Labor Senators Report
SUMMARY
1.1
Labor senators oppose each of these Bills, all
but one of which are simply recycled versions of bills that the Senate has
previously not supported.
1.2
A common thread linking three of the bills - the
Workplace Relations Amendment (Compulsory Union Fees) Bill 2002, the Workplace
Relations Amendment (Genuine Bargaining) Bill 2002 and the Workplace Relations
(Secret Ballots for Protected Action) Bill 200s - is that they reflect an
underlying ideological agenda of marginalising unions and reducing their
capacity to bargain and organise effectively for working people. They will also
have the unfortunate, and not necessarily unintended, consequence of fostering
a more adversarial and less co-operative relationship between employers and
unions.
1.3
The other two bills - the so-called ‘Fair
Dismissal’ and ‘Fair Termination’ Bills - are concerned with removing a
fundamental employment protection from the most vulnerable employees in the
Commonwealth jurisdiction, ostensibly to remove a potential source of risk for
employers and increase employment opportunities.
1.4
Labor senators believe that the Bills are also a
reflection of the Government’s ideologically driven workplace agenda, which
rests on and perpetuates negative stereotype of unions and employees more
generally. We believe that there are more constructive approaches that would
promote productivity, cooperative workplace relations and employment growth,
without sacrificing important principles or the rights of Australian workers.
Workplace Relations
Amendment (Fair Dismissal) Bill 2002
Introduction
1.5
This Bill would abolish the right of small
business employees to seek reinstatement or compensation in the Australian
Industrial Relations Commission following unfair dismissal. A measure along
this lines has been rejected six times by the Senate since 1996.
1.6
No new evidence or arguments in support of the
exemption have been presented in the intervening period. At the same time, the
evidence and arguments previously used in support of the employment effect of
the exemption have been largely discredited. In addition, changes to the unfair
dismissal provisions introduced in August 2001 have undermined the case for an
exemption based on the disproportionate burden of unfair dismissal claims on small
business. The Department’s submission and the Government’s supporting arguments
lacked any real assessment of the extent to which those amendments have reduced
the procedural burden of unfair dismissal applications on employers.[1] While it will be some time
before there is any sound empirical evidence of the effect of those changes,
statistics of unfair dismissal claims in Victoria, which falls under the
Commonwealth laws, suggest a trend towards declining application rates since
August 2001.[2]
This Bill is essentially the same as the Bill most recently rejected by the
Senate – with the exception that this Bill is now expressed to apply to
businesses with fewer than twenty, rather than fifteen, employees.[3] Despite the fact that the Labor
Party and the Democrats have made it clear that they would continue to oppose a
blanket exemption, particularly in the absence of compelling evidence of the
need or net social benefit, the Government has refused to consider constructive
amendments to the Bill to improve unfair dismissal procedures and reduce costs
for participants in the unfair dismissal process.
1.7
The Government’s motives in persisting with a
proposal that is so clearly unacceptable to the Senate in its current form, and
in introducing the Bill in the first week if the first session of a new
Parliament are clearly political. Indeed the Government has made it clear that
it intends to use this Bill to provide the trigger for a double-dissolution of
Parliament, should that suit its purposes during the life of this Parliament.
At the same time, there is marked Government inaction on a host of other
matters of greater concern to small business. In light of this, Labor senators
question the sincerity of the Government’s commitment to making sound
legislation or to improving small business’ capacity to increase employment.
Employment effect of an
exemption - assessing the evidence
1.8
The Government has repeatedly claimed that
exempting small business from the unfair dismissal laws will create up to
53,000 jobs.[4]
While this claim has been qualified in the fine print of some more recent
Government statements, it remains the argument featuring most prominently in
media statements and is obviously the key message that the Government is
seeking to convey. However repetition and reinforcement cannot convert a bald
assertion into a fact.
1.9
Claims about the employment effect of the
exemption have never been supported by sound evidence. This was most recently
and tellingly highlighted in the Federal Court case of Hamzy v Tricon (Hamzy)
in late 2001, where the government’s own expert witness on workplace relations
and employment matters, Professor Mark Wooden, conceded that:
- there has not been any direct research on the effects of
introducing unfair dismissal laws;
- the growth in employment in the 1990s had been at its strongest
when the unfair dismissal laws were at their most protective; and
- the driving force behind employment growth is clearly the state
of the economy and not the existence or non-existence of unfair dismissals law.[5]
1.10
While the Hamzy case involved issues
relating to the dismissal of a casual employee, the general arguments and
findings about the employment effect of unfair dismissal laws apply
irrespective of whether the jobs in question are casual or permanent. The Department
indicated that it is exploring research into the link between unfair dismissal
laws and employment.[6]
However this begs the question as to why the Government is proceeding with
legislation in the absence of sound empirical evidence.
1.11
Professor Wooden’s evidence is also consistent
with the results of surveys of small business, including the Yellow Pages
Survey, which the Government has consistently relied on as evidence of the
‘need’ for an exemption. The February 2002 Yellow pages survey indicates that the
most important barrier to small business employing additional staff was a lack
of sufficient work.[7]
1.12
Significantly, during the public hearings into
this Bill, the representative of the Council of Small Business Associations
(COSBOA), which originally advanced the estimate that 50,000 jobs could be
created as a result of the exemption, advised the Committee that, in her view,
it was unrealistic to expect any significant increase in employment in small
business in the Bill was enacted:
Senator GEORGE CAMPBELL—I have a couple of questions, Mrs Keenan. Your
organisation, through its former chief executive director, Mr Bastion, is
credited with the claim that 50,000 jobs could be created if these unfair
dismissal laws were not in place. That has been indexed by the current minister
to 53,000, but essentially that claim came out of your organisation. What was
the research done by your organisation to establish the veracity of that claim?
Mrs Keenan—During the implementation of the new tax system
we had a call centre, and as part of the process of that call centre—in which
we made 60,000 calls to individual small businesses—one of the questions asked
as part of the questionnaire was whether, under the unfair dismissals act, the
owner-operator of that business believed that, if the unfair dismissals bill
were passed, they would employ more people. The figures taken from the survey,
taken on that 60,000 and extrapolated out, were that that would be the number
of people who would employ more. I have doubts about that. I have serious
doubts about that. I do not necessarily believe that we are going to see a
massive increase in employment in small business. I do not believe it will work
that way. I believe it will make employment in small business more secure, but
I do not believe that there will be a massive blow-out of new employment.[8] (Emphasis added).
1.13
The representative of the ACCI also acknowledged
that no one factor determines whether an employer will engage additional staff,
but that the overriding factor is whether there is a commercial need.[9]
1.14
Surveys of small business also indicate that
concerns about unfair dismissal are declining and that the concerns that do
exist are largely based on misperceptions. In November 1997, 9 per cent of
small business respondents considered that employment conditions (including,
but not limited to, unfair dismissal) were impediments to employing additional
staff; but in February 2002, this had declined to 5 per cent. [10]
1.15
Unfair dismissal laws also ranked low among
small business concerns in a recent CPA Australia survey of small business,
with greatest single concern being the New Tax System, including the GST and
associated paperwork (33 per cent).[11]
1.16
The CPA Australian March 2002 survey of small
business employment found that a lack of work and the difficulty in finding and
recruiting staff with the appropriate skills and motivation were the main
impediments to job creation. Only five per cent of all respondents nominated
unfair dismissal laws as the major impediment[12].
1.17
That survey also found that small business views
about the effect of unfair dismissal laws rest on some major misunderstandings.
Almost a third of all small businesses surveyed reported that the unfair
dismissal laws prevent them from dismissing staff, even if their business is
struggling or the employee is stealing from them.[13] Only 58 per cent of all small
businesses were confident that they knew how to employ staff in accordance with
the legislation and only 30 per cent of these were very confident. [14] In light of these findings,
CPA Australia concluded that:
These perceptions are as much a barrier to employment as the
operation of the law. The Government in any strategy to assist small business,
should address misinformation and lack of awareness.[15]
1.18
Labor senators accept that there is concern
within members of the small business community about unfair dismissal laws and
are open to changes that would address those concerns without sacrificing the
fundamental rights of employees. We also believe that much of that concern that
exists in the sector is not only based on misunderstanding but has been
deliberately fuelled by the Government’s continuing fear campaign, of which
this Bill is the most recent manifestation. The representative of COSBOA
advised that Committee that:
Over the last three years a number of employers, because of the
publicity, the discussion and all that is going on, have said to me: ‘ I really
have a problem in that I cannot afford to have an unfair dismissal case against
me. ... [16]
1.19
The Minister’s second reading speech contributed
further to this fear campaign by highlighting cases where business had found it
hard to dismiss incompetent or redundant staff.[17]
1.20
Exempting small businesses in the Commonwealth
jurisdiction from unfair dismissal claims is unlikely to affect the large
majority of Australian small businesses that operate under state laws. [18]The Department acknowledged
this, but added that the Government would encourage the states to adopt a
similar exemption.[19]
1.21
The Committee also heard that many small businesses
do not know whether they fall under Commonwealth or state jurisdictions, where
the majority of unfair dismissal claims originate. Changes to Commonwealth
unfair dismissal law are therefore unlikely to affect their perceptions of
‘risk’ and could create even greater uncertainty. As the representative of
COSBOA acknowledged, the differences between state laws ‘causes tremendous
confusion’,, and development of uniform national principles would help overcome
this.[20]
The representative of the ACCI also acknowledged the jurisdictional problem and
flagged the benefits of more uniform laws.
Other effects
1.22
As well as overstating the benefits of the
exemption, the Government ignores the likely adverse effects. It ignores the
fact that employees would be discriminated against in relation to a fundamental
protection, simply on the basis of the size of their employer’s business (and
or location). Protection against unfair dismissal should form part of the
fundamental employment rights that are available to all employees, once they
have satisfactorily completed a probationary period of employment. A Bill that
would remove this protection from a large - and growing - component of the
workforce would result in the development of a two-tier labour market and
further marginalise the employees of small business.
1.23
There are also sound economic - including
employment-related - arguments against the Bill. For example, a small business
exemption would:
- reduce the employment security of many employees of small
business, which would in turn affect their consumption and investment;
- undermine trust and co-operation in the workplace, making it more
difficult to manage workplace change and boost productivity;
- discourage people from seeking employment in the small business
sector where they would enjoy “second-class” rights;[21]
- leave small businesses vulnerable to protracted and expensive
common law litigation, increasing costs and uncertainty.
A better alternative
1.24
Labor senators believe that, instead of
excluding small business employers and employees from the system, the
Government should be examining ways to improve the operation of the unfair
dismissal system for all participants. The representative of the Australian
Chamber of Commerce and Industry (ACCI), while advocating an exemption as a
preferred approach, recognised that ‘there are respectable arguments on both
sides’ [22]and
put forward some arguments for modifications that would be of general
assistance:
...there are differences in
views within the business community itself about the operation of the small
business exemption. Obviously, businesses which are just outside the boundaries
of the small business exemption see no particular benefit to their business as
a consequence of the passage of the small business exemption. We set out the
reasons that there is a specific case for the small business exemption and why
we support it, but the additional matters that we also identify are matters
which would have application across all businesses... [23]
1.25
Practical measures that could improve the system
and merit further consideration might include:
- increasing the emphasis on reinstatement as the primary remedy,
to reduce the incentive to litigate purely for compensation;
- reducing the legal costs of conciliating and settling a matter;
- regulating paid agents before the AIRC, to ensure ethical
standards of conduct;
- facilitating electronic means of communication, to assist
businesses in rural and regional areas;
- disseminating an information package on sound recruitment and
dismissal practices, produced in consultation with State and Territory
Governments;
- establishing indicative time-frames from the determination of
matters;
- enabling a common application to be brought on behalf of
employees who were dismissed at the same time or for related reasons.
1.26
These would address some of the concerns raised
during the inquiry, including by employer groups, about a range of problems
including unethical behaviour by agents. The representative of the Victorian
Automobile Chamber of Commerce told the Committee:
...we see too many times genuine applicants being mistreated by
agents who promise them things and who do not have any experience; agents who
charge them well in excess of what they should and so on. Applicants are luck
to walk away with $50 when agents are walking away with $2,000, and things like
that... there really is a need to improve the system, not just for the employers
but for the applicants and Commission as well.[24]
Conclusion
The Government likes to claim that unfair dismissal laws are
an example of “the cure being worse than the disease”. This is more apt to
describe its proposed small business exemption. Labor senators believe that a
more constructive approach could improve the operation of the system to the
benefit of all parties.
Workplace
Relations Amendment (Compulsory Union Fees)
Bill 2002
1.27
Labor senators condemn the Government for the
misleading title of this Bill. It is not a Bill about ‘compulsory union fees’.
If that were the case, that phrase could be expected to appear at least once
in the text of the Bill. Rather, the Bill refers only to ‘bargaining services
fees’, which are defined to specifically exclude union membership dues. Labor
senators can only speculate that the motive for such a misleading title is to
create an impression within the broader community that unions are engaging in
unethical and unlawful practices such as charging compulsory union fees.
1.28
Labor senators believe that the proposal in this
Bill is premature and inappropriate because it seeks to pre-empt a matter that
is still before the courts. The legal status of bargaining fees included in
certified agreements will be considered by the Full Federal Court in the case
of Electrolux v AWU, listed for hearing on 27-28 May 2002. As a matter
of general principle, Parliament should not pre-empt deliberations of the
courts except in exceptional circumstances. There are no compelling
circumstances justifying legislation in this case, because the Federal Court at
first instance held that bargaining fees are not a matter pertaining to the
relationship of employer and employee, and, as a result, protected industrial
action cannot taken over an enterprise agreement which includes bargaining
fees.
1.29
The Government’s rhetoric in support of this
Bill is intended to promote the myth that bargaining fees in enterprise
agreements are being forced on employees without their consent. This is not
correct and would not be possible under the relevant legal framework. The Workplace
Relations Act 1996 requires that include that all employees
who will be subject to an enterprise agreement must have ready access to a
proposed agreement for at least 14 days beforehand, that employers must take
reasonable steps to ensure that the terms are explained to employees, and that
a valid majority of employees voting have genuinely agreed to the agreement.
The Commission has specified that ‘genuine agreement’ requires both informed
consent and an absence of coercion (Re Toys ‘R’ Us (Australia) Pty Ltd
Enterprise Flexibility Agreement 1994, Print L9066, 3 February 1995, per
Ross VP).
1.30
This Bill is also inconsistent with the
Government’s stated philosophy of removing third party involvement in the
enterprise bargaining process. In this case, the Government, as a third party,
is seeking to intervene in the bargaining process to dictate the matters that
can be subject to enterprise bargaining and preclude employees and employers
from agreeing on a legitimate method of funding the bargaining process.
1.31
The approach taken in relation to the matter of
bargaining fees in certified agreements is also inconsistent with the
Government’s approach to negotiation of AWAs (s 170VK). An employee can
appoint a union as their bargaining agent in relation to an AWA and nothing
precludes the union from charging a fee in respect to such an arrangement. And
yet the Government would seek to prevent employees from agreeing by a majority
vote to a collective agreement that includes bargaining fees.
1.32
At the same time, the Government also opposes
unions from striking agreements that restrict the benefits of their negotiated
agreements to financial members of the union. On 8 March the Employment
Advocate applied to the Federal Court for the removal from several certified
agreements of a clause providing insurance for union members. He argued that
the clause is contrary to the Act because it extends the benefit of insurance
cover to employees who are union members, instead of all employees.
1.33
In view of that position it is quite
hypocritical for the Government to effectively outlaw the charging of a bargaining
service fee for time incurred by a trade union in negotiating a collective
agreement that necessarily must apply to all workers in an enterprise.
1.34
The Government argues that bargaining fees are
inconsistent with freedom of association. If this were correct, bargaining fees
would be prohibited by the International Labour Office (ILO) principles and
standards, which are founded on core principles such as freedom of association.
In contrast, bargaining fees are permitted by the ILO and in countries such as
the United States, Canada, Switzerland, Israel and South Africa, which are also
known for their adherence to principles of freedom of association.
1.35
There are a number of other objections to the
proposal. The provision is drafted so broadly that it effectively precludes
even voluntary contributions to the cost of bargaining and unreasonably service
fees being charged for a range of advocacy services by either unions or
employer organisations. Indeed, both the Australian Industry Group and the
Australian Chamber of Commerce and Industry expressed concern that the Bill
would prevent them from charging employer organisations service fees in
relation to advice and other assistance in relation to enterprise bargaining. [25]
Conclusion
1.36
Labor senators oppose this Bill which is
misleadingly titled and simply designed to prevent unions from charging fees to
cover the costs they incur in undertaking enterprise bargaining services. Such
a restriction is inconsistent with the objectives of the Act in promoting
agreement making between parties and allowing parties to determine the most
appropriate form of agreement. Labor senators can only speculate that the
underlying intention is to reduce the capacity for unions to bargain
effectively on behalf of their own members and Australian employees more
generally.
Workplace
Relations Amendment (Secret Ballots for Protected Action) Bill 2002
Background
1.37
This is the third attempt by a Howard Government
to amend the Workplace Relations Act 1996 to require secret ballots of
union members (and/or employees) as a precondition for protected industrial
action. Labor and Democrat senators rejected the proposals in the 1999 and 2000
bills.
1.38
The Minister asserted that this Bill addresses
the reasonable concerns raised in relation to the previous bills,[26] in particular concerns that
the processes required for approval and conduct of a secret ballot represented
an impediment to legitimate industrial action. The Department’s submission
argued that the process in this Bill is simple, quick and more streamlined than
that in previous bills.[27]
Departmental witnesses before the Committee emphasised the scope for a ballot
to be initiated one month before the conclusion of a certified agreement as one
of the major improvements over previous models.[28]
1.39
Despite these assurances, this Bill retains the
fundamental features (and defects) of its predecessors, and would prevent
protected industrial action unless it has been approved by a majority of
employees in a secret ballot in which a quorum of employees have voted. The
practical effect would be to make protected industrial action at best
ineffective and at worst impossible.
Impediment to legitimate industrial action
1.40
As the Democrats noted in their report on the
MOJO Bill ‘...industrial disputation is an essential part of the bargaining and
market process’.[29]
The ILO requires that the conditions required for lawful industrial action
should be reasonable and not place a substantial limitation on taking
industrial action.[30]
1.41
The ballot process proposed in this Bill is an
impediment to industrial action, being both cumbersome and potentially lengthy
(as the bill’s length of 35 pages suggests), with scope for a ballot proposal
to be challenged on a number of points. The ACTU identified the key obstacles
as follows:
Employers and others wishing to delay the action will be able to
argue a number of issues before the Commission, such as the validity of the
bargaining period and whether or not the union has genuinely tried to reach
agreement. In addition, procedural issues, such as who should conduct the
ballot, the roll and the timetable are all issues for debate which can be used
for delay.[31]
1.42
The National Tertiary Education Union (NTEU)
gave some examples of the difficulties and delays that could arise before
eligible voters could even be identified in the education sector:
In highly casualised large and decentralised employers such as
many of those in education, it may well take weeks for an employer to compile a
list of all employees who were employed “on the day” of the ballot order...in
higher education, there is no centralised system of recording which of (say)
3000 casuals were employed “on the day” the ballot was ordered.[32]
1.43
Witnesses from the Department of Employment and
Workplace Relations suggested that they would not expect delays of that nature
to be the norm, but it appeared that they had not undertaken any assessment of
this factor.[33]
1.44
Senator Murray questioned whether a simpler
process, such as a secret ballot of attendees at a meeting called to consider
industrial action, might well achieve the stated objective. The Department’s
advice was that the simpler process used in the United Kingdom - which
ironically is promoted by the Government as in many ways a model for Australia
- has been subject to extensive litigation.[34]
Indeed, Government claims that the legislation passed by the Blair Government
in the UK in relation to Secret Ballots ignores critical differences between
the legislation and the extent to which the model in this Bill is far more
restrictive. [35]
Absence of any demonstrated need
1.45
The Government has never sought to demonstrate
the existence of the problem that the Bill is supposed to address.
1.46
The AIRC presently has a discretion to order
a ballot on any question if it would help resolve a dispute. At times it has
declined to use this to order a pre-strike ballot where it was obvious that
employees favoured taking industrial action (for example, South Burnett Beef
Pty Ltd v AMIEU, 1 February 2001, PR900825). A Ministerial Discussion Paper
Pre-industrial action secret ballots (August 1998) concluded that the
Commission appears to be using ballots strategically to progress dispute
resolution, particularly where the parties have reached a stand-off in
negotiations.
1.47
Nor is there any evidence that current levels of
industrial disputation require additional legislative controls. Enterprise
bargaining and employment insecurity and enormous levels of personal debt have
seen levels of industrial disputation fall to their lowest level since
recording began.[36]
1.48
The Department’s submission argued that secret
ballots would enhance democratic processes[37]
and the Minister has asserted that the bill will enhance freedom of choice for
workers and ensure that protected action is a genuine choice of workers
concerned.[38]
This implies that current arrangements are defective in this regard and indeed
the Bill, like its predecessors, is based on an assumption of intimidation of
employees by union officials or the mass of members at meetings. Although the
Department argued that the Bill was not predicated on the assumption of
intimidation,[39]
the Minister’s message is otherwise when he argues that the Bill would:
...ensure that the right to take industrial action is not abused
by union officials pushing agendas unrelated to the workers at the workplace
concerned.[40]
1.49
No convincing evidence was presented to support
insinuations of intimidation. The representative of the ACCER advised the
Committee that his organisation had not seen any evidence of coercion or
intimidation in the taking of industrial action.[41]
1.50
As the Department’s submission notes, the Workplace
Relations Act 1996 requires that protected industrial action by a union is
duly authorised in accordance with the organisation’s rules. [42] Commonly, those rules require
consultation with employees before a decision is taken on industrial action.
The ACTU endorses pre-strike votes and as a matter of practice unions hold
them. Union officials are held accountable to their members under the detailed
provisions governing trade unions in the Workplace Relations Act. The
representative of the AMWU explained that that union’s consultative processes
meant that the union’s rules could be altered to require secret ballots if the
majority of members supported such an arrangement.[43]
1.51
There was no evidence that employees or union
members - as opposed to employers - were dissatisfied with this form of
consultation. Where secret ballots have been used in Australia in previous
times, they have almost invariably resulted in decisions to proceed with
industrial action,[44]
suggesting that the problem of bullying union officials or intimidatory
meetings is imagined rather than real.
1.52
The model proposed in this Bill will also fail
to ensure that decisions on industrial action actually represent the views of
those workers who will be affected by the action. In the tertiary education
sector, where there is a very high rate of casual employment, many of those
eligible to vote in a ballot may no longer be employed when industrial action
is taken, while many of those who will be employed when action will take place
will not be employed - or eligible to vote - at the time of the ballot.[45]
1.53
Government members of the Committee also put
forward the view that secret ballots are appropriate because they reflect the
Australian culture of participative democracy, resting on the use of secret
ballots to elect a government every three or four years. [46]
1.54
While superficially appealing, there is a major
flaw in this argument. If secret ballots are necessary and appropriate to
ensure democratic decision-making and full consultation and are a distinctively
Australian approach to collective decision-making, then surely they are equally
appropriate for decisions by unions or employees to lift industrial
action and by employers to initiate protected industrial action, such as
lockouts of employees. However employers and the Department both argued that,
in these cases, the principle of secret ballots should not apply because, in
both cases, it would not be practical. The representative of the Australian
Industry Group argued that requiring a secret ballot as a precondition for
lifting industrial action would not be sensible because it would delay the
conclusion of action which was often economically damaging for employers and
employees.[47]
This practical consideration apparently overrode any principle about the
potential for intimidation of those employees who may prefer to continue with
industrial action rather than accept a negotiated settlement recommended by
union officials.
1.55
The question of a ballot of shareholders before
employers undertook protected industrial action was also dismissed purely on
the grounds of practicality.
1.56
The double standard that applies to the
Government’s pursuit of the principle of democratic consultation in relation to
protected industrial action, and the complexity of the process proposed,
suggests that the real motivation for this Bill can only be to place obstacles
in the path of unions and employees wishing to take protected industrial
action.
1.57
The Government claims inaccurately that its
measures have the approval of the ILO. If the Government relies for this
proposition on a letter from the ILO to the Department dated 9 October 2000,
this is untenable.
Conclusion
1.58
Labor senators oppose this Bill as contributing
nothing to improved industrial relations or industrial democracy. In reality,
it is simply intended to make it more difficult for employees to take
industrial action. Paradoxically the complexity of the process is likely to
encourage more industrial action because there would be a strong incentive for
unions that have completed the complex requirements for a ballot - and are
then liable for 20 per cent of the cost - to proceed with agreed industrial
action, notwithstanding any constructive developments in the negotiation process.
This complex and costly process would also encourage unions to seek agreement
for the broadest possible industrial action, because short, sharp action would
no longer be cost effective.
Workplace Relations Amendment
(Genuine Bargaining) Bill 2002
Introduction
1.59
This Bill recycles several proposals rejected by
the Senate in 2000. It remains narrowly focused on introducing obstacles to
protected industrial action, suspending and terminating bargaining periods and
restricting the scope for unions to pursue industry-wide or multi-employer
agreements. The title of the Bill is a misnomer because it would do
nothing to facilitate genuine bargaining and the resolution of industrial
disputes.
1.60
Labor senators strongly support enterprise
bargaining, which remains a key feature of the Labor Party’s industrial
relations policy. However we believe that workplace bargaining is not
incompatible with the pursuit of improved wages and conditions at the industry
level and multi-employer agreements. A combination of workplace bargaining and
industry bargaining is common practice in contemporary Australia, being the
most sensible and preferred approach for many employers and employees,
particularly in sectors such as education.[48]
The ‘genuine bargaining’ provisions (s170MW(2A))
1.61
The proposed s170MW(2A) purports to provide
guidance to the Commission on matters that would tend to indicate whether a
party to enterprise bargaining negotiations is genuinely seeking to reach
agreement. The Government claims that this provision draws on the decision of
Munro J in the Metals case decision in 2000 and reinforces the
Commission’s ability to end protected industrial action if unions are not
genuinely bargaining about their claims at the workplace level.[49]
1.62
There are several fundamental objections to this
argument. First, there is no indication that the Commission has any need of
such guidance. On the contrary, Munro J’s decision in the Metals case is
clear evidence that the Commission has sufficient power and discretion under
the existing Act to intervene where it believes that genuine bargaining is not
taking place.[50]
1.63
Second, it is misleading to assert that the
provisions in s170MW(2A) are consistent with the Metals case decision.
S170MW (2A) and the supporting information is based on an assumption that
pattern bargaining - or the pursuit of common claims against more than one
employer - is inconsistent with genuine bargaining at the workplace level.[51] However Munro J made it clear
that pattern bargaining is practised by employers as well as unions, and is a
legitimate industrial strategy. The submission from the ACTU highlighted the
relevant aspects of Munro J’s decision:
It is not unusual for major corporate employers to attempt to
achieve a consistency and sometimes a relative uniformity of outcomes in
negotiations affecting workers....It appears that some of the more loudly voiced
and caustic criticisms of " pattern bargaining", as practised by
unions, are muted or tolerant of corporate practices intended to achieve
similar uniformities of negotiating outcome across different workplaces.
...Industry-wide demands are often made by unions and sometimes pursued at
national level. It is not that character of the demand that may cause offence
to the policy embodied in section 170MP and paragraphs 170MW
(2)(a) and (b). I see no reason why such claims may not be advanced in a way
that involves a genuine effort to have each employer concede the benefit
sought. In such cases, the "pattern" character of the benefit
demanded, its source, and even the uniform content of it, may be a cogent
demonstration that the negotiation conduct is genuinely directed to securing
agreement from the other party.” (paras 47-49) [52]
1.64
The Bill appears to be designed to fetter the
Commission’s discretion by introducing a presumption that certain bargaining
approaches are inconsistent with genuine bargaining. The AMWU, along with other
unions and employee advocates appearing before the Commission, expressed concern
that, under this Bill, they could be construed as not genuinely bargaining if
they had the mere intention of reaching agreement with more than one employer. [53] The NTEU expressed concern
that the Bill would also prevent them from pursuing minimum or floor wage
outcomes.[54]
1.65
The Women’s Electoral Lobby saw the Bill as
inhibiting bargaining that would assist women in achieving greater equity in
wages and conditions. [55]
In the view of the Australian Catholic Commission for Employment Relations
(ACCER), the Bill had the potential to inhibit the development of
multi-employer agreements, which were important for the Catholic school system.
[56] ACCER also identified a
philosophical objection to the Bill, as s seeking to elevate workplace
bargaining as the only acceptable form of agreement making at the expense of
promotion of cooperative and harmonious relations and allowing parties
determine the type of agreement that best met their needs.[57]
1.66
Curiously, despite the Minister’s
characterisation of pattern bargaining as an ‘outdated, ‘one size fits all’’
approach to agreement making,[58]
the Government, as an employer, engages in pattern bargaining, in particular by
setting ‘policy parameters’ on workplace arrangements to apply across
departments and agencies. As the Senate Finance and Public Administration
References Committee found in its October 2000 report:
Rhetoric about the decentralised environment of the Workplace
Relations Act in which agency heads have flexibility to negotiate terms and
conditions to suit their workplace has been misleading. The reality is that,
while agencies have greater flexibility, the Government is the ultimate
employer and has in place policy parameters and guidelines to protect its
policy interests.[59]
1.67
A further objection to this Bill is that it adopts
an inappropriately narrow and unbalanced approach to the requirement for ‘good
faith’ bargaining. In proposed s170MW(2A)(d) and (e), the factors that the
Commission should take account of in determining whether a negotiating party
is genuinely seeking to reach agreement, are whether the party refuses to meet
or confer or to respond to the other party’s proposals. Labor senators consider
that these factors are the core tests or principles of ‘good faith’ bargaining.
However under this Bill these principles only need be considered if and when an
application has been made to the Commission to suspend a bargaining period in
order to curtail or prevent protected industrial action. The result is that, in
practice, the requirement for good faith bargaining will only apply to unions
and only in cases where the union is considering or undertaking protected
action.
1.68
If the Government genuinely wished to promote
‘good faith’ bargaining, a more even-handed and effective approach would be to
restore the Commission’s power to direct all parties - whether employer, union
or employee - to bargain in good faith. As it stands, under the existing Act
and these proposed changes, employers who refuse to bargain in good faith will
face no effective sanctions (except in the relatively rare instances where they
wish to undertake protected industrial action). The AMWU representative gave an
example of a case where an employer refused an offer by the conciliating
Commission to arbitrate a difficult dispute and the union had no recourse.[60]
Limitations on new bargaining periods (s170MWA )
1.69
Proposed s170MWA is apparently aimed at
situations where a party peremptorily terminates a bargaining period in order
to deprive the Commission of jurisdiction to hear an application under s170MW.
The Government has made no attempt to demonstrate the need for such a
provision. Although the AiG argued in its submission that this was a tactic
employed by unions during Campaign 2000[61],
evidence to the Committee indicated that, if that were the case, there was no
evidence that the Commission had been unable to deal effectively with it.
1.70
The submission from the ACTU indicated that in
the Metals Case, Munro J considered a situation where unions terminated
bargaining periods with a number of employers under section 170MV, apparently
in order to institute a ‘cooling-off’ period, and then reinstated bargaining
periods with much the same claims, with the same employers, a short time later.
Munro J used the powers currently available to the Commission under s170MW(10) to
terminate the bargaining periods.[62]
Cooling off periods - s170MWB
1.71
The proposed s170MWB, which provides the
power for the Commission to suspend bargaining periods where it considers that
this would be appropriate in terms of assisting in resolution of the dispute,
is also unnecessary. The Government suggests that this provision would assist
in the resolution of industrial disputes.[63]
However industrial disputation is at the historically low levels, suggesting
that there is little practical need for additional powers to intervene in
disputes. In addition, the Commission has a range of powers under current
s170MW to suspend or terminate a bargaining period and the Government has not
demonstrated that these powers are insufficient or that the Commission has failed
to use them when appropriate.
1.72
There is also an absence of complementary
measures that could make a genuine contribution to the resolution of
differences. As the ACTU commented:
the cooling off period
concept is a misnomer. It is not really a cooling off period, because all it
does is again stop workers taking industrial action while allowing employers to
maintain their position. They are not required to bargain in good faith; they
are not required to consider claims; and there is no ability for anyone to deal
with the underlying issues of the dispute.[64]
1.73
Given the absence of any evidence of the need
for these additional powers, and their unbalanced nature Labor senators can
only conclude that the real purpose of this provision is to encourage the
Commission to intervene more frequently to suspend or terminate protected
industrial action. The inevitable result would be to undermine the scope for
effective industrial action and with that, the bargaining power of unions and
employees.
Conclusion
1.74
Labor senators oppose this Bill as being both
unnecessary and an inappropriate and heavy-handed restriction on bargaining
between employers and employees.
Workplace Relations Amendment (Fair Termination) Bill 2002
Introduction
1.75
This Bill moves a number of exclusions from the
unfair dismissal laws contained in the Regulations into the Act, makes the
filing fee for unfair dismissal claims permanent and indexes the fee.
1.76
The proposal in the Bill to exclude from the
unfair dismissal system casuals with less than 12 months regular and systematic
employment and a reasonable expectation of continuing employment, is a
regressive measure.
1.77
Labor senators do not believe that the
Government’s argument that this proposal simply restores an exemption that
applied before the Full Federal Court decision in Hamzy in November 2001 found
that the regulation was invalid, provides a sound reason for supporting the
Bill.
1.78
It is not correct to argue that the
regulation was found to be invalid on purely ‘technical’ grounds. The court
held that the regulation extended beyond the powers prescribed in the Act for
the making of regulations in relation to casuals. Those powers relate to
casuals employed for a short period. A regulation that meant that a casual
employee who had worked for an employer for 10 years or more could in some
circumstances meet the definition of being employed for a "short
period" - for example, where the casual had been employed frequently but
not on a regular pattern - was found to be beyond what had been envisaged in
the Act.
1.79
The decision in Hamzy highlighted the
discrepancy between the principle of excluding short term casuals (consistent
with the principles of the ILO Convention on Termination) and the previous
regulation and this Bill. It provides an appropriate opportunity to re-assess
the criteria for excluding casuals from this fundamental employment protection.
1.80
More than a quarter of all jobs in Australia are
now characterised as ‘casual’. This rate is extremely high by international
standards. Casual employment is also increasingly diverse, ranging from ‘true
casual’ work, which is often irregular, intermittent or for short periods to
full-time ongoing employment, which is permanent in all but name (and perhaps
entitlements and security). In recent years full-time casual employment has
increased more rapidly than part-time casual employment,[65] suggesting a trend of
substitution of casual for permanent jobs.
1.81
The growth of casual employment, in substitute
for permanent employment, has profound social consequences. While it may
provide flexibility to employers, left unchecked it threatens social cohesion
by increasing poverty and insecurity, particularly among young and female
workers who make up the majority of casual employees. It usually precludes an
individual from obtaining finance for a significant purchase such as a family
home, locking a whole class of employees out of the property market with the
consequent inter-generational effect of preventing accumulation of an asset
base of any significance. It can also affect decisions on family formation.
1.82
The Committee also heard evidence that a number
of employers were now recognising that excessive reliance on casual employment
has harmful effects for their businesses’ productivity and efficiency.[66]
1.83
In determining an appropriate period of
exclusion, it is important to strike a balance between the legitimate need of
some businesses for short-term casual labour, and the need to ensure that
unfair dismissal laws do not provide an artificial incentive to hold employees
as casuals rather than offering them more secure employment.
1.84
Labor senators believe that a 12 month exclusion
fails to strike such a balance. If a casual employee has a reasonable
expectation that they will be employed for 12 months or more, this raises the
question of why the employment has only been offered on casual basis. The 12
month exclusion of casual employees from the unfair dismissal laws may be
playing some role in the employer’s decision to offer such ongoing employment
on a casual rather than permanent basis. This is an undesirable consequence.
1.85
The Committee also heard evidence of concerns
that the combination of the 12 month exclusion - which excludes casual
employees from protection against unlawful, as well as unfair, termination -
and the extension of maternity leave to casuals with more than 12 months
employment, could result in employers ‘churning’ casuals every 12 months,
particularly if they became pregnant.[67]
1.86
Labor senators consider that it is not
necessarily inappropriate for the exclusion to be greater than the 3 month
probation period which applies to other employees. In general, the
appropriateness of the period will depend on the individual workplace and the
nature of the industry. A 6 month exclusion which can be reduced by agreement
between an employer and employees in an award or a certified agreement, strikes
an appropriate balance.
1.87
Another effect of this Bill is the exclusion of
employees on fixed term contracts. Under the legislation introduced by the
Labor government, this exclusion only applied to contracts of up to 6 months
duration. Such a limitation struck an appropriate balance between the need for
short-term labour, and the need to avoid providing an incentive to use fixed
term contracts to circumvent unfair dismissal legislation.
1.88
The courts have taken a sensible approach to
this provision, holding for example that a series of fixed term contracts or a
contract with a power to termination would not necessarily be covered by this
exclusion. There is danger in disturbing wording that has been sensibly
construed by the Courts, however, the operation of this provision should
continue to be monitored to ensure it is not being abused.
1.89
Labor senators do not believe that the filing
fee should be prescribed in primary legislation. Inclusion of the fee in an Act
would be an extraordinary precedent, preventing the Government from being
required to regularly report to Parliament on the effect of the fee. Regular
review of the effect of such fees is important because they are blunt
instruments for deterring vexatious claims with the potential to act as a
barrier to justice. The Committee heard that the current level of the fee could
represent 15 per cent of the wages of some employees.[68]
Conclusion
1.90
Labor senators oppose this Bill on the grounds
that it would deny fundamental rights to a large and increasing proportion of
the Australian workforce.
Senator George Campbell Senator
Kim Carr
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