Bills Digest No. 77 2003-04
Workplace
Relations Amendment (Better Bargaining) Bill
2003
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 (Better
Bargaining) Bill 2003
Date Introduced: 6 November 2003
House: House of Representatives
Portfolio: Employment and Workplace
Relations
Commencement: The amendments set out in
Schedules 1, 2, 3, 4 and 5 amend the Workplace
Relations Act 1996 (WR Act, the Principal Act) and
will commence 28 days after the Act receives Royal
Assent.
The Bill proposes:
-
to allow the Australian Industrial Relations Commission (AIRC)
to order cooling-off periods where one or both of the parties to a
collective bargaining process are taking protracted industrial
action. The proposal will not affect or limit all bargaining forms
under the WR Act, for example, the Bill will not affect
employer-initiated lock-outs under Australian Workplace Agreement
(AWA) negotiations
-
to allow a third party (neither employer nor employee), affected
by industrial action, such as a business client, to apply to the
AIRC to have a bargaining period suspended and thus terminate
protected industrial action
-
to limit protected industrial action to single employers
-
to deny access to protected industrial action during the life of
a certified agreement (CA), including over claims for matters not
addressed in the certified agreement and thus nullify the effects
of the Federal Court s Emwest decision(1)
-
to confine protected industrial action to matters which pertain
to the employment relationship and to deny protected industrial
action to parties not directly in an employer employee
relationship, which will be subject to any certified agreement.
Certain provisions of
this Bill have appeared in earlier Bills, although others are
new provisions. All deal with restricting access to or suspending
protected industrial action solely in the context of negotiating
certified agreements.
While the Bill has as its main purpose
allowing the AIRC to order cooling off periods during (mainly)
union bargaining negotiations for certified agreements, bargaining
and disputes occur also in respect of federal awards and Australian
Workplace Agreements, although these other bargaining forms are not
addressed in the Bill. For all three forms of bargaining and
dispute resolution, the AIRC has a reduced or no role under the WR
Act.
The AIRC s dispute resolution function under
its award-making powers is circumscribed by the WR Act. Section
89 (functions of the Commission), section
89A (allowable award matters) and section
143 (making and publication of awards) limit the arbitration
function of the AIRC under its award-making arm to the making
safety net awards, and thus the effect of the combined restraints
makes the resolution of the gamut of industrial disputes less
likely under traditional arbitration by awards and orders. The AIRC
s Justice Munro summed up both the pre and post 1996 arbitral
changes in a speech recently:
To the extent that arbitration of employment
conditions continued to be a significant function (of the AIRC), it
rapidly accreted characteristics akin to conditioned delegations
from government. The detail of statutory guidance about the manner
of exercise of most discretions increased almost exponentially ...
Alterations of statutory functions were and are still reinforced by
collateral measures Against that background, it would be a
stupidity to be confident that the current functions and structures
in the federal tribunal will remain stable The complexity of the
statutory regime and the associated "lawyering" of tactical moves
in negotiations, involve new layers of
difficulty.(2)
In the context of negotiating certified
agreements, a full bench of the AIRC in the case known as
Hunter Valley No.1 (1997)(3) initially
determined that the WR Act allowed the parties to a CA dispute
considerable scope to cause each other (and the surrounding
communities) considerable economic damage before AIRC intervention
was warranted under section
170MW of the WR Act. Industrial action by either side can be
taken during CA negotiations after a bargaining period is notified
(WR Act: sections
170MI and 170ML).
Perhaps not surprisingly, this let them rip
view was subsequently overturned by the Federal
Court.(4) The Federal Court found that the AIRC Full
Bench had misconceived the nature of the power to terminate a
bargaining period under section
170MW of the WR Act, which inter alia allows the suspension of
bargaining when personal or property damage occurs or where
economic dislocation results. Termination of bargaining is a
pre-requisite to the AIRC arbitrating the differences into an award
of the AIRC (albeit for a limited time: section
170MX). The Federal Court held that section 170MW did not
require that the circumstances identified in section 170MW in fact
exist, and, thus upheld Justice Boulton s original decision to
begin the process of settling the dispute by terminating the
bargaining period, the practical consequence of which is a
resumption of work.
Applications to terminate bargaining periods
under section 170MW are comparatively infrequent, with 45 such
applications in 2002-03, as against about 7 500 applications to
certify collective agreements and over 15 000 applications to
initiate bargaining periods.(5) In other words, the AIRC
tends to refrain from determining CA negotiations, and prefers to
leave the negotiations to the parties in accordance with the spirit
of the WR Act s principal objects (WR Act: section
3).
The AIRC may exercise dispute resolution
powers under the terms of a current certified agreement, but this
depends on the wording of the (compulsory) disputes resolution
clause of the CA [subsection
170LT(8)], and what role such a clause may afford to the AIRC
in resolving disputes when a CA is extant.
Finally, bargaining may take the form of AWA
bargaining, that is over the terms of an individual agreement.
Provisions of the WR Act allow parties to take industrial action
while negotiating an AWA, and no formal role in tempering this
process is ascribed to the AIRC, nor to the Employment Advocate.
The current Bill will not restrict protracted AWA action of the
sort endured in the course of the G&K O Connor industrial
dispute. In the three years from 1998 the company and the meat
union (AMIEU) tested the provisions of the WR Act, with five cases
in the AIRC, seven in the Federal Court and one each in the
Victorian Supreme Court and the High Court. It involved the longest
lockout since the 1930s (nine months) at the end of which the AIRC
(Justice Boulton) issued orders under section 127 of the WR Act for
the employer to cease AWA protected industrial
action.(6) The case involved the hiring of industrial
agents to spy on union meetings and huge legal fees, resulting in a
workforce employed initially under AWAs and later, by a safety net
award.(7)
Thus it could be argued of the Bill that it
has a misplaced focus by limiting the proposed cooling off periods
to only certified agreement negotiations which involve protected
industrial action, and provides no avenues to resolve failed AWA
bargaining.
Each of the Bill s purposes listed above is
discussed under its own schedule below. These are prefaced with a
general overview of recent industrial activity and of protected
industrial action as first recognised in federal labour law in
1993.
Restricting access to protected industrial
action for collectives of workers by legislation is usually
associated with some form of increase in industrial activity.
Although that form of industrial action which might be defined as
protected is not captured by the Australian Bureau of Statistics,
the most recent industrial disputes data indicates that the long
term trend of a decline in industrial disputation in aggregate
continues:
Industrial Disputes (Cat.No.6321.0) reports that
During the twelve months ended August 2003, there
were 656 disputes, 56 less than in the twelve months ended August
2002. During the twelve months ended August 2003, there were 274
700 working days lost, 4 800 less than in the twelve months ended
August 2002.(8)
The number of working days lost per thousand
employees, in aggregate, also fell for each of the past four years
(to August) from 88 to 49 to 35, and 34 working days lost (per 1000
employees) for the 12 months to August 2003. Due mainly to the
effects of a national education industry campaign, working days
lost per 1000 employees increased to 50 for the 12 months to
October 2003.
The current Bill, inter alia, curbs access to
protected industrial action by allowing the AIRC to suspend
protected industrial action at the time when a certified agreement
is being negotiated. The suspension of protected action renders a
party continuing the action liable to common law damages.
The WR Act has been criticised for failing to
give effect to the main International Labour Organisation (ILO)
conventions on industrial action, ILO Convention 87 (freedom of
association) and Convention 98 (collective bargaining). The issues
raised concerned protected action which must be in relation to
claims for a single business enterprise agreement (not
multi-employer or industry wide) dealing with issues pertaining to
the employer-employee relationship. The ILO s Committee on the
Application of Conventions and Recommendations observed that the WR
Act prohibits sympathy action and actions involving demarcation
disputes, and that unions can be deregistered if action interferes
with the provision of public services.(9)
Access to protected industrial action was
provided initially under amendments made to the Industrial
Relations Act 1988 in the context of the recognition of
the move from the AIRC s award system to enterprise bargaining.
However the concept was crucially important to
facilitating enterprise bargaining, as strikes and lockouts had
long been recognised in the United States federal labor law the
enterprise bargaining model underpinning Australia s new collective
bargaining process.(10) Thus if the US bargaining model
was to be emulated locally, some tolerance of strikes and lockouts
had to be afforded.
For the Coalition Parties the acceptance of
legitimate industrial action represented a major concession at the
time. During the passage of the Coalition s Workplace Relations
and Other Legislation Act 1996 (WROLA Act) the then industrial
relations minister, the Hon Peter Reith acknowledged in 1996 that
the Coalition Parties were obligated to recognise industrial
action:
For the Coalition Parties to recognise the
right
to
strike
was a significant policy shift, but a necessary policy shift, given
that we ourselves had been encouraging the system to move towards
an enterprise focus. In the context of a bargaining system a
right
to
strike
in prescribed limited circumstances is both reasonable and
consistent with good international practice. As a result we make
provision for that in this legislation.(11)
Protected industrial action was thus
recognised as in keeping with good international practice and
accessible for bargaining periods. However, it is useful to mention
that other and related amendments of the IR Reform Act had
attempted to secure a degree of immunity to those employees who had
engaged in or were otherwise associated with industrial action (ie
the provisions provided immunity from other actions for loss or
damages, or termination). These provisions were contained in the
then freedom of association provisions of sections 334 and 334A of
the Industrial Relations Act 1998.
These provisions were not carried over into
WROLA Act, and in certain ways the current Bill seeks to further
reduce legislative immunities for industrial action, or being
connected with such action. This is because the effect of having
protected industrial action suspended, eg as provided by the
application of an affected third party as proposed by the Bill, is
to expose the party taking the action (often a union, its officers
and members) to legal suit and ultimately damages.
By the time that
the
Workplace Relations Legislation Amendment (More Jobs Better Pay)
Bill 1999 was introduced to
the Parliament, the Coalition proposed a number of restrictions to
accessing protected industrial action, as elaborated by the
Workplace Relations Minister, the Hon Peter
Reith:
One of the critical proposed changes in the More
Jobs Better Pay Bill is in the area of protected action over new
agreements. Put simply we are wanting to do three things:
Require secret ballots to be conducted before the
legal right to strike can be taken
Require genuine workplace bargaining rather than
industry wide pattern bargaining as being a sufficient trigger to
the right to strike;
Enable a cooling off period to be ordered by the
AIRC to bring a halt to the right to strike in protracted disputes
where this is causing economic damage or loss of job security.
Why are we doing this? because the right to strike
has to carry with it some responsibilities these include the
responsibility that it be democratically exercised, that it be
based on a genuine dispute at a workplace over negotiations for a
new agreement and that it not be counterproductive to the interests
of the workforce.(12)
The Bill aims to overturn the consequences of
the Federal Court s Emwest decisions. From the facts
disclosed in Federal Court proceedings, Emwest's 71 employees were
covered by a 1988 Award and an enterprise agreement (the 2000
agreement) certified on 30 April 2001 with a nominal expiry date of
30 June 2003. This agreement with the Australian Manufacturing
Workers Union covered a broad range of employment terms and
conditions, but did not deal directly with redundancy issues. In
the negotiations leading to the operative enterprise agreement,
both parties agreed to drop redundancy as an issue and deal with it
as a separate topic in the following year.
However, the parties also had an agreement
certified by the AIRC on 14 December 1998 with a nominal expiry
date of 30 September 2000 providing for redundancy processes and
severance payments. It was over this redundancy agreement (which
had passed its nominal expiry date) that the union served notice
upon Emwest pursuant to
section 170MO and
section 170MR of the WR Act.
The matter was first heard by Justice Kenny in
Emwest (6 February 2002). It was held that
section 170MN of the Workplace Relations Act does not
always prevent a union and its members engaging in industrial
action in support of claims against an employer even when the
relevant employees are covered by a current (ie unexpired)
certified agreement. However, the claims related to the industrial
action must not be matters dealt with in the certified
agreement.
The Full Federal Court upheld the reasoning of
Justice Kenny in Australian
Industry Group v Automotive, Food, Metals, Engineering, Printing
& Kindred Industries Union [2003] FCAFC
183,15 August 2003.
According to the CCH Australian
Industrial Law News:
The logic of the Full Court's decision is that
because the Federal Government's legislative regime restricts award
coverage to a finite number of allowable matters, other matters are
to be the subject of agreement at the enterprise level. It follows
then that the presumed policy behind section 170MN to encourage
parties to adhere to their agreements, would be inconsistent with a
notion that prohibited a party from effectively negotiating a
matter that is not the subject of an existing agreement. Recourse
to industrial action is part and parcel of the bargaining
process.(13)
The major employers association, the
Australian Chamber of Commerce and Industry (ACCI) in a
press
release strongly condemned the decision on
15 August 2003, and canvassed the possibility of
legislative action being taken to offset the Court s
decision:
Today s decision by a full bench of the Federal
Court in the Emwest
case is an unwelcome, unintended and damaging extension of the
right to strike in Australia. The decision will negatively impact
on workplace bargaining by permitting unions to engage in
industrial action after an agreement has been made with an
employer. This decision is based on the Federal Court s
interpretation of the Workplace Relations Act. It decided that
section 170MN of the Act is open to multiple interpretations.
The Court has preferred an interpretation which
differs from the intent of the Keating Labor government when it
introduced the right to strike into Australian law in 1993 - laws
which were retained by the Howard government in 1996. This is an
alarming extension of the right to strike in Australia The impact
of this decision should be addressed by the parliament by
legislative change to preserve its original intention.
(14)
Thus provisions of this
Bill
reflect this
desire for legislative action to close off extra claims during the
life of a certified agreement. However the notion that industrial
issues are closed for the life of a particular agreement is at odds
with the fact that businesses are at liberty to significantly
restructure the business during the course of an agreement, which
will be responded to by claims from employees and their
organisations, an issue also recently acknowledged by the Federal
Court in matters pertaining to a restructure of Australia
Post.(15)
The
Workplace Relations Legislation Amendment (More Jobs Better Pay)
Bill 1999 introduced the concept of the
cooling-off period and would have implemented other restrictions on
accessing protected industrial action, such as pre-industrial
action secret ballots. Provisions under Schedule 11 of that
Bill would have required the Commission to
suspend a bargaining period after industrial action has been
engaged in, in order to establish a cooling off period during which
parties may attempt to settle the matters at issue between them
without recourse to industrial action. Similarly suspension of the
bargaining period may have applied after 14 days of industrial
action had been taken.
This Bill also
attempted to curtail access to pattern bargaining . Pattern
bargaining has been defined by the Department of Employment and
Workplace Relations as and when:
a party seeks
common outcomes on an all or none basis from agreements across a
number of enterprises or workplaces, usually within the same
industry or for multiple enterprises at a particular project or
site.(16)
Although the current Bill does not address
pattern bargaining, another Bill currently before the Parliament,
the
Building and Construction Industry Improvement Bill 2003,
attempts to make pattern bargaining illegal in the building and
construction industry.
However the research organisation ACIRRT contends that most
international bargaining models involve some mix of pattern
bargaining and workplace bargaining:
there is no
sector in the Australian labour market or bargaining system in the
OECD which fits this fictitious model of genuine enterprise
bargaining all bargaining systems contain elements of
pattern-setting and workplace bargaining(17)
The More Jobs Better Pay Bill was set aside by
the Senate on 29 November 1999.
Senator Murray on behalf of the Australian
Democrats made the following comments about the proposed amendments
under Schedule 11 of the More Jobs Better Pay Bill:
In my view, it is difficult for the Government to
advocate a much greater tightening up of this area of industrial
disputes, when it is simultaneously boasting that Australia has the
lowest level of industrial disputation in eighty years. Industrial
disputation is an essential part of the bargaining and market
process, and parties to disputation must be given the opportunity
to work matters through. The system we now have seems, by and
large, to serve Australia well.(18)
The Government decided to reintroduce
provisions of the More Jobs Better Pay Bill in separate Bills. The
Workplace Relations Amendment Bill 2000 proposed a new
section 170MWA requiring the Commission, to suspend a bargaining
period to allow for a period of cooling-off during which the
negotiating parties could attempt to settle the matters at issue
between them without recourse to industrial action. This Bill was
introduced to the House of Representatives on 11 May 2000, and was
in part conceived as a legal response to the then looming Campaign
2000 of the metal unions.
Under a related provision, the AIRC would have
been able to terminate a bargaining period, on application by a
negotiating party, if an organisation of employees engaged in
pattern bargaining in respect of the proposed agreement. So,
pattern bargaining was not to be outlawed per se (it actually forms
the basis of the federal award system) instead access to protected
industrial action was to be denied.
Among the Bill s other measures were
provisions to:
-
deny legal protection otherwise available under the WR Act to
unions, union officials and employees who engage in industrial
action as part of a campaign of 'pattern bargaining'
-
require the AIRC to act within 48 hours on applications under
the WR Act s section 127 to stop industrial action
-
provide for the AIRC to suspend access to legal forms of
industrial action, and
-
give the Federal Court power to determine if industrial action
is 'protected action' for the purposes of the Principal
Act.
The Australian Council of Trade Unions (ACTU)
in its
submission to the Workplace Relations Amendment Bill 2000
commented:
The Bill would make it virtually impossible to
take protected industrial action in support of claims being pursued
throughout an industry or in the workforce generally, even though a
separate agreement is negotiated at each enterprise. Effective
bargaining is impossible without an entitlement to take lawful
industrial action because employers would know that the employees
and their unions had no means to put pressure on them. The Bill
would put Australia in even further breach of international law
regarding collective bargaining.
The Bill was referred to the Senate
Employment, Workplace Relations, Small Business and Education
Legislation Committee which reported on 5 June 2000, and this Bill
ultimately failed to pass the Senate.
The next attempt to curtail union bargaining
and introduce cooling off periods was in the form of the Workplace
Relations Amendment (Genuine Bargaining) Bill 2002. It initially
attempted to allow the AIRC to suspend a bargaining period (and
thus suspend access to protected industrial action) if the listed
behaviours below (at proposed s.170MW2A) were apparent in
bargaining, ie the criteria identified by Justice Munro in
bargaining disputes arising from Campaign 2000 (Australian Industry Group v
Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union & Ors [Print T1982]):
(a) the first party s conduct shows an intention
to reach agreement with persons in an industry who are, or could
become, negotiating parties to another agreement with the first
party, rather than to reach agreement with just the other
negotiating parties; and
(b) the first party s conduct shows an intention
either:
(i) to reach agreement with all persons in an
industry who are, or could become, negotiating parties to another
agreement with the first party; or
(ii) to reach agreement with none of them;
rather than to reach agreement
with just the other negotiating parties; and
(c)
the first party s conduct shows an intention primarily to reach
agreement with a person other than the other negotiating parties;
and
(d)
the first party s conduct shows a refusal to meet or confer with
the other negotiating parties; and
(e)
the first party s conduct shows a refusal to consider or respond to
proposals made by the other negotiating parties. The existence of
one or more of the matters mentioned in paragraphs (a) to (e) would
tend to indicate that the first party is not genuinely trying to
reach an agreement with the other negotiating parties.
However the Genuine Bargaining
Bill was amended, with the provisions above
deleted during its review by the Senate Employment,
Workplace Relations and Education Legislation
Committee.(19)
Senator Murray noted that the Government had
accepted the amendments proposed by the ALP and Australian
Democrats, bar two:
The bill that we were presented with was
significantly altered by Labor and us, with five successful
Democrat amendments and two successful opposition amendments. Some
very important technical provisions survived ... The government
has, very sensibly, accepted all of those amendments apart from the
two that refer to bargaining in good faith.(20)
The then Employment and Workplace Relations
Minister, the Hon. Tony Abbott, commented on the Senate amendments
noting that he was prepared to accept the removal of cooling-off
periods:
A number of amendments were moved in the Senate.
The effect of those amendments is to provide a weaker form of
legislative reference to the Munro reasoning. The amendments also
remove from the bill the cooling off period provisions.
Nevertheless, even as amended in the ways the government is
prepared to support, the bill is a significant
reform.(21)
Nevertheless the
Workplace Relations Amendment (Genuine Bargaining) Act
2002 by amending the Principal Act currently:
-
provides guidance to the Commission on when parties are
genuinely negotiating
-
allows parties to apply for suspension or termination of
bargaining periods without having to identify the specific
bargaining periods involved, and
-
gives the Commission express power to prevent, or attach
conditions to, the initiation of new bargaining periods where a
bargaining period has previously been withdrawn or suspended.
It would thus appear that the AIRC has the
power to effect a cooling-off period should it deem that the
suspension of protected industrial action may spur the parties to
an agreement.
The Minister s
Second Reading Speech to the current Bill, notes that the
amendments to WR Act s section 170MW to allow a third party to make
an application for a termination of bargaining:
provides the Commission with a remedy to address
the impact of industrial action on the welfare of third parties who
are not currently directly involved in a dispute.
These amendments deliver on promises the
Government made earlier this year to amend the Workplace
Relations Act, as part of the higher education reform
package.(22)
It is difficult to imagine that protected
industrial action will not result in some economic damage to third
parties, and there is at least the potential for the scope of
immunity offered under protected action to be narrowed by the
Bill.
The provision in the Bill to confine protected
industrial action to matters which pertain to the employment
relationship attempts to limit the grounds for taking protected
industrial action. The issue has come before the AIRC in a number
of matters, and has been before the Federal Court in the
Electrolux cases.
In June 2002, a Full
Bench of the Federal Court considered bargaining fees in the
context of a union log of claims served upon an employer, where
protected industrial action followed in the course of negotiations.
When certain procedures are complied with, protected industrial
action is available to employers to use against employees in
workplace agreement negotiations, as well as by employees against
employers and has been available since 1994 (for collective
agreements Part V1B Division 8 and for AWAs Part V1D Division 8,
since 1997).
The Electrolux case arose as an
appeal by unions (Australian Manufacturing Workers Union,
Australian Workers Union & Communications Electrical and
Plumbing Union) against a previous decision by the Court (Justice
Merkel) which found against industrial action taken to include
bargaining fees in a CA. The employer (Electrolux) contested
elements of a log of claims served upon it by unions and the AWU in
particular. These related to the protection of employee
entitlements in the event of employer insolvency and bargaining
fees (a fee to be served upon an employee who is employed under the
terms of any subsequent certified agreement, usually a 'Division 2'
section 170LJ certified agreement under the WR Act).
Justice Merkel held that certain contentious
items within the AWU's log of claims did pertain to the employment
relationship, and industrial action could be taken to have these
included as legitimate matters of an enterprise agreement (WR Act
section 170LI), e.g. a claim for the protection of
worker entitlements. But other components of the claim, e.g. the
payment of bargaining fees, it was held, were not matters
pertaining to the employment relationship, (following precedent)
and thus could not be the subject of industrial action in
negotiations for an enterprise agreement.(23)
Unions appealed Justice Merkel's decision. A
Full Bench of the Federal Court held in Electrolux
No.2 on 21 June 2002 that industrial action taken to
pursue a union log of claims was legitimate, including over all of
the claims, although it did not reach a conclusion on which matters
of the claim did pertain to the employment relationship.
Yet in a separate set of appeals, on 10
January 2003, a full bench of the AIRC ruled that union bargaining
agents' fees and union notification clauses were not matters that
pertain to the employment relationship between employers and
employees and therefore are not industrial matters which can be
included in a certified agreement (refer WR Act s.170LI).
The AIRC decided not
to follow the Federal Court's Electrolux No.2 case, and to
date has not been influenced by moves of the NSW Industrial
Relations Commission to adopt bargaining fees (as part of its
enterprise bargaining principles). Instead, the AIRC followed the
reasoning of its previous decision in Atlas Steels
(National Union of
Workers; re Atlas Steels
Metals Distribution Certified Agreement 2001-2003 and Ors
(PR917092,
29 April 2002).
The issue of whether bargaining fees could be
included in certified agreements was put to rest in the
Workplace Relations Amendment (Prohibition of Compulsory Union
Fees) Act 2003 which amends the Principal Act and was
passed by the Senate on 26 March 2003.
The new legislation seeks to:
-
prohibit conduct designed to compel people to pay compulsory
bargaining services fees
-
prohibit the inclusion of compulsory bargaining service fees
clauses in agreements, and make void existing clauses
-
provide for the removal of compulsory clauses, and
-
prohibit the making of false or misleading representations about
bargaining services fees.
However as CCH s industrial law editor has put
it:
The law was not entirely clear on this matter;
while a Full Bench of the AIRC had decided that bargaining fees did
not "pertain" to the employer/employee relationship and thus could
not be included in certified agreement, a Full Bench of the Federal
Court had expressed doubt as to the correctness of that view
(admittedly by way of obiter dicta) in the Electrolux No 2
case).(24)
The Electrolux company had also sought leave
from the High Court to make an appeal against the Federal Court s
decision. At the time of writing this appeal has not been
determined.
Section
170LB(2) of the WR Act currently provides:
For the purposes of this
Part:
(a) if 2 or more
employers carry on a business, project or undertaking as a joint
venture or common enterprise, the employers are taken to be one
employer; and
(b) if 2 or more
corporations that are related to each other for the purposes of the
Corporations Act 2001 each carry on a single
business:
(i) the corporations may
be treated as one employer, and
(ii) the single
businesses may be treated as one single business.
The aim of the amendment of Schedule 4 of the
Bill is to deny such entities being treated as a single employer,
thus protected industrial action will be denied to such businesses.
Action would not be protected when taken against a subsidiary
company, where an agreement was being pursued with the holding
company (or vice versa). The CCH Australian Industrial
Law News in its comments on the Bill
notes that these provisions may have the effect of preventing
unions from negotiating with the head offices of large
companies.(25)
Section
170MM of the WR Act prohibits industrial action involving
secondary boycott. The Bill proposes to replace this with one which
stipulates that industrial action taken in concert with employees
of different employers is unprotected.
Protected industrial action can be taken only
by parties to whom the proposed agreement will apply. Section 170MM
of the WR Act provides that industrial action may lose its status
as protected action if it is taken 'in concert' or organised 'in
conjunction' with unprotected persons. Where the issue of proving
whether the action has been taken in concert and thus leading to
the suspension of protected industrial action has come before the
AIRC, it has been difficult to prove.(26)
In the Coalition s workplace relations policy
taken to the November 2001 Federal Election, some commitment to at
least parts of this Bill s provisions was made, including a
commitment to introducing cooling-off periods under circumstances
of protracted industrial action:
Part 7 Helping to resolve workplace
disputes.
Industrial disputes are best resolved at the
workplace by the parties directly involved. The Coalition supports
an independent industrial body, the Australian Industrial Relations
Commission (AIRC) as being an important forum for conciliation and
arbitration of industrial disputes. As the workplace relations
system increases its flexibility, and as employers and employees
take greater responsibility for workplace outcomes, alternative
dispute resolution systems, such as legally recognised mediation
and cooling-of periods can help resolve workplace disputes.
The Coalition will:
A The Australian Industrial Relations
Commission
Maintain and support the Australian Industrial
Relations Commission as an independent conciliator of industrial
disputes, as a body approving collectively negotiated workplace
agreements, and as the arbitrator of safety net award wages and
conditions of employment.
B Mediation and alternative dispute
resolution
Give legal recognition to alternative dispute
resolution of industrial disputes including by voluntary mediation.
In cases of protracted workplace bargaining disputes, empower the
Australian Industrial Relations Commission to suspend a protected
(lawful) strike to allow for a cooling-off period and resumption of
work whilst conciliation or mediation takes
place.(27)
The ACCI view of the need for a Bill to
nullify Emwest has been referred to earlier, and in a
subsequent press release, ACCI lauds the current Bill:
To protect the gains made in reducing dispute
levels in Australia, and to drive disputes down to comparable OECD
levels, we must close these loopholes before they are exploited by
those union officials in key industries that see militancy and
strikes as a standard method of doing business The Bill does this
in two ways - by preventing the right to strike being used during
the life of agreements; and by requiring the right to strike to be
used only where claims concern employer and employee issues. This
Bill is also important if we are to maintain the integrity of the
enterprise bargaining system - why would an employer negotiate an
agreement with a union only to be exposed to industrial action by
the union whilst the agreement exists? The Bill would deter this
outcome The Bill also proposes to expand the AIRC's powers to order
a cooling off period for industrial action, as well as providing
remedies for third parties - such as small businesses or
contractors damaged by strike action. These proposals are also
supported.(28)
In a paper What's in a name? The Federal
Government's IR agenda Anthony Forsyth argues that the direct
reduction in union influence is the main preoccupation of the
Government, in introducing this and related Bills:
The Minister's public comments, and the package of
Bills cracking down on unlawful industrial action and the behaviour
of officials, indicate that the reduction of union power and
influence is now the main theme framing the shape and direction of
Government policy.
Of course, this has been a major focus of the
Government's industrial relations agenda since it came to office in
1996, the confrontation with the Maritime Union was a defining
episode of the first term. But the heat has clearly been turned up
on the unions in this third term. Curbing their power has become a
much more explicit feature of the Government's policy rhetoric and
program.(29)
The
Industrial Relations and Management Newsletter reports on
the ACTU s comments on this Bill,
which it says will remove workers rights to take industrial action
in many circumstances, and give employers new powers to avoid
bargaining with employees. It notes that the grounds for
terminating bargaining periods would be significantly broadened,
allowing third parties affected by industrial action, or the threat
of it, to apply to the AIRC to suspend the industrial
action.(30)
Item 1 of Schedule 1 repeals
for the purpose of supporting or advancing claims against the
employer in respect of the employment of employees whose employment
is subject to the agreement or award, engage in industrial action ,
from WR Act subsection
170MN(1) and replaces that phrase with
organise or engage in industrial action affecting the employer
(whether or not that action relates to a matter dealt with in the
agreement or award) .
Item 2 repeals for the
purpose of supporting or advancing claims in respect of the
employment of employees whose employment is subject to the
agreement or award, lock out such an employee from his or her
employment , from WR Act subsection
170MN(4) and replaces that phrase with lock
out an employee whose employment is subject to the agreement or
award from his or her employment (whether or not that lockout
relates to a matter dealt with in the agreement or award) .
Thus under items 1 and 2, industrial action or
lock outs cannot be taken during the life of an agreement or an
award, regardless of whether the dispute involves matters not
covered by the dispute or award. These provisions are designed to
nullify the effects of the Emwest decision, but have been
extended to awards, as well as certified agreements.
Item 3 provides that the
amendments made by items 1 and 2 apply to industrial action or
lock-out action taking place on or after the commencement of the
Schedule.
Item 1 inserts new section 170MWB.
Proposed subsection 170MWB(1) allows the (Australian
Industrial Relations) Commission to suspend a bargaining period for
a period specified in an order, when a negotiating party applies to
the Commission for the bargaining period to be suspended and
protected action is being taken in respect of the proposed
agreement and the Commission considers that the suspension is
appropriate.
The Commission is to have regard to factors
such as whether suspending the bargaining period would be
beneficial to the negotiating parties by assisting in resolving the
matters at issue; the duration of the action; whether suspending
the bargaining period would be contrary to the public interest or
inconsistent with the objects of the Act, and any other matters
that the Commission considers relevant.
In considering whether the action is
threatening to cause significant harm to a person, the Commission
may have regard to the extent to which an employee is particularly
vulnerable to the effects of the action; the extent to which the
action threatens to damage the ongoing viability of a business
carried on by the person or disrupt the supply of goods or services
to a business carried on by the person; or reduce the person s
capacity to fulfil a contractual obligation; or cause other
economic loss to the person.
Under new subsection
170MWB(2), the period of suspension specified must be a
period that the Commission considers appropriate and under
new subsection 170MWB(3), the Commission may
extend the period of suspension by a specified period. Such
applications may be made by an organisation, person or body
directly affected by the action (other than a negotiating party) or
the Minister. The Commission must not extend the suspension if it
has previously been extended (new subsection
170MWB(4)). The negotiating parties must
be given an opportunity to be heard (new subsection
170MWB(5)). New subsection 170MWB(6)
allows the parties to be informed that they may voluntarily submit
the dispute to the Commission to conciliate, or have the issue
mediated. New subsection 170MWB(7) clarifies that
action taken under a suspension is not protected industrial action.
New section 170MWC allows third parties affected
by the bargaining dispute to apply for a suspension of protected
action, where the Commission considers it is causing harm,
including economic harm to a business.
Item 2 applies the suspension
of bargaining amendments to bargaining periods which begin after
the commencement of item 2 (28 days after Royal Assent).
Item 1 of Schedule 2 inserts new
subsection 170ML(6A) which has the effect of denying the
status of protected industrial action to action taken in pursuit of
a claim which is not related to the employment relationship. The
provision is designed to nullify the effect of the
Electrolux decision. It applies in relation to a
bargaining period that begins at or after the commencement of Item
2 (28 days after Royal Assent).
Item 1 inserts new subsection
170ML(3A) which states that for the purposes of
subsections 170ML(2) and 170ML(3) (allowing the organising or
engaging in industrial action), two or more employers cannot be
treated as a single employer under paragraph 170LB(2)(b), (which
otherwise allows related companies to be treated as the one
employer).
Item 1 repeals and replaces section
170MM. New section 170MM relates to industrial action
taken in concert with non-parties. Currently, section 170MM
provides that industrial action will not be protected where it is
taken in concert with or organised by a person who is not a
protected person , ie a person also entitled to take protected
action. However the current provision does not require that person
to be protected in relation to the same agreement.
Accordingly, action can be taken in concert by employees of
different employers, as long as all employees are entitled to take
protected action. In some circumstances this makes it possible to
pursue industry-wide protected action.
The proposed section 170MM
provides that industrial action will not be protected where it is
taken in concert with or organised by others who are not protected
for that particular industrial action, ie, in pursuit of a
particular agreement with a particular employer. The amendment
applies to industrial action occurring on or after the commencement
of Schedule 5 (28 days after Royal Assent).
At any one time, different groups of employees
are entitled to take protected action against different employers,
so simultaneous action may well occur without any intention to act
in concert. The Bill provides no definition of acting in concert
nor does it describe the evidence that might be required to prove
that employees are acting in concert.
The Bill facilitates the Government s response
to the Federal Court s Emwest decision in an apparently
decisive way, although it is possible that parties to industrial
disputes may resort to informal agreements to circumvent the Bill.
The Bill also appears to have a reasonable purpose in allowing
parties the opportunity to cool off during protracted disputes.
However the provisions are not designed to afford the AIRC any
defined role in resolving the dispute, and protracted industrial
disputes occur outside of certified agreement negotiations, which
the Bill does not address.
The Bill also gives effect to the Government s
response to the Federal Court s Electrolux No.2 decision,
although the AIRC has reaffirmed its view that collective
agreements with provisions not pertaining to the employment
relation should not be certified. Finally, it is possible in
multiple enterprise bargaining rounds (for collective agreements)
that all protected action may be lost for legitimate participants
where a few, presumably employees, partake or are otherwise caught
up in the wrong industrial action.
-
Federal Court of Australia
Emwest Products Pty Ltd v AMWU [2002] FCA 61
-
Australian Industrial Relations Commission (AIRC), Munro J.
Decision making without fear or favour in industrial tribunals?
Balancing Acts, policies, ethics and consumers in justitiating
industrial matters ,
Speeches, 15 October 2003.
-
AIRC, Boulton J, Print P6557, 7 November 1997.
-
Federal Court of Australia, CFMEU & Ors v Full Bench of
the AIRC & Coal & Allied Operations P/L (1998) 84 IR
314.
-
AIRC/AIR Annual Report
2002-03, pp. 10, 78 and 79.
-
AIRC, Boulton J, Print S0987, 17 November 1999.
-
Blood and guts grind , The Australian, 6 November
2001.
-
ABS Industrial Disputes, (Cat.No. 6321.0)
-
For a review of the issues raised by ILO committees on
Australian labour legislation, see ACTU submission to the Senate s
Building and Construction Industry Inquiry, December 2003, pp. 30
31.
-
As the full Australian bargaining legislative model provides for
and enforces individual agreements (AWAs), it actually provides for
outcomes not envisaged in the US federal bargaining model.
-
The Hon Peter Reith: Address to TUTA Industrial Relations
Conference , Melbourne 26 November 1996.
-
The Hon Peter Reith: Australian
Workplace Relations Framework into the Next Millennium
Sydney, 3 November
1999.
-
Emwest encourages flexible bargaining CCH Australian
Industrial Law News, September 2003.
-
ACCI, The right to strike warning to employers , Media
Release, 15 August 2003.
-
See for example the Federal Court decision on claims following
restructuring of Australia Post in Clarke v
Baulderstone Hornibrook Pty Ltd [2003] FCA 1426, 5 December
2003.
-
Quoted in ACIRRT s Adam Report No. 35 Pattern Bargaining taking
a closer look (December 2002).
-
ibid.
-
Australian Democrats Minority Report to the inquiry and Report
on the Consideration of the Provisions of the
Workplace Relations Legislation Amendment (More Jobs Better
Pay) Bill, by the Senate Employment, Workplace
Relations, Small Business and Education Legislation Committee
November 1999, p. 397.
-
Report on the provisions of bills to amend the Workplace Relations
Act 1996: Workplace Relations Amendment (Fair Dismissal) Bill
2002, Workplace Relations Amendment (Prohibition of Compulsory
Union Fees) Bill 2002, Workplace Relations Amendment (Secret
Ballots for Protected Action) Bill 2002, Workplace Relations
Amendment (Genuine Bargaining) Bill 2002 and Relations Amendment
(Fair Termination) Bill 2002 (May 2002).
-
Senate Hansard, 19 November 2002, p. 6694.
-
House of Representatives Hansard, 16 October 2002, p.
7752.
-
The Hon Kevin Andrews, House of Representatives
Hansard, 6 November 2003.
-
The Federal Court of Australia,
Electrolux Home Products Pty Ltd v Australian Workers Union
(FCA, No. S157 of 2001, 14 November
2001).
-
CCH Australian Industrial Law News, Issue 4,
April 2003.
-
CCH Australian Industrial Law News, Issue 11, November
2003.
-
AIRC Metal Trades Industries Association of
Australia v Australian Workers' Union
& Ors Print P0754 8 May 1997. In this case the AIRC
reviewed the facts of a multiple employer bargaining dispute and
resolved not to suspend protected industrial action in relation to
some of the businesses.
-
The Liberal Party of Australia, Choice and Reward in a
Changing Workplace, November 2001.
-
ACCI, 'Closing loopholes in the right to strike' Media
Release, 6 November 2003.
-
Anthony Forsyth, What s in a name? The Government s IR Agenda
CCH Australian Industrial Law News, July 2003.
-
The most contentious issue the right to strike and collective
bargaining under attack , IRM Newsletter , v.20 n.11,
December 2003, p. 5.
Steve O'Neill
17 February 2004
Bills Digest Service
Information and Research Services
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