Bills Digest No. 150 2002-03
Workplace Relations
Amendment (Choice in Award Coverage) 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
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Workplace Relations Amendment
(Choice in Award Coverage) Bill 2002
Date Introduced:
13 November 2002
House: House of Representatives
Portfolio: Employment and Workplace
Relations
Commencement:
The earlier of
proclamation or the day after 6 months after Royal
Assent
This Bill amends the Workplace Relations
Act 1996 (the WR Act) to:
- place conditions on the service of logs of claims including
content and notice requirements, and
- limit the Australian Industrial Relations Commission s (the
Commission) capacity to make any dispute findings for employers
with less than 20 employees, unless an employee is a member of the
disputing organisation
Proposed section 101A of the Bill relates to
the notice and information requirements for logs of claims. This
provision was first introduced in the Workplace Relations Amendment
(More Jobs, Better Pay) Bill 1999. That Bill was introduced on 30
June 1999 and an amended version passed the House of
Representatives on 29 September 1999. The Bill did not pass the
Senate. The Senate Employment Committee reported on the Bill on
29 November 1999. The Government agreed to reintroduce
the Bill in smaller parts.(1) Proposed section 101A was
reintroduced along with the exemption for small businesses without
union members in the Workplace Relations and Other Legislation
Amendment (Small Business and Other Measures) Bill 2001 (the Small
Business Bill).(2) That Bill was introduced on
30 August 2001 but did not progress before the 2001 federal
election was called. The present Bill is identical to Schedule 6 of
that Bill.
In short, a log of claims is a registered
letter sent to employers by unions with a list of claims for
working conditions for the employees of that organisation. In
practice, it is used as a trigger mechanism which will result in
the particular employer/s and union being bound by the terms of a
federal award that sets minimum employment terms covering employees
of the respondent employer. The log is the first requirement for a
registered organisation to attract the jurisdiction of the
Commission which may then make a finding regarding the claims. It
is important to note that while the WR Act allows 'enterprise
associations' to be registered, it is only the larger registered
industrial organisations (ie. a federal union, or a federally
registered employers' association) which may actually be party to a
federal award. Following the service of a log of claims, the next
step is to notify a 'paper' dispute to the Commission. As the
Commission puts in its advice to employers:
Union demands on employers are frequently made by
a letter demanding agreement, within a specified time, to matters
set out in a log of claims. If the demands are not agreed to, the
union will normally notify the Australian Industrial Relations
Commission that an alleged industrial dispute exists between it and
the employers. The Commission, on being notified (WR Act, s.99)
will list the alleged industrial dispute for hearing. At the
hearing the Commission will normally decide whether there is an
industrial dispute and if so, who the parties to it are and what
the matters in dispute are. Employers (who the union asserts were
sent the log of claims) will be advised of the time and place of
the hearing (3)
An employer may not respond to the log, or
issue a log of counter claims, either way establishing the
boundaries of the dispute, or the ambit of the dispute. For
example, if a log of claims includes a pay increase of $20 and the
employer responds with an offer of $5, then a Commission s finding
of $4 or $21 would be invalid. While the ambit of the claim exists
(ie. it is not exceeded), the Commission has the jurisdiction to
determine and vary the provisions of any resulting award. Where the
ambit is exhausted, the log serving process must be repeated. It
should be noted that the Commission's discretion in determining the
provisions of an award is also governed by provisions of the WR Act
setting out the safety net role of awards and allowable award
matters (sections 88 and 89).
The Commission may find in relation to a log
served on employers that an interstate industrial dispute exists
under section 101 of the WR Act. The Commission may then
resolve the industrial dispute by determining appropriate terms and
conditions which are then binding on the parties affected by the
dispute. For example, the Commission would consider whether
employment in a particular enterprise is sufficiently governed by a
non-award arrangement and therefore may not make a finding of an
industrial dispute.
The general principle is that federal awards
bind the parties respondent to them, and as businesses change hands
or start up in the relevant industry, it is very likely that unions
will seek to have these enterprises roped in to the relevant,
usually, parent or industry award. The union/s may serve the
previous log of claims which led to the parent award being made on
the new businesses, thus allowing the Commission to vary the award
s schedule of respondents to include the new businesses.
In summary, this Bill is designed to address
the following:
a section 101 claim may be determined without an employer having
been aware that its business is to become a respondent to a federal
award, and
as a result, business costs are increased by being required to
provide their employees with access to award-based entitlements,
such as paid overtime, which they may otherwise not have.
The Commission and the High Court have
recognised that paper disputes may seem odd to those unfamiliar
with the system, but they have held that, in general, the
requirements [of the ambit doctrine] not only promote, but
necessitate the making of inflated demands . The High Court has
also noted that money claims for wages and allowances which seemed
extravagant when made, appear, in the light of inflation, to be
reasonable some years later. (4)
Logs of claims are complicated by
constitutional questions about the basis for Commission s power to
administer Commonwealth workplace relations laws. Currently, the
power relating to dispute prevention and settlement is based on the
conciliation and arbitration power in section 51(xxxv). For the
purposes of this Digest, it is sufficient to note that the effect
of reliance upon the conciliation and arbitration power is that the
Commission s findings cannot automatically be made to bind an
industry as a whole (a common rule approach), but rather must be
applied to specific parties in dispute.(5) This applies
in the states but not the territories. As noted in section 141 of
the WR Act, a common rule approach can be taken in the territories
and classes of public sector employment, consistent with
constitutional limitations on the Commission.
Another requirement reintroduced by the
present Bill is that an organisation with less than 20 employees
cannot be bound under a federal award unless one such employee is a
member of the disputing organisation (the union which served the
log). Although the organisation and employer must be identified,
any individuals cannot be identified in the Registrar s certificate
to the effect that an employee is a member of an organisation.
In general, however, there is no requirement
that there only be a dispute with employers that have employees
that are members of the union. The Australian Labour Law Reporter
notes that:
Unions act as parties in their own right and not
merely as agents for their current members. Consequently, the High
Court has held that a union may notify a dispute with employers
who do not at the time employ any members of that union and
the union is entitled to expect a federal arbitral tribunal to make
an award in settlement of the dispute. (See Burwood Cinema Ltd
v Australian Theatrical and Amusement Employees Association
(1925) 35 CLR 528) The rationale for this approach is that unions
have an interest in protecting their members' working conditions
and consequently, ensuring that these conditions are not undermined
by employers employing non-union members at lower rates of pay or
on lower conditions.(6)
This would suggest that the requirement of
being a union member should not necessarily be a requirement for
whether or not a federal award should apply to a particular
workplace.
In 1999, the Government changed the objects of
Part VI of the WR Act, dispute prevention and settlement, so that
it included that the Commission actually encourage the making of
agreements between employers and employees at the workplace or
enterprise level .(7) This offsets the general objective
which remains that wages and conditions of employment are protected
by a system of enforceable awards established and maintained by the
Commission.(8)
Irrespective of whether the requirement to be
a union member should be included, the focus on relieving any
possible burden on small business is the general context in which
the Government s position should be considered. The Minister
confirms this in his Second Reading Speech:
The Bill will enhance the ability of small
business to resist attempts to rope them into federal awards the
Government is demonstrating its commitment to making the system
better meet the needs and circumstances particularly of small
business.(9)
The ACTU Secretary said the following of the
omnibus Small Business Bill which included the provisions
introduced separately in the present Bill:
[the Bill] would remove legal rights from half the
Australian workforce, or more than 3 million employees of
businesses with less than 20 staff [the laws] would unfairly
discriminate against half the workforce. Why should employees have
fewer legal rights and protections just because they work in a
small business? (10)
In his Second Reading Speech, the Minister
counted 1,122,000 private sector, non-agricultural, small
businesses in Australia, noting that these accounted for 96% of all
businesses.(11)
On 17 January 2003, the Full Bench of the
Commission made an award in favour of the Shop, Distributive and
Allied Employees Association (SDA) in response to a log of claims
initially served on over 35,000 employers in the Victorian retail
industry on 26 June 1998. The SDA eventually sought the roping in
of 17,268 employers in an interim award. The Bill could be seen as
a response to this sort of case. The Full Bench outlined key
positions and its findings:
The Commonwealth, supported by
the employer parties, strenuously opposed the application on the
basis of its potential to affect labour costs and employment levels
.[23] It was submitted that the outlook for the
Victorian retail trade indicates that if the application were
granted there would be significant negative impacts on the
businesses concerned.
[57] The SDA
contended that retail employees in Victoria not subject to federal
awards or agreements are disadvantaged because the conditions in
Schedule 1A provide only limited protection. The key areas of
disadvantage were said to be: the absence of provision for
overtime, penalty rates, annual leave loading, shift loadings and
severance entitlements .
[62] It is probable that some
Schedule 1A employees are paid wages at the minimum level
prescribed and that they do not have the benefit of many conditions
which commonly apply to employees covered by federal awards and
agreements. We find that some Schedule 1A employees in the
Victorian retail sector are likely to be so disadvantaged .
[76] It is beyond doubt that the
safety net provided in Part XV for Schedule 1A employees is
less comprehensive and at a lower level than the safety net
provided by the Commission's awards in the retail industry
[78] We have taken into account
the fact that most of the approximately 17,000 employers affected
did not appear before us either to oppose the award or otherwise.
Nevertheless, for the reasons we have identified some caution is
desirable. We intend, therefore, that the roping-in should take
place in a staged process so that all of the increases in labour
costs are not introduced at the same time .(13)
Under section 99 of the WR Act, alleged
industrial disputes must be notified to the relevant Presidential
Member of the Commission or a Registrar. Where such a dispute comes
before the Commission, the Commission shall determine the parties
and matters in dispute, if it considers that the alleged
industrial dispute is an industrial dispute. Item
2 introduces proposed section 101A that
sets out criteria to be satisfied before the Commission can find a
dispute:
Proposed subsection 101B(2)
requires the Commission to give each employer notified of an
alleged dispute a notice in writing requesting that the employer
inform the Commission, within a specified period, whether it
employed less than 20 people on the service day. Proposed
subsection 101B(3) states that if the employer informs the
Commission that it employs less than 20 people on the service day,
the Commission must not determine that the employer is a party
unless:
- the commission is not satisfied that the
employer employed less than 20 people on the service day, or
- the Commission is satisfied that the employer
employs a member of that organisation.
Proposed subsection 101B(4)
requires those small businesses determined to be parties, ie.
having a union member, to be given a notice in writing inviting the
employer to make written comments on proposed award within a
specified period.
Service day is the day the log of claims was
served (proposed subsection 101B(5)). Casual
employees engaged on a regular and systematic basis for a sequence
of periods of at least 12 months are to be included in the 20
people, but not other casual employees (proposed subsection
101B(6)).
The
Bill represents a change to
the award coverage of non-unionists and a challenge to traditional
legal authority which upholds the ability of unions to affect both
unionised and non-union workplaces through safety net awards. The
Bill will also have the effect of reducing union right of entry for
the purposes of having discussions with employees as that right is
conditional upon an award being in place.
(15)
- For further information about the Small
Business Bill, see Stephen O Neill, Workplace Relations and Other
Legislation Amendment (Small Business and Other Measures) Bill
2001, Bills
Digest, No. 60, 2001 02, p. 3.
- ibid.
- AIRC, Information sheet for
employers, Form R.5. www.airc.gov.au/assets/rtf/FormR5.rtf
- R v Ludeke, Ex parte
Queensland Electricity Commission and Ors (1985)
159 CLR 178 cited in Federated Furnishing Trades Society
of Australia v Withams Warehouse and Ors
(1990) AILR, 147. See CCH Australian Labour Law Reporter
(ALLR) at 2-535 where it is noted that excessively wide and
non-specific claims, may, occasionally, result in a finding that an
industrial dispute has not been created [but this would be] unusual
and most logs of claims, albeit of extremely wide ambit, would
still be capable of generating an industrial dispute.
- ALLR, at 2-460 states that The High Court has held
that 'arbitration' can relate only to a particular dispute and the
particular disputants so any decision made in arbitration of a
dispute can only be binding on the actual parties to that dispute
(see Australian Boot Trade Employees Federation v Whybrow &
Co(1910) 11 CLR 311 ).
In Whybrow's case it was held that 'arbitration' within the meaning
of sec 51(35) of the Constitution can only take place between
ascertainable parties who possess ascertainable differences (see,
for example, Latham CJ at pp 317-318). The Court declared invalid a
provision of the 1904 Act which authorised the Commonwealth Court
of Conciliation and Arbitration to declare a ''common rule'' in any
industry.
- ALLR, 2-460, Arbitration and Arbitration
processes , emphasis added.
- WR Act, paragraph 88A(d)(i), inserted by
No.119 of 1999, Schedule 1, item 2, commenced 20 October 1999.
This new approach was reflected in amendments to paragraph
111(1)(g) and section 111AAA of the WR Act to impose more stringent
criteria before a federal award could be made.
- WR Act, paragraph 88A(a).
- The Hon. Tony Abbott MP, House of
Representatives,
Debates,13 November 2002, p. 8856.
- ACTU, Abbott clears way for lower wages, more
sackings , Media
Release, 30 August 2001.
- The Hon. Tony Abbott MP, House of
Representatives,
Debates,13 November 2002, p. 8856.
- Shop,
Distributive and Allied Employees Association and $2 and under and
others, AIRC Full Bench, PR926620, Melbourne, 17 January
2003.
- ibid, emphasis added.
- In any case, any log demand regarding
preference clauses cannot be a matter in dispute as employers are
prohibited under sections 298K and 298L from discriminating against
persons for prohibited reasons such as membership of an industrial
association. See Re AMWU & Ors; Ex parte The Shell Company
of Australia Limited & Ors (1992) 174 CLR 345 as cited in
Thiess Contractors Pty Ltd v Australian Collieries Staff
Association, AIRC FB (P9291) (1998) 43 AILR 3-788.
- WR Act, section 285C.
Sudip Sen
19 May 2003
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ISSN 1328-8091
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