Bills Digest No. 56, 2004–05
Workplace Relations Amendment (Agreement Validation)
Bill 2004
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
Conclusion
Endnotes
Contact Officer & Copyright Details
Passage History
Workplace
Relations Amendment (Agreement Validation) Bill
2004
Date
Introduced: 17
November 2004
House: Senate
Portfolio: Employment and Workplace
Relations
Commencement:
On the day of Royal
Assent
This Bill proposes to
retrospectively validate certain Certified Agreements whose
validity has been brought into question following the High Court of
Australia s decision in Electrolux
Home Products Pty Ltd v The Australian Workers Union and
Others (Electrolux).(1)
On 2 September 2004, the High Court delivered its judgement in
the Electrolux matter. The case concerned a question as to
whether bargaining agent s fees in which employees are required to
pay a fee to a union as a contribution to the costs of negotiating
a certified agreement could be included in Certified Agreements
(CA) made under the Workplace Relations Act
1996.(2)
Under s. 170LI of that Act, an agreement can only be certified
if it is about matters pertaining to the relationship between
employers and employees. Under s. 170ML, parties are entitled to
take industrial action in support or advancement of a proposed CA.
The Act provides that action taken under this provision is
protected action immune from civil or criminal liability. Under s.
170NC, industrial action taken or threatened in pursuit of a new
agreement or a variation to an agreement is illegal, unless it is
protected action. The interaction between ss. 170LI, 170ML and
170NC means that action taken in pursuit of matters that do
not pertain to the employment relationship may not be
protected action and may therefore be illegal. Accordingly,
Electrolux also concerned a secondary question as to
whether action taken in pursuit of bargaining agent s fees was
protected and legal action.
By a majority of six judges to one with Justice Kirby the
dissenter the court made the following key findings:
i. CAs can contain only matters which
pertain to the relationship between employers and employees in
their capacity as such .(3) Provision for the collection
of bargaining agent s fees from employees by employers is not such
a matter and therefore may not be included in CAs
ii. any CA which contains matters
which do not pertain to the employment relationship (
non-pertaining matters ) is invalid, and
iii. any action taken in support or
advancement of a proposed agreement which includes non-pertaining
matters is not protected action.
Each of these findings has brought its own uncertainty to the
conduct of industrial relations in Australia.
The first finding reaffirmed a test that has been used by
previous courts to determine the allowable content of awards and
agreements (hereafter referred to as the pertaining to
test).(4) As far as the application of that test to
bargaining agent s fees was concerned, the Court s finding was moot
at least with respect to any future cases as Parliament had enacted
legislation specifically prohibiting such provisions while
Electrolux was still being litigated.(5) But by
reaffirming a narrow test as to what pertains to the employment
relationship, the Court has left some observers wondering about
what other types of matters might also be non-pertaining . The
Australian Financial Review suggested that restrictions on
the use of casuals, labour hire or non-union contractors, rights of
union entry, dues deductions and training leave for delegates were
all now unenforceable .(6)
The second finding, that any CA containing non-pertaining
matters was invalid, cast into doubt the validity of many existing
agreements. The full bench of the Federal Court had earlier decided
that, even if a CA contains some non-pertaining matters, it could
be a valid agreement if the agreement as a whole could be said to
pertain to the employment relationship.(7) The High
Court took a much narrower approach, requiring that valid
certification only occurs where all the terms of the agreement are
about matters pertaining to the requisite relationship (with an
exception for matters that are merely ancillary, incidental or
machinery in nature).(8)
Electrolux made it clear that inclusion of a bargaining
agent s fee provision could invalidate an entire agreement, but
uncertainty remains about agreements that contain other matters
that might be non-pertaining . The narrower the pertaining test is
applied in practice, the larger the number of agreements in
question. Doubt over the validity of existing agreements can create
serious concerns for both employers and employees.(9)
For employers, the prohibition in the Workplace Relations Act on
industrial action during the life of a valid agreement would be
ineffective if the agreement is in fact invalid under the
Electrolux test. This would allow unions to initiate new
bargaining periods and take industrial action before the nominal
expiry date of the old (invalid) agreement. For employees, a
question mark over the validity of a CA puts a question mark over
any of the employment conditions it guarantees. Accordingly, a
simple underpayment claim could quickly escalate into major and
costly litigation over the validity of the CA itself.
It is the uncertainty created by this finding that the current
Bill seeks to address.
The third finding has also introduced uncertainty into the legal
status of protected action. By deciding that industrial action is
not protected, and potentially illegal, when it is taken in pursuit
of a proposed agreement that includes even one non-pertaining
matter, the High Court has cast doubt over the status of both past
and future industrial action. As Electrolux shows,
industrial action which was thought to be protected and legal at
the time it was taken may later be found to be unprotected under a
different application of the pertaining to test. It is possible
that some employers or other parties adversely affected by
industrial action will use the Electrolux precedent to
initiate proceedings for penalties or compensation in relation to
industrial action taken long ago.
Given the uncertainty over what is and is not pertaining , the
status of any future industrial action will be also uncertain. As
Electrolux shows, even High Court and Federal Court judges
can disagree over whether or not matters pertain to the employment
relationship. Yet an effect of Electrolux is that unions
are expected to make a reliable prediction as to whether proposed
provisions pertain before commencing any industrial action, or risk
penalties later on. As Justice Kirby noted:
To expose an industrial organisation of employees
to grave, even crippling, civil liability for industrial action,
determined years later to have been unprotected , is to introduce a
serious chilling effect into the negotiations that such
organisations can undertake on behalf of their
members.(10)
The present Bill is the Government s proposed legislative
response to the uncertainty that Electrolux has generated.
As the second reading speech said:
The Government is determined to address the
concerns of employers and workers across Australia in putting
forward this Bill. Not to remedy the uncertainty raised by the
Electrolux decision would be unjustifiable, particularly in the
lead up to the Christmas holiday period.(11)
In summary, the Bill specifically addresses the uncertainty over
the status of existing CAs and Australian Workplace Agreements
(AWAs). It does not address the uncertainty over the application of
the pertaining to test, nor the uncertainty over future agreements,
nor the uncertainty over the status of past and present industrial
action.
This Bill has been referred to an
inquiry by the Senate Employment, Workplace Relations and
Education Committee. At the time of writing, it has received
submissions and is due to report on 29 November 2004.
Significant interest groups have submitted to the inquiry and
their positions are summarised below.
The
ACTU submits that the Bill does little, if anything, to resolve
the problems associated with the need for certainty for parties to
certified agreements .(12) In particular, the ACTU notes
that the Bill does not address concerns about the validity of
post‑2 September 2004 agreements. The ACTU also submits
that the narrowing of the allowable content in agreements
undermines the principles of collective bargaining, which requires
Government to enforce those agreements reached between employers
and unions on matters they believe are relevant.(13)
The ACTU makes the following recommendations:
(i)
Remove the requirement for industrial disputes and certified
agreements to be about matters pertaining to the employment
relationship;
(ii)
Amend the current requirement that the dispute or agreement be
about matters pertaining to the relationship between employers and
employees to permit it to, alternatively, pertain to the
relationship between employers and unions, employer organisations
and unions, unions and employees or employer organisations and
unions;
(iii)
Amend the Act in either of the above ways in respect of agreements
only;
(iv)
Amend the Bill to validate agreements in their entirety,
irrespective of when they were certified;
(v)
Amend the Bill to validate, in their entirety, agreements certified
prior to the Bill s commencement date and, in respect of agreements
certified after that date, to provide for their certification if,
taken as a whole, they pertain to the employment
relationship.(14)
The ACTU also recommends that the Act should be amended to
protect industrial action which has been taken in support of claims
for a certified agreement, whether or not those claims include
matters which might be held not to pertain to the employment
relationship .(15)
AIG submits that the Bill is a sensible and practical piece of
legislation that it strongly supports .(16) According to
AIG, [s]ome unions have sought to exploit the uncertainty regarding
the validity of existing agreements and embarked upon industrial
campaigns to renegotiate existing certified agreements
.(17) For this reason, it supports the Government s
attempt to validate existing agreements through this Bill.
AIG also supports the Government s decision not to address other
consequences of Electrolux. In particular, it would not
support any attempt to validate post-2 September agreements as
these have been vetted by the Australian Industrial Relations
Commission (AIRC) or the Employment Advocate already. Similarly, it
considers the Government s decision not to provide a fuller
definition of the pertaining to test sensible as to do so would be
almost impossible and the issue is best left to the AIRC and
relevant Courts to determine .(18)
The
ACCI submission also supports the Bill. However, ACCI does
suggest that some leeway might be provided to validate those
agreements certified after 2 September 2004 but agreed and voted on
before that date. (19)ACCI makes no comment on the areas
the Bill does not address.
The Australian Labor Party has not stated its position on this
Bill. Its new industrial relations spokesperson, Stephen Smith, has
been reported as saying that, along with any other new workplace
relations proposals, the ALP will be judging this Bill on its
merits.(20)
Newspaper reports suggest that the Australian Democrats intend
to support the Bill. Senator Andrew Murray has been quoted as
saying that the Bill appeared to be sensible, but he needed to see
it and consult his colleagues. (21)
The Australian Greens do not appear have stated a position on
the Bill at this stage.
Item 1 would retrospectively validate certain
certified agreements made or varied before 2 September 2004,
the date the High Court delivered its judgment in
Electrolux. Specifically, it provides that agreements made
or varied before that date remain valid to the extent that they
contain permitted matters, even if they contain one or
more matters that are not permitted (proposed s.
170NHA for new agreements and s. 170NHB
for variations to agreements).
Proposed s. 170NHC defines permitted
matters for the purposes of CAs under s. 170LI (otherwise
known as Division 2 agreements ) in almost the same terms used in
s. 170LI to describe the content of certifiable agreements. In
other words, a permitted matter under the Bill is a pertaining
matter under the Electrolux test.
The effect of these provisions is to rectify the uncertainty
regarding the validity of existing CAs that has followed
Electrolux. It will be recalled from the Background that
one of the key findings of Electrolux was that an
agreement is invalid if it contains even one non‑pertaining
matter. That rule would remain for all agreements concluded and
certified after the 2 September 2004. However, the Bill proposes to
retrospectively declare valid any such agreements certified before
that date, at least as far as the pertaining matters are concerned.
Any non-pertaining (or, in the language of the Bill, non-permitted)
provisions will be unenforceable, but they will not undo the
validity of the remainder of the agreement.
The Bill goes beyond validation of CAs made under s. 170LI
(which were the subject of Electrolux) but also deals with
agreements made under ss. 170LO and 170LP and with Australian
Workplace Agreements (AWAs).
Certified agreements can be made under ss. 170LO and 170LP to
settle, prevent or maintain a settlement of an industrial dispute
or industrial situation (these are known as Division 3 agreements
).(22) As with Division 2 agreements, proposed
s. 170NHC would define permitted matters in similar terms
to those used in ss. 170LO and 170LP to describe the circumstances
in which these agreements can be made. As the definition of the
industrial dispute includes a requirement that the dispute concerns
matters pertaining to the relationship between employers and
employees , this essentially means that permitted matters are
pertaining matters. As with Division 2 agreements, the effect of
the Bill would be to ensure that pre-2 September Division 3
agreements are not invalid simply because they include one or more
non-permitted matters.
Item 2 deals with AWAs. As with CAs, the Bill
would ensure that pre-2 September AWAs are not invalid simply
because they contain some matters that do not pertain to the
employment relationship. Electrolux did not consider AWAs
at all. Nonetheless, the Government felt that the logic of
Electrolux could apply equally to AWAs and have
accordingly made appropriate provision to validate
pre-Electrolux AWAs in this Bill.(23)
Comments
What the
Bill does not do
This Bill is less likely to be controversial for what it does
than for what it does not do. There seems to be a consensus that
Electrolux has generated intolerable uncertainty over the
validity of existing agreements that contain potentially
non-pertaining matters . This Bill is an effective mechanism to
correct that uncertainty.
However, Electrolux has also generated uncertainty in
other ways which this Bill does not address. Firstly, and most
importantly, is the uncertainty over what may and may not be
included in agreements. Following from this is the uncertainty over
whether new agreements are valid or invalid. Electrolux
has demonstrated that parties cannot rely on certification as an
indication that they have a reliable and enforceable agreement.
Also following from the first uncertainty is uncertainty over the
legal status of protected action, both past and future. In the
absence of Parliamentary intervention, these uncertainties will
either be resolved by the AIRC and the Courts or linger on for
years to come.
The first uncertainty that Electrolux generated, and
the most serious, is over the question of what is and is not a
pertaining matter and therefore a matter which may be provided for
in an industrial instrument. The majority in Electrolux
adopted the test which had been used in previous cases involving
the definition of industrial dispute , which, as we have seen, also
involves a test of whether the matters concerned pertain to the
employment relationship.(24) Noting that Parliament had
adopted very similar language in the enactment of the provision
relating to certified agreements (s 170LI), the majority applied
the old test to the new instrument of certified
agreements.(25) Justice McHugh summarised the test in
the following terms:
The cases emphasise that matters pertaining to
relations of employers and employees must pertain to the relation
of employees as such and employers as such, that is employees in
their capacities as employees, and employers in the capacities as
employers.(26)
The test is vague and difficult to apply to actual provisions.
The majority held that bargaining agent fee provisions did not pass
muster under the test. Such provisions were more appropriately
characterised as
pertaining either to the relationship between the
union and employees; or, to the extent that the claim concerned
deduction of the fee from the employees wages, to the relationship
between the union and the employer in its effective capacity as
agent for the union.(27)
But how the test applies to other types of provisions remains
unclear. Questions have been raised about the validity of:
provisions on shop stewards time off for trade
union training leave; deducting union dues; encouraging union
membership; extending right of entry; giving unions a role in
recruitment of employees; obliging employers to contribute to trust
funds for redundancy and employee entitlements; and the use of
contractors and casuals.(28)
Other commentators have also suggested that provisions dealing
with alternative dispute resolution, grievance procedures and
post-separation employee obligations (such as confidentiality
requirements) might cause problems.(29) Even provisions
importing parts of a corporate strategic plan or mission statement
might be non-pertaining and affect the validity of an entire
agreement. Absent parliamentary modification of the law, the status
of these types of provisions can only be tested through the AIRC
and the Courts.(30) As Electrolux shows, the
Commission, the Federal Court and the High Court can easily
disagree on whether a provision pertains , so protracted litigation
and lingering uncertainty could be expected for many years until
reliable precedents are established on each of the contentious
species of provision.
There is a strong policy rationale against applying the test
that has traditionally be used to define industrial disputes and by
extension the permitted scope of awards to agreements. The move
toward enterprise-level bargaining was intended to provide more
room for parties at the enterprise level to self-regulate their
relations, without the intervention of third parties such as the
arbitral commission.(31) The interventionist nature of
compulsory arbitration arguably warrants a short legislative leash
restraining the scope of matters dealt with in awards. But where
parties at the workplace are expected to negotiate the substance of
the rights and obligations which will govern their relationship, it
seems logical that they should be given a broader scope to
determine the range of matters that might be relevant to that
relationship. This changed context was recognised by Justice Kirby
who explained that the purpose of s. 170LI was:
to restore the capacity of employers and
employees, with or without the interposition of arbitrated awards,
freely to negotiate employment conditions to govern employment
relationships. They were to be able to do so largely on an
enterprise basis, without all of the constraints of arbitrated
industry-wide awards that had been such a feature of regulation of
Australian industrial conditions virtually from federation and
until recent years.(32)
This argument seems even more powerful when applied to AWAs.
These allow negotiation of employment conditions on an even more
decentralised basis, between employer and individual employee
without the intervention of the collective of employees. Yet, as
the Government acknowledges through this Bill, Electrolux
s narrow pertaining to test logically applies to AWAs as it does to
CAs, thereby reducing the negotiating terrain for employers and
employees in concluding an AWA.
In rejecting Justice Kirby s reasoning for a broader pertaining
to test for agreements, the majority of the High Court has
effectively strengthened the hand of state intervention in
employment relationships. Applying Electrolux, the
Commission and Employment Advocate must now take much closer
interest in the content of proposed agreements to vet them for
allowable and non‑allowable content. This reduces the ambit
of self-regulation and, with it, the negotiating options available
to employers and employees alike. Where the Commission or
Employment Advocate fails and lets a non-pertaining matter through,
Electrolux requires the Courts to rule the entire
agreement invalid.
Now that the High Court has determined that the same narrow test
that governed the scope of awards does apply to CAs and, by
extension, to AWAs, Parliament has an opportunity to clarify what
it wants of these agreements. If the self-regulatory philosophy of
CAs and AWAs is to be maintained, a variety of options are open to
the legislature, such as:
-
reinstating the position adopted by the full Federal Court, that
agreements must pertain to the employment relationship when
considered as a whole. If there are concerns that certain
objectionable or irrelevant matters might become enforceable
provisions of agreements if left to this broad test, Parliament
could match this approach with specific prohibition of those types
of matters. This approach has already been taken with the
prohibition on bargaining agent s fees in the Workplace
Relations Amendment (Prohibition on Compulsory Union Fees) Act
2003, or
-
clear statutory provision for the types of matters that may be
included in agreements, notwithstanding the Electrolux
test. This approach suffers the disadvantage that Parliament would
have to pre-empt new categories, rather than allow them to develop
organically through negotiation between employers and
employees.
Either of these approaches would have the advantage of involving
Parliament and through it, broad public debate in deciding what
types of matters that ought to be included in statutory agreements.
If the post-Electrolux status quo is maintained, these
important policy choices will be made by the Commission and the
courts, with little public discussion until after judgement is
delivered.
While this Bill addresses the uncertainty over
pre-Electrolux agreements, it does not deal with the
uncertainty generated by Electrolux for new agreements. It
would remain the case that if a new agreement contains a single
non-pertaining matter the entire agreement could be invalid and
unenforceable. Given that the pertaining/non-pertaining distinction
is not always clear, and that this Bill makes no effort to make it
clearer, the status of new agreements will remain under a cloud of
uncertainty, at least until clear precedents are developed by the
Commission and the courts.
A possible legislative response to this aspect of Electrolux
might be to provide that non‑pertaining provisions do not
invalidate an entire agreement but are simply unenforceable. This
is the approach the Bill takes to pre-Electrolux
agreements. If this approach were taken, the party insisting on the
inclusion of a non-pertaining provision would carry the risk that
such a provision would be an unenforceable part of the agreement.
Such uncertainty over a provision would be an incentive for parties
to stick to clearly pertaining matters as the core of their
negotiating position. The benefit of this approach would be that
any uncertainty is quarantined to the questionable provision, not
undoing the entire agreement and the many pertaining matters
therein.
The Bill does not address the uncertainties for both past and
future protected action that has followed Electrolux.
The uncertain status of industrial action taken before
Electrolux was discussed in the Background. Although the
Bill would retrospectively validate agreements certified before
Electrolux, it has deliberately chosen not to take
legislative action to retrospectively ensure that industrial action
taken before the decision is deemed protected. The second reading
speech explained the rationale for this approach:
Parties could not have reasonably expected that
protected action was available to support claims for non-pertaining
matters. Further, validating past industrial action would be
complex and practically difficult.(33)
Nonetheless, the speech went on to add that:
the Government considers it would be highly
undesirable for parties to exploit uncertainty in relation to past
industrial action by initiating or threatening legal
action.(34)
The statement that parties could not have reasonably expected to
take protected action in pursuit of non-pertaining matters seems at
odds with the Government s recognition that prior to the High Court
s decision, there was uncertainty about the correct interpretation
of s. 170LI. (35) In making judgements about the likely
legal status of action they were about to commence, unions suffered
the same uncertainty over the meaning of s. 170LI and therefore the
scope of protected action as everyone else.
Should it want to, Parliament could take action to
retrospectively protect industrial action which was taken before
Electrolux based on misreading of s. 170LI. The difficulty
would be in distinguishing between industrial action based on a
genuine misreading of s. 170LI and action that was clearly
beyond the scope of s. 170LI however construed. This would be a
much easier task if Parliament had taken the approach of more
clearly defining the pertaining to test, as discussed above. Then
action could be retrospectively protected if it was in pursuit of
an agreement which conformed to the new test. In the absence of
this approach, Parliament could nonetheless retrospectively protect
action taken in pursuit of an agreement which is, by virtue of this
Bill, valid except in a defined list of cases. That list could
include bargaining agent s fees and other provisions considered
objectionable. Alternatively, the list could take its lead from
Justice Kirby s interpretation of s. 170LI and include wholly
extraneous demands such as those concerned with purely political
issues, overseas matters or matters having no relevant connection
to the particular Australian employment relationship
.(36) Many options are available and the task need not
be as complex and practically difficult as the Minister
suggests.
The Department of Employment and Workplace Relations has
suggested the following policy rationale for the decision to
validate pre-Electrolux agreements but not
pre‑Electrolux industrial action:
unlike certified agreements, no third party vets
protected action to ensure it meets the requirements of the Act. It
has always been up to the party taking industrial action to ensure
that they meet the requirements of protected action in order to
take advantage of the very generous immunity that applies to
protected action. While some decisions of courts and the Commission
may have suggested that non-pertaining matters could be included in
agreements, parties taking industrial action could not have
reasonably thought there was no risk involved in taking industrial
action in respect of matters that do not pertain to the employment
relationship.(37)
The nub of DEWR s argument seems to be that the incorrect
certification of an invalid agreement is not the fault of the
parties whereas a misjudgement as to the status of industrial
action is. Accordingly there is a more important rationale for
validating those wrongly certified agreements than for validating
misjudged industrial action.
However, it should be noted that there are immediate
opportunities for other parties to bring industrial action to an
end where it is not protected action. Accordingly, it is not only
up to the party taking action to ensure it is acting within the
requirements for protected action. First among these mechanisms is
an order to return to work under s. 127 of the Workplace Relations
Act, which may be made by the Commission on its own motion or on
the application of a party to the dispute or any other person
directly affected by it. Second, the Federal Court may order an
injunction against anyone taking unprotected action in pursuit of
an (invalid) certified agreement under s. 170NG (on the basis of a
contravention of s. 170NC). If these remedies are not pursued, a
unions misjudgement as to the status of protected action might be
considered to have been shared by the other parties and the
Commission. It seems anomalous that Parliament should enact
legislation to validate agreements all parties previously
considered to be valid, while not enacting legislation protecting
industrial action which all parties previously considered
protected.
The Bill does not address the serious chilling effect in the
negotiation of CAs that Justice Kirby identified as a result of
Electrolux.(38) As discussed in the Background,
an effect of that judgment is that unions must be very careful to
ensure that any action they take is not in pursuit of a proposed
agreement containing non-pertaining matters. A misjudgement on that
issue can result in the action being unprotected and possibly
subject to penalties and substantial civil remedies. This issue
might not be so problematic if the test of what does and does not
pertain were clearer, but this Bill makes no effort to provide a
clearer test. Electrolux itself shows that highly educated
and experienced commissioners and judges can disagree on whether a
matter pertains. As the full Federal Court said:
If the parties are to make rational and confident
decisions about their courses of conduct, they need to know where
they stand. It would be inimical to the intended operation of [the
relevant provisions of the Act] to interpret s. 170ML(2)(e) in such
a way as to make the question whether particular industrial action
is protected action , and therefore immune from legal liability,
depend upon a conclusion concerning a technical matter of law As
this case demonstrates, that may be a matter about which
well-informed people have different views.(39)
This is the effect of the High Court s majority decision in
Electrolux. This may act as a strong disincentive to
taking any industrial action and/or a strong disincentive to think
of new and creative (but untested) ways of regulating the
employment relationship through agreements.
Given the High Court s interpretation of the current law,
Parliament may want to consider whether a different approach is
warranted to ensure that the liability of parties does not depend
on such technical matters of law . The following approaches might
be considered:
-
providing that all action in pursuit of an agreement assuming
other requirements such as notification of a bargaining period and
notification of proposed action are met is protected, unless in
pursuit of specifically prohibited provisions (such as bargaining
agent s fees, political matters or other provisions determined by
Parliament)
-
providing a very short limitation period for actions and
prosecutions arising out of protected action, to encourage any
remedies to be pursued at the time of the dispute, not years
afterwards, or
-
providing that industrial action is not unprotected on the basis
that a matter in the proposed agreement is non-pertaining unless
notice is given by the other parties, the Minister or the
Commissioner to those participating in the industrial action,
before or during the action, that the status of the relevant
provisions is in dispute.
The Electrolux decision has generated
significant uncertainty in Australian workplace relations. This
Bill effectively addresses one very important aspect of that
uncertainty, being the validity of existing certified agreements
and Australian Workplace Agreements.
However, it does not address the
post-Electrolux uncertainty in the following areas:
-
the lack of clarity over what is and is not a matter pertaining
to the employment relationship
-
the uncertainty over the validity of agreements concluded after
2 September 2004, given the remaining uncertainty over the
pertaining to test
-
the uncertainty over the protected or unprotected status of
industrial action taken prior to the 2 September 2004, and
-
the uncertainty over the protected or unprotected status of
future industrial action, given the continuing uncertainty over the
pertaining to test.
In the absence of Parliamentary intervention, much of this
uncertainty will only be resolved after cases have appeared and
been resolved by the Commission and the courts. This could take
many years and involve millions of dollars in litigation expenses
to taxpayers and parties.
In addition, the narrow approach to the pertaining to test will
be an obstacle to the development of new types of agreement
provisions. This will reduce the dynamic benefits that can be
expected to flow from the decentralisation of employment regulation
embodied in the shift to CAs and AWAs from awards. The ability for
employers and employees to develop enforceable instruments that
remain up-to-date with contemporary management techniques and
business models may be stymied by an overly restrictive approach to
the allowable content of these instruments. It is true that
non-pertaining matters can be formalised through non-workplace
relations mechanisms such as common law contracts and deeds. But
these lack the practical and inexpensive enforcement options
available through the AIRC that make CAs and AWAs so useful and
attractive in the first place.
As well as generating uncertainty, Electrolux can also
be seen as a re-exertion of active state intervention in workplace
relations. Following more than a decade s worth of reforms in which
self-regulation at the workplace or individual level has been
promoted, Electrolux requires the Commission and courts to
play a more integral role in policing the borders of
self-regulation. While employers and employees remain free to
determine the content of agreements, subject to certain minimum
requirements, the breadth of those agreements has been
circumscribed. Parliament now has an opportunity to decide whether
agreements should be so limited, and if so how.
-
[2004] HCA 40. (Hereafter, Electolux.)
-
See Steve O Neil, Workplace Relations Amendment (Prohibition on
Compulsory Union Fees) Bill 2002 [No.2] , Bills Digest, 101,
Parliamentary Library, Canberra, 2002-2003 for background to the
bargaining agent s fee issue.
-
Electrolux, op. cit., per Gleeson CJ at para 9, McHugh
J at para 60, Gummow, Hayne and Heydon JJ at paras161-162.
-
The most important previous cases had been R v Portus; Ex
parte ANZ Banking Group Ltd (1972) 127 CLR 353 and Re
Alcan Australia Ltd; Ex parte Federation of Industrial,
Manufacturing and Engineering Employees (1994) CLR 96.
-
Workplace Relations Amendment (Prohibition of Compulsory
Union Fees) Act 2003.
-
Labor in limbo on right to strike (Editorial), Australian
Financial Review, 6 September 2004, p. 62.
-
Automotive, Food, Metals, Engineering, Printing &
Kindred Industries Union v Electrolux Home Products Pty
Limited [2002] FCAFC 199, quoted from Andrew Stewart,
Electrolux in the High Court: Strict interpretation, uncertain
results , Australian Industrial Law News, Issue 9, 30
September 2004.
-
Elextrolux, per McHugh J, para 100.
-
See Court clarification raises new IR doubts (Editorial),
The Age, 10 September 2004, p. 12.
-
Electrolux, per Kirby J, para 193.
-
Senator Ian Campbell, Second reading speech: Workplace Relations
Amendment (Agreement Validation) Bill 2004 , Senate,
Debates, 17 November 2004, p. 12.
-
Australian Council of Trade Unions, Submission to Senate
Employment, Workplace Relations and Education Legislation
Committee, Melbourne, 23 November 2004, p 4.
-
ibid, p. 5-6.
-
ibid, p. 6.
-
ibid, p. 6.
-
Australian Industry Group, Submission to Senate Employment,
Workplace Relations and Education Legislation Committee,
Sydney, 23 November 2004, p. 1.
-
ibid, p. 9.
-
ibid, p. 11.
-
Australian Chamber of Commerce and Industry, Submission to
Senate Employment, Workplace Relations and Education Legislation
Committee, Melbourne, 23 November 2004, p. 15.
-
Karen Middleton, Labor won t be pushed on IR reforms , West
Australian, 1 November 2004, p. 4.
-
Megan Shaw, IR laws to receive second airing , The Age,
p. 6.
-
Industrial dispute and industrial situation are defined by s. 4,
of the Workplace Relations Act 1996. For relevant
purposes, an industrial dispute is an industrial dispute that
extends beyond the borders of any one State and is about matters
pertaining to the relationship between employers and employees . An
industrial situation is a situation which could lead to an
industrial dispute if preventative action is not taken.
-
Senator Campbell, op.cit.
-
Principally, the majority relied on R v Portus and
Re Alcan. See note 4 above.
-
Electrolux, op. cit., per Gleeson CJ at para 8, McHugh
J at para 61.
-
Electrolux, op. cit., per McHugh J, para 60.
-
Stewart, op. cit.
-
Electrolux: The ramifications , Workplace Express, 3
September 2004. http://www.workplaceexpress.com.au
-
Paul Munro, Swings, roundabouts and allowable matters , paper
for the Centenary Convention of the Industrial Relations
Association of South Australia: The Conciliation and Arbitration
Journey, Adelaide, 22 October 2004, p. 35.
-
A series of possible test cases are already being litigated: see
Matters pertain: Win for unions in post-Electrolux case Workplace
Express, 22 October 2004, WA court case shaping up as next
Electrolux test Workplace Express, 27 October 2004 and
Electrolux uncertainty continues as Merkon case withdrawn ,
Workplace Express, 8 November 2004.
-
See Breen Creighton and Andrew Stewart, Labour Law: an
Introduction, 3rd Edition, Federation Press, Sydney, 2000, p.
122.
-
Electrolux, per Kirby J, para 183.
-
Senator Campbell, op. cit.
-
ibid
-
Department of Employment and Workplace Relations, Submission to
the Senate Employment, Workplace Relations and Education
Legislation Committee , Canberra, 23 November 2004, p. 2.
(Hereafter, DEWR.)
-
Electrolux, per Kirby J, para 219.
-
DEWR, op. cit., p. 5.
-
See above p. 4.
-
Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union v Elextrolux Home Products Pty Ltd (2002) 118
FCR 177, p, 195. Quoted in Electrolux, per Kirby J, para. 190.
Jacob Varghese
29 November 2004
Bills Digest Service
Information and Research Services
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