Bills Digest No. 108 2001-02
Workplace Relations Amendment (Prohibition of Compulsory
Union Fees) Bill 2002
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Workplace Relations Amendment (Prohibition of
Compulsory Union Fees) Bill 2002
Date Introduced: 20 February 2002
House: House of Representatives
Portfolio: Employment and Workplace Relations
Commencement: Substantive amendments of
Schedule 1 commence 28 days after the Act receives Royal Assent.
However certain provisions may apply before this date; refer to the
commencement section of the Bill.
Purpose
The purpose of
the Bill is to prevent collective agreements certified under the
Workplace
Relations Act 1996 (the WR Act) containing provisions
which require the payment of bargaining services fees by non union
members to the relevant trade union which is party to the
agreement. The Bill also prohibits conduct designed to force the
payment of such fees. On the other hand, the Bill does not prevent
the voluntary contribution of such 'fees' by non members to
unions.
The background to the inclusion of bargaining
services fees in union-negotiated certified agreements was covered
in Bills
Digest No.2 2001-2002. That Digest addressed the previous Bill
dealing with bargaining services fees, the
Workplace Relations Amendment (Prohibition of Compulsory Union
Fees) Bill 2001. The previous Bill on compulsory union fees
failed to pass the Senate, with debate on the Bill adjourned on 6
August 2001. In the Bills Digest, the following context to the
introduction of these fees was canvassed:
-
- In June 2000 the ACTU Congress endorsed a policy that member
unions may seek to insert a 'fee for service' clause in new
certified agreements (CAs), under which a negotiating fee would be
levied on those for whom the union had negotiated a section
170LJ agreement. (Section 170LJ agreements are one form of CA
permitted under the WR Act). Bargaining fees would prevent
non-unionists 'free riding' on members.
-
- A number of unions sought to recover the expenses involved with
enterprise bargaining by charging a fee to non-members. In some
cases a provision of the agreement itself provided for the payment
of the fee, usually via deduction from pay. This policy could be
justified on the basis that under section 170LT
of the WR Act, all employees bound by the agreement are required to
approve it, usually by a ballot, and section170MDA
prevents the CA discriminating between unionists and
non-unionists.
-
- However, the use of bargaining fees in CAs was opposed by the
Federal Government which sees the use of these fees as a de facto
compulsory union membership fee, with recourse to these being
prompted primarily by the fall in union membership.
-
- In 2000, the Employment Advocate intervened in the
certification process of a number of agreements negotiated by the
Communications, Electrical, Electronic, Energy, Information,
Postal, Plumbing and Allied Services Union (CEPU and sometimes
referred to as the ETU) which contained provisions for the levying
of these fees (set at 1 per cent of employee's salary or $500 pa
whichever the greater).
-
- The Employment Advocate argued that these agreements contained
an objectionable provision in contravention of section 170LU(2A),
because the provision required conduct allegedly violating the
'freedom of association' provisions of the WR Act (Part
XA). (It is helpful to understand these provisions are supposed
to prevent coercion to associate, meaning not to join a union, as
well as preventing conduct preventing employees from joining
unions, ie allowing them freedom to join or associate).
-
- The EA's objections in the CEPU matter were brought before the
Australian Industrial Relations Commission, heard by Vice President
McIntyre.(1) Under section 298Z
of the WR Act, the EA sought to have the clauses
removed. His Honour concluded that although the action
(charging a fee) may be for a prohibited reason, the
intention or motive of the conduct was an essential component of a
breach of section 298K,
but the provision did not disclose a prohibited reason as the
intention or motive. (2)The previous Bills Digest noted
that VP McIntyre's decision was subject to appeal.
Appeal to the AIRC Full
Bench
A Full Bench of the Australian Industrial
Relations Commission upheld the Vice President s finding that the
union fee clause was not objectionable.(3) The decision
noted:
The agreement provides that the employer
must advise all new employees of the requirement that they are to
pay a bargaining agent's fee to the CEPU. Once the employer has
done that its obligation has been discharged.
The clause does not overtly or otherwise
require the employer to differentiate as between unionists and
non-unionists in the terms upon which employment will be offered.
On its face the agreement does not require or permit, etc. an
employer to discriminate in any way between union members and
non-union members. (4)
However, the Full Bench did raise a question
about whether matters not pertaining to the relationship of an
employer and employee could validly be included in an CA.
Securing bargaining
rights
Academics classify bargaining fee clauses under
the rubric of measures to promote trade union security. Trade union
security, ie the rights to organise, recruit members, develop
collective bargaining policy and act as the sole bargainer on
behalf of workers has often been regarded the key to trade union
survival and the issue has been the centre of the most vicious
industrial disputes. In many countries the principle has been more
important than any results of bargaining such as high pay or good
conditions, since trade union security is the precondition for such
an outcome. In the Australian context of the development of
arbitration systems at the end of the nineteenth century, Macintyre
and Mitchell observe that
The series of great strikes, indeed the
substance of the capital-labour debate in the 1890s, was not so
much concerned with wages and conditions of employment, as with
recognition and the role of the union and its rules in the system
of industrial regulation if arbitration was to bring about
industrial peace (it) was necessary to prevent precisely those
types of disputes which had given rise to the idea of arbitration.
This required recognition of unions, and of their legitimate
interests
Seen in this light, registration of unions
became a crucial object of the arbitration legislation This
justifies the argument that the framework of union entitlement
erected by arbitration, preference for union members, protection
from discrimination, monopoly of organisation and so on, were
intended as rights to be bestowed upon those unions party to the
formal state processes of industrial regulation.(5)
The pre-entry closed shop is an arrangement
between a union and employer which seeks to make employment in an
enterprise conditional upon the new starter being a union member.
The closed shop or compulsory unionism in this sense represents the
pinnacle of trade union security. However the closed shop was not
the pillar of union commitment to arbitration that union preference
provided. In Australia, closed shop arrangements have not been
commonplace, as Michael Wright has noted:
Following the introduction of conciliation and
arbitration tribunals (from the 1900s), closed shop practices
became illegal and could only operate on an informal, de
facto level.(6)
Phillipa Weeks has noted in her study of trade
union security arrangements in Australia, a few States later
legalised the closed shop arrangement but retreated from it at
other times.(7) The Employment Advocate's 1999 report
into compulsory unionism estimated that the practices affected 346
000 employees, or 5 per cent of the then workforce, while in 1990
compulsory unionism was estimated to affect 17 per cent of the
workforce.(8)
Thus, more common under the federal jurisdiction
has been the ability of federal awards to provide for preference in
employment for members of registered organisations. In legal terms,
union preference did not require or enforce a closed shop. Union
preference clauses did offer advantages to union members over
non-members in respect of appointment, promotion and termination,
usually in circumstances where both or more candidates were
'suitable' (hence the term qualified preference).
In any case, provisions under the WR Act have
removed preference provisions from awards as such provisions have
not been included under allowable matters (subsection 89A)(2))
which awards may contain. Also, section 94
limits the discretion of the AIRC to include such provisions in
awards. Other provisions under Part XA render such provisions (ie
those found in CAs) void and facilitate their removal from CAs. The
current Bill will reinforce these provisions.
Bargaining fees charged on non-unionists
represent a middle approach to trade union security, for as Weeks
notes, these fees do not enhance the union's ability to bargain and
thus weaken solidarity.(9) On the other hand, it has
only been since 1997 that non unionists have been afforded the
privilege of voting on union-negotiated agreements (in the federal
jurisdiction). So, union members tend to see these fees as the
'quid pro quo'.
Note also that similar arrangements exist in
other industry sectors. The Australian reported in 1998
that the former Borbidge Government in Queensland had legislated in
favour of several farmers' organisations affiliated to the National
Farmers Federation to effectively rope farmers into being members
in order to trade. Thus cane growers operated under legislation
allowing a general levy on all growers for administration purposes,
while Queensland farmers with more than 70 pigs had to be a member
of the Queensland Pork Producers.(10)
Recent
developments
The matter of bargaining fees has been addressed
by Justice Merkel in a subsequent Federal Court decision which
looked at what elements of a union-formed log of claims for
bargaining purposes would attract the status of 'protected action'
in the process of bargaining for a new CA. Under specified
circumstances, where bargaining has reached an impasse, employees
may undertake industrial action and employers may lock-out
employees. Such action may be protected in the sense that actions
(eg for damages) cannot be progressed.
Justice Merkel held that claims for the
protection of accrued employee entitlements would be eligible to
attract the status of protected action. (11)However he
dismissed the notion that bargaining fees were legitimate matters
of the employment relation which a CA could address. His Honour
observed from the agreed facts and evidence that the bargaining
agent's fee was being claimed by the unions to be payable only by
employees who were not union members to reflect the service
obtained by those non-members from the unions in negotiating
agreements. He also noted that the relationship being created by
the provision was one of agency:
(41) The relationship between the employer and
the employee that would be created were the claim acceded to is,
essentially, one of agency; Electrolux is to contract with its
employees on behalf of the relevant union, as its agent. The agency
so created is for the benefit of the union, rather than for the
benefit of the employee upon whom the contractual liability is to
be involuntarily imposed. The resulting involuntary "bargaining"
agency is, as a matter of substance, if not form, a "no free ride
for non-unionists" claim, rather than one by which the union is
undertaking its traditional role of representing the interests of
union members in respect of the terms of employment of
employees
(42) the bargaining fee debit facility is
analogous to a demand by unions that an employer pay its employees'
union dues by making deductions and payments from salary due and
payable to employees in accordance with authorities provided by
them. Such a claim has been held to not be within the requisite
employment relationship.(12)
However in a more recent case, Justice Munro has
decided not to follow Electrolux, observing that CA
clauses authorising a payroll deduction system for union dues
payment is an issue more to do with an arrangement for the
electronic transfer of funds. Accordingly, provisions which may be
properly included in the contract of employment through an
industrial agreement should be found in the views of the parties
themselves. The decision also canvasses the question of CAs
containing bargaining fee clauses. The relevant CA clauses
considered by Justice Munro read:
Webforge NSW agrees to allow for
subscription charges of AMWU membership to be deducted from wages
subject to completion of a signed deduction authority by the
employee concerned.
And:
The employer agrees to maintain the current
payroll deductions of employees, such as Union Fees, Social Club,
Medical & Health cover etc.
Justice Munro made the following observations
(in a lengthy decision) and decided that the inclusion of matters
which strictly did not pertain the employer-employee relationship
was not sufficient to prevent the agreements being certified. He
reflected on the conflict between industrial relations
practicalities and strict legal determinations:
[23] Writing in 1979, Sorrell
repeated a point he first made in 1973 in a comment about the
decision in Re Portus , but one still relevant to that
contrast:
"To anyone concerned with the realities of
labour relations the check-off is so clearly an industrial matter
in any acceptable sense of the words as to seem to need no
argument; and in USA it has been held to be a proper subject for
collective bargaining under the National Labour Relations Act (US
Gypsum Co (1951); and for Britain see Donovan, 1968, paras 718 ff).
Whatever view may be taken of the Union Badge case, it would be
impossible to argue from that decision that the check-off is not an
industrial matter. But Menzies J in Re Portus said "It is
the principle enunciated in R v Kelly that must be applied here,
not the more general statements to be found in the Union Badge case
and in Archer's case" (p 625); and since "the relationship that
would be affected by such an obligation is a financial relationship
of debtor and creditor ... not the industrial relationship ..." the
check-off was not an industrial matter This could be construed as a
piece of very narrow legalism - which says nothing of why the High
Court should give this narrow, indeed regressive, interpretation to
the industrial power given by the constitution to the
Parliament."
[24] However, that criticism of
the decision in Re Portus fell on barren ground. The
reasoning in Re Portus was entrenched by the decision in
Alcan and has apparently been carried through several
rounds of statutory change. Although the body of precedent relates
primarily to the use of award making powers, or to the
identification of what matters may be subject of industrial
disputes, it now steers also the decisions in Electrolux
and Commission rulings. I note that the decision in
Electrolux is subject to appeal.
[25] For the reasons I have
given, I consider that each of the PRD (payroll deduction)
provisions in these agreements is distinguishable as an agreed term
from the matters at issue in those decisions. Moreover, in the
context in which each appears in the agreements, I doubt that
either provision could properly be said to be a substantive and
significant matter. Each is undoubtedly discrete in the sense that
it stands by itself and may be readily severable. It may be
necessary to decide the point solely upon application of what I
understand to be the principles applied by Merkel J in
Electrolux. For the reasons I have given, I would not
consider that the inclusion of either provision would prevent the
respective agreement from being an agreement about matters that
pertain to the relationship between an employer and all persons
whose employment is subject to the agreement. (13)
It might be noted that the NSW Labour Council
has commenced proceedings in the NSW Industrial Relations
Commission (March 2002) to have payroll deduction provisions
enshrined as award rights. According to Assistant Secretary, Mark
Lennon, the case was aimed at stopping employers withholding
payroll deductions during enterprise negotiations, as many
employers opted for terminating deductions as a bargaining chip. He
said: "We see this as enshrining a fundamental right of employees
to have their wages paid into a nominated account".(14)
As we have seen, the same ground for opposing union fee clauses in
awards has been used to prevent having bargaining fees included in
CAs. This initiative from NSW is thus significant.
The Workplace Relations Amendment (Prohibition
of Compulsory Union Fees) Bill 2001 was referred to the Senate
Employment, Workplace Relations, Small Business and Education
Legislation Committee which reported on the Bill in September 2001
in the report
Provisions of the Workplace Relations Amendment (Prohibition of
Compulsory Union Fees) Bill 2001. This inquiry provided a forum
for many organisations to submit their views on the subject, and
these views in abbreviated form are reported later.
The issue of bargaining fees was considered by a
Senate Committee in the early 1980s. The Harradine Committee did
recommend an agency fee approach be adopted for those who did not
have strong (religious) conscientious objection to union membership
but nevertheless did not want to be a union member.(15)
The fee proposed in the Harradine report was the usual membership
fee discounted for non-industrial activity and determined by the
Industrial Registrar. The legislative provisions to be relied on in
this proposed exercise were the conscientious objection provisions
administered by the Australian Industrial Registrar and found in
the Conciliation and Arbitration Act 1904. These
provisions remain under section 267
of the WR Act. Upon proof of the grounds for the objection the
registrar may issue a certificate to the person concerned, and the
usual or 'prescribed' fee paid to the registrar. However the
provisions are rarely used, as Part XA provisions are available.
Note that the Harradine report was concerned about the award and
union preference systems. The problems thrown up by enterprise
bargaining are discussed in the conclusion to this digest. However,
many would see the Harradine proposal as being quite a reasonable
middle way.
Coalition Parties
Part 9 of the Liberal Party's 2001 election
policy Choice and Reward in a Changing Workplace
stated:
Keeping union membership voluntary
Employees in Australia now have the basic right
to choose whether to join or not to join a trade union, and to
exercise that choice free of coercion or duress. Indirect
interference or discrimination with these rights, such as requiring
non unionists to pay compulsory bargaining fees to trade unions
should be outlawed.
The Coalition will:
Legislate to prohibit trade unions involved in
workplace bargaining from imposing a compulsory $500 per year fee
on non union employees.(16)
The Coalition's previous workplace relations
policy known as 'More Jobs Better Pay' (1998) also made reference
to curb practices which might encourage the 'closed
shop'.(17) Coalition senators delivered the majority
report of
Provisions of the Workplace Relations Amendment (Prohibition of
Compulsory Union Fees) Bill 2001
Australian Labor
Party
The ALP's position can be summarised in an
extract from its dissenting report in
Provisions of the Workplace Relations Amendment (Prohibition of
Compulsory Union Fees) Bill 2001
The view of Labor senators in regard to this
bill is consistent with earlier dissenting reports. The legislation
currently before the Parliament is yet another attempt to
marginalise union involvement in workplace relations and in
negotiations on wages and conditions to the point of irrelevancy.
In this sense the Government is intent on destroying a century of
Australian industrial relations traditions. The realisation of this
policy has been slow in coming to some sections of the workforce
but there are distinct signs of a sharpening of consciousness of
the importance of maintaining processes that the Government has
been anxious to dismantle.
-
- As part of the Government s attempt to reorganise the
Australian workplace, Labor senators note that it has flagged an
intention to address the nature of the industrial system in this
bill. The government has sought in the past to remove what Labor
senators consider to be protections within the industrial
bargaining system. These are unique and intrinsic to the Australian
system and provide a component of protection and a reflection of a
more egalitarian approach to workplace relations compared to the
industrial relations scene in other countries. As yet, the
Government has not succeeded in removing those protections, so that
there exists a bargaining system with certain constraints on what
is allowable bargaining. The Government also refuses to acknowledge
those restrictions placed on bargainers within the system with a
bill such as this.(18)
Australian
Democrats
The following extract is from the Australian
Democrats Minority Report in
Provisions of the Workplace Relations Amendment (Prohibition of
Compulsory Union Fees) Bill 2001
-
- The Australian Democrats support the rights of employees and
employers to join or not to join registered organisations. We
support the prohibition on duress. This bill addresses the
possibility of non-members of unions being forced to pay bargaining
fees (fee-for-service as it is also known), which then converts
into a kind of compulsory unionism. The Democrats believe that
fee-for-service issues must be separated out from issues of freedom
of association and a prohibition on duress. Both fee-for-service
and freedom of association are principles we support. The question
then revolves around enabling legislation and whether this bill is
the appropriate vehicle for the resolution of these issues ...
-
- We see a clear distinction between the notion of compulsory
unionism (which we oppose) and a contribution to the costs of
bargaining, where the person paying is a direct beneficiary of that
bargaining. Such payees are not joining a union, but clearly the
fee should not be a substitute for a normal union fee. They are
paying for a service. They are not contributing to other activities
of the union, or electing to play any role in the activities,
policies or other conduct of the organisation, or getting any of
the other benefits of a union. They are not union members.
The following summaries of the positions of key
organisations are taken from their respective submissions to the
2001 Senate Employment Committee inquiry into the
Workplace Relations Amendment (Prohibition of Compulsory Union
Fees) Bill 2001.(19)
Australian Council of Trade Unions
(ACTU)
Points made by the ACTU in its submission to the
Senate Employment Committee's inquiry into the Workplace Relations
Amendment (Prohibition of Compulsory Union Fees) Bill 2001 include
the following:
-
- Bargaining fees paid by employees covered by collective
agreements who are not union members are provided for in the law of
a number of countries, including the United States, Canada,
Switzerland, Israel and South Africa.
-
- The principle in these countries is that where a union is
recognised by the employer for the purposes of collective
bargaining and negotiates an agreement covering all employees,
fairness demands that non-members, or "free riders", be required to
pay a fee to the union, either at the same level as union dues or
at a lower rate set to approximate the real costs to the union for
representing the employees as part of the collective.
Quoting from Graeme Orr's(20) research into bargaining
fees, the ACTU observes that in the United States, the standard
clause adopted by the Federal Court of Appeals states:
No employee shall be required to become or
remain a member of the union as a condition of employment.
Each employee shall have the right to freely
join or decline to join the union.
Each union member shall have the right to
freely retain or discontinue his membership.
Employees who decline to join the union may be required to pay a
reduced service fee equivalent to his or her proportionate share of
union expenditures that are necessary to support solely
representational activities in dealing with the employer on
labor-management issues.
-
- In Canada, the "Rand formula" (named after Justice Rand who
developed it in a 1946 decision for the Canadian public service)
provides that the compulsory bargaining fee is presumptively that
of the usual union dues.
-
- The ILO views bargaining fees as a valid issue for collective
bargaining, with its Freedom of Association Committee holding:
"When legislation admits trade union
security clauses such as the witholding of trade union dues from
the wages of non-members benefiting from the conclusion of a
collective agreement, those clauses should only take effect through
collective agreements."
-
- The ILO s General Survey explicitly states that
bargaining fee provisions, when negotiated between unions and
employers, are consistent with freedom of association
principles:
(Clauses in collective agreements) may also
require all workers, whether or not they are members of trade
unions, to pay union dues, or contributions, without making union
membership a condition of employment (agency shop) or oblige the
employer, in accordance with the principle of preferential
treatment, to give preference to unionized workers in respect of
recruitment and other matters. These clauses are compatible with
the Convention provided, however, that they are the result of free
negotiation between workers organizations and employers.
-
- The current requirement in the Act that certified agreements
include only matters "pertaining to the relationship between
employers and employees" is inconsistent with the principle of free
collective bargaining. It should be noted that the High Court has
held that deduction of union dues is not a matter pertaining to the
employment relationship, and so cannot be validly included in an
award or an agreement. The Court also expressed the view that such
deductions could be considered "industrial" for the purposes of the
Constitutional conciliation and arbitration power; the
jurisdictional restriction results from the limitation imposed by
the Act, not the Constitution.
-
- Apart from the specific prohibitions in section 298K, and the
penalties attached to a breach, the effect of section 170MDA is
that it is not possible in practice for a union to make an
agreement with an employer only on behalf of its own members, as
non-members would be able to obtain an extension of the agreement
to cover their employment.
-
- The Minister has made it clear that he expects unions to
represent non-members, as in his criticism of unions for failing to
insert a redundancy pay provision into the award covering One.Tel
employees.(21)
Australian Industry
Group
Points made by the AIG in its submission to the
Senate Employment Committee's inquiry into the Workplace Relations
Amendment (Prohibition of Compulsory Union Fees) Bill 2001
include:
-
- Agency or bargaining fees are only permitted in collective
agreements in a limited number of overseas jurisdictions.
Typically, these countries (like the United States and Canada) have
industrial relations systems which are quite different from that in
Australia. These jurisdictions often operate under a system of
collective bargaining, whereby unions must overcome substantial
hurdles before gaining the right to represent employees in
collective bargaining negotiations.
-
- By contrast, unions are afforded greater representation and
organisational rights under the Australian workplace relations
system. Unions in Australia do not require majority membership in
order to gain employer recognition for the purposes of collective
bargaining. Instead, under the current statutory framework, unions
are entitled to (amongst other things):
-
- meet and confer with the employer in respect of any proposed
agreement where at least one employee requests it;
-
- negotiate on behalf of members employed at a particular
workplace;
-
- take protected industrial action in support of claims for a new
collective agreement;
-
- become parties to collective agreements where at least one
member requests it.
-
- While countries like the United States and Canada operate under
collective bargaining systems, Australia s workplace relations
framework is a "hybrid" system - enterprise bargaining underpinned
by an industry-wide award "safety net" system. Under the award
system, unions derive significant representational and corporate
rights to act on behalf of both members and non-members. For
example, arbitral awards are usually the product of union action
and (under the Metal Trades case doctrine) apply equally
to unionist and non-unionist alike.
-
- Almost as a trade-off for obtaining benefits on behalf of all
employees (including those employees who choose not to make any
financial contribution to the collective effort), trade unions have
always been granted important representational and organisational
rights under Australian industrial law. If Australian trade unions
now seek agency shop arrangements in line with places like the
United States or Canada, then it can be argued they should also be
prepared to accept weaker union recognition and representational
rights under collective bargaining law.
-
- In those foreign jurisdictions where agency shop arrangements
are permitted, the law usually introduces strict controls to limit
the inevitable inroad into freedom of association which agency
shops represent. Monies collected by a union in this way are
typically ring-fenced to prevent them from being used to support
political parties or activities.
-
- There is a need for legislation to be passed to ban the
compulsory imposition of bargaining levies upon Australian workers.
Alternatively, strict controls need to be implemented before
irreparable harm is done to the principles of freedom of
association which are so highly esteemed by employers and employees
in present-day Australia.
Department of Employment,
Workplace Relations and Small Business
Points made by DEWRSB (now DEWR) in its
submission to the Senate Employment Committee's inquiry into the
Workplace Relations Amendment (Prohibition of Compulsory Union
Fees) Bill 2001 include:
-
- Compulsory union fees are often claimed to be justified on the
grounds that they represent a user pays or mutual obligation
approach to service delivery consistent with other areas of public
policy, in fact compulsory union fees represent an indirect means
of promoting union membership.
-
- Given that the fees are typically imposed via the operation of
a concluded and certified agreement, payment of the fee after the
event would not result in the provision of services to the
individual. In many cases compulsory union fees are set in excess
of union membership fees. The VPA s (Victorian Police Association)
proposal to impose a $750 bargaining agents fee when annual dues
for membership of the Association are set at approximately $420 is
a good example of this tendency and highlights the coercive impact
that fees may have.
-
- The compulsory union fees in the ETU (CEPU referred to above)
agreements are a further example. Vice President McIntyre
recognised the intent of such clauses was to persuade new employees
to join, or to coerce new employees into joining, the ETU when he
found that (for technical reasons) he was unable to remove the
bargaining agents fee clause as an objectionable provision under
section 298Z.
-
- The mutual obligation analogy for compulsory union fees is not
appropriate because a key element of the Government s approach to
implementing the principle of mutual obligation through the
delivery of programs, such as Work for the Dole , is that
individuals only incur obligations where they consent to receiving
the services delivered. The imposition of compulsory union fees
through a clause in a certified agreement is not consistent with
this requirement of individual consent.
-
- The user pays analogy meets similar objections - users can only
be required to pay for services they have requested or consented to
receive. The Government believes that industrial associations
should be subject to the same standards as ordinary businesses,
which are prevented by fair trading legislation from providing
unrequested services and then demanding payment for those
services.
-
- Although federal legislation in the United States makes
provision for agency shops, it also permits such arrangements to be
made unlawful by State law. Right to Work legislation that
over-rides the federal legislation and makes the enforcement of
agency shops illegal has been enacted in 21 State jurisdictions.
Right to work legislation takes precedence over union security
legislation and prevents employees from being dismissed because
they refuse to join, or pay fees to a union
-
- The Bill bolsters the direction to the Australian Industrial
Relations Commission to refuse to certify a CA where it contains
'objectionable provisions'. Unions will not be able to take
industrial action against employers for the purpose of seeking
consent to bargaining services fees. The payment or non-payment of
bargaining services fees has been added to the list of prohibited
reasons which may trigger a freedom of association violation. New
provisions prevent an industrial association from demanding payment
of bargaining services fees and provisions for bargaining services
fees are specifically rendered void.
Schedule 1
Part 1
Item 1 amends
subsection 170LU(2A) directing the Commission to
refuse to certify agreements which contain 'objectionable
provisions'. Other provisions of the subsection are deleted.
Objectionable provisions are later defined under amendments to
subsection 298Z(5).
Items 3 and 4 provide
definitions for bargaining services and bargaining services fees
respectively under amendments to section 298B(1) contained under
Part XA which deals with freedom of association and non
association.
bargaining services
means services provided by (or on behalf of) an industrial
association in relation to an agreement, or a proposed agreement,
under Part VIB (including the negotiation, making, certification,
operation, extension, variation or termination of the
agreement).
bargaining services
fee means a fee (however described) payable:
(a) to an industrial association; or
(b) to someone else in lieu of an industrial
association;
wholly or partly for the provision of bargaining
services, but does not include membership dues.
Item 6 adds the payment or
non-payment of bargaining services fees to the list of prohibited
reasons in section 298L(1) under new paragraph
298L(1)(o). Prohibited reasons relate to reasons for which
an employee cannot be dismissed, injured in employment or alter the
employment of the employee to his/her prejudice.
Items 7 and 8 modify existing
provisions concerning employees and contractors (sections 298Q and
298S respectively), preventing these industrial associations from
inciting these persons to take industrial action or coercing these
persons to join the association where the conduct involves the
non-payment of bargaining service fees.
New provisions are added to Division 5 of Part
XA. Proposed subsection 298SA prevents industrial
associations from demanding bargaining service fees while proposed
subsection 298SB prevents an industrial
association from taking action with the intent of coercing the
payment of bargaining service fees.
Item 10 inserts a new
Division 5A into Part XA. New section
298SC prevents persons from making misleading statements
about a person's liability to pay bargaining service fees.
Item 11 insets new
subsection 298Y(2) which holds that a provision of
a certified agreement is void to the extent that it requires
payment of a bargaining services fee.
Item 12 repeals and replaces
subsection 298Z(5) providing a new definition of
'objectionable provision' to include a provision of a certified
agreement which requires the payment of a bargaining services
fee.
Part 2
Application
Items 13 allows the amendments
to the certified agreement provisions to have application (after
the provisions commenced) even if a matter had commenced hearing in
the Commission prior to the amendments coming into effect.
Item 15 applies the proposed
definition of objectionable provisions under Item 12 to apply to
old agreements
Item 16 confirms that payments
made and received prior to these amendments coming to effect
stand.
The evidence which has been presented appears to
show that there is somewhat of a division in the legal authorities
as to whether what are essentially payroll deduction arrangements
are outside the concept of matters pertaining to the employment
relationship, or, could be construed as objectionable provisions.
The current Bill will make amendments to the WR Act in the attempt
to put this issue beyond doubt in respect of bargaining fees.
The evidence shows that such arrangements are
arguably within the scope of industrial matters under the
Constitution's Conciliation and Arbitration power. However, most
CAs in the federal jurisdiction are based on alternative
constitutional powers, notably the Corporations
power.(22) The use of these non-traditional
constitutional powers (ie those other than the conciliation and
arbitration power) is usually associated with the notion that the
parties are to be allowed greater discretion in framing the terms
of their agreements. Thus the Bill will limit this discretion.
A related issue concerns the drafting of clauses
under enterprise bargaining which allows participants, particularly
those operating under 'joint working parties' to create provisions
in their own hand thus moving away from the control of the
Commission. The Commission has formerly helped to provide a modicum
of consistency for example in the drafting of certain award
clauses. The new freedom possibly makes it difficult for the
Commission to locate just one objectionable provision of an
agreement when certifying the agreement where gifted amateurs have
made the attempt to draft clauses. (In this sense, a 'union
agreement' may be one that is union-vetted rather than
union-drafted.) Where the agreement is proposed for certification
and has been approved by the majority in the enterprise to be
covered by it, it represents the will of the parties, as Justice
Munro observed (above).
Finally, the current Bill appears to be offering
consent to the payment of a 'fee' or contribution which is
voluntary as opposed to one which is obligatory under a CA, perhaps
in recognition that the practice of charging bargaining services
fees is likely to continue. Listing the non-payment of a bargaining
services fee as a prohibited reason under Part XA is likely broaden
the reach of the proposed provisions, ie into areas of State
industrial jurisdictions.
-
- AIRC, Print
900919, 9 February 2001.
- Bills Digest No.2 2001-2002 Workplace Relations
Amendment (Prohibition of Compulsory Union Fees) Bill 2001, p. 1
- AIRC Print
PR 910205, 12 October 2001.
- Ibid, paragraphs 19 20.
- Macintyre, S. and Mitchell, R. (eds) Foundations of
arbitration: the origins and effects of state compulsory
arbitration 1890-1914 (Oxford University Press, Melbourne,
1989) p. 16.
- M.Wright 'Union preference and the closed shop in Australia' in
Australian Unions, G.W. Ford and D. Plowman (eds.)
(Melbourne, MacMillan, 1983) p. 241.
- P. Weeks, Trade union security law, a study of preference
and compulsory unionism (Federation Press, 1995).
- 'Closed shops dying out', The Australian Financial
Review 11 June 1999.
- Weeks, op cit, p. 260.
- 'Closed shops still open', The Australian, 17 June
1998.
- Electrolux Home Products Pty Ltd v Australian Workers
Union
[2001] FCA 1600 (14 November 2001).
- Ibid.
- AIRC Print
PR914378 18 February 2002.
- 'Unions launch test case on payroll deductions' AAP News
Service, 5 March 2002.
- Senate Select Committee on Industrial Relations Legislation,
1982, par 4.51.
- The Liberal Party of Australia, Election 2001, Choice and
Reward in a Changing Workplace, Part 9, 'Keeping union
membership voluntary'.
- Liberal Party of Australia and National Party of Australia,
Policies for a Coalition Government (September 1998) 'More
Jobs Better Pay'. The policy determined to make unlawful for
persons to plan to establish or maintain, directly or indirectly, a
closed union shop (p.28).
- Labor Senators Report of the Senate Employment, Workplace
Relations, Small Business and Education Legislation Committee
Provisions of the Workplace Relations Amendment (Prohibition of
Compulsory Union Fees) Bill 2001
- All electronic submissions can be located here:
http://wopared.parl.net/senate/committee/EET_CTTE/WR_
compunifees01/sublist.htm
- Graeme Orr, 'Agency shops in Australia? Compulsory bargaining
fess, union (in)security and the rights of free-riders'
Australian Journal of Labour Law, v.14, n.1 at p. 15.
- Note transcript of interview with the Hon Tony Abbott on
7.30 Report 4 June 2001.
- The forms of certified agreements and numbers covered are
discussed in Bills
Digest No.2 2001- 2002.
Steve O'Neill
12 March 2002
Bills Digest Service
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