Chapter 2 - Consideration of the issues
General comments
2.1
With the exception of the Workplace Relation
Amendment (Fair Termination) Bill 2002, the matters contained in the bills
under consideration have been before this Committee before, albeit sometimes in
a different form. In two of the bills in particular, the Workplace Relations
Amendment (Genuine Bargaining) Bill 2002 and the Workplace Relations (Secret
Ballots for Protected Action) Bill 2002, the Government has sought to address
concerns raised in the context of previous considerations by the Committee.
2.2
The committee received submissions and heard
evidence from a range of organisations, primarily those representing employers
and employees, as well as from the Department. Unions were largely opposed to
all of the bills, and employers largely supportive (with some minor caveats).
The Australian Catholic Commission for Employee Relations (ACCER) criticised
aspects of the bills but was open to elements of some proposals, such as that
relating to compulsory union fees.
2.3
Evidence in support of the bills came from
organisations representing a variety of business sectors, including
representatives from agriculture, the manufacturing and construction sector and
the service sector as well as the small business sector. Those supportive of
the bills considered that they promoted reasonable changes that would address
problems or improve the operation of the current system and maintain an
appropriate balance between the rights and needs of employees and unions and
those of employers.
2.4
Evidence against the bills also came from unions
representing workers in a wide range of industries. Opponents of the bill were
concerned that they would remove important rights of employees and unions and
introduce obstacles to protected industrial action by unions and employees, but
not by employers.
2.5
Critics also raised concerns that the bills were
not consistent with Australia’s obligations under the conventions of the
International Labour Organisation (ILO). The Department advised that it was
satisfied that the bills would comply with our international obligations. In
relation to the bills dealing with access to unfair dismissal provisions, the
Department noted that the ILO’s Termination of Employment Convention 1988
recognises that it could be appropriate to exclude small businesses and casual
employees from termination of employment provisions. It also noted that the
secret ballot model was developed after consultation with the ILO to ensure
that it met Australia’s international obligations.
2.6
While most submitters and witnesses maintained
the same positions that they had held in relation to previous bills on these
issues, representatives of some employer or business organisations raised some
compromise or alternative proposals in relation to the exemption of small
business employees from the unfair dismissal provisions. The Committee did not
have the opportunity to explore these proposals in detail but considers that
they are a refreshing development. The Committee majority sees this willingness
to seek a compromise as an indicator of the importance of the issue for those
proposing change.
2.7
While there was little new evidence presented to
this inquiry, the Committee noted that there had been a number of developments
since it last considered the matters raised in the bills. These included court
or tribunal decisions in relation to the exclusion of casual employees, union
bargaining fees and pattern bargaining and further surveys and information in
relation to the employment effect of unfair dismissal laws on hiring
intentions. These were considered during the course of the inquiry. The
Committee also heard arguments about the the extent to which proposals in these
bills differed from those in previous bills.
Consideration of
the Provisions
2.8
This section of the Chapter
reviews the evidence presented to the Committee about the provisions of the
five bills, and provides the Committee majority’s conclusions and
recommendations.
Workplace
Relations Amendment (Fair Dismissal) Bill 2002
2.9
The Committee notes that the Minister’s second
speech made it clear that the purpose of the bill is to deal with an unintended
consequence of the unfair dismissal laws, which operates to deter small
business owners from employing additional staff:
The basic problem that this bill is designed to address is the
fact that the laws do not really stop unfair dismissal so much as institute a
de facto system of additional payments for people who are dismissed fairly or
unfairly from their employment. This is inelegantly known as `piss-off money'
in small business circles. This has been the practical impact of the unfair
dismissal regime under which small business has had to operate for the last
decade or so. The result of these laws—however well motivated and well
intentioned they might originally have been and however sincerely members
opposite and elsewhere believe that they are a protection for workers—is that
many small businesses are frightened of putting on new staff, and that is a
real problem in our economy and a real problem for our society.[1]
Evidence
2.10
The Australian Council of Trade Unions (ACTU)
and other unions argued that they could see ‘no economic justification for the
special treatment of small business particularly where this affects the rights
of employees.[2]
The ACTU also noted that the absence of any declared financial impact in the
proposal as evidence that claims about on the effect on employment growth
lacked credibility.[3]
2.11
Unions also expressed concern about the more
vulnerable situation of many small business employees, who had low rates of
unionisation, and argued that the issue was fundamentally about natural justice
and equity.[4]
2.12
The ACCER noted that the dignity of the
individual required procedural fairness and natural justice to apply in
decisions on termination and suggested that an exemption could disadvantage
small business owners by making the sector less desirable for employees.[5]
2.13
Employer representatives and representatives of
the small business sector presented their concerns about the adverse effect of
the current laws on small business owners and the implications for their hiring
intentions.
2.14
The committee heard evidence from Australian
Chamber of Commerce and Industry (ACCI) about the results of their Pre-Election
Survey, in late 2001, which surveyed more than 2,300 employers across
Australia.[6]ACCI submitted that the survey responses demonstrated a high level of
awareness and concern amongst employers, including small business, about the
operation of unfair dismissal laws. They also submitted that it was that
awareness of the risks of unfair dismissal action that affected hiring
intentions:
The sixth most important issue is the unfair dismissals
legislation. Business remains deeply resentful of the way in which employees
who have been dismissed for cause are able to take actions that require their
former employers to pay them large sums of money to finally see them on their
way. There are some legitimate cases of unfair dismissal, and that has never
been at issue. But this process has now become contaminated in a way that
ensures that firms will often be required to defend their actions before a
tribunal. The managerial time needed to process and deal with such claims is
generally just not worth it to the firm. The result is that unfair dismissal applications
are a cost to business that has absolutely no return. It slows growth and makes
firms more reluctant to hire. This is a problem that needs final resolution.[7]
2.15
In response to claims from other witnesses and
some Committee members that unfair dismissals did not feature among the main
concerns of small business in a range of general surveys, witnesses from the
ACCI maintained that it was among the most important concerns in relation to
industrial relations matters.[8]
2.16
Small business representatives described the
burden of an unfair dismissal claim on a small business, both in terms of the
financial costs and the time and stress associated with such claims, and how
these are more severe for regional businesses:
Regional areas where these happen are far more relevant, because
the only place they can be heard is at a distance, in a lot of cases, from the
restaurant. So time is spent in travelling. I am the chef in my business; if I
am not there, the business does not operate and so the whole thing closes down.
I still have to pay other staff—the permanent staff[9]
I can quote a case in particular of an unfair dismissal claim
being made where it took five months of stress and worry—of writing letters, of
consultation and of talking to solicitors—by a small business which employed
four people¾ before the matter was
resolved actually to the satisfaction of the employer—but it was five months of
stress and worry. That is very common and it frightens the small business
person. They already work approximately 80 hours a week.[10]
I spoke yesterday with a business operator who said that his
legal advisers advised that, if they were in an unfair dismissal case and they
could settle for less than $12,000, they should go ahead and do so because it
would be cheaper than going all the way. So I think that ‘go away’ money
concept is there, if not just in the minds of people. It is certainly in their
minds and it certainly seems to be happening—at least from what we have heard
anecdotally.[11]
2.17
The ACCI contended that the effect of unfair
dismissal laws was to provide all dismissed employees, irrespective of whether
they had been fairly or unfairly dismissed, with a right to seek redress or
compensation, and a requirement for employers to defend such actions. The
result is that an employer faces significant costs every time s/he dismisses
an employee, whether in accordance with the unfair dismissal laws or not:
They (federal unfair dismissal laws) provide a right for
an employee whose employment is terminated to take legal action against their
employer in a third party tribunal or court. Unfair dismissal laws create a
right to sue, a cause of action. In this sense they do not deal only with
unfair dismissals. They can deal with all dismissals. An assertion by an
employee that they have been unfairly (or more strictly speaking harshly,
unjustly or unreasonably) dismissed is sufficient to expose the employer to the
risk of an adverse finding. An employer, once having dismissed an employee, is
exposed to the process and the power of the ‘system’ whether the dismissal was
fair or unfair. This is an important point as it bears not only on how
employers see the jurisdiction operating, but also on the need to constrain
costs and expense once claims are made, and to create some greater certainty or
consistency in the independent judgements that are made by conciliators and
arbitrators.[12]
2.18
The Committee heard that, as a consequence, some
employers are reluctant to dismiss employees who were incompetent or redundant.
2.19
The Committee heard evidence that the burden of
unfair dismissal claims falls most heavily on small business where the
owner/manager usually carries responsibility for day to day operation of the
business including staff management, and generally lacks knowledge and training
of personnel management practices and requirements. [13] The Victorian Automobile
Chamber of Commerce (VACC) gave the example of the automobile repair industry
where most business operators were tradespeople who employed a small number of
employees. [14]The
Department’s submission noted that there are precedents of exempting small
business from legislative requirements in a number of areas, in recognition of
the fact that they faced a disproportionate compliance burden.
2.20
The Committee also heard evidence from the VACC
and the ACCI of the need for procedural improvements to lessen the impact of
unfair dismissal laws on all employers, whatever the size of their business.[15]
2.21
Union representatives argued that that the
court’s decision in the Hamzy case was support for the contention that
there is no clear link between unfair dismissal laws and employment patterns.
The Committee notes, in this context that the decision in Hamzy only
highlighted the absence of any empirical evidence for the link between
employment and dismissal laws. It did not undermine the theoretical arguments
or the weight of survey evidence of employers’ hiring intentions. The Court’s
comment is difficult to reconcile with the central arguments put in the case.
2.22
For example, an ACCI survey[16] conducted in 1999 showed that
53.95 per cent of businesses with fewer than 20 persons indicated that they had
hired fewer employees because of unfair dismissal laws. Although the survey did
not distinguish between state and federal laws, ACCI argues:
There is no doubt that a myriad of different factors apply which
motivate employers to employ or not to employ an employee. Not surprisingly the
dominant feature is and always be economic- work requirements based on business
needs. But issues of cost and risk are also significant. It is in this context
that negative experiences or negative perceptions of unfair dismissal law act
as one factor that weighs against decisions to employ.[17]
2.23
Opponents of the bill sought to undermine the
value of such surveys by arguing that it was rarely, if ever, clear whether
respondents were subject to federal and state laws, and that it was therefore
difficult to draw reliable conclusions from the results. The Committee majority
accepts that most surveys suffer from this limitation but is of the view that
in this instance, such confusion does not detract from the survey results.
However, it also notes that, despite the differences between unfair dismissal
laws in the different jurisdictions, a feature common to all jurisdictions is
that most dismissed employees have the capacity to bring an unfair dismissal
claim against their employer. It is that feature - and the associated
uncertainty - that, as the ACCI indicated, is of most concern to employers and
affects their assessment of the risks of employing additional staff.
2.24
There was also discussion during the hearings
about the effect of different Commonwealth and state industrial relations
jurisdictions on the scope for this bill to achieve its stated objective. The
Bills Digest prepared by the Parliamentary Library estimated that only 25
percent of small businesses would benefit from the proposed changes to the
Commonwealth law.[18]
A number of witnesses also indicated that many small business owners may not
know whether they fall under federal or state laws.
2.25
The partial coverage of federal unfair dismissal
laws is, not, however, a good argument to do nothing to alleviate the burden on
small business owners. If unfair dismissal is a very real problem for small
business, then there are good reasons why that problem should be addressed,
even if only initially for the quarter of small businesses that fall under
Commonwealth law benefit. The Committee majority believes that a uniform system
across all jurisdictions would serve to maximise the benefits of any Commonwealth
small business exemption and that the States should be stimulated to follow
this job creation mood
2.26
There was also discussion at the hearing of the
estimate that up to 50,000 jobs could be created if small businesses were
exempt from unfair dismissal laws. The representative of Council of Small
Business Organisations of Australia (COSBOA) which had originally advanced the
claim, explained how the estimate had been derived from the responses of 60,000
small businesses to a question on their hiring intentions if they were exempted
from unfair dismissal laws.[19]
She also emphasised her strong view, as a result of her contact with small
business owners, that many were not employing additional staff for fear of
unfair dismissal claims. Instead, they were preferring to manage additional
workload by employing family members.[20]
Conclusion
2.27
The Committee majority considers that the
arguments in favour of an exemption for small business from unfair dismissal
provisions remain compelling.
2.28
Those arguments primarily rest on the
disproportionate effect of unfair dismissal claims on small business, and the
effect on the hiring intentions of small business employers. With an increasing
proportion of employment in this sector, and small business as the main source
of new jobs in regional areas, the Committee majority believes that we cannot
afford to delay in removing this potential obstacle to further job creation.
2.29
The committee majority believes that by removing
the burden of unfair dismissal laws on small businesses, more employment
opportunities will be created.
Recommendation
2.30
The committee majority commends this bill
to the Senate.
Workplace Relations Amendment
(Prohibition of Compulsory Union Fees) Bill 2002
2.31
In considering this bill the Committee examined
the extent to which the use of bargaining fees undermines the principles of
freedom of association and freedom of choice.
2.32
Freedom of association is one of the fundamental
principles of the Act; a principle strongly supported by this committee, and
indeed the wider Australian community:
The Act evinces a clear policy intention that employees should
be free to choose whether or not to belong to a union. This policy reflects
contemporary community values and attitudes in Australia.[21]
Evidence
2.33
Supporters of the bill argued that the policy
intentions of the Act in this area are being undermined by the imposition of
bargaining fees in union-negotiated certified agreements. The Australian
Industry Group (AiGroup) put their concern to the Committee in this way:
perhaps the most unfair aspect of the compulsory bargaining fee
clauses currently being pursued by trade unions is that they restrict an
individual’s freedom of choice, and effectively operate by way of financial
coercion toward non-union members.
Bargaining fees represent a mere financial variation of the
closed shop, and thereby destroy individual freedom of choice.[22]
2.34
Similarly the ACCI argued that the bill is
necessary for the proper functioning of the Act and the workplace
relations system in general.
ACCI recognises that the freedom to join, or not to join, a
trade union is a fundamental freedom which should be enjoyed by all people in a
free and democratic society. It is for this reason that ACCI provided strong
support to the introduction of freedom of association legislation in the
original Workplace Relations Act 1996.
The coercive effect of bargaining services fees is at odds with
the views of the Australian community which favour protecting the rights of
employees to choose whether they wish to belong, or not belong, to a trade
union.
We note that prior to the passage of the Workplace Relations
Act 1996, preference clauses within awards and certified agreements were
permitted by industrial legislation. With the passage of the Workplace
Relations Act 1996, these clauses have become unlawful. This was a key
aspect of the policy imperative behind the passage of the original 1996 Bill
and delivered an environment which empowered workers to make choices about
whether they wished to belong or not belong to a trade union. [23]
2.35
The ACCER observed that while the use of
bargaining fees in certified agreements might not technically contravene the
objects of the Freedom of Association provisions of the Act, the amount or
structure of the fee charged for the provision of bargaining services may
persuade or influence an individual or organisation to join or not to join the
relevant industrial association. [24]
2.36
The committee also heard of examples of
bargaining fees imposed under agreements that were in excess of normal union
fees, suggesting a coercive intent. One of the examples was in relation to fees
charged by the CEPU:
“The CEPU embarked upon a campaign to secure the payment of
compulsory bargaining fees in the electrical contracting industry. After the
CEPU applied significant industrial pressure to its members, the National
Electrical Contractors Association (NECA) reached a pattern agreement with the
CEPU which incorporated a clause prescribing a compulsory bargaining fee. The
relevant clause stated:
“Clause 14.3 Bargaining Agents Fee
The Company shall advise all employees prior to commencing
work for the Company that a ‘Bargaining Agents’ fee of 1% of the employees
gross annual income or $500 which ever is the greater is payable to the [CEPU
annually] . . . “
Under the standard clause, employees could choose to join the
CEPU as a member at the cost of around $300 per annum, or choose not to and be
required as a condition of employment to pay the $500 bargaining fee. If they
did not pay the $500 fee, then they were subject to disciplinary action from
their employer. The fee was only to be levied on new, not existing employees.
It was clear that the CEPU would waive the bargaining fee in respect of those
who joined its ranks. This standard pattern clause has now been incorporated
within hundreds of certified agreements applying to electrical contractors.[25]
Similar clauses are being pursued by other unions in the building and
construction industry.[26]
2.37
The Ai Group also explained that, whatever the
intent of the fees, the reality is that the choice between a bargaining fee or
disciplinary action, meant no choice at all for non-union members:
Under the standard clause, an individual non-union member who
does not wish to join the union is faced with a stark “choice”: either pay the exorbitant
“service fee” levied under the relevant certified agreement, or face the
prospect of disciplinary action. Given the choice of a hefty service fee or
disciplinary action (possibly including termination of employment), the
individual non-unionist is driven towards taking out union membership. This is
a draconian and unfair situation for an individual non-union member.[27]
2.38
Opponents of the bill justified the imposition
of a bargaining fee as a fee for service on the grounds that it was consistent
with the ‘user pays’ and ‘mutual obligation’ principles. Unions noted that the
capacity to charge bargaining fees was important in the context where the Act
prevented them from restricting the benefits of union-negotiated agreements to
union members, with the result that non-union members who were employed under a
union-negotiated certified agreement, were ‘free riders.’[28]
2.39
Unions also objected to the title of the bill
because the bill seeks to address bargaining fees not union membership fees and
the title, in their view, implied a coercive approach that was lacking. [29]
2.40
Unions also argued that it was inappropriate for
the Government to legislate at this time when the issue of bargaining fees in
certified agreements was still before the courts.[30],[31] On the issue of compulsion,
most unions argued that the requirement for all employees, whether union
members or not, to vote on certified agreements, provided the necessary degree
of voluntary consent.[32]
2.41
The Government has made it clear that it does
not agree with the view that it is premature or inappropriate to legislate on a
matter that is before the courts. The Department has also argued that, whatever
the outcome of the current court case, it is important to clarify the status of
bargaining fees in certified agreements. While the courts may rule on the
enforceability or otherwise of a bargaining fees in certified agreements,
legislation would be required to remove relevant clauses from current
agreements. It was also necessary to prohibit conduct that would seek to require
agreement to such fees.
2.42
The Department argued that the ‘free rider’
argument did not apply in the case of union-negotiated agreements:
.... the fact that a non-member receives the same outcomes under a
union-negotiated agreement does not mean that the non-member is a free-rider.
In an agreement-making process, there is limited likelihood, and no guarantee,
that the relevant union will consult with non-members, or will address the
specific needs of non-members in negotiations. There is also no guarantee that
the outcomes under a union-negotiated agreement would be superior to any
outcomes that the non-members might have obtained had they been directly
involved in the negotiations for the collective agreement, or had separately
negotiated with the employer.[33]
2.43
ACCER also questioned the validity of the ‘free
rider’ argument in a context where non-union members appear to have little
scope to negotiate separately with employers if they are negotiating an
agreement with the union:
... a non-member employee does not necessarily intentionally enter
into the “free-rider” situation. The current structure of the Act does not
appear to legally entitle a non-member employee to choose his or her own
external representative in collective negotiations. Only union members may
request an industrial association to represent their interests in the
negotiation of collective certified agreements. ..Therefore, non-members may
effectively be marginalised in negotiations for a collective agreement as they,
or their representatives, may not be included in the negotiation process where
a union is involved until the certified agreement is to be finalised by a vote
of the majority.
2.44
The Department also gave an example of a case
where a union had excluded non-union members from joining with it in the
negotiation of an agreement, suggesting that there were elements of compulsion
in the bargaining ‘service’ provided:
In late September 2001, two
employees at a call centre in Victoria wrote to the OEA seeking advice in
relation to alleged discriminatory action by the employer against non-union
employees at the centre. The complainants alleged that the employer had
initially extended an invitation to non-union employees to represent themselves
at negotiations for a certified agreement to cover Account Sales staff. The
employer, however, subsequently withdrew the invitation when the ASU refused to
negotiate if non-union employees were at the bargaining table. The
complainants had objected to the ASU claim for a bargaining agents fee clause
and sought to be involved in the negotiations for themselves, at least in part
so that they could reject claims for the payment of a bargaining agents fee on
the basis that they had bargained for themselves. The Department understands
that the OEA was successful in obtaining undertakings from the employer in
January 2002.
2.45
The Committee notes that the bill does not
prevent a non-union employee from freely entering into an arrangement with a
trade union to negotiate on their behalf; nor imposing a fee for that service;
rather, it prevents collective agreements being used as the mechanism to impose
such fees. A similar rule applies in relation to fees imposed by professional
industrial advisers involved in providing enterprise bargaining services to
companies on a fee for service basis. In addressing a concern on this matter
raised by the Ai Group and ACCI, the department explained:
“I was not aware of the AIG concern but I am aware of a concern
that has been raised in other employer association quarters. I understand that
they believe that the prohibition on demanding bargaining services fees might,
where they have a contract with a non-member for the provision of services,
prevent them from enforcing the contract. We believe that that fear is
ill-founded: if you have a contract with somebody and they do not pay you, your
demand for payment is not a demand for a bargaining services fee; it is a
demand for satisfaction of your contract. So, if the AIG concern is the same as
the concern I have outlined, we believe it is an unfounded concern.”[34]
2.46
The Department informed the Committee that its
advice was that such arrangements would remain enforceable under the law of
contracts.[35]
2.47
The ACTU also argued that the bill
inappropriately restricted the matters that could be contained in bargaining
agreements. The Government disagrees with this position, noting that it has
committed itself to the principle that employment bargaining issues should be
negotiated between employers, employees and their representatives at the
enterprise level. This bill clarifies the operation of one aspect of that
process. The ACTU’s argument also overlooks the broader principles that are
under threat if this legislation is not passed, that is the principle of
freedom of association.
2.48
The Department also advised that it is the
Government’s view that the provisions of the bill are not incompatible with ILO
principles.
Conclusion
2.49
This bill is part of the continuing commitment
by the Government to workplace reform. It seeks to protect the principle of
freedom of association within the workplace. It is the Government’s position
that demands by unions for bargaining service fees are contrary to this
principle and that amendment to the legislation is necessary to achieve that
protection.
2.50
In introducing this bill the Government does not
seek to restrict lawful negotiating activities of registered associations but
rather to ensure that all employees have freedom of choice in making certified
agreements.
2.51
The committee majority does not accept the
argument that compulsory bargaining fees do not mandate union membership or
equate to compulsory membership fees. The evidence before the Committee was
that fees have been set at a level where they essentially face non-union
members with limited choices: either pay a fee that is a similar or higher
level than a union membership fee, face disciplinary action, or join the union.
2.52
Nor does the Committee majority accept that the
process for employees to vote on certified agreements provides the necessary
degree of consent. Non-union members rarely have any input into the development
of a union-negotiated agreement and must accept the majority decision. They
also are unlikely to have the opportunity to bargain on their own behalf except
in the case of an individual agreement.
2.53
While the principle of ‘user pays’ is an
admirable one, and one that this committee supports, the committee majority can
see no application of this principle to bargaining fees imposed under a
certified agreement. For the principle to apply, a service must be requested
and delivered.
2.54
The committee majority also believes that the
union opposition to this bill reflects their concern to compensate for, and
protect, their shrinking membership base.
Recommendation
2.55
The committee majority commends the
provisions of this bill to the Senate.
Workplace Relations Amendment (Secret
Ballots for Protected Action) Bill 2002
2.56
The main philosophical arguments in relation to
a secret ballot requirement for protected industrial action were canvassed in
the Committee’s report on the MOJO Bill and the 2000 bill.
2.57
The major issue under consideration in relation
to this bill is whether it is an unreasonable obstacle to protected industrial
action.
Evidence
2.58
The Committee heard evidence of the differences
between this bill and the models set out in its predecessors (as set out in
Chapter One). By and large, employer and business representatives and the
Department considered that these changes addressed reasonable concerns with
previous models and represented a workable and efficient approach. Union
representatives and employer advocates on the other hand considered that the
changes were merely ‘cosmetic’ and did not address their fundamental concerns
with previous models. There were no amendments or suggestions for modifications
to the model.
2.59
The Department argued that the main benefit and rationale of the
ballot process was to strengthen accountability, transparency and democracy in
decision-making in relation to protected industrial action. Its submission
noted that the introduction of secret ballots in the UK, while initially
resisted by unions, had now been accepted by many unions as having improved
democracy. It cited a UK Trade Union Congress paper in 1994 as stating that:
In recent years there have been encouraging democratic reforms
(stimulated it must be said in some cases by the 1984 Trade Union Act) which
have ensured that leaders have to become more sensitive and directly
accountable to their members, through the imposition of postal ballots for
their own elections and before the calling of strikes and other forms of
industrial disputation.[36]
2.60
It also noted the prevalence of a similar requirement in other
OECD countries, including Japan, Germany, Canada and Ireland. [37]
2.61
Critics of the bill argued that it is an attempt by the
government to extinguish the right of employees to protected action.
2.62
A major criticism of unions was that the process for the ballot,
including for compiling the ballot roll, was detailed and cumbersome and
potentially lengthy.[38]
The requirement for unions to pay 20 per cent of the cost of the ballot was
also considered unreasonable.
2.63
The ACTU raised concerns that the ballot process could be challenged at
several points providing an opportunity for employers to delay and frustrate
the process, if they so chose.
2.64
It is difficult to give credence to some of the objections to the
perceived complexity of the ballot process and requirements. The model proposed
in this bill is significantly more streamlined than in previous versions and
also provides more flexibility to unions. The provision for a ballot to occur
one month before a certified agreement expires means that even in large or
dispersed workplaces, it should still be capable of completion before the
expiry of a certified agreement. A simpler process may seem intuitively
appealing, but it ignores the realities and complexities of the modern
workplace and the risk of legal challenge where eligibility and similar
requirements are not tightly specified.
2.65
The Committee also heard that a mandatory pre-industrial action ballot
was not necessary, because unions own consultative processes were democratic,
and the Commission has sufficient powers under the current Act to require
secret ballots where appropriate.[39]
2.66
The Committee accepts that under Australian law unions are required to
have democratic structures and principles and that this is an improvement on
the situation in some other countries. However this does not mean that the
union can be sure that it is necessarily reflecting the views of the majority
of employees in each workplace on all occasions. Even democratically elected
organisations or individuals can stand at odds with those who elected them on
some occasions.
2.67
The Committee also notes the existence of the secret ballot powers in
the current Act but does not consider this is an argument against having
mandatory ballots as a precondition for protected industrial action.
2.68
Employer representatives and the Department highlighted the
benefits of secret ballots for improving consultation and democratic processes
within unions. In this context, the AiGroup, as an employer
representative, outlined how the risk of intimidation or at least ‘peer
pressure’ at mass meetings to decide industrial action meant that the process
was not as democratic as it could be:
If you put it in the context of a mass meeting, it is a fairly
intimidatory thing for any individual to stand up at a mass meeting during a
strike and put forward a different point of view to the one that is being put
forward forcefully by the union official that is running that mass meeting. We
are not alleging that union officials in most circumstances are intimidating
the individuals in a very overt way but that the whole process is intimidatory.
We believe that secret ballots could not be more democratic because people are
given the opportunity to express their view without fear or favour.[40]
2.69
On the matter of conformity with international labour standards, the
Department also advised that it was satisfied on the basis of its discussions
with the International Labour Office, that the secret ballot requirements did
not substantially limit the taking of industrial action.[41]
Conclusion
2.70
The committee majority considers that a secret
ballot is a fair, and simple process for deciding whether a group of employees
should take protected industrial action. It is also an appropriate
counterbalance to the significant benefit of protection against civil liability
that the Act provides in relation to protected action. The committee majority
also believes that the ballot process in the bill will enhance freedom of
choice and strengthen the accountability of unions to their members, by
guaranteeing a free and democratic vote before protected industrial action is
taken. Unions that have consultative and democratic processes have nothing to
fear from secret ballots as a precondition for protected industrial action.
Recommendation
2.71
The committee majority commends the
provisions of this bill to the Senate.
Workplace Relations Amendment
(Genuine Bargaining) 2002
2.72
The Committee notes that the Government’s
arguments in support of this bill essentially rest on the benefits of
enterprise bargaining and the need to protect the role of enterprise bargaining
from union attempts to return to bargaining at an industry level.
2.73
The Government argues that enterprise bargaining
has brought significant benefits to the Australian economy. These include
significant productivity and efficiency improvements for business, a closer
relationship at the enterprise level between employers and employees, and
significant real wage increases for employees. It has also been associated with
record low levels of industrial disputation.
Evidence
2.74
The Ai Group argued that there was a need for
further legislative amendments to prevent unions, particularly in the
construction and manufacturing industries, from eroding the gains from
enterprise bargaining. With nearly 70 percent of all agreements in these two
sectors, any action to undermine enterprise bargaining in those sectors
represents a real threat to enterprise bargaining.[42] The Ai Group explained the
unions’ strategy in 1999-2000, known as Campaign 2000, to undertake
industry-wide bargaining, by co-ordinating and standardising its negotiations
with 3,000 different enterprises :
The situation in construction and manufacturing during 1999-2000
highlights the risk. In the construction sector, the CFMEU sent out 3,000
identical bargaining notices and organised industrial action across the
industry at a common time in pursuit of a 36-hour week and a 24 per cent wage
increase. In manufacturing, the AMWU and the other unions sent out some 1,500
bargaining notices on the same day, and then they sent out notices of protected
action in identical terms to hundreds of companies and organised an industry
strike. The significant danger is that we could end up with massive industrial
disputation across an industry under the premise that that is all about
negotiating an enterprise agreement—which is absolutely false.[43]
2.75
The Group explained that why they expected a
re-run of Campaign 2000 in the next twelve months:
In the construction industry, employers in New South Wales,
Queensland and other states are very concerned about what might happen later
this year when the 36-hour week that was forced upon employers in Victoria is
pushed in those other states through campaigns that the unions have already
announced. Employers in the manufacturing sector are also very concerned. For
the past two years, the AMWU and the CEPU have been quietly pursuing a common
expiry date of 31 March 2003. Employers have been resisting the unions’ push,
but figures from the Department of Employment and Workplace Relations send a
clear message about what lies ahead. That data shows that there are 416
agreements expiring in the manufacturing sector on 31 March 2003, 355 of which
are in Victoria and 296 of those are in the manufacturing sector. We have 390
agreements expiring in the metals sector in Victoria in the first half of 2003.
The situation is as bad as that faced by employers during the unions
destructive Campaign 2000[44]
2.76
Unions and some employee advocates argued that
the outcome of Campaign 2000, where the Commission terminated bargaining
periods on the basis that the union was not undertaking genuine bargaining at
the enterprise level, demonstrates that the Commission has sufficient power
under the current Act to deal with cases of protected industrial action in the
context of non-genuine workplace bargaining.
2.77
On that question, the Ai Group argued that the
bill, while a minimalist approach, would nevertheless help to address some of
the limitations associated with the current law. The experience of Campaign
2000 showed that, while the Commission may have been able to use its current
powers to terminate bargaining periods when it found non-genuine bargaining,
the process was not straightforward or simple. [45]
2.78
A strong theme in union submissions and evidence
to the Committee was the need for unions to continue to bargain at industry
level, for both efficiency and equity reasons. Unions expressed concern that
the bill would be unworkable in practice because it would mean that industrial
action could be challenged on the basis that unions were bargaining with more
than one employer at a time and that pursuit of common claims across an
industry or several employers could be in breach of the Act.
2.79
Unions also criticised the absence of a general
requirement in the Act for negotiating parties to bargain in good faith.
2.80
The Committee heard evidence that the bill does
not prevent unions from lodging common claims across an industry or number of
employers and undertaking protected industrial action provided there was
genuine bargaining at the workplace level in relation to those claims. As the
ACCI submission explains:
The proposed amendments do not have the effect that a party
cannot set an industry bargaining strategy, or even industry goals for
agreement making (such as for example setting a goal for industry wage increase
outcomes). They do not remove the right to take protected industrial action.
The proposed amendments would however more clearly set out for
parties the point at which such goals or strategies can over-step the mark, and
can become strictures which mitigate towards outcomes at odds with the objects
of the Workplace Relations Act 1996 set out by Parliament. [46]
2.81
The proposed amendments would also assist the
Commission by providing initial guidance on the exercise of its discretion in
these cases. The amendments would provide the Commission with Parliament’s
expectations of bargaining, and Parliament’s guidance on when a party has
ceased to bargain genuinely, and the prescribed avenues should be further
considered[47]The
Department in its evidence and submission was emphatic that the bill would not
prevent industry bargaining or bargaining with more than one employer. Unions would
remain free to engage in pattern bargaining - they would only be prevented from
undertaking protected industrial action in pursuit of such bargaining.
2.82
The Committee also noted that, under the
proposed new provision, the existence of common claims would not be
determinative of the whether bargaining was genuine or not; the Commission
would retain a discretion to consider whether bargaining was genuine in the
terms of the Act, on the facts of the case and taking account of all of the
relevant factors.
2.83
The Committee also notes the assessment of the
Bills Digest prepared in relation to this bill by the Parliamentary Library,
which compared the provisions in this bill with previous bills and noted that
the provisions in this bill should be uncontentious.
2.84
Emphasising the uncontroversial nature of the
bill, the AiGroup argued that the bill essentially clarifies the rules about
genuine bargaining by clearly articulating, in a sensible and practical
manner, the decision by Justice Munro in the Metals case:
We are strongly supporting that, because it does clarify the
rules that should apply to differentiate common claims and illegitimate
industry tactics imposed on enterprises.[48]
2.85
The committee heard evidence about the
advantages of cooling off periods. The AiG cited Justice Munro’s comments in
the Campaign 2000 proceedings:
it appears to me in most disputes to be a matter for welcome
that the parties resort to what are termed cooling-off periods......the term
cooling-off period I don't think is known to the Act at this stage, although
some have sought to have it introduced.....The course of Campaign 2000
litigation before the Commission in all its aspects indicates that the
cooling-off periods have in particular instances served some useful purpose in
reaching agreement in some instances or at least in allowing the parties to
back off from what would otherwise have emerged as dug in positions.[49]
2.86
Union witnesses generally argued that cooling
off periods in the bill were unnecessary and would have the sole effect of
reducing the effectiveness of industrial action.
2.87
The provision relating to new bargaining periods
raised similar issues.
Conclusion
2.88
The committee majority considers that the case
has been made for a need to reinforce the provisions of the Act to ensure that
unions only have access to a right to protected industrial action where they
are genuinely bargaining at the workplace level.
2.89
The Committee majority notes that a previous
Labor government tied the right to protected industrial action to enterprise
bargaining and considers that this bill is simply seeking to ensure that that
connection is maintained and protected. It also notes that this bill represents
a minimalist approach and a major departure from
previous models, and is disappointed that unions have not recognised the
extent to which the Government has addressed concerns with previous bills
particularly as this will protect jobs.
Recommendation
2.90
The committee majority commends the
provisions of this bill to the Senate.
Workplace
Relations Amendment (Fair Termination) Bill 2002
2.91
This Committee heard evidence from a range of
union and employer groups in relation to this bill.
Evidence
2.92
On the employer side, several organisations that
rely heavily on the use of casual labour, explained how the bill was necessary
to ensure that they could continue to operate their normal businesses without
fear of falling foul of the unfair dismissal provisions.
2.93
Union representatives emphasised the vulnerable
nature of casual employment and the scope for an exemption to be abused and
result in churning of employees.
2.94
Employers also agreed with the Department’s
assessment that the bill should be uncontroversial because it simply restored a
provision that had been in effect for almost five years:
Why should an exclusion that was enacted in 1997 and not
subsequently disallowed by Parliament not be allowed to continue?[50]
2.95
They also gave evidence about the uncertainty
and loss of flexibility arising from the Hamzy decision:
Employers have lost some of the flexibility which they had available
with regard to the use of different forms of employment. Further, employees who
work on an irregular basis (often voluntarily due to their lifestyle choices or
family responsibilities) may find that they have fewer employment opportunities
because of an increased use of contractors at the expense of casual labour as a
result of the Hamzy decision.[51]
2.96
The Ai Group argued the need for the amendment
proposed in this bill in order to restore the concepts of ‘regular and
systematic’ employment and ‘reasonable expectation of continuing employment’ in
the exemptions relating to casual employees: It argued that these concepts are
essential inclusions and are fair to both employers and employees. It also
explained the consequences if the bill was not enacted:
It is not uncommon for a company to have a list of persons who
may be available to carry out casual work and for the company to use that list
from time to time when it needs casual labour. If a casual on the list works
for a company irregularly and there is no reasonable expectation of continuing
employment then it is unfair for an employer to be exposed to an unfair
dismissal claim from such a casual - regardless of whether or not the casual
has been on the list and worked for the company on several occasions over a
period of more than 12 months.
2.97
The National Farmers Federation (NFF) explained
that the problems flowing from the Hamzy decision would be exacerbated
if the regulations enacted in December 2001 are disallowed in the Senate and
casual staff have access to unfair dismissal remedies following a three month
probationary period:
NFF believes that the exclusion of casual employees in this
manner is essential for the efficient operation of agriculture. It is also
essential that the short period not be reduced to anything under the less than
twelve months as proposed in the bill.
NFF wishes the Committee to note that the Australian Democrats
had previously agreed on these changes and an altered decision now can only
damage agricultural interests. A number of sub-sectors of agriculture employ a
large number of casual, itinerant workers. These workers often work beyond
three months (the new statutory probationary period set out in the Bill) and
the Bill deals well with the problems that would be caused if the unfair
dismissal laws applied[52]
2.98
Critics of the bill argued that casual workers
should not be treated differently from other employees when it comes to
termination remedies[53]
and that the casualisation of the workforce is undesirable[54].
2.99
Employers argued that this attitude to casual
employment was out of touch with the changing social dynamics of the
workforce.
We believe also that employees have changed their mind-set. It
is no small accident that 40 per cent of all temporary or casual staff are
under 25 years of age. This is the type of employment that young people are
seeking today. It gives them the opportunity to experiment with the market, to
evaluate different careers in a quick manner. It gives them the flexibility to
move in and out of different types of activities to suit the various lifestyles
people are adopting these days. We believe that the temporary market these
days, the casual market, is not a market of the disadvantaged but rather a
market of those that choose a lifestyle and have, within the parameters of the
legislation as proposed, the ability to move in and out freely with the support
of employers and to exercise their right to take that flexibility.[55]
2.100
The Recruitment and Consulting Services
Australia (RCSA) considered that that casualisation of the workforce is a
direct reflection of market forces and that it is a market reality that an on-going casual or flexible workforce satisfies
the employment requirements of a large number of businesses. This argument was
also strongly supported by the NFF who maintained that the seasonal nature of
agricultural work creates special employment circumstances in the sector.
2.101
The Committee notes that casuals were first
exempted from accessing unfair termination laws in 1994, by the ALP government.
The Committee majority considers that the factors that justified an exclusion
in 1994, justify restoring the full exemption and validating the regulations
that were declared invalid by the Hamzy decision.
2.102
All industry groups supported the $50 filing fee
as an appropriate deterrent to vexatious claims. The fee however, attracted
criticism from the unions. They argued that the fee operated as a barrier to
justice, particularly to those who are in a weak financial position.[56]
Conclusion
2.103
The Committee majority considers that a good
case has been made for the need to restore the casual exemption to the
situation that has applied for almost five years. The Committee majority notes
that casual employment is an increasing choice of Australian employees,
including those seeking the flexibility to balance work and family or study
commitments or simply the variety and freedom that can be associated with
temporary work.
2.104
On the matter of the filing fee, the committee
majority was not convinced by arguments of the hardship this might cause,
particularly in view of the Commission’s power to waive the fee in cases of
hardship.
Recommendation
2.105
The Committee majority commends the
provisions of this bill to the Senate.
Summary
2.106
The five bills considered by the committee
present a well considered package of important amendments to the Workplace
Relations Act. If enacted the legislation will fulfil commitments made by the
governments as part of their election 2001 policy.
2.107
The Committee majority considered that recent
developments and information referred to in submissions provided further
support for the amendments to the Act contained in this package of bills to
either reinforce principles established in the courts or, the case of casual
employees, to rectify a problems that had arisen as a result of a court
decision.
2.108
The committee majority supports workplace
relations reforms that are designed to ensure that Australia has workplace
relations arrangements capable of sustaining and enhancing living standards,
productivity, international competitiveness and employment.
Recommendation
2.109
The committee majority commends the
provisions of the five bills in this package to the Senate.
Senator John Tierney
Chair
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