Bills Digest no. 62 2009–10
Fair Work Amendment (State Referrals and Other Measures)
Bill 2009
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
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date introduced: 21 October 2009
House: House of Representatives
Portfolio: Education, Employment and Workplace
Relations
Commencement:
Various dates, although the majority of the provisions commence on
Proclamation or six months after Royal Assent, which ever is the
earlier. Complete commencement details are set out in the table in
Clause 2 of the Bill.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
Where a State refers all or part
of its powers to make laws in relation to industrial matters to the
Commonwealth, the Bill will extend the Fair Work Act 2009
to cover the State s unincorporated employers and employees and
outworker entities.
The Bill also:
- facilitates the referral of State instruments such as awards
and agreements from those States to the Commonwealth in respect of
private sector workplace relations, and
- allows all States and Territories the option to retain their
public service and local government employees under their own
workplace relations system.
This Bill is introduced consequent to the Fair Work Act
2009 (the FW Act), the Fair Work (Transitional Provisions
and Consequential Amendments) Act 2009 (T&C Act) and the
Fair Work (State Referral and Consequential and Other
Amendments) Act 2009 (first referral Act). The first referral
Act commenced on 1 July 2009 and primarily dealt with the referral
from Victoria.
The Parliamentary Library s Bills Digest reviewing the Fair Work
Bill 2008 noted:
The purpose of the [Fair Work] Bill is to
ultimately replace the current Workplace Relations Act
1996 (WR Act) with industrial legislation designed to promote
collective bargaining and broader workplace rights for employees.
At a later time, the Bill may facilitate the referral of powers
from the States to the Commonwealth in respect of private sector
workplace relations laying the basis for a national approach to
workplace relations regulation.[1]
This Bill further progresses the national approach to workplace
relations regulation by facilitating the transfer of state
enterprise awards and collective and individual agreements to the
federal jurisdiction.
Section 51 (xxxvii) of the Commonwealth Constitution provides
that the Commonwealth Parliament 'may make laws for the peace,
order and good Government of the Commonwealth' with respect to:
Matters referred to the Parliament of the
Commonwealth by the Parliament or Parliaments of any State or
States, but so that the law shall extend only to the States by
whose Parliaments the matters is referred, or which afterwards
adopt the law.
This Bill provides for a text base referral[2] in workplace relations matters
from States to the Commonwealth. The Bill also facilitates the
referral of State instruments such as awards and agreements from
those States to the Commonwealth in respect of private sector
workplace relations laying the basis for a national approach to
workplace relations regulation.
The Bills Digest on the Fair Work (State Referrals and
Consequential and Other Amendments) Bill 2009 provided background
on the progress of the States agreeing to refer workplace powers to
effect referral.[3] The main development since
then is that Tasmania, South Australia and Queensland have
introduced referral legislation into their Parliaments. Further to
that, on 25 September 2009, Ministers from Victoria, South
Australia, Tasmania, the Northern Territory and the Australian
Capital Territory endorsed and signed an Inter-Governmental
Agreement for a National Workplace Relations System for the Private
Sector. New South Wales is yet to make a decision about its
participation in the national system, while Western Australia has
not changed its initial position of deciding against a
referral.[4]
If more States do introduce referral legislation it will be
necessary for the Commonwealth to make further amendments to
accommodate the specifics of those referrals.[5]
The Bill has been referred to the Senate Education Employment
and Workplace Relations Committee for inquiry and report by 16
November 2009. Details of the inquiry are at:
http://www.aph.gov.au/Senate/committee/eet_ctte/fair_work_state/index.htm
It has been reported that the Coalition parties do not intend to
oppose the passage of this Bill, subject to its inquiry and report
in the Senate.[6]
Submissions to the Senate inquiry generally support and welcome
the Bill for progressing the delivery of a uniform national
industrial relations system.
The ACTU states that it supports the Bill and applauds the
consultative approach adopted by the government in working with the
referring States to determine the scope of their referrals and the
transitional arrangements that will apply to employees and
employers transferring from the State systems .[7]
Professor Andrew Stewart similarly expresses a supportive view
stating:
If passed the State Referrals Bill will help to
create a clear and consistent delineation between federal and State
industrial laws. At least in referring States, all private sector
employers will be subject to the federal system, including the
great majority of non-profit organisations [ ] The uncertainty over
the status of incorporated local employers, and certain other
incorporated government business enterprises, will also be
resolved. [8]
However ACCI and Australian Industry Group (Ai Group), while
supporting the referral of the State industrial relations powers to
the Commonwealth, raise concerns regarding aspects of the referral
provisions. Ai Group goes so far as to suggest the Bill should not
proceed their preference being a complete referral of power from
the States to the Commonwealth.[9]
Some of the technical issues raised by interest groups such as
Ai Group and ACCI are discussed under the Main Provisions section
below.
According to the Explanatory Memorandum, the provisions of the
Bill will generate extra work for Fair Work Australia (FWA) and the
Fair Work Ombudsman in South Australia and Tasmania and the cost of
the extra work will be absorbed within existing operational
capacity . The Explanatory Memorandum adds that the financial
impact of the expansion into other States will be considered
separately.[10]
As noted above, Victoria was the first State to legislate for
the referral of workplace relations matters to the
Commonwealth.[11]
The Fair Work (State Referral and Consequential and Other
Amendments) Act 2009 (Cth) inserted Division 2A into Part 1-3
of the FW Act which gave effect to Victoria s referral. It enabled
all the elements of the national system of industrial relations
laws to apply to all employers and employees in Victoria with
effect from 1 July 2009.
The main purpose of Schedule 1 in the Bill is to give effect to
other State references that occur by 1 January 2010.
Item 39 inserts new Division
2B into Part 1-3 of the FW Act. It would give effect to
State references of workplace relations matters to the Commonwealth
that take effect after 1 July 2009 but on or before 1 January 2010.
To date, South Australia, Tasmania and Queensland have introduced
referring legislation into their Parliaments.[12]
The new Division 2B is largely based on the
framework used for the referral by Victoria as set out in Division
2A. It relies on a number of definitions,
including the definitions of referring State , referred subject
matters and excluded subject matter , national system employee and
national system employer . These definitions are discussed
below.
Proposed section 30L defines referring State
and is a key provision. A State is a referring State if its
Parliament, after 1 July 2009 but on or before 1 January 2010
refers the matters set out in proposed subsections 30L(3),
30L(4) and 30L(5) to the Commonwealth
Parliament, to the extent that these matters are not otherwise
within Commonwealth legislative power and are within the State s
legislative power. Proposed subsections 30L(3),
30L(4) and 30L(5) provide for three
referrals of power, namely the initial reference , the amendment
reference and the transition reference .
New subsection 30B(3) gives effect to a
reference of matters relating to the text of the referred
provisions [13] in
Division 2B. Matters covered by this text will cover the regulation
of unincorporated and public sector employers and their employees,
outworker entities.[14] These are brought into the referral by virtue of the
extended definitions of national system employee and national
system employer (proposed sections 30M and
30N)[15], and outworker entity (proposed section
30Q)[16]. Certain types of adverse action are
also brought into the referral through extending the operation of
the FW Act s general protections in Part 3-1 (proposed
section 30R).[17]
New subsection 30K(4) gives effect to a
referral of matters relating to express amendments [18] of the FW Act. This
would allow the Commonwealth to amend the FW Act in relation to the
referred subject matters.
The referred subject matters are defined in proposed
section 30K and amongst other things include:
- terms and conditions of employment (such as in minimum
standards or instruments, or in relation to bargaining or transfer
of business), and
- rights and responsibilities of employees and employers and
other persons (such as in relation to freedom of association,
industrial action, unfair dismissal and right of entry).
These correspond with the matters regulated by
the FW Act.
Excluded subject matter from the referral are also defined in
proposed section 30K and include amongst other
things:
- matters dealt with by the States various equal opportunity or
anti-discrimination Acts which are preserved in their application
to national system employees and employers by subsection 27(1A) of
the FW Act
- superannuation, workers compensation, occupational health and
safety, public holidays, long service leave, regulation of employee
and employer associations, and workplace surveillance, business
trading hours, enforcement of contracts of employment.
Comment
Ai Group, in their Senate inquiry submission are
critical of this definition, arguing that its lack of consistency
with existing section 27 of the FW Act would create uncertainty and
potentially an increased regulatory burden for employers. Ai Group
state that the definition gives States powers in respect of
training arrangements, long service leave, public holidays and
claims for enforcement of contracts of employment. The submission
continues:
It is not appropriate to give States increased
powers in the proposed areas and, accordingly, to undermine the
provisions of the Fair Work Act, modern awards and enterprise
agreements relating to these matters.[19]
Ai Group s preference is for the definition of
excluded subject matter currently used in section 30A[20] arguing it ensures
consistency with section 27 non-excluded matters in the FW
Act.[21]
Proposed subsection 30L(5) gives effect to a
referral of matters relating to the transition to the national
system. This would enable the Commonwealth to transition State
employers and employees from regulation by State industrial
relations frameworks to the system created by the FW Act. It would
also enable the transition of unincorporated employers and
employees currently covered by the WR Act (as it continues to apply
because of the T&C Act) to the FW Act regime.
Proposed subsection 30L(2) clarifies that a
State is still a referring State even if the State s referral law
provides for the reference to terminate in certain circumstances,
or if it excludes certain matters relating to State public sector
employment or local government employment. The effect is that
referring States can refer or exclude from references matters
relating to State public sector employment and local government
employment. [22]
The Explanatory Memorandum states that it is anticipated that
none of the Division 2B referring States will refer matters
relating to public sector employment. Victoria (a referring State
under Division 2A) on the other hand, has referred matters relating
to its public sector and local government (subject to certain
exceptions set out in its referral Act).[23]
Proposed subsection 30L(6) provides that if a
State terminates any or all of the initial, amendment, or
transitional references it will cease to be a referring State
unless subsections 30L(7) or (8) apply. Proposed
subsections 30L(7) and (8) enable a
referring State to remain a referring State if its amendment
reference is terminated by the State Governor by proclamation in
the following circumstances:
- with six months notice, if the amendment references of other
referring States all terminate on the same day, or
- with three months notice, if the Governor considers that an
amendment to the FW Act is inconsistent with the fundamental
workplace relations principles as set out in proposed
subsection 30L(9)[24].
The effect of proposed subsections
30L(7) and (8) is that if a State
terminated its amendment reference it would still be able to remain
a referring State.
Comment
ACCI in its Senate inquiry submission argues that
there is no reason why such a provision should be part of the
referral process for a national system.
This may be used as a political tool to styymie
further amendments to the Commonwealth laws and put pressure on the
Commonwealth by threatening to withdraw from the federal
system.
[ ]
If the termination of an amendment reference is
ever invoked by a State Government, this will cause confusion and
unnecessary dislocation for referral employers, as non-referred
employers continue to be bound by the fair work laws, but their
referral counterparts do not. It also appears to indicate that
State Governments are not fully committed to achieving a national
system for the private sector.[25]
ACCI therefore recommends that these provisions (subsections
30L(7) and (8)) be removed from the Bill.
Ai Group also expressed concern about an effective State
Government veto power over amendments to the FW Act and the
possibility of State Governments being able to pressure the
Commonwealth into amending or not amending the FW Act. Such a veto
could also cause delays in necessary amendments to the FW Act and
could also result in one or more State Governments terminating
their amendment references, thereby creating different versions of
the national workplace relations system for different groups of
employers and employees.[26]
In response to these concerns, a senior spokesperson for the
Department of Education, Employment and Workplace Relations told
the Senate inquiry that these provisions were worked out in close
consultation with the States. They are aimed at protecting States
long-term interests in a cooperative workplace relations system and
address States concerns that unwelcome changes to workplace
relations laws could be forced upon them without any consultation
by a future Commonwealth government.[27]
As stated above, Division 2A of the FW Act gave effect to
Victoria s workplace relations reference to the Commonwealth. Many
of the amendments in Schedule 1 of the Bill amend this existing
Division 2A to ensure consistency with the proposed arrangements in
new Division 2B. This includes provisions that
enable Victoria (like Division 2B referring States) to terminate
its amendment reference and remain in the national system
(items 14, 17, 18, 26 and
31).
Also for consistency with new Division 2B, Schedule 1 inserts
new definitions including excluded subject matter (item
15), local government employee and local government
employer (items 20 and 21) and
State public sector employer (item 25).
There are also a number of minor technical amendments to
Division 2A, including amendments consequential on the creation of
Division 2B (item 11 and items
32-37).
Items 1 to 36 insert new
definitions into item 2 (the dictionary) of Schedule 2 to the
T&C Act to cross-reference new definitions and application
provisions relevant to new Schedule 3A.
Item 38 amends the general regulation-making
power in item 7 of Schedule 2 of the T&C Act. It provides a new
regulation making power for the transitional purposes of
referral.
Items 43, 45 and 47 provide
definitions for the purposes of categorising State reference
employers and employees. They are either Division 2A State
reference employers and employees (ie Victoria) or Division 2B
State reference employers and employees (ie other States).
Item 54 inserts new Schedule
3A into the T&C Act. It deals with the treatment of
State awards and State employment agreements of Division 2B
referring States.
Proposed items 2 to 6 of the
new Schedule 3A define Division 2B State awards and Division 2B
State employment agreements which are to be known collectively as
Division 2B State instruments. At the referral commencement, State
awards and State employment agreements in operation under a
referring States industrial law become notional federal awards and
agreements.
Proposed items 4 and 6 have
the effect of preserving Division 2B State instruments in relation
to those employers, employees, outworker entities and other persons
who were covered by the instrument immediately before the referral
commencement as well as new employees engaged by those employers
after that time.[28]
Proposed items 7 to 17 deal
with matters relating to the terms of State awards and agreements
on referral commencement.
Proposed item 7 provides that
a term of a State award dealing with dispute resolution procedures
would effectively be replaced in the Division 2B State award with a
model dispute resolution clause, prescribed by regulation. In
contrast, State employment agreements dispute resolution terms
would be retained (proposed item 8). The effect is
that where Division 2B State employment agreements confer power on
State industrial bodies (or other third parties), the State
industrial bodies or parties will not be prevented from exercising
power.
Other State rules would be preserved at referral commencement.
For example:
- State rules about instrument content would be preserved
(proposed item 10)
- State rules about interaction between instruments would be
preserved (proposed item 11)
- Awards would continue to be subject to the same outworker
interaction rules (proposed item 12).
Proposed items 14 to 16 deal
with the transition of employee entitlements at referral
commencement. Generally an employee s service with an employer
before referral commencement counts as service for the purpose of
determining entitlements under the relevant Division 2B State
instrument (proposed item 14).
Proposed item 17 clarifies that
there is no loss of accrued rights or liabilities when a Division
2B State instrument terminates or ceases to apply.
Proposed item 18 sets out the circumstances
under which Division 2B instruments may be varied or terminated.
Such instruments may be varied so as to remove ambiguities
(item 19) or on referral from the Australian Human
Rights Commission (proposed item
20); otherwise they may be varied pursuant to items 8 and
40 of the proposed Schedule 3A of the T&C Act in relation to
dispute resolution under State Employment Agreements and resolving
difficulties between State instruments and the National Employment
Standards); pursuant to Part 6 of proposed Schedule 3A dealing with
the ongoing operation of State laws for transitional purposes and
under its schedules dealing with enterprise instrument
modernisation process, variation of State awards in annual wage
reviews and transfer of business. Similarly Division 2B State
instruments cannot be terminated other than under Part 6 of
proposed Schedule 3A dealing with the ongoing operation of State
laws for transitional purposes or arising from an enterprise
instrument modernisation process, or from a transfer of business
matter.
Proposed item 21 stipulates that Division 2B
State industry awards terminate 12 months after the Division 2B
referral, notwithstanding any award provision providing for an
earlier termination. Proposed items 22 and 23
allow the termination of collective State employment agreements
under Part 2 4 of the FW Act, either by agreement between the
parties or by the FWA after the agreement s nominal expiry
date.
Proposed items 24 to 26 deal with the
termination of individual Division 2B State employment agreements
by written agreement between the parties; or where the individual
agreement is to be superseded by an enterprise agreement under the
FW Act; or by a unilateral application to the FWA upon the Division
2B agreement reaching its nominal expiry date, subject to notice
requirements. The agreement s termination takes effect 90 days
after the FWA s approval.
Proposed item 27 defines the nominal expiry
date of a Division 2B State employment agreement to be either
the day expressed in the agreement or 3 years from the Division 2B
referral, if the agreement specifies a later nominal expiry date
than this. Proposed item 28 makes clear that when
a Division 2B State employment agreement terminates it ceases to
cover and can never again cover any employer or employees.
Proposed item 29 obliges FWA to consider
varying modern awards within the first 12 months of referral
commencement, to include transitional arrangements for Division 2B
State award employees (but not employees under State enterprise
awards). Any State award term to be included in a modern award must
comply with section 136 of the FW Act and apply to State award
employees. Any such provision made by FWA takes effect after 12
months from the referral commencement and cease to have affect
within 5 years or earlier, if stipulated.
Proposed item 30 obliges FWA to consider the
making of orders to apply State award long service leave, in the 12
months following a State referral. Any such order would override
inferior long service leave provisions of either an award or
enterprise agreement.
Proposed item 31 provides that the termination
of a Division 2B State award is not intended to result in a
reduction of take-home pay for employees and outworkers. Where a
reduction in take-home pay does occur because of a termination of a
State award, the FWA may make remedial take-home pay
orders under proposed item 32 on application
from an employee or outworker, an organisation entitled to
represent the employee or outworker, or a person acting on their
behalf. Proposed item 33 ensures that any such
order will remedy only the reduction in pay brought about by the
termination of the State award. Proposed item 34
provides that a take-home pay order continues to apply for so long
as the relevant modern award replacing the State award, continues
to apply to the employee.
Where a provision of a State instrument (award or agreement) is
detrimental to an employee when compared to an entitlement under
the National Employment Standards (NES), the State instrument
provision is of no effect as stipulated under proposed item
37.
Certain provisions of the NES have effect under proposed
item 38 in relation to modern award or enterprise
agreement, as if reference to these instruments included reference
to a Division 2B State instrument. These terms of the NES include:
the averaging of hours, cashing out and taking annual leave,
cashing out and taking personal leave including evidence
requirements, the substitution of public holidays, employees giving
termination notice, where redundancy pay does not apply and the
provision paid loadings in lieu for school-based trainees and
school-based apprentices. Proposed item 39
provides that a Division 2B State instrument employee is entitled
to the shiftworker annual leave entitlement under the NES.
Proposed item 41 provides that where a Division
2B State employment agreement and a modern award both apply to an
employee, or employer, or other person, the State employment
agreement prevails. Proposed item 42 ensures that
modern award outworker terms will continue to apply despite the
provisions of item 41. Proposed item 43 provides
that a Division 2B State award will apply to relevant employees
until its termination under this Bill. Where a FW Act enterprise
agreement or workplace determination commences to apply to an
employee, employer or other person then an otherwise applicable
collective Division 2B State agreement ceases to apply under
proposed item 44; however an individual State
employment agreement will continue to apply. Further, under
proposed item 45, a Division 2B State award may
re-apply to an employee, employer or other person at some point in
time, if the FW Act instrument ceases to apply. Outworker terms
under a State award will continue to apply despite the existence of
an otherwise applicable enterprise agreement under proposed
item 46.
Proposed item 47 stipulates that an employee is
not award/agreement free for the purposes of the FW Act, if a
Division 2B State instrument applies to the employee. Where an
employee s ordinary hours of work are determined by a Division 2B
State instrument, the hours of work stipulated therein continue to
apply, as provided for in proposed item 48. Where
no hours are agreed and no State instrument applies, ordinary hours
of work shall be 38 hours for full-time employees and the lesser of
38 hours and the employee s usual hours of work for other
employees. Proposed item 49 applies the FW Act s
payment of wages provisions under Part 2-9 to referred State
instruments and proposed item 50 applies the FW
Act s guarantee of earnings to employees under referred State
awards under Part 2-9, and also the exclusions of high income
employees from awards under a written guarantee of earnings.
Employees under referred State awards or agreements will be
protected from unfair dismissal under the FW Act s dismissal
provisions by proposed item 51.
Section 26 of the FW Act puts as a general rule that the FW Act
is intended to apply to the exclusion of all State and Territory
industrial laws, while section 27 of the FW Act makes certain
exclusions to section 26. Under this proposed Part 6, FW Act
provisions excluding State (or Territory) laws to national system
employees and employers under section 26 are do not apply in
respect of state laws which facilitate the commencement or
completion of an award appeal before referral commencement under
proposed item 55. Similarly section 26 of the FW
Act does not apply to a state law facilitating the completion of an
employment agreement proceeding which had commencement before
referral commencement under proposed item 56, nor
does section 26 apply in relation to an agreement appeal made
before, on or after referral commencement. Proposed item
58 ensures that any decisions made in relation to award
appeals, agreement proceedings and agreement appeals are not
subject to section 26 of the FW Act. Proposed item
59 applies where a state agreement, or variation or
termination has been approved by a state industrial body before
referral but has not come into effect at the time of referral
commencement; in such a case section 26 of the FW Act does not
apply. State laws also continue to apply under proposed
item 60 where a state law relates to compliance with an
entitlement or obligation occurring prior to referral commencement.
Proposed item 61 ensures the ongoing operation of
tribunal or court orders or injunctions preventing industrial
action before referral commencement.
Item 56 inserts at the end of Part 3 of
Schedule 4:
Proposed item 16 stipulates as a general rule
that an employee s service with an employer prior to referral
commencement counts as service for the purposes of determining the
employee s entitlements under the National Employment Standards,
subject to the proviso that no double entitlement shall occur as a
result of the referral.
Where an employee has accrued paid personal/carers leave or paid
annual leave, prior to referral commencement, the NES provisions
concerning the taking, payment and cashing out will apply to the
accrued leave under proposed item 17. Proposed item
18 provides that leave being taken prior to referral
commencement can continue to be taken after referral commencement
under the relevant NES provisions for the taking of that leave.
Where an employee s service prior to referral did not generate
an entitlement to redundancy pay, the NES redundancy schedule
commences from referral commencement; however redundancy pay for
service prior to referral is allowed where a state industrial body
makes such orders (as is generally the case with redundancy pay in
the Tasmanian industrial system). Proposed item 20
however provides that where notice of redundancy was made prior to
referral commencement, but the date of the termination occurs after
referral, the NES redundancy pay liability still applies for the
period of service. Proposed item 19 provides that
the NES notice of termination requirements apply only to
terminations occurring on or after referral commencement.
Proposed item 21 requires the NES Fair Work
Information Statement to be provided only to employees who commence
work after the referral commencement.
Item 68 inserts at the end of Part 4 of Schedule
7:
Provisions under this Part apply to enterprise agreements,
whether these be greenfields agreements or non- greenfields
agreements, made or varied after referral commencement for
employees who would otherwise be covered by a state award.
Proposed item 20A relates to new agreements
satisfying the FW Act s better off overall test , while
proposed item 20B relates to the requirements for
varying agreements.
Item 70 inserts at the end of Schedule 9 a new Part 5
Provisions relating to Division 2B State instruments. It
contains:
Provisions under this Part ensure that base rates of pay under a
Division 2B state award or state agreement, after referral, are not
less than the national minimum wage and the FWA may make orders to
phase in any increases in base pay rates. However proposed
item 19 provides for award/agreement free employees, that
where application of the national minimum wage would result in a
fall in base rates, the state minimum amount (for example
stipulated by law or order) will apply.
Proposed item 20 allows FWA to vary the wages
terms of a referred state award under the FW Act s annual wage
review.
Item 74 inserts at the end of Part 3 of Schedule
11:
Proposed items 14 to 15 provide for the
application of the FW Act s transfer of business provisions under
Part 2 8 to transferring employees covered by a Division 2B state
instrument. Proposed item 16 determines that where
a state instrument covered an old employer and employee, that
instrument continues to cover the employee and the new
employer.
As noted above, proposed subsection 30L(2) of the FW Act
recognises that referring States can choose the extent to which
matters relating to state public sector or local government
employment are included or excluded from references. This Schedule
of the Bill makes further amendments in relation to public sector
and local government employment.
Items 1 to 3 amend section 14 ( national system
employer ) of the FW Act by adding provisions
allowing certain employers, such as those established for a
State/Territory public purpose as well as local government
entities, to be declared under a State or Territory law not to be
national system employers. The effect would be that all States and
Territories would be able to exclude by declaration certain State
public sector and local government employers over which the
Commonwealth currently has jurisdiction (such as constitutional
corporations) from the FW Act. Such declarations could not however
be made in relation to universities, nor electricity, gas, water,
rail or port utilities (proposed subsection
14(6)).
To be effective, a declaration would need to be endorsed by the
Minister administering the FW Act (proposed subsection
14(2)). Such an endorsement (or alternatively a revocation
or amendment) by the Minister would be a legislative instrument for
the purposes of the Legislative Instruments Act 2003 and
required to be tabled in Parliament. The instrument would however
not be subject to the disallowance or sunsetting provisions of that
Act (proposed subsection 14(5)).
Comment
ACCI is critical of this amendment noting that it would
effectively allow local governments that are currently subject to
the federal laws to be carved out of the national system. [29] ACCI argues that this
ability for States to opt-out of the system would have a
destabilising effect on the national system, particularly for those
employers that have been subject to the federal system for a
considerable period of time. ACCI s strong preference is for a
referral to encompass all employers and employees and therefore
recommends that these amendments to section 14 of the FW Act be
omitted.[30]
The ACTU, on the other hand supports the amendment stating:
This will allow the Commonwealth to retreat
from covering any local government entity or state enterprise that
is a trading corporation where the State has determined (in
consultation with the employers and employees in the local
government sector) that it will not refer them. This sensible
approach draws a bright line around the sector and avoids the
difficulties that otherwise arise in determining whether a
particular council or enterprise is a trading corporation.[31]
Professor Andrew Stewart also supports this amendment stating
that it will resolve the uncertainty over the status of
incorporated local government employers, and certain other
incorporated government business enterprises.[32]
Submissions from Unions NSW and United Services Union, while
supporting the ability of the States to retain local government and
public sector employment within their industrial systems, question
the rationale of excluding utilities and energy generation.[33]
Other provisions in Schedule 3 of the Bill:
- amend the FW Act to allow State/Territory ministers to make
applications for the suspension of industrial action in a relevant
State or Territory (items 4 to
6), and
- allow State/Territory ministers to intervene in court matters
pertaining to the FW Act as these affect a State or Territory
(proposed section 569A, item 10).
Concluding comments
Along with the Fair Work (State Referral and Consequential
and Other Amendments) Act 2009, this Bill progresses a
significant national reform that will bring Australia to the
closest point in its history of having a single set of workplace
relations laws for the private sector.[34] As the Parliamentary Library s Bills
Digest reviewing the Fair Work (State Referral and Consequential
and Other Amendments) Bill 2009 noted: A revolution is underway .
This comment reflected the move to a uniform national workplace
relations system for the private sector reflected in the agreements
by most States to refer industrial legislation to the
Commonwealth.
While submissions to the Senate inquiry into the current Bill
were generally in favour of progressing the delivery of a national
system, there were genuine concerns raised about some of the Bill s
referral provisions. Those concerns are indicative of the
complexity of achieving a fully national system.
The Bill was introduced on 21 October 2009, the Senate Committee
inquiry has had a three-week time frame in which to consider it,
and the new system is expected to be operational by 1 January 2010.
Parliament may ask why it has such a short time frame in which to
consider such a significant and complex reform.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2463.
- a matter dealt with in a law referred to in subsection
27(1A)
- a non-excluded matter within the meaning of subsection 27(2)
(other than paragraph 27(2)(p)), or
- rights or remedies incidental to these matters.
Mary Anne Neilsen
Steve O Neill
16 November 2009
Bills Digest Service
Parliamentary Library
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