Australia must deal with its
industrial relations needs through an integrated approach, and the
duplication of laws, tribunals and bureaucracies in this area has
long been a drag on the economy. From a strictly parochial point of
view, the decision to cede the powers will do nothing to hurt
Victoria's image in the eyes of investors, who will see the state
as one place on the continent with streamlined industrial relations
laws: one set that applies to all workplaces.(14) </ ul>
Even some critics of the legislation, largely supporting a
unitary approach but arguing that the specific referral of matters
contemplated here falls well short of achieving an ideal result,
have generally not suggested that the Commonwealth Parliament
should reject the present Bill.(15)
Section 51 (xxxvii) of the Commonwealth Constitution provides
that the Commonwealth Parliament 'may make laws for the peace,
order and good Government of the Commonwealth' with respect to:
Matters referred to the Parliament of
the Commonwealth by the Parliament or Parliaments of any State or
States, but so that the law shall extend only to the States by
whose Parliaments the matters is referred, or which afterwards
adopt the law: </ ul>
As Lumb and Moens note, until recent times section 51(xxxvii)
has not been an effective source of Federal-State co-operation
except in limited instances. Recent examples of the referral of
power include the Commonwealth Powers (Family Law - Children) Acts
and the Mutual Recognition Acts.(16)
Key features of the referral power are that:
- the subject matter to be ceded may be expressed in quite
general terms
- whether the affected State(s) retain power to legislate with
respect to a certain matter once that matter is referred to the
Commonwealth depends on the nature of the referral and whether the
resulting Commonwealth law 'covers the field' (ie leaves no subject
area which may be dealt with under a valid State law)
- as noted above, the method of referral is to some degree
circumscribed by implied constitutional limitations on the capacity
of the Commonwealth to pass laws which either single-out or
discriminate against a State(s) or interfere with a State so as to
inhibit the performance of functions which are critical to its
capacity to function as a government. In the case of the present
proposal, the Commonwealth has accepted legal advice to the effect
that it could not rely on the present referral of power to pass
laws affecting the working conditions of certain State
Office-holders. (A different form of 'referral' conferring the
right to exercise Victorian powers on a federal industrial
tribunal, would, in all probability, not be subject to such a
prohibition.)
- a referral under section 51(xxxvii) cannot be made in such a
way as to bind the Parliament of a State or the Commonwealth in
perpetuity
- a referral may be limited in its scope and provision may be
made in the enabling State Act for the referral to be revoked
unilaterally
- where a referral is terminated, the Commonwealth law, to the
extent it relies on the referral, ceases to have effect
- the referral must be effected by the State (ie the relevant
legislation must commence) prior to the Commonwealth enacting any
law in reliance on the referral. This limitation does not, however,
prevent the Commonwealth Parliament debating the present Bill prior
to the Victorian law coming into effect.
Scope of referral
As previously noted, the operational provisions of the Bill
(unless another head of power is employed) cannot go beyond matters
referred to the Commonwealth by Victoria under the Commonwealth
Powers (Industrial Relations) Bill 1996. Accordingly, the
Commonwealth Bill largely complements the provisions of the State
Bill. The Commonwealth Bill, however, does not reproduce in full
the text of the proposed Victorian law and therefore reference is
made below to the provisions of both Bills.
Clause 4 of the State Bill prescribes the 'matters' being
referred to the Commonwealth. As conveniently summarised in the
Commonwealth Department of Industrial Relations' Submission to the
Senate Economics Legislation Committee, those matters are:
- conciliation and arbitration for the prevention and settlement
of industrial disputes within the limits of Victoria (in other
words, there will not be a requirement for interstateness in
relation to the creation of disputes);
- agreements about matters pertaining to the relationship between
an employer or employers in Victoria and an employee or employees
in Victoria (this will allow the Commonwealth's Workplace Relations
Act provisions concerning certified agreements and Australian
Workplace Agreements to apply to employers and employees who would
not otherwise be able to use them, eg, an unincorporated employer
who is not a party to an interstate dispute);
- minimum terms and conditions of employment for employees in the
State (this will allow the continuation of the minimum conditions
guaranteed under the Employee Relations Act 1992 (Vic) for
employees not covered by federal agreements and provide minima for
employees transferring to the federal system who would have them
provided by federal awards);
- termination of employment at the initiative of the employer
[this will allow the new federal termination provisions relating to
harsh, unjust or unreasonable dismissals to apply to employees and
employers (eg, unincorporated employers) who would otherwise be
outside the scope of the provisions];
- freedom of association (this will allow the new freedom of
association provisions under the Workplace Relations Act
1996 to operate in relation to employers, employees and
independent contractors otherwise beyond the scope of that
legislation);
- settling and adjusting minimum wages for employees in Victoria
who are in a work classification declared in the Employee
Relations Act 1992 (Vic) (this will allow the Australian
Industrial Relations Commission (AIRC) to periodically adjust
minimum wages which must be paid to employees who are not under
federal agreements or whose pay is not regulated by a federal
award); and
- the exercising by the AIRC of powers in relation to matters or
disputes which arose before the commencement of the State referral
legislation.
Clause 5 of the State Bill specifically limits the range of
'matters' referred to the Commonwealth under this measure. Those
'matters' not transferred to the Commonwealth, including a range of
items which may be characterised as 'managerial prerogatives',
are:
- the number, identity, appointment and discipline of employees
in the State Public Sector (including the State Public Service,
some State Statutory Authorities and Government Business
Enterprises);
- the number or identity of employees in the public sector
dismissed, or to be dismissed, on grounds of redundancy;
- certain specified subject matters (worker's compensation;
superannuation; occupational heath and safety; apprenticeship; long
service leave; public holidays; equal opportunity), but only to the
extent that they may not, under the Workplace Relations Act as at
30 November 1996, be included in agreements or awards (in other
words, the limitation on the referral concerning these subject
matters will only operate if the Workplace Relations Act
1996 (Cwlth) changes how they may be included in awards or
agreements);
- 'common rules', ie awards applying to employers generally in
any given industry irrespective of whether they were served
personally with the relevant log of claims, ('common rules' may be
made in the States, and in the federal system in relation to the
Territories, but are not included here as they were abolished in
Victoria in 1992);(17)
- Ministers, Members of Parliament, judicial officers or members
of administrative tribunals;
- statutory office-holders;
- the number, identity, appointment (other than matters
pertaining to terms and conditions of appointment not referred to
in the paragraph), probation, promotion, transfer from place to
place or position to position, physical or mental fitness, uniform,
equipment, discipline or termination of employment of members of
the police force, police reservists, police recruits or protective
service officers;
- holders of senior executive offices in State departments;
- persons employed at higher managerial levels in the State
public sector;
- ministerial assistants or ministerial advisers;
- Parliamentary officers;
- transfer or redundancy of employees of a body restructured by a
Victorian Act; and
- duties of employees in situations of emergency or in relation
to vital industries or projects declared to be such under a
Victorian Act.
As with matters referred under the State Bill, these exclusions
only limit the capacity of the Commonwealth to enact valid laws
insofar as the Commonwealth seeks to rely on the referred power,
and not some other head of Commonwealth power, to make laws
affecting Victorian employment relations.
Matters of Contention
[Given the abbreviated time for consideration by the
Commonwealth Parliament of this Bill, the following discussion
concentrates on a number of issues raised in submissions to the
Senate Economics Legislation Committee.]
State Laws overriding Federal Awards
Proposed subsection 493(2) of the Commonwealth
Bill provides that the Commonwealth may make regulations providing
that a law of Victoria may override an award or order made under
the proposed law where that law applies to the resolution of
industrial disputes in the Victorian public sector. It has been
argued by the ACTU and the Victorian Trades Hall Council that such
a provision unfairly discriminates against public sector employees.
It may be noted, however, that section 121 of the (Commonwealth)
Workplace Relations Act 1996 recognises the pre-existing
capacity of the Commonwealth Government to take similar legislative
action in relation to its own employees. It may be further noted,
however, that this power has been infrequently exercised and its
use has proven controversial.
Minimum Wages
Proposed section 500 seeks to continue the
minimum conditions protected under the Employee Relations Act
1992 (Vic). Any entitlements gained under the State Act are
not lost on transfer to the federal system.
Proposed section 501 empowers the AIRC to set
or adjust minimum conditions of Victorian workers not covered by
awards, certified agreements or an Australian Workplace Agreement.
This measure is intended to allow the federal tribunal to continue
the practice under the Employee Relations Act 1992 (Vic)
whereby the Employee Relations Commission of Victoria may set
minimum wages in declared industry sectors and work
classifications. Proposed subsection 501(7)
provides that the AIRC may take account of past practice in
Victoria in making such adjustments.
More controversial are provisions dealing with deemed minimum
terms of employment of workers transferring to the federal system.
Proposed new arrangements will facilitate access to the federal
system of industrial relations in Victoria but there may some
employees in Victoria who may not initially be subject to federal
awards or agreements. There is an issue as to whether those
employees(18) should automatically gain access to minimum
protections presently available under the federal Act or whether
they should only retain the protections they currently enjoy. The
legislation as currently framed appears to protect only the (less
generous) State minima.
Bargaining Periods and Expiry of (State) Individual Employment
Agreements
Under the Employee Relations Act 1992 (Vic),
collective employment agreements must have a collective
expiry date which cannot be more than 5 years after they come into
force. Under sections 170MN and 170VU of the Workplace
Relations Act 1996 (Cwlth), industrial action is not protected
in relation to the negotiation of collective agreements until the
nominal expiry date of any pre-existing certified agreement or
Australian Workplace Agreement (AWA). The Bill provides that those
covered by State collective employment agreements cannot rely on
protection for industrial action taken in pursuit of a new
certified agreement or AWA until the existing agreement has expired
or reached its nominal expiry date (see proposed sections
523-525).
Under the Employee Relations Act 1992 (Vic),
individual employment agreements do not have an expiry date.
However, under the federal scheme, a 3 year expiry period is
specified (section 170VH). Proposed sections
523-525 are couched in such a way that the 3 year expiry
period for existing individual employment agreements does not begin
to run until the current Bill comes into effect.
Persons covered by a deemed agreement [taken to exist under the
Employee Relations Act 1992 (Vic)] are not similarly
restricted in seeking to negotiate a fresh certified agreement or
AWA.
There may be some suggestion that these provisions are
unnecessarily complex and needlessly perpetuate the operation of
existing individual employee agreements. A suggested alternative
would have been to make the nominal date of expiry for individual
employment agreements 3 years from their date of
commencement, not the commencement date of these amendments. The
suggested alternative proposal appears to have, in part, been
rejected to achieve administrative simplicity.
Stand down provisions
Proposed section 518 provides that stand down
provisions are deemed to be inserted/remain in all employment
agreements carried over from the Victorian system. Stand down
provisions are not automatically included in federal awards or
agreements. It is arguable, however, that such a provision merely
maintains the status quo for State employees until new awards and
agreements are made under the extended federal legislation.
Representation Rights and 'Conveniently Belong to'
The ACTU and Victorian Trade Hall Council's concerns in relation
to representation rights are also discussed above. Although there
is some potential for disruption to the federal system from the
proposed easier entry requirement for current State associations,
the principle that unions should be able to follow their members
into the new system seems sound enough. Moreover, the combined
effect of proposed sections 489, 534 and 535
appears to be that only State unions recognised immediately prior
to the commencement date of this Act will be able to make
'transitional registration applications'. This would appear to
limit the scope for possible abuse of the provisions. It may
nonetheless have been preferable for the mooted regulations for
giving effect to this proposal to have been discussed and settled
with the interested parties prior to this Bill being presented.
As indicated in the body of the Digest, some qualms have been
expressed regarding the way in which this measure is being
progressed. Doubts have also been voiced as to the true
significance of the changes being proposed. On the other hand, the
net positive effects of the proposed referral are not seriously
disputed although there is a view that the measures proposed stop
well short of creating a 'unitary' system for Commonwealth and
Victorian industrial relations. The complexity of some provisions
may also test the claim that the legislation will 'simplify'
existing arrangements or reduce the regulatory or compliance costs
of the existing dual systems.
Aspects of the package, including the proposed
Victorian-Commonwealth Agreement on supporting measures and the
foreshadowed regulations dealing with 'transitional recognition of
State unions' have been criticised for not being spelled out
earlier and in greater detail. Some special interest groups such as
the Victorian Police Association have also voiced particular
concerns. On the other hand, some of the apparent uneasiness
appears to be overstated or misconceived.(19) In this context, the
time initially scheduled in both the Commonwealth and the Victorian
Parliaments to scrutinise the specifics of the referral proposal
may have unduly exacerbated concerns about the wider implications
of the package. (20) In fairness, however, it is worth noting that
there are reasons for seeking to progress this matter quickly. The
administrative changes that flow from this measure, principally the
winding-up of the Employee Relations Commission of Victoria, make
it desirable that debate be finalised before the end of the current
Sittings.
Lastly, apart from some brief remarks by Senator Andrew Murray
(Australian Democrats, WA) during the Senate Economics Legislation
Committee's public hearing, it is interesting to note the
comparative lack of public comment on or support for the existing
federalist model of industrial relations and the checks and
balances that it provides.
- The Police Association of Victoria, however, made written and
oral submissions to the Senate Economics Legislation Committee
asserting that the proposals reduce existing rights of some of
their members with respect to unfair dismissal. The Association
also claimed that the Victorian Bill (as amended) goes back on
certain undertakings regarding coverage given by the Victorian
Government to the Police Association.
- Justice Alan Boulton, 'Mechanisms for Promoting Co-operation
between Federal and State Industrial Tribunals', (1990) 3
Australian Journal of Labour Law: 6.
- Australian Financial Review Seminar, 'Prospects for
Arbitration, the Significance of the Hancock Report', 5 June 1985;
and Address, Annual Convention of the Industrial Relations
Society of South Australia, 1980.
- Amendments to subsection 111(1) of the Act formed part of the
Industrial Relations Legislation Amendment (No.2) Act
1992.
- Re SPSF (1993) 178 CLR 249; Re Australian
Education Union; Ex parte State of Victoria (1995) 128 ALR
609; Re Dingjan; Ex parte Wagner (1995) 128 ALR 81; and
Victoria and Others v Commonwealth (1996) 138 ALR
129.
- Labour Law: An Introduction, 2nd edition, 1994: 123
(fn 124).
- 12 November 1996. No ABS survey of award coverage has been
published in recent years and the position is further complicated
by the diffuse range of institutional and legal arrangements
regulating employment relations in the Victorian system.
- The State law designed to refer power over Victorian industrial
relations to the Commonwealth.
- Victorian Parliamentary Hansard, 19 November 1996. (proof)
- In debate on 19 November 1996, the Labor Spokesperson on
Industrial Relations, Mr Brack, suggested that 'The Premier placed
great importance on what he calls this "reform" but what we call
his throwing in the towel, putting up the flag and saying his state
industrial relations reforms have failed.'
- Hon T.C. Theophanous, Legislative Council, Victorian
Hansard, 4 December 1996. The Victorian Government's
Submission to the Senate Economics Legislation Committee provides
evidence of an ongoing (if sporadically re-iterated) commitment to
a unitary model (See attachment 1 to the Submission). The then
Kennett Opposition's 1992 platform contained the commitment that 'A
Coalition Government will be prepared to abolish the Victorian
system totally after the Federal Coalition implements its
reforms.'
- Hon T.C. Theophanous, op cit.
- Editorial.
- Editorial.
- Note, however, written and oral submissions made to the Senate
Economics Legislation Committee by the Victoria Police
Association.
- The Constitution of the Commonwealth of Australia, 5th
edition, 1995: 281-284.
- The Joint ACTU and Victorian Trades Hall Council Submission to
the Senate Economics Legislation Committee is critical of this
provision noting that the 'common rule nature of the State system
was probably the most important feature that would have assisted in
streamlining industrial regulation.' (page 5).
- Those persons engaged under common law employment contracts
which are underpinned by Victorian statutory minima.
- Refer in particular to the persuasive closing remarks of
Department of Industrial Relations, Deputy-Secretary, Mr Robin
Stewart-Crompton, to the Senate Economics Legislation Committee:
Hansard, 9 December 1996.
- Senator Dee Margetts (WA Greens) expressed such concerns in
discussing the urgency of the Bill (Senate Hansard, 5 December
1996: 6331). See also, for example, Victorian Opposition Leader, Mr
Brumby's comments in the Victorian Legislative Assembly on 19
November 1996 in relation to the time-tabling of the Commonwealth
Powers (Industrial Relations) Bill 1996 (Vic).
Bob Bennett Ph. 06 277 2430
11 December 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
PRS staff are available to discuss the paper's contents
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the public.
ISSN 1323-9031
© Commonwealth of Australia 1996
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