commission is given the discretion to determine whether an interim order is
required. But, if it determines that an interim order is required it will have
guiding ‘factors’ to consider in making an interim order. It may also use its
discretion in considering other factors.
1.42
In opposing this bill, the main objection of unions
is that there is no evidence of an increased level of protected or unprotected
industrial action that would warrant supporting the bill[33]. The ACTU argues that
increasing pressure to deal with interim orders more efficiently may lead to
other applications being delayed. The ACTU then reversed its opinion of the actions
of the Commission dealing expeditiously with industrial actions by stating:
...An examination of cases before the
AIRC dealing with industrial action shows a significant number which might have
been avoided if the employees had felt confident that the AIRC could deal with
their concerns swiftly and decisively.[34]
1.43
The Ai Group supports the bill and points out in
its submission:
Industrial action can be extremely
damaging for employers and employees. Applications for orders under s.127 of
the Act are invariably made in circumstances where a party is alleging that the
industrial action which is happening, threatened, impending or probable, is
unlawful. When applications are made under s.127 of the Act, it is essential
that the AIRC act quickly and decisively.
The issuing of s.127 orders by the
Commission is discretionary and, on occasion, delays have been experience in
having applications heard. Delays have also occurred, on occasions, in
decisions being issued by the Commission. Such delays can be very costly,
particularly when further delays of several days are typically experienced in having
s.127 orders, which are breached, enforced by the Federal Court.[35]
1.44
DEWR provided in evidence the government view
that the proposed amendments in relation to the Commission hearing and
determining applications within 48 hours will formalise already established
processes within the Commission.[36]
DEWR notes in its submission that most applications for section 127 orders are
dealt with promptly, with 85 per cent being listed for hearing within four days
of an order being made. However, DEWR acknowledges that the Commission is
unable to resolve all applications prior to industrial action starting or
before action causes damage to industry and the economy.[37]
1.45
Unions are opposed to changing the provision in
relation to interim orders because they consider that the Commission already
has this power.[38]
1.46
In relation to interim orders, DEWR indicated in
its submission that there is currently no express power for the Commission to
make interim section 127 orders[39].
The proposed amendments would explicitly give the Commission this power. It
will also clarify the nature of an interim order, which DEWR states in its
submission is envisaged to be a “stop gap” mechanism pending a final decision
by the Commission.[40]
1.47
The committee majority supports giving the Commission
greater power to deal with orders in an expeditious manner, acknowledging the
disruptive nature of unprotected industrial action and the damage it causes
industry. The committee majority supports giving the Commission the explicit
power to make interim orders given the confusion over this measure and the
questioning by some unions of the power of the Commission to do so.
Conclusion
1.48
The committee majority recommends that
these bills be passed without amendment.
John Tierney
Chair
Navigation: Previous Page | Contents | Next Page