Chapter 1 - Introduction
1.1
This chapter provides a policy context to the bill, its purpose and
background. As in all its major reports, the committee takes the opportunity to
make broad observations about policy trends and details which have been
observed over a number of years.
Reference
1.2
On 25 November 2008, the Senate referred the provisions of the Fair Work
Bill 2008 (the bill) to the Senate Standing Committee on Education, Employment
and Workplace Relations for report by 27 February 2009. The bill was passed by
the House of Representatives on 4 December 2008.
Conduct of the inquiry
1.3
Notice of the inquiry was posted on the committee's website and
advertised in The Australian newspaper, calling for submissions by 9 January 2009. The committee also directly contacted a number of interested parties,
organisations and individuals to notify them of the inquiry and to invite
submissions. 154 submissions were received as listed in Appendix 1.
1.4
The committee conducted public hearings in:
- Brisbane on 27 January 2009;
- Adelaide on 28 January 2009;
- Perth on 29 January 2009;
- Melbourne on 16 and 17 February 2009;
- Sydney on 18 February 2009; and
- Canberra on 11 December 2008 and 19 February 2009.
1.5
Witnesses who appeared before the committee are listed at Appendix 2.
1.6
Copies of the Hansard transcript from the hearings are tabled for the
information of the Senate. They can be accessed on the internet at http://aph/gov.au/hansard.
Acknowledgements
1.7
The committee thanks those who assisted with the inquiry.
Purpose of the bill and its context
1.8
The Fair Work Bill is the second of four pieces of legislation which,
taken together, will ultimately replace the current Workplace Relations Act
1996 (WRA) and provide for a new workplace relations system to commence on 1 January 2010.
1.9
The first piece of legislation, considered by the committee in its
report tabled on 17 March 2008, was the Workplace Relations Amendment
(Transition to Forward with Fairness) Bill 2008, which changed the framework
for making workplace agreements, abolishing Australian Workplace Agreements
(AWAs) and initiating award modernisation.
1.10
Key features of this second piece of legislation include: a safety net of
National Employment Standards (NES) and modern awards; reaffirmation of the
principle of collective bargaining at the enterprise level; restoration of unfair
dismissal appeal rights; an independent umpire, Fair Work Australia (FWA); and
strong compliance measures including rules on industrial action and right of
entry.
1.11
Eventually the bill may also facilitate the referral of powers from the
states to the Commonwealth regarding private sector workplace relations which
would enable a national workplace relations system for the private sector.
1.12
The legislation dealing with transitional and consequential arrangements
will be presented to parliament in two separate bills, the first expected to be
introduced shortly. The Minister has stated that the transitional bill will:
ensure maintenance of take-home pay levels during the transition to agreements
made under the new bargaining framework; ensure that the NES and minimum wages
apply to all employees from 1 January 2010, including those covered by existing
agreements; and, allow parties to modernise enterprise awards to continue in the
new system and treat NAPSAs derived from the state enterprise awards in the
same way.[1]
1.13
The approach of legislating transitional arrangements separately has
been criticised by some organisations for its failure to allow for a proper
assessment of its effects.[2]
It appears that the government has sought to keep the focus on the system
rather than on the complex transitional matters.[3]
Some of the transitional issues raised with the committee are listed at the end
of chapter eleven for consideration by the government as the transitional bills
are drafted.
Background
1.14
As noted earlier, the Fair Work Bill builds on the Transition to Forward
with Fairness amendments to the WRA to give effect to the remainder of the
government’s substantive workplace relations election commitments which are
detailed in the policy documents released in 2007, Forward with Fairness
and the Forward with Fairness Implementation Plan. In particular, the
bill gives effect to the government’s election commitment to implement a new
workplace relations system. While retaining some of the features of the current
WRA, the bill aims to restore balance and fairness.
Striking the right balance between
employee and employer needs
1.15
Fairness and balance are concerns of long-standing in industrial relations
legislation. The proponents of the Workplace Relations Bill in 1996 claimed
that the new legislation was based on the need to restore 'balance'. It was
argued that business, especially small business, was much hampered by the
'privileged' access of employees to collective agreements, backed by coercive
union power. AWAs would restore 'balance'. While the introduction of AWAs more
than shifted that balance, the WorkChoices amendments to the WRA in 2005
drastically tilted it. Over time, it became apparent to the electorate that
AWAs, especially after WorkChoices, were simply a device to strip employee
entitlements to the bone and to maintain the existence of a low-paid
casually-employed underclass.
1.16
This bill implements Forward with Fairness and reverses the trend
evident in the WRA, especially in its later amendments, of elevating individual
agreements above collective agreements, especially where such agreements were
negotiated by unions. It restores union participation in industrial relations
because without it there is no effective way of ensuring the right of employees
to freedom of association and the maintenance of fair minimum conditions of
employment. Yet this is also the first time that industrial legislation has
facilitated the move toward a truly national system of industrial relations.
While WorkChoices was grounded on the use of the corporations power, this
appeared to be more of an expedient and did not achieve a truly national system
for the private sector as it did not extend to many employers who are not constitutional
corporations, leaving those employers and their employees covered by state
systems. Instead Forward with Fairness embodied a consultative process with the
states in relation to a proposed workplace relations system that has wide
electoral support. This legislation is intended to restore fairness and balance
across the entire workforce. As one employee representative submission
recognised: 'The Government understands that the needs of a 21st
century global economy cannot be met by tinkering around at the edges of the
existing industrial relations system.[4]
1.17
This legislation further advances this commitment and continues the reversal
of the imbalances in WorkChoices. As expressed by the Minister for Education, Employment
and Workplace Relations:
We have presented to this parliament a bill that puts workplace
relations right where is should be – in the dead centre, where the pendulum
should be, between the interests of employers and employees.[5]
1.18
This balance has been recognised by employer groups. On the day the bill
was released, the Australian Industry Group (AiG) described it as 'by and large
a workable compromise'.[6]
This recognition is in no small way due to the unprecedented level of
consultation that was undertaken by the government.
Consultation process
1.19
In Forward with Fairness the government committed itself to
consult on the development of the legislation. Since the passage of the
Transition Forward to Fairness Bill the government has consulted widely with
interest groups as part of the legislative drafting process, particularly in
regard to identifying ways of improving the practical operation of the laws and
identifying unintended consequences. The consultation process included
stakeholders such as peak union and employer bodies and state and territory
officials and workplace relations ministers. The government formed two new
groups; the Business Advisory group and the Small Business Working Group, and
kept the main two former government groups, the National Workplace Relations
Consultative Committee and its subcommittee, the Committee on Industrial
Legislation (COIL).[7]
1.20
The stakeholder groups have acknowledged the government’s consultation
process as being genuine, comprehensive and thorough.[8]
1.21
This contrasts with the lack of consultation
undertaken by the former government on the WorkChoices legislation. For
instance, consultation with COIL involved over 60 people for two weeks in Canberra in October 2008 to
work through the detail of the draft legislation.[9] This may be compared with the few short hours they were given
to review the complex and lengthy WorkChoices Bill.[10]
1.22
In addition, this Senate inquiry process has taken three months, with
hearings in six locations, compared to the three week process undertaken for
WorkChoices which held hearings in Canberra only.
Simpler legislation
1.23
The government pointed to the exposure draft of the National Employment
Standards (NES) released on 14 February 2008 as evidence of its commitment to greater
simplicity. Employer and employee stakeholders expressed approval on the
simpler approach.[11]
1.24
This approach has been continued with this bill where the government has
aimed at drafting workplace legislation that is simpler and more workable for
employers and employees. The government commissioned University of Adelaide law
professor Andrew Stewart to assist this process. Professor Stewart had
criticised former coalition and Labor governments for allowing the industrial
legislation to rival the income tax laws for complexity. Although he listed
some areas where further improvements could be made, Professor Stewart
expressed satisfaction that every manager, union official and industrial
practitioner who needs to consult this legislation regularly would find their
work much easier.[12]
The Workplace and Corporate Law Research Group, Monash University also agreed
that the bill provides simpler legislation:
There is no doubt that the Fair Work Bill is simpler to
understand and apply than its predecessors and that the new national workplace
relations system as a whole will be less complex than the system established by
Work Choices.[13]
1.25
The committee majority notes that the WRA totalled some 1,500 pages. This
bill is significantly shorter at fewer than 600 pages. It notes the general
agreement that the bill is easier to read and comprehend, which will assist
those who need to consult it regularly. This improvement has been noted more
than once by Opposition participating committee member Senator Abetz.[14]
Economic context
1.26
The debate about the relative importance of industrial relations as a
determinant of productivity has continued over the life of the WRA and
continues still. The government has been criticised for its timing of the new
legislation given the unfavourable economic cycle the country now finds itself
in.[15]
The Minister has stated that the government takes a long term view:
Labor in opposition deliberately designed these laws so that
they could be the workplace relations laws of this country in good times and in
difficult times. We designed a workplace relations system that was ready to
meet the challenges this nation could face in the future; a workplace relations
system that would be fair to employees, flexible and productive no matter what
was going on in the economy. Consequently, our Fair Work Bill is there to set
the workplace relations laws for this country for the long term.[16]
1.27
The Minister added that the priority was to achieve balance in meeting
the needs of the economy, and advised:
...we believe we’ve got the balance right and that the Bill is
good for employees, good for employers and good for the economy and future
productivity and prosperity.[17]
1.28
The government has responded to the current global financial crisis
through its $10.4 billion Economic Security Strategy to strengthen the economy
and create 75,000 jobs.[18]
In addition, on 3 February 2009 the government announced a $42 billion Nation
Building and Jobs Plan to support long term economic growth, and up to 90,000
jobs in 2008-09 and 2009-10.[19]
1.29
In current economic conditions the government believes it is all the
more important to deliver certainty and stability regarding workplace relations
laws.[20]
In the committee's mind, employment confidence underpins consumer confidence.
The committee majority particularly deplores statements made by some employers that
the legislation is ill-timed, given the current threat of world recession. This
is not defensible. No economic justification has been put forward to support
it. It reflects only a fear of change, and an opportunistic tactic to delay it.
The prevailing wisdom is that the workforce must be protected so as to be ready
for recovery.
1.30
Critics of the bill have claimed that the proposed changes add to
industry costs, implicitly through the 'inevitably' increased cost of labour.
This is also an implicit admission that they remain trapped in the low-wage
time-warp in linking prosperity with the driving down of wages. They appear to
believe that if the IR system is skewed, or 'balanced' toward a
'take-it-or-leave-it' system of wage negotiation, economic growth will
automatically follow. As evidence from the Department of Education, Employment
and Workplace Relations (DEEWR) noted:
...drivers of national economic growth and performance come from a
far wider range of sources than the type of workplace relations system that a
country adopts. [21]
1.31
Professor Andrew Stewart agreed that 'job creation responds
predominantly to forces other than the conditions that are set by labour law'.
He added that he did not see the legislation leading to any higher levels of
unemployment than will be due to the economic downturn.[22]
1.32
In summary, the committee majority regards external forces, principally
the decline in foreign demand for goods and services, and the limited
availability of investment funding, as the likely drivers of unemployment. The
new National Employment Standards have no significance in the employment
equation, compared, for instance, with the decline in China's economic growth
from 9 to 6.8 per cent in the final quarter of last year[23]
which is already having a direct effect on jobs in sectors such as the mining
industry.[24]
As well, the general downturn in the domestic economy is affecting retail and
other jobs. Protecting jobs in this economic climate is a key goal for the
government, but not one that would be assisted by allowing industrial relations
reform to falter.
1.33
In response to criticism from the Coalition that the government has not
relied on any economic forecasts or impact statement before introducing the
bill into parliament, the Minister has pointed out that 77 pages of regulatory
and economic effects are included in the explanatory memorandum. The Minister
added that the Office of Best Practice Regulation agreed that this analysis has
effectively documented the regulatory implications of the bill.[25]
1.34
The government has pointed to evidence that identifies a clear link
between enterprise bargaining and increased productivity.[26]
DEEWR noted that the bill is broadly consistent with the recommendations to
maintain a flexible labour market made in the OECD Economic Survey of Australia,
released on 10 October 2008. In particular, the OECD recommended that
collective bargaining be preserved at the enterprise level; that industrial
relations systems be harmonised across states; and that awards be modernised.[27]
1.35
Government senators recall that over many years the committee has been
given economic modelling data which purported to show the certainty of
increased productivity as a consequence of the operation of AWAs. The WRA was
supposed to usher in an era of increased productivity. In fact, the early years
of its operation coincided with the coming to fruition of micro-economic
reforms commenced earlier, together with enterprise bargaining which was part
of pre-WRA industrial reform.
1.36
There is evidence for this in data relating to trends in productivity
growth which report that: based on ABS figures from 1988-99 to 2003-04 annual
growth in labour productivity averaged 2.2 per cent which is 1.1 percentage
points below the average of 3.3 per cent over the previous growth cycle of
1993-94 to 1998-99. DEEWR noted that this was the highest growth rate on record
and coincided with the formal introduction and spread of enterprise bargaining.
More recently, since 2003-04, productivity growth has averaged 1.1 per cent
which suggests growth over the current cycle will be down on the longer term
average.[28]
1.37
The Explanatory Memorandum mentions research by the Productivity
Commission and the Melbourne Institute which linked productivity gains to
collective bargaining. It also mentioned work by Tseng and Wooden which found a
correlation between collective bargaining and higher productivity. Specifically
they found that firms with employees on collective agreements had a nine per
cent increase in productivity levels compared to employees on awards. In addition,
work from Fry, Jarvis and Loundes was cited which found that organisations
entering into collective agreements reported higher levels of self-assessed
labour productivity relative to their competitors.[29]
1.38
In response to the claims that wage claims will spiral out of control,
DEEWR noted the close tie between productivity and wage increases, which,
together with the continued prohibition on pattern bargaining, place limits of
the possibility of unsustainable wage increases.[30]
Flexibility
1.39
While Coalition senators and employer groups have raised questions about
the sufficiency of flexibility of the system, the committee majority is mindful
that flexibility has to be balanced with fairness. It is clear from some of the
evidence to be discussed later that 'flexibility' often has different meanings
for employees and employers. Measures to achieve genuine flexibility to meet
the needs of individual employees and employers – without sacrificing minimum
standards – is inherent in the framework of the bill. The bill ensures that
employees are better able to balance work and family life.[31]
There are individual flexibility arrangements in awards, and flexibility terms
must be contained in enterprise agreements. These arrangements are subject to
protections to ensure they are genuinely agreed and do not undermine the safety
net of employment standards.
1.40
Further the legislation recognises that award protections are of less
relevance to employees on high incomes. The bill therefore provides that
employees earning a guaranteed annual salary of more than $100,000 per annum
(indexed) are not subject to modern awards.
1.41
In contrast, the WRA gave employees the 'flexibility' to offer AWAs that
removed basic employment entitlements such as leave, penalty rates, public
holidays, redundancy pay and overtime. These could be offered on a 'take it or
leave it' basis as a condition of getting a job or a promotion. AWAs were often
entered into as result of such pressure and significantly disadvantaged
employees by providing minimal (if any) wage compensation for employees
foregoing such basic work entitlements. Such 'flexibility' may have been
appealing for employers, but much less so for most workers.
1.42
Professor Stewart had some relevant remarks to make about flexibility in
the bill in response to questions from Senator Cameron:
I would also say that of course there is flexibility built into
the system in a whole lot of ways anyway.... There is still ample scope for many
parties to engage in workplace bargaining that could indeed, in some instances,
see some employment conditions being negotiated away. We are starting to see
some of that happen already in the current economic climate and I would expect
that will continue. The question is: do we want to move to a situation where
you can bargain below the safety net?
For a very large number of workers in industries like retail,
hospitality, cleaning, child care and community services, there is not a lot of
scope there to bargain downwards. Until and unless there is a convincing
economic case which says that society as a whole benefits massively by cutting
employment conditions of some of our lowest paid, most vulnerable workers, then
I for one would not support that.[32]
Committee view
1.43
The committee majority believes that there is sufficient provision in
the legislation to allow wide scope for negotiation of flexible working
arrangements. Current arrangements and enterprise awards, as well as current
enterprise Notional Agreements Preserving State Awards (NAPSAs) will be a part
of the new system. The bill provides for common law contracts and individual
flexibility arrangements on top of an award or an enterprise agreement which
will enable employers to attract and retain staff.
1.44
As noted earlier, the WRA allowed an imbalance to occur in the
bargaining power of employers and employees. While the majority of businesses
treated their employees well, the WorkChoices laws removed the previously
accepted notions of obligation which employers owed to employees, notably that
of fairness. In some cases, it led to unscrupulous employers exploiting
vulnerable workers, but more serious was the encouragement it gave to treat
employees as expendable commodities, especially at the low-paid casual end of
the market. The committee majority believes that the general condition of
employees would have been considerably worse had not skills shortages over
recent years given employees in some areas more bargaining power. It is
important to consider this fact at a time when the demand for labour is likely
to fall, and when the protections afforded by Fair Work legislation will be
even more necessary. In this regard the committee notes evidence given by Ms Janet
Giles from SA Unions who told the committee:
We believe that there was an overwhelming call for the
reinstatement of balance and fairness at work by the Australian people at the
last election. We believe we now need that more than ever because of the
economic times that we are in. Work Choices was bad in good times; it is going
to be horrific for vulnerable people in difficult times and where individual
workers have far less bargaining power. It is the role of industrial relations
to not only provide a collective voice for workers but also to protect the
vulnerable and the young, and that is why we think that right now it is crucial
to have this strong safety net based legislation.[33]
1.45
In summary, the Fair Work Bill promises certainty and stability in
workplace relations laws. It has been drafted to stand for the long-term,
providing flexibility and fairness through changing economic cycles. Above all,
it provides a genuine balance between the interests of employees and employers,
in the pursuit of national economic growth.
Key issues raised with the committee
1.46
This section of the chapter summarises the key issues most frequently
raised in submissions and discussed at hearings. They are subject to more
detailed examination later in the report. The committee majority notes that
much of the commentary and criticism made in submissions appears to be based
either on a lack of understanding of crucial provisions of the bill, or on
speculation about worst-case outcomes which have no basis in fact.
1.47
This attitude is most evident in the apparent reluctance by some
employer groups to let go of their attachment to individual agreements. The committee
experienced several exchanges with employer organisation witnesses where such
concepts as negotiating above the award were unimaginable. There were similar
exchanges about workplace flexibility.
The bargaining process
1.48
Forward with Fairness should by now have been absorbed by all
employer organisations, but the committee has found that an attachment to
individual agreements is still strong. The Minerals Council of Australia, for
instance, expressed strong opposition to the making of collective agreements
negotiated with unions under any circumstances. The CEO told the committee that
'We do not accept the premise that fairness in working arrangements can only be
determined on a collective platform under the guise of a third party external
to the business.'[34]
According to the Minerals Council, this bill impinged on freedom of association
rights.
1.49
Not all employer organisations took this view. The Australian Hotels
Association stated that it believed that the government had made a sincere
attempt to try and build an industrial relations system that is suitable for a
service-based economy. It was a 'total re-write' of the legislation and that,
like a quilt, if you start unravelling different strands of this legislation
the whole thing starts to unravel.[35]
The AHA was generally pleased with the bargaining arrangements in the bill,
saying the system had a safety net of conditions above which it was up to
individual businesses to take advantage of the bargaining arrangements to
derive productivity offsets and then to share those productivity offsets.[36]
The Mandate
1.50
Opposition senators asked witnesses their view on the government's
mandate to introduce the bill in the form that it has, and whether it passes
some kind of 'mandate test'. Employer organisations have responded by declaring
that certain provisions of the bill appear to contradict declarations made by
Labor leaders during the course of the election campaign.
1.51
Such details as were discussed did not extend to the core of Labor
policy or intentions. When asked about the mandate, the National Secretary of
the SDA stated:
It does have a mandate to legislate, and in broad terms that is
what this bill does. It does away with Work Choices. It does away with a number
of things which were part of the legislation that Work Choices had introduced,
and clearly it had a mandate to do that. What we are now talking about are very
much things at the margin and very much at the detail of the implementation of
the mandate. We are not talking about the fundamentals of the mandate that the
government has.[37]
1.52
Mr de Bruyn made a related point:
Well, if the government limited itself to its mandate and
ignored suggestions which perhaps everybody might agree would make the bill
better, that is not something that is going to improve governance. So obviously
at the time when people are running an election campaign they put forward
policies, but it is always possible, and in practice it happens frequently,
that people come up with improvements subsequently, and so a government should
not be limited only to what it says in its platform in the period before the
election.[38]
1.53
The committee majority makes the point that questions asked about the
mandate by the Opposition appear odd in view of their recent experience in
government, and in view of a general understanding about the way governments
must operate. The 'mandate' is widely understood to be based on a broad
understanding of the thrust of policy presented in Forward with Fairness.
No election manifesto can be expected to extend to legislative detail that
could not be anticipated, or which may be required by the exigencies that will later
arise.
Right of entry
1.54
The committee majority note that employer groups appear not to
have understood that the bill changes the basis for a union's right of entry.
It removes the current requirement for a union to be bound to an award or
agreement as a condition of entry. Right of entry to a site is now linked to
the union’s right to represent employees as is set out in detail in the Forward
with Fairness Policy Implementation Plan. It is a fundamental principle
that employers must respect an employee's right to join and be represented by a
union. Under the bill the right of entry to hold discussions with members and
potential members is no longer displaced by non-union agreements and AWAs. It
was the extreme, anti-union WorkChoices laws that in 2005 provided for the
first time that non-union agreements and AWAs removed the right of entry for
unions to enter to hold discussions with employees who were their members or
potential members. In the view of the committee majority, this was a blatant
breach of a person’s fundamental right to join and be represented by a union if
that is their wish.
1.55
The argument by employers was that this policy would lead to demarcation
disputes. The committee majority believes this fear is unfounded The provisions
are not intended to displace existing union coverage boundaries and a mechanism
to handle demarcation disputes will continue to be available under provisions
regulating registered organisations.
1.56
The most persistent concern of employer groups was the right of entry
provisions and the 'considerably expanded' rights of unions. This fear is
unfounded. The changes to the right of entry regime: to allow union access to
non-union employee records where this is necessary to investigate a
contravention, and allowing all employees to meet with their union in the
workplace regardless of the form of agreement applying, are not new and existed
in the pre-WorkChoices WRA (and for very many years before that) without the
kinds of consequences that some employers have suggested to the committee would
occur. They are balanced with appropriate obligations placed on unions and
sanctions apply for misuse. It is worth noting that under the anti-coercion
provisions, no employees can be forced to attend discussions with unions. See
chapter seven for more detail.
Access to employee records
1.57
Another concern for employer groups was in relation to union access to
employee records. Once again the protections in the bill seem to have been
overlooked. The committee majority emphasises that permit holders cannot copy
anything they wish and fears about open slather access to employee records are groundless.
Access is allowed only to the extent that it is relevant to a suspected breach.
Privacy protections apply. The committee heard of no instance of misuse or
abuse of employee records by a union and the department was not aware of any
such allegation. The committee majority also notes that the protections for personal
information are stronger and more comprehensive under the Fair Work Bill than under
WorkChoices and there are also heavier penalties for the unauthorised use or disclosure
of employee records.
1.58
As will be noted in more detail in chapter seven, the committee has
received assurances from DEEWR officials about the operation of the legislation
in regard to privacy safeguards, 24 hour notice served on employers responsible
for producing the documents, and generally ensuring a balance between privacy
and the rights of employers.
Greenfield agreements
1.59
Employer groups were particularly concerned about greenfield agreements
which must be made with one or more unions eligible to represent employees.
Employer groups have read this clause to mean that these agreements must be
made with every relevant union, and fear that even just one union may frustrate
bargaining. The committee majority believes these fears are unfounded,
particularly in the light of advice which has been received about the operation
of the legislation. There is an element of fear-mongering in some statements
made by opposition members and by certain press commentators. Employer
organisations appear to have feared the worst in speculating on the disruption
that this is likely to cause. It is clear, however, that the provisions for
good-faith bargaining would not permit a single union to hold a multi-union greenfield
agreement to ransom.
1.60
The government has made it clear that an employer must notify all
relevant unions and advise FWA but it is then up to those unions to approach
the employer if they wish to be involved. An employer is not required to make
an agreement with every union that was notified or that was involved in
bargaining although it may choose to do so. If the employer strikes a deal with
one of the relevant unions, the employer can ask to have the agreement approved
by FWA. See chapter four for more detail.
Agreement content
1.61
Employer groups and unions expressed concern about what can and cannnot
be included in agreements. Government policy is that agreements should include
matters pertaining to the relationship between the employer and the employees
and the employers and any union to be covered by the agreement. Matters irrelevant
to the employment relationship cannot be the subject of protected industrial
action. The bill will allow matters that are long-standing, basic features of
workplace relations agreements but which were prohibited under WorkChoices to
be included in enterprise agreements, such as union consultation clauses or
leave to attend union training. This will allow parties to cover these issues
in their agreements and make the current practice of 'side' agreements between
employers and unions largely unnecessary.
1.62
Bargaining fees cannot be included in an agreement as bargaining agent
fee clauses are objectionable provisions. The committee majority also notes
there is no blanket prohibition on right of entry terms in agreements but
certain terms about right of entry are unlawful if it provides an entitlement
that is inconsistent with the right of entry part of the bill. A particular
concern was whether environmental issues could be included in agreements. The
committee majority notes that environmental issues are able to be dealt with in
enterprise agreements where the issue has the necessary connection to the
employment relationship between an employer and the employees covered by the
agreement. Also see chapter four.
Transfer of business
1.63
Employer groups criticised the new definition of a transfer of business
and the requirement to continue to provide the entitlements in the transferring
employees’ existing industrial instruments. The committee majority notes that
this concern should be allayed by the provision allowing an employer to apply
to FWA to rationalise the instruments of employment that apply and that such a
request may be considered before or after the transfer. This issue is dealt
with in more detail in chapter nine.
Restoration of unfair dismissal rights
1.64
Employer groups have raised concerns that extending the unfair dismissal
protections in the current economic circumstances will discourage employers
from hiring staff. The committee majority notes advice from DEEWR that there is
no direct or conclusive evidence to support the claim that unfair dismissal
laws influence recruitment of employees. DEEWR cited the May 2008 Sensis Small
Business Index, surveying 75 per cent of small to medium enterprises, which
reported that reinstatement of the previous unfair dismissal laws would have no
real effect on their business.
1.65
While welcoming the restoration of unfair dismissal rights to most
employees, the ACTU expressed the view that the protections should be extended
to all workers, subject to a three-month probation period. The new scheme recognises that employees
should have protections from unfair treatment while recognising that small
business owners do not have the support of expert human resources advisers in
managing under-performance. Unfair dismissal issues are covered in detail in chapter
five.
Submission of unfair dismissal claims
1.66
A common criticism of the bill was that the seven day timeframe to lodge
unfair dismissal claims is too short, and would disadvantage certain parties
such as those in remote areas; employees who may not be aware of their rights;
those from a non-English speaking background; and those who may be distressed.
Most advocated a 14 or 21 day timeframe. Employer groups were also concerned
that the timeframe might encourage claims that would otherwise not have been
lodged and that the timeframe may result in the substitution of general
protection claims for unfair dismissal claims. See chapter five for the
committee's recommendations in this area.
Arbitration
1.67
The committee heard opposing views on access to arbitration. As might be
expected, many employee organisations wanted wider access to arbitration and
employers wanted less. The bill requires a modern award to include a term for
settling disputes about any award or NES matter and enterprise agreements must
contain a dispute settlement clause. In addition, FWA has broad powers
to mediate or conciliate, make recommendations and make workplace
determinations. For more detail see chapter eight.
Right to request flexible working arrangements
1.68
Although welcoming the right to request flexible working arrangements
for those with pre-school age children, organisations wanted more clarity about
what constitutes 'reasonable business grounds' for the refusal of such a
request. The committee notes that FWA will provide further guidance on this
issue. There were also concerns about an employee's ability to challenge a
refusal. The committee majority notes that it is open to the employer or
employee to suggest modifications which might be able to be more easily
accommodated. An employee may also have remedies under relevant discrimination
legislation if they feel they have been discriminated against by the handling
of their request.
Individuals may request work arrangements in order to remain at
workplaces as their family circumstances change, which will also enable
employers to retain the human capital investment made in the employee. This is
covered in chapter two.
Pattern bargaining
1.69
The committee heard opposing views on this issue. Some witnesses did not
support the restrictions on pattern bargaining, arguing that it limits the
employee's freedom of association and pointed out that some employers are quite
happy with a pattern approach to bargaining as it ensures consistency in wages
and conditions. In contrast, some employers expressed concern that the low-paid
bargaining stream is a form of pattern bargaining. This was despite the
explanation that apart from some language changes for simplification, the description
of pattern bargaining is in substance the same as what is in the current act.
1.70
The prohibition on pattern bargaining is achieved by the combined
operations of various provisions and clauses. The committee majority notes the
assurances provided by the Minister to employers that there will be no return
to pattern bargaining by unions. Industrial action in support of pattern
bargaining is specifically prohibited and an injunction can be sought from the
court to restrain any such industrial action. The committee notes that these
assurances have been recognised by employer groups such as AiG which believes
the ban on industrial action will prevent a return to pattern bargaining. See
chapter four.
Structure of the report
1.71
Chapter two of the report will cover the first part of the legislated
minimum employment standards, the NES. Chapter three will look at the second
part, modern awards. Chapter four details the new bargaining framework. Chapter
five examines unfair dismissal rights. Chapter six details industrial action
and chapter seven, the rules around right of entry. Chapter eight examines the
establishment of FWA. Chapter nine covers transfer of business. Chapter ten
deals with outworkers and chapter eleven covers the development of a national
system and coverage issues as well as issues to be covered by the transitional
bill. The start of each chapter provides further details on the issues
contained in each.
Navigation: Previous Page | Contents | Next Page