Bills Digest No. 31 2001-02
Workplace Relations Amendment (Minimum Entitlements for Victorian
Workers) Bill 2001
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
Appendix A
Contact Officer & Copyright Details
Workplace Relations Amendment (Minimum
Entitlements for Victorian Workers) Bill 2001
Date Introduced: 9 August 2001
House: House of Representatives
Portfolio: Employment, Workplace Relations and Small
Business
Commencement: Sections 1 to 3, on receiving
Royal Assent; the remaining provisions on or within 6 months of the
Act receiving Royal Assent
The purpose of
the Bill is to amend sections of the Workplace
Relations Act 1996 (WR Act) under Part XV which deals with
'matters transferred from Victoria'.
Schedule
1A of the WR Act sets out minimum entitlements provided to
Victorian employees not employed under Commonwealth
awards/agreements (referred to below as Schedule 1A workers) in
conjunction with Part XV of the Act. As a result of complimentary
State and Commonwealth legislation of 1996, the WR Act now
'administers' the Victorian industrial system.
The effect of this
Bill will be to widen the five current minima specified in
Schedule 1A which comprise:
-
- paid annual leave of four weeks
-
- five days paid sick leave
-
- an appropriate minimum wage
-
- parental leave, and
-
- notice of termination or compensation in lieu
to include:
-
- five days of carers leave within eight days of sick leave
-
- two days bereavement leave paid on death of immediate family or
household member
-
- access to the Supported Wage System for disabled workers and
their employers on an industry sector basis rather than case by
case
-
- payment for hours worked in excess of 38 hours
-
- detail on the calculation of annual leave and sick leave,
and
-
- a legislative right to stand down employees where they cannot
be gainfully employed.
Also, additional powers for Commonwealth
workplace inspection officers will be provided. Other compliance
measures will include obligations for employers to maintain time
and wages records. A statutory right of intervention would be given
to the Victorian Government where enterprise bargaining processes
are terminated and in the setting or variation of minimum wage
orders.
The Bill extends the relevant minimum wage to
outworkers employed in the Victorian textile industry 'within
constitutional limitations'. This means that the provisions will
apply only to the extent that the work performed is contracted by
corporations or where the work to be performed is in relation to
interstate, intraterritorial or international trade or commerce
(see Schedule 2 of the Bill discussed below under Main Provisions).
The Bill provides for specific inspection powers over the textile
outworking industry.
The dual nature of employment regulation in
Australia under State and Commonwealth jurisdictions has meant that
the employed workforce within State boundaries can be employed
under either jurisdiction (but not both).
Under the Australian Constitution, Commonwealth
industrial jurisdiction initially was to apply to interstate
industrial disputes, the Australian Public Service and the
Territories, while the States had responsibility for their public
services and local businesses.
For a variety of reasons, the Commonwealth
jurisdiction has expanded in the period since Federation, meaning
that a large proportion of the Australian workforce is employed
under Commonwealth awards and agreements. The Australian Industrial
Relations Commission (AIRC) has been given specific roles and
responsibilities in arbitrating disputes, making awards and
overseeing agreements under Commonwealth legislation. The expansion
of the Commonwealth jurisdiction has been due to the building of
national if not international businesses into a national economy.
State industrial jurisdictions have thus receded but play a very
important role in industrial relations. Nevertheless, Victoria took
the opportunity to refer its industrial relations powers to the
Commonwealth in 1996, being the only State to have done so.
Workforce Statistics - Victoria
As at February 2001 there were approximately
1.948 million wage and salary earners in Victoria.(1)
The bulk of these employees now work under Commonwealth awards and
agreements.
However, there has been a movement out of the
State jurisdiction's coverage over the 1990s. In 1990, the ABS
reported that of Victorian employees under awards (82% of the then
Victorian workforce), slightly more workers were employed under
State awards (52%) than under Commonwealth awards
(48%).(2)
In early 1993 the Keating Government amended the
Industrial Relations Act 1988 to allow the speedy transfer
of Victorian award workers to the Commonwealth
jurisdiction.(3) It was reported in 1994 that about
400 000 employees transferred to the Commonwealth
jurisdiction.(4)
As a result, the bulk of Victorian employees are
covered under the Commonwealth industrial jurisdiction but
approximately 560 000 employees are not covered by a
Commonwealth award/agreement.(5) Of these, according to
the
Victorian Industrial Relations Taskforce, approximately
356 000 employees work under Schedule 1A minimum entitlements
and about 235 000 work under minimum entitlements only, in
conjunction with minimum wage orders, and thus may be affected
directly by this Bill.(6)
In a recent AIRC decision (16 August 2001) to
apply the May AIRC Safety Net Wage decision to Victorian Schedule
1A workers, Vice President Ross of a Full Bench noted that Schedule
1A workers were over-represented among low wage earners. He
observed that 15 per cent of wage earners were earning less than
$10.50 per hour compared with 11 per cent of federal award
employees. More than half of Victoria's 263 000 workplaces
employed Schedule 1A employees, with most of those in small
businesses.(7) In summary, Schedule 1A workers mainly
come from the lower paid occupations in small business.
1992 Victorian Reforms
In 1992 the newly elected Government in Victoria
under Premier Kennett passed legislation to abolish the Victorian
award system and replace it with a system of individual (and
collective) employment contracts via the Employee Relations Act
1992 (Vic). These contracts would be based on minimum
conditions of employment set out in Schedule 1 to the Act. The
cumulative effect of the 1992 changes were:
-
- All Victorian awards ceased operation on 1 March 1993
-
- Employees who were in work at that time and who continued with
the same employer were deemed to be governed by agreements which
became known as 'roll over' agreements, provided they did not
conclude an individual employment agreement or were not bound by a
collective employment agreement
-
- Roll over agreements were deemed to contain the wage rate which
was provided in the relevant Victorian award, and were overseen by
the newly established Employee Relations Commission of Victoria
(ERCV)
-
- the ERCV had no powers of compulsory arbitration, and could
only use voluntary powers of arbitration where all of the parties
agreed, and
-
- These changes applied equally to both the private and public
sectors. (8)
A further legislative development contained
provisions to enable 'safety net wage' increases to be accessed by
Schedule 1 workers. The Employee Relations (Amendment) Act
1994 (Vic) commenced operation on 9 May 1995. It gave the ERCV
power to specify the minimum hourly wage rate for work
classifications in 19 industry sectors, within certain
limitations.
So, with this legislation Victorian employees
coming under the State's industrial jurisdiction could be employed
under rolled over State awards, employment agreements provided for
under the 1992 legislation, or under minimum wage orders. 'New'
employees could not be employed under rolled over awards. They
could be employed under minimum wage orders for the particular
industry they worked in conjunction with the minimum entitlements
specified under Schedule 1.
Annual Reports of the ERCV highlighted
constraints and inflexibilities of the 1992 legislation. A
comprehensive review of the 1992 legislation and the regulatory
machinery has been undertaken by former ERCV President, Ms Susan
Zeitz. Her review is attached to the report of the
Victorian Industrial Relations Taskforce.(9)
By the time of the agreement with the
Commonwealth to refer industrial powers, the ERCV had:
proved to be a thorn in the side of the Kennett
Government finding legal avenues to re-introduce arbitration powers
and expired award conditions.(10)
Commonwealth - Victoria
Agreement
In 1996 the State of Victoria and the
Commonwealth entered into an agreement to confer certain industrial
functions on the Commonwealth under a referral of State powers
available under the Constitution [s.51(xxxvii)]. Victoria passed
its Commonwealth
Powers (Industrial Relations) Act 1996 (Vic). This Act set
out the limits of this referral, including the ability for the
Victorian Government to unilaterally withdraw from the arrangement
at a later date.
For its part, the Commonwealth passed the
Workplace Relations and Other Legislation Amendment Act (No.2)
1996. This Act created Part XV of the WR
Act. The main features of the new provisions were:
-
- Employers with agreements under the Victorian system who wished
to make new agreements (either certified agreements or Australian
Workplace Agreements) would have to meet the Commonwealth's 'no
disadvantage test'
-
- Employers who decided to have their workforces remain on
employment agreements entered into under the Victorian system would
have fixed time after which these could not be renewed
-
- Victorian employees would be covered by the Commonwealth's
unfair dismissal system
-
- The constitutional requirements for an interstate dispute to
exist as a precondition for a federal award to be made would be
negated
-
- 'Division 2' certified agreements (a collective agreement made
by a union or employees with an employer which is a corporation)
and Australian Workplace Agreements could be entered into without
the Commonwealth requirement that the employer be a constitutional
corporation; ie these instruments would be available to
non-corporate entities such as partnerships, and
-
- The role of adjusting minimum wage orders was assumed by the
Australian Industrial Relations Commission (AIRC).
However, the referral of power was a limited
referral and should not be interpreted to mean
that Victorian employees under the State jurisdiction were
transferred to Commonwealth awards. This point was noted in
Bills Digest No. 66 1996-97
The scope of the Bill is in large measure
determined by the 'matters' formally conferred on the Commonwealth
by the Victorian Parliament via the Commonwealth Powers (Industrial
Relations) Bill 1996 (the Victorian Bill). The potential reach of
Commonwealth law is further restricted by certain implied
constitutional limitations on the capacity of the Commonwealth to
pass laws which may affect functions of a State which are critical
to its capacity to function as a government. (11)
Commentators, however, observed that the
agreement would mean in the long run that Victorian employers would
become subject to higher (Commonwealth) minimum employment
conditions, as Victorian agreements expired, and employers sought
to place employees under federal enterprise agreements, a point
noted by journalist Mark Davis:
... yesterday's agreement means that most
Victorian employers operating under the Kennett Government's
deregulated industrial system will eventually be subject to a
considerably higher safety net of minimum conditions under federal
industrial law ... Employers who want to stay under the Victorian
system will continue to be subject to the State's safety net of
four minimum employment conditions but will not be able to renew
existing State agreements.(12)
However utilising these options assumes there is
a willingness to move to Commonwealth agreements, while in reality
some employers may prefer to 'do nothing'. In effect, the referral
of industrial relations power to the Commonwealth put a sunset on
the operation of the former Victorian system of employment
agreements, but not minimum wage orders which operate as a default
pay arrangement in the absence of any 'superior' employment
agreement. In other words, it is perfectly feasible for Schedule 1A
employers and employees to remain in the old State system, and not
move across to agreements under the Commonwealth jurisdiction as
envisaged in 1996.
Workplace Relations Legislation
Amendment (More Jobs Better Pay) Bill 1999
The 'More Jobs Better Pay' Bill was introduced
to the House of Representatives in June 1999 and contemplated a
significant re-write of the WR Act. Following a report(13)
on the Bill by the Senate Employment Legislation Committee, the
'More Jobs Better Pay' Bill failed to pass the Senate on 29
November 1999.
Schedule 15 of the 'More Jobs Better Pay' Bill
addressed matters referred by Victoria, and as with the current
Bill, attempted to:
-
- clarify the operation of the Schedule 1A entitlements to annual
leave and sick leave and to determine that Schedule 1A employees
were entitled to payment for work performed in excess of 38 hours a
week
-
- provide inspectors with the power to enter and inspect premises
where they reasonably believe that Schedule 1A work is being
performed
-
- provide for a power to make regulations requiring employers to
keep and maintain employment records for employees covered by
Schedule 1A, and employees employed under Victorian employment
agreements
-
- provide that a breach of the Schedule 1A minima could be
prosecuted under sections 178 and 179 of the WR Act, and
-
- provide a mechanism for the stand-down of Victorian employees
who were not employed under federal awards or agreements or
Victorian under employment agreements. Formal stand-down
arrangements have a particular advantage of allowing employees'
continuity of service to remain unbroken.
The arguably inferior treatment of Schedule 1A
workers in Victoria compared to employees under other State and
Commonwealth jurisdictions was extensively detailed in the Senate
Committee's Minority Report of Labor Senators.(14) They
concluded that there were some benefits in the 'More Jobs Better
Pay' Bill in so far as hours worked in excess of 38 would have to
be paid and in respect of the proposed compliance provisions. On
the other hand, casual and seasonal workers might lose access to
annual leave and sick pay. There was also concern that the
mathematical model used in the amended Schedule for the calculation
of leave which excluded time on leave resulting in lower leave
entitlements than is the practice in other jurisdictions.
The Government has since presented certain
schedules of the 'More Jobs Better Pay' Bill as separate Bills to
Parliament.(15)
The Bracks Government
The election of the Bracks Labor Government in
October 1999 precipitated a review of the arrangement of the
transfer of industrial responsibilities to the Commonwealth.
Initially the new Victorian Government expressed dissatisfaction
with referral arrangement, particularly criticising the suite of
the five only minimum entitlements prescribed under the
Commonwealth Act to apply to Schedule 1A workers.
As noted, Schedule 1A minima essentially
replicate the minimum entitlements provided under Victorian
legislation at the time of the transfer. Schedule 1A minimum
entitlements are less than the 20 allowable matters which
Commonwealth awards can address. The Victorian minimum entitlements
predicate any current individual or collective employment contract
(ie the contract cannot specify lower conditions than those
specified in Schedule 1A), and the minimum entitlements provide
conditions in conjunction with minimum wage orders. Thus the
Victorian Government believes that its 'State' workers work under
inferior industrial law and have access to fewer entitlements and
conditions then comparable State award employees (eg in Queensland
or New South Wales).
The Commonwealth's response was that the
Victorian concerns would be initially considered, as noted in an
interview with the former Workplace Relations Minister, the Hon.
Peter Reith in February 2000:
The Victorian Government's stated policy
position is that they would like some changes but only in the event
that they couldn't achieve reasonable change would they then want
to establish a Victorian system. Now as to where matters go from
here I think further discussions would be sensible and I would
expect there will be some ongoing process. How that will exactly
pan out remains to be determined but we had a sensible discussion
today, it was of a preliminary nature basically.(16)
From this time, relations between the two
governments soured over differing responses to disputes in the
construction, manufacturing and power industries. The Victorian
Government then put its request for reforms in a formal advice. In
a letter to the Hon. Peter Reith, the Victorian Industrial
Relations Minister, the Hon. Monica Gould requested major reforms
to the WR Act (ie under Part XV) thus honouring an election
commitment for a fairer deal for Victorian workers.(17)
Problems perceived with the arrangement included:
- The Workplace Relations Act had resulted in more than
600 000 Schedule 1A workers being disadvantaged compared to
their counterparts in other states, as they are not covered by any
award
- Establishing a comprehensive award system that reflects the
full range of issues affecting the wages and conditions of
employees
- An expanded role for the Australian Industrial Relations
Commission giving it powers of compulsory conciliation and
arbitration over all terms and conditions of employment for
Victorian workers
- A genuine no disadvantage test that properly assesses the
fairness of workplace agreements, and
-
- New powers for Victoria to have the right to require industrial
disputes to be brought before the Commission for
determination.
Minister Gould said the proposed reforms were also aimed at
providing protection for those 600 000 Schedule 1A workers who
do not have basic entitlements:
These workers only have access to five minimum working
conditions ...
They do not have overtime, shift allowances, penalty rates, meal
breaks, bereavement leave - there aren't any limits on rostering of
hours, or any requirements on employers to notify changes in the
workplace. There needs to be a greater safety net in place to
improve the working conditions of these workers. Mr Reith needs to
act to bring their working conditions in line with their
counterparts in other states.(18)
The question then became to what extent would
the Commonwealth agree to bring working conditions in line with the
standards of other States? Additionally, the Victorian Government
was particularly concerned that formal avenues to intervene in
enterprise bargaining disputes were not available to the Victorian
Government, as Minister Gould explained to The Age:
Following the referral of Victoria's industrial
relations powers to the Commonwealth in 1996, the Bracks Government
has only a few limited options available to it ...
Termination of a bargaining period under the
(WR) Act, which then sparks compulsory conciliation and
arbitration, can be ordered only by the (Australian) Industrial
Relations Commission on its own initiative, or on application by a
negotiating party, or by (Minister) Reith himself. The State
Government can seek to intervene only after one of these parties
has called the matter before the IRC.(19)
The WR Act allows the AIRC to grant intervention
in matters before the AIRC (s.43). State governments are major
industrial players and it would be rare for their applications for
intervention to be refused, particularly over major disputes within
their State. Where a State Government or its authority was party to
a Commonwealth award it would have access to a superior right of
intervention.
Nevertheless, the Commonwealth responded to
these overtures in a strident criticism of the Victorian Government
and, in passing, criticised the award and arbitration systems
operating in some of the States, as reflected in statement by the
Hon. Peter Reith:
Re-creating a state system is not only
unnecessary, but a costly duplication of resources, as well as a
detrimental re-introduction of the legal complexities which result
from dual systems.
Steve Bracks' justification for a new IR system
is completely undermined by his support in 1996 for the referral.
He supported it then because it was good for Victoria, he opposes
it now because he is looking for a scapegoat for his own
leadership. Other Australian states have retained their state
systems. To varying degrees, this results in:
-
- Different arbitration and conciliation outcomes, depending upon
whether a matter is before a state of federal forum. This gives
impressions of unequal treatment, and lessens confidence in the
overall system
- A multiplicity of state and federal awards means confusion,
complexity, and varying standards
- Duplication of costs
- Encouragement of 'forum shopping'
- Confusion and uncertainty about the rights and obligations of
employers and employees, and some unions and employer organisation
- Exacerbated demarcation disputes.(20)
Minister Reith correctly observed that the
re-introduction of Victorian industrial legislation and formal
machinery processes would not give the Victorian Government a
statutory right to intervene in industrial disputes under the
Commonwealth jurisdiction. He also observed that
State Governments have been recognised by the AIRC as major
stakeholders in major disputes within the particular State, without
the need for a statutory right of intervention.(21)
Victorian Industrial Relations
Taskforce
Having been rebuffed at its request for reforms
to the WR Act, the Victorian Government proposed an inquiry by a
taskforce into the Victorian industrial relations system on 4 April
2000. Terms of reference were then prepared.(22)
According to Minister Gould, the setting up of the taskforce
implemented a key recommendation from the "Growing Victoria
Together" summit which was convened in early 2000 with business and
unions to review the handling of some major disputes:
It (the Taskforce) will make recommendations to
the Government on how the industrial relations system might be
better framed to share growth with all Victorians. The abolition of
Victoria's awards in 1992 was done without public consultation by
the Kennett Government.
The Bracks Government believes it is now time to
review the effectiveness of these industrial relations arrangements
through a taskforce which has consultation with, and input from,
the community, as a paramount consideration. Community and
stakeholders would be invited to make submissions to the taskforce
on the effectiveness of the current industrial relations system,
and about whether it meets the needs of Victoria heading into the
new millennium.
An Issues Paper was released in May 2000 calling on written
submissions from the public. This was to be followed by
consultations in urban and regional areas of Victoria.
Following submissions and consultations, the Taskforce made its
report in August 2000. Key points of the report canvassed:
-
- The structure, functions and powers of an industrial tribunal
(the Fair Employment Tribunal) which would be required to
administer a Victorian industrial relations system where the
recommendations contained within this report could not be
accommodated in federal law
-
- One system of industrial regulation which could be achieved for
all Victorian workplaces would be in respect of federal unfair
termination laws, agreement making, and the pursuit of a harmonised
Victorian compliance and enforcement system to apply to all
Victorian workplaces
-
- For other matters there would be a fair employment statute,
which would specify and review terms and conditions of employment
for all Victorian employees, to the extent that these matters are
not covered by federal awards, federal certified agreements or
Australian workplace agreements. These terms and conditions of
employment would include: annual leave; annual leave loadings;
public holidays; long service leave; sick leave; cultural leave;
personal carer's leave; bereavement leave; jury service leave;
parental leave (maternity, paternity, adoption and part-time work
provisions); and specifications on full-time, part-time and casual
employment
-
- Other fair employment standards to be applied in specific
industry sectors, would be determined and administered by the Fair
Employment Tribunal. These industry sector terms and conditions of
employment would include:
-
- rates of remuneration
-
- work classifications
-
- allowances
-
- hours of employment (varying hours of work provisions,
including ordinary hours of work, rostering arrangements, meal
breaks, and rest pauses)
-
- remuneration or compensation for overtime arrangements
-
- penalty rates; recompense or time in lieu or substitution days
for work undertaken on a public holiday, and
-
- redundancy and severance pay arrangements.
-
- The Fair Employment Tribunal would also be given a power of
inquiry into industrial matters. The Fair Employment statute should
provide a mechanism for promptly resolving employee grievances, for
example in respect of rostering arrangements
-
- The Fair Employment Tribunal should publish a code of practice
specifying steps for promptly resolving employee grievances within
places of work. Employees who have failed to resolve a grievance in
accordance with the code of practice at the place of work, may
apply to the Tribunal for assistance in resolving the
grievance
-
- The Fair Employment statute would contain a definition of
'employee' which would cover outworkers in the clothing
industry
-
- The Fair Employment Tribunal would have the power to review
independent contractor arrangements in cases where those
contractors were persons who performed work in an industry, as well
as to register multi-contractor arrangements, such as owner-drivers
in the transport and forestry industries in order to bring
stability to these types of work arrangements.
- The Fair Employment Tribunal would also provide an education
and advisory service to employers, employees and the community,
and
- The Fair Employment Tribunal would possess power to settle
small claims relating to wages and to allowances, to ensure
compliance.
A Fair Employment Bill was introduced to the
Victorian Parliament on 25 October 2000 implementing many of the
Taskforce's proposals, although with some amendments from its
original form after discussions with key parties (see its
main provisions in the appendix to this
Digest).
The Bill failed to pass the Victorian Upper
House on 4 April 2001. In rejecting the Fair Employment Bill, Dr
Denis Napthine, Leader of the Opposition, claimed that the Bill was
anti-small business, would cost 40 000 jobs and was not in the
interests of Victoria. He also claimed the Bill was unnecessary
after the Howard Government's decision to amend the WR Act to
address the needs of Victoria's lowest-paid
workers.(23)
The Workplace Relations Minister, the Hon. Tony
Abbott formally advised the Victorian Government of his intention
to amend WR Act provisions addressing Schedule 1A workers on 14
March 2001. (media
release)
Premier Bracks then challenged the Commonwealth
to bring Schedule 1A workers under Commonwealth awards:
We'll refer all relevant IR powers if they (the Commonwealth)
agree that a quarter of a million Victorians are entitled to the
same basic employment conditions as other Australians. These
conditions are available to workers under their Workplace Relations
Act in all other states and territories in Australia. Under the
Bracks Government's plan, Victoria will allow the Commonwealth to
give the Australian Industrial Relations Commission the power to
make federal awards apply as common law across Victoria ... We are
asking two simple things: federal awards to apply to all Victorian
workers and outworkers to be protected as
employees.(24)
The question is, will the provisions of the
current
Bill satisfy the Victorian Government's demands? A comparison
of the Commonwealth's offer on Victorian demands for industrial
legislation (represented by provisions of this Bill) with the
provisions of the Victorian Fair Employment Bill are attached as an
appendix to this Digest.
Schedule 1 - Matters concerning
Victoria
Item 1 inserts a new
subsection 45(3A) into the WR Act allowing the Victorian
Government to intervene in an appeal before a Full Bench of the
AIRC in respect of termination of a bargaining period concerning
Victorian employee/s and in relation to an appeal concerning
minimum wage orders. (See also Item 7). The Full
Bench must grant the application. (Note section 43 of the WR Act
provides the AIRC with a general power to grant applications to
intervene in proceedings).
Item 2 repeals and replaces
subsection 86(1) which deals with the role of workplace inspectors
visiting businesses for the purpose, inter alia, of ascertaining
whether an award or other instrument has been breached. A
new subsection 86(1A)(c) would require a person
(employer) to produce documents to the inspector under notice. (see
also Item 6).
Item 5 adds provisions to
subsection 86(4) which concern giving formal notice to a person to
produce documents under subsection 86(1A)(c). They will also
provide that documentation so produced will not be admissible as
evidence in any criminal proceedings against the individual, except
in the case of obstruction.
Item 6 inserts new
subsections 86(6) and 86(7) to allow inspectors to enter
workplaces which employ Schedule 1A workers and thus for such
workers to make complaints or seek advice about possible employment
breaches.
Item 7 adds new
subsection 170MW(1A) which requires the AIRC to grant
intervention to a Victorian Minister in respect of the termination
of bargaining involving Victorian employees.
Item 10 inserts new
subsection 501(2A) which entitles the Victorian Government
to intervene in AIRC proceedings concerning the setting or
variation of minimum wage orders. The AIRC must grant the
application. (This provision might be compared to section 44 of the
WR Act which stipulates the intervention rights of the Commonwealth
Minister).
Item 11 inserts new
section 501A - Supported Wage System (SWS). The provision
would allow the AIRC to order that the Supported Wage System
applies to Schedule 1A employment in a particular work
classification in a declared industry sector. Currently the AIRC
may approve a SWS arrangement on a case by case basis in Schedule
1A workplaces by exempting them from the relevant minimum wage
order in respect of certain employees.
Item 15 repeals and replaces
subsection 506(2) and adds new subsection
506(3). These provisions will allow Schedule 1A workers to
bring actions under section 178 in respect a penalty for breach and
under section 179 in respect of underpayment. Inspectors will also
be able to bring such actions. Item 20 adds
new subsection 533(4) which prevents an action for
an order re a breach being made under section 533, if an action has
commenced under section 506.
Item 16 inserts new
section 509A which will allow Schedule 1A employees to be
stood down in circumstances where an employer cannot provide work
due to strikes, machinery breakdowns or other stoppages for which
the employer cannot be held responsible. The employee's employment
contract would be deemed to contain the model stand down clause
prescribed in this section.
Item 18 repeals and replaces
existing section 514 with a new section under which regulations to
the Act may prescribe the making and retention by employers of
employment records and time and wages records of employees and
allow for the inspection of these.
Item 21 repeals and replaces
paragraphs 1(1)(a) and (b) of Schedule 1A which refer to (a) paid
annual leave and (b) paid sick leave. The new provisions exclude
casual and seasonal workers from paid annual leave. Sick leave is
replaced with the term personal leave and casual and seasonal
workers are excluded from it. A new paragraph
1(1)(ba) introduces paid bereavement leave to the minimum
entitlements. Item 26 adds new provisions to the
end of Part 1 of the Schedule which set out how these entitlements
are to be calculated. Note: personal leave credits are to be
cumulative, however unlike the Commonwealth award standard
bereavement leave is not to be included in the determination of
personal leave. This results in fewer days personal leave than the
Commonwealth award standard.
Item 24 inserts new
paragraph 1(1)(f) into Schedule 1A which will ensure that
those working under employment contracts underpinned by Schedule 1A
provisions must be paid for hours worked in excess of 38.
Item 25 adds new
subsection 1(3) which provides for Schedule 1A workers to
be paid for hours worked in excess of 38.
Items 27 to 36 are items
dealing with application of the new provisions of this Schedule and
ensure that new entitlements do not accrue for the employment
period prior to the new Act coming into effect.
Schedule 2 Contract Outworkers in
Victoria in the textile, clothing and footwear industry
Item 3 inserts a new
Part XVI after Part XV in the Act.
New section 539 determines that
the new Part will apply where a party to a relevant contract for
services is a constitutional corporation.
New Section 540 determines that
Part XVI also applies where the work contracted to be performed is
in the course of international, interstate or intraterritorial
trade.
New subsection 541(3) provides
that the minimum statutory amount to be paid to an outworker in the
textile industry employed under a contract for service must be the
amount the worker would be entitled to be paid if he or she had
performed the work as a Schedule 1A employee in Victoria.
New section 542 provides
certain powers to inspectors to ensure compliance in the outwork
textile industry with the new minimum wage provisions.
New sections 543 to 548 deal
with the imposition of penalties and recovery of pay.
New section 549 parallels
section 353A of the Act allowing regulations to be made requiring
records of contracts with outworkers to be made and retained and
made available for inspection.
Note: another potential source of constitutional
power for the Commonwealth to regulate the textile outworking
industry could be the External Affairs power (s.51 xxix of the
Constitution). In 1996 the ILO adopted Convention 177 on Home Work.
This Convention came into force in 2000. Australia to date has not
ratified the Convention, and only Ireland and Finland have done so.
Nevertheless, the Senate Economics References Committee 1998 report
into the garment outworking industry noted that the Government was
undertaking necessary consultations before determining whether
Convention 177 should be ratified by Australia.(25) The
Federal Clothing Trades Award 1999 has application to
Victorian textile outworkers (see Part 9) but not in respect of
Schedule 1A workers.
Item 4 proposes that the above
provisions will come into effect after their commencement
irrespective of whether a contract for service has been entered
into before (or after) that commencement.
Discussion of improving minimum employment
conditions and of extending the Commonwealth award system to
Victorian Schedule 1A workers reflects the change of the balance of
power in Australia's Federation brought about the elections of ALP
governments in Victoria, Queensland and Western Australia over the
past eighteen months.
Upper Houses in Victoria and Western Australia
have restrained the respective Government's industrial agendas. In
the case of Victoria, the legislative referral of powers in 1996
now reveals the Commonwealth's control over the pace of regulatory
reform over the Victorian employment system. The Victorian
Government is disappointed with the concessions offered in this
Bill as it believes it continues the inferior treatment of
Schedule 1A workers in Victoria and prefers Commonwealth awards to
be common rule awards across Victoria (thereby displacing any
reference to Schedule 1A workers), as noted by Minister Gould:
Legislation introduced today (9/8/2001) by the
Howard Government would entrench the blatant discrimination against
Victoria's lowest paid workers ... the amendments were totally
inadequate and failed to provide a fair deal for Victoria's low
paid workers ...
Today's proposal could give them another couple
(minimum standards) - but this still leaves them way behind every
other worker in the country and provides no regulation at all for
hours of work ...
Providing for federal awards to have common
application throughout Victoria would ensure that the State's
250,000 vulnerable workers, not currently covered by federal
awards, would have the same rights as those enjoyed by workers in
all others states and territories.(26)
Premier Bracks has proposed to re-introduce the
Fair Employment Bill following its failure to pass the Victorian
Parliament in April 2001. The Victorian Government is reluctant to
withdraw from the 1996 referral arrangement without being able to
put in place an alternative legislative system.
The Victorian Trades Hall Council is also
critical of this Bill.(27) Nevertheless, this Bill
improves the minimum entitlements and protections available to
Schedule 1A workers in Victoria. In many respects the need for a
Bill such as this, highlights the limits of employer/employee
agreements acting as a full and systematic substitute for awards
and agreements determined under the auspices of principles
developed and enforced under Commonwealth industrial law.
Other key players have favourably reviewed this
Bill, as noted in comments of Senator Murray from the Australian
Democrats:
... any improvement to the current level of
inadequate protection of Victorian workers on employee entitlements
should be welcomed and the Democrats will certainly be considering
this bill very favourably.(28)
The matter of divergent minimum employment
standards was recently alluded to by AIRC President Guidice in an
address to the Bar Association of Queensland Industrial and
Employment Law Conference, where he said:
There is an important related issue concerning
minimum standards - referred to in Federal industrial legislation
as the award safety net. A great deal has been done in the last 20
years or so to coordinate many basic entitlements through the State
and federal industrial award systems. But there are still
differences in the nature and level of entitlements. Where those
differences have no rational basis but are accidents of industrial
or political history they advantage some citizens and disadvantage
others. This too is a lack of equality and it undermines our
society in a significant way.(29)
In this light, the extension of a few key
Commonwealth industry awards to Victorian Schedule 1A workers as
common rule awards would be a more sure-footed way of resolving the
'lack of equality'. For example in the case of the textile industry
and Victorian outworkers, the Federal Clothing Trades Award
1999 could be used as a suitable instrument. It was the
subject of an award simplification process in the Australian
Industrial Relations Commission and retains its special application
to outworkers following award simplification.(30) Note
however that such an option is specifically excluded by the
Victorian referral legislation.(31)
Nevertheless, the Bill improves the position of
most Schedule 1A employees. As well, providing a statutory right to
the Victorian Government of intervention in major Victorian
enterprise bargaining disputes before the AIRC is a right not
provided to other States.
-
- ABS Wage and Salary Earners, (Catalogue No. 6248.0).
- ABS, Award Coverage Survey 1990, (Catalogue No.
6315.0).
- Industrial Relations Amendment Act (No.2) 1992
amending s.111 of the Industrial Relations Act 1988.
- 'Vic IR system nears end, warns solicitor', The Australian
Financial Review, 10 March 1994.
- The Hon Monica Gould, 'Bracks Government seeks Industrial
Relations Reforms', Media Release, 28 February 2000.
- Independent Report of the Victorian Industrial Relations
Taskforce, (August 2000) p. 8
http://www.vic.gov.au/irtaskforce
(23/08/01)
- AIRC Print PR 907793 16/8/01 and WorkplaceInfo
17/8/2001 at:
http://www.workplaceinfo.com.au/alert/2001/01186.htm
(23/08/01)
- Independent Report of the Victorian Industrial Relations
Taskforce, (August 2000) p. 31.
- Cited in endnote 6.
- 'Kennett to scrap IR system', The Australian Financial
Review, 12 June 1996.
- Bills Digest 66 1996-97 at: http://www.aph.gov.au/library/pubs/bd/1996-97/97bd066.htm
- 'Victoria leads way on IR reform', The Australian Financial
Review, 12 November 1996.
- Senate Employment, Workplace Relations, Small Business and
Education Legislation Committee, Consideration of the
Provisions of the Workplace Relations Legislation Amendment (More
Jobs Better Pay) Bill 1999, November 1999
- Ibid, pp. 364-367.
- These Bills are listed under Legislation in the DEWRSB website
http://www.dewrsb.gov.au/workplaceRelations/legislation/default.asp.
- The Hon. Peter Reith MP, transcript of doorstop interview, 3
February 2000.
- The Hon. Monica Gould, 'Bracks Government seeks Industrial
Relations Reforms', Media Release, 28 February 2000.
- Ibid.
- 'Why the system is not up to the job', The Age, 9
February 2000.
- The Hon. Peter Reith, 'Bracks and Yallourn - six myths
exposed', Media Release, 13 February 2000.
- Ibid.
- The Hon Monica Gould, 'Gould establishes IR Taskforce'
Media Release, 12 April 2000.
- The plan to amend the Workplace Relations Act in respect of
Victorian workers was revelaed in March 2001: see 'Abbott to amend
workplace laws for Victorians', The Age, 15 March 2001
- Premier Steve Bracks, 'Howard Government must provide genuine
IR system for all', Media Release, 5 April 2001.
- Senate Economic References Committee, Review of the Inquiry
into Outworkers in the Garment Industry, July 1998, p. 12.
- The Hon. Monica Gould, 'Howard Government continues to deny
fair go for Victoria's low paid workers', Media Release, 9
August 2001.
- 'Abbot's dirty deal is destined to backfire', The Age,
19 March 2001.
- Senator Andrew Murray, Press Release, 13 March 2001
- AIRC, 20 April 2001 at
http://www.airc.gov.au/research/speeches/speeches/Giudice0401.htm
- AIRC, Print R 2749, 12 March 1999.
- Section 5(1) of the Commonwealth Powers
(Industrial Relations) Act 1996 (Vic).
Table of Minimum Standards proposed in
the Victorian Fair Employment Bill compared with the Workplace
Relations Amendment (Minimum Entitlements for Victorian Workers)
Bill 2001
Fair Employment Bill> |
Commonwealth Proposals and Schedule
1A> |
Up to 5 days paid carers leave, to be taken out
of existing sick leave
|
Up to 5 days paid carers leave to be taken out
of existing sick leave
|
Up to 8 days sick leave
|
Up to 8 days sick leave
|
Up to 2 days bereavement leave
|
Up to 2 days bereavement leave
|
Unpaid bereavement leave for long term
casuals
|
No provision
|
Long service leave available for long term
casual employees
|
Long Service Leave is in the Long Service
Leave Act 1992 (Vic) The Act is silent in respect of casual
employees
|
Parental leave available for long term casual
employees
|
No provision
|
Employees to be paid for hours worked beyond 38
hours per week
|
Legislate for payment for hours beyond 38 per
week
|
Employees entitled to minimum 30-minute break
every 5 hours, and 10 minutes after 4 hours.
|
No provision
|
Fair Employment Tribunal may tailor industry
order to provide penalty payments for work performed in excess of
38 hours per week, or outside ordinary hours, or on weekends
|
AIRC still prevented from determining penalty
rates or overtime rates
|
Employees who work on public holidays are
entitled to payment for that day, had they worked on that day if
not for the fact it was a public holiday.
|
No provision for payment for public holidays
|
If an employee works on a public holiday, they
are entitled to any additional rate determined in an industry
order
|
No provision for penalty payments for public
holidays
|
A Full Bench of the Tribunal may review minimum
conditions, and vary, substitute, or add conditions.
|
No provision
|
Tribunal may determine industry sector orders,
and tailor them for each sector
|
No provision
|
Principle of equal remuneration for work of
equal or comparative value
|
No provision
|
Tribunal may add or vary industry sectors to
suit the needs of the parties
|
Industry sectors remain fixed
|
Principal contractors to be made liable, in
certain circumstances, for payment of subcontractors
|
No provision
|
Provisions guaranteeing continuity of service
and employment
|
No provisions
|
Outworkers deemed to be employees
|
No provision. Textile industry outworkers to be
entitled to minimum rates of pay only, and still treated as
contractors
|
Establishment of a low cost, properly resourced
tribunal, allowing easy access to employers and employees so that
grievances may be resolved
|
With the exception of unfair dismissal hearings,
AIRC still irrelevant for Schedule 1A employers and employees
|
Fair Employment Tribunal to mediate disputes
|
AIRC still no power to do this
|
Tribunal to hear claims for repayment of
entitlements up to $20,000 for employees and independent
contractors
|
Only available forum is Magistrates Court
|
Re-establishment of Victorian Wageline
|
Continue to rely on federal Wageline.
Under-resourced, and many complaints from users about long waiting
times. Complaints, from employers and employees, relating to
accuracy of information and advice.
|
Information Service Officers to assist employers
and employees, and help enforce the legislation
|
Promise that federal inspectors will now be able
to enter Schedule 1A workplaces, inspect records, and enforce Act.
Also new service for outworkers. But no commitment to increased
resources. Current inspectorate under-resourced. No real service
outside metropolitan Melbourne, with only Bendigo and Geelong
offices still open
|
Limited right of entry for authorised union
officials, in exactly same terms as Workplace Relations Act
|
No provision for union officials to enter
Schedule 1A workplaces
|
Tribunal has power to review unfair contracts
for security guards, owner-drivers, cleaners and child care
workers
|
No provision
|
Tribunal may, subject to certain tests being
satisfied, declare certain classes of persons to be employees
|
No provision
|
|
Victorian Government to be granted limited right
to intervene in certain matters only before the AIRC
|
Time and wage records to be kept
|
Time and wage records to be kept
|
(Source: IR Update Newsletter,
http://www.business.channel.vic.gov.au/bc/irnews/irnews.nsf)
Steve O'Neill
28 August 2001
Bills Digest Service
Information and Research Services
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(IRS). Advice on legislation or legal policy issues contained in
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ISSN 1328-8091
© Commonwealth of Australia 2000
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