Chapter 6 - Schedule 4 - Conciliation and Schedule 5 - Mediation
This chapter deals with amendments to the WR Act
relating to the Commission’s powers to conciliate industrial disputes, set out
in Schedule 4 of the Bill, and to recognise mediation as an alternative
mechanism for resolving industrial disputes, set out in Schedule 5 to the Bill.
Outline of proposed amendments
Under the WR Act, the Commission may only deal
with an industrial dispute by arbitration, or settle an industrial dispute by
making an award, if the industrial dispute relates to ‘allowable award
matters’, which are set out in subsection 89A(2) of the Act. There are other limited
situations in which the Commission can exercise arbitral powers, for instance,
in relation to ‘exceptional matters’ under section 120A.
The Commission’s ability to conciliate
industrial disputes is not currently limited in this way. However, Schedule 4
of the Bill amends the Act so that the Commission can only exercise its
compulsory conciliation powers in the same circumstances that it can currently
exercise its arbitral powers. These circumstances include, amongst other
- settlement of disputes about allowable award
matters (item 7 of Schedule 4); and
- settlement of disputes about exceptional matters
(item 8 of Schedule 4).
Schedule 4 also introduces a new Part VA,
conferring new powers on the Commission to voluntarily conciliate other types
of industrial disputes, matters that are at issue between the parties relating
to negotiation of a certified agreements, or issues arising under awards or
This new jurisdiction can only be exercised if
all parties to the dispute agree to conciliation, and to operate on a user-pays
basis, with the Bill proposing a fee of $500 for this service.
The Bill allows the Commission to decide whether
a dispute referred to it can be dealt with by compulsory conciliation, and to
separate parts of a dispute that can only be dealt with by voluntary
A Commissioner who has conciliated an industrial
dispute is also prevented from later arbitrating on the dispute, unless the
parties agree to the same Commissioner arbitrating.
Item 6 of Schedule 5 introduces new provisions
to allow federal industrial disputes to be mediated by independent accredited
workplace relations mediators. The Act does not currently prevent parties to a
dispute from using mediation to resolve the dispute. However, the new
provisions give legislative recognition to mediation as an option, promoting it
as an alternative method of resolving disputes.
The Bill allows for the appointment of a
Mediation Adviser, with the functions of overseeing the approval of mediation
agencies, promoting the use of mediation, approving mediation agencies to
assess and accredit mediators, and determining competency standards for
accredited workplace relations mediators.
Compulsory and voluntary conciliation
The Department submitted that the proposed
amendments to limit compulsory conciliation and introduce a new voluntary
...are consistent with the policy of encouraging employers and
employees to take greater responsibility for their own workplace relations.
They will also help ensure that voluntary mediation becomes an effective option
as an alternative to the Commission’s voluntary conciliation role...The proposed
changes will not involve a reduction in the role of the Commission, as the
Commission will retain its ability to conciliate in relation to all matters
where it currently exercises conciliation powers. However, it is proposed to
introduce a requirement for the parties to consent to the exercise of this
jurisdiction in relation to non-allowable matters.
The Australian Chamber of Commerce and Industry
and the Business Council of Australia, supported the amendments:
It is difficult to justify compulsory conciliation over a matter
which is not allowable, and which either has been or will be removed from
awards, and which cannot be arbitrated. Voluntary conciliation over
non-allowable matters is a logical consequence of the original decision to
restrict awards to allowable award matters, and it appears that this issue was
simply overlooked in the initial development of the Bill.
This part of the Bill is not about restricting the Commission’s
real teeth – because it is not about limiting its powers of arbitration.
Currently, where the Commission does not have powers of arbitration the parties
are resolving industrial disputes (often with the assistance of the Commission
when a dispute arises) without an imposed solution, although the means may be
recommended. Therefore the amendments will ensure that this process occurs in
an environment where the parties have a greater say in the process for
achieving their resolution, rather than having no choice other than to accept
the compulsory conciliation process of the Commission.
The establishment of the distinction between ‘voluntary’ and
‘compulsory’ conciliation is simply recognition that the Commission now has
limits on its arbitral powers and consequently also should have limits on its
capacity to compel parties to participate in processes against their will over
subject matters that the Commission has now power to arbitrate on.
Mr Des Moore, the
Director of the Institute for Private Enterprise, also supported reducing the
extent of the Commission’s powers to compulsorily conciliate industrial
I ask that the Committee
consider this Bill against the urgent need for Australia to reduce labour
market regulation to a minimum and, in particular, to change the existing role
of the AIRC to that of a voluntary
adviser and mediator providing service to both employers and employees, with
those on low incomes being eligible for subsidised or free access.
There was, however, opposition to the proposed
limits on compulsory conciliation from unions and employee associations, academics, lawyers, community groups and some employers, who
thought the current system of compulsory conciliation was operating effectively
and did not need to be changed.
Other witnesses submitted that the system of
compulsory conciliation was an established and proven method of settling
industrial disputes, and that there should be clear evidence put forward to
justify any proposals to restrict the Commission’s powers to intervene:
I regard public and prompt conciliation to be a right of
Australian citizens at work, as it bolsters the fairness compact. Without
compelling evidence showing the failure of Commission conciliation, it is my
view that it should not be watered down by a fee for service which is utilised
only to push voluntary conciliation into the private domain and out of the
Professor Isaac, a former Commissioner, claimed
that most conciliation undertaken by the Commission has not been on a
compulsory basis, and submitted:
The Commission has generally exercised this power with
discretion and sensibility on the timing of its intervention and the handling
of the conciliation process.
Other submissions and witnesses provided
examples of situations where the Commission had exercised its conciliation
functions over disputes about non-allowable matters with beneficial outcomes,
disputes that would not, in their opinion, have been resolved without
Parties who objected to the amendments in
Schedule 4 were primarily concerned about the inability of the Commission to
intervene to resolve a dispute where one party to the dispute has significantly
less bargaining power than the other. It was submitted that in these cases, the
party with greater bargaining power would simply refuse to agree to
The maintenance of a strong
and independent industrial tribunal is seen as essential to ensure that the
principles of fairness, equity and justice are maintained for employers and
employees alike, and to ensure the protection of vulnerable parties. The ACCER
suggests that the Bill would narrow the ability of the commission to carry out
this role by allowing compulsory conciliation on arbitral matters only (and)
introducing voluntary conciliation for other matters on a fee-for-service
The Committee was provided with one example of a
group of employers who oppose the proposed amendments because of the industrial
strength of their employees:
The position of contractors on building sites makes them
commercially vulnerable to industrial action. Almost universally notification
of industrial disputes to the Commission is made by an employer or employer
organisations in an attempt to enlist the aid of an independent third party to
bring pressure to bear on the CFMEU to cease industrial action, constructively
negotiate etc. There are a range of issues which are likely to fall outside of
matters where the Commission can compulsorily conciliate. ...Voluntary
conciliation requires the agreement of both parties. It would be our expectation
that the CFMEU would not generally agree to voluntary conciliation as it has
the knowledge that it is able to exert considerable commercial pressure on
subcontractors through the pursuit of industrial action...
It was stated to the Committee that there were
many employers and employees who would behave responsibly under the proposed
system of voluntary conciliation, but some witnesses were concerned that it is
not these employers and employees who generally become involved in protracted
Reference was made
during the public hearings to the successful use of voluntary conciliation and
mediation in the United Kingdom to resolve disputes. The
Advisory Conciliation and Mediation Service (ACAS) was established in the late
1970s in Britain, and provides voluntary conciliation, arbitration and
mediation services to employers and employees: ACAS
conciliators have no power to impose, or even recommend, settlements. ACAS has also evolved to provide
assistance to employers and employees to construct workplace cultures which
prevent disputes from occurring in the first place and following a ‘rational approach’, perceived to be based upon ‘jointness’.
These amendments have attracted some criticism
that they are intended to reduce the powers and functions of the Commission.
The Committee does not agree with this assertion, and considers that the
Commission remains an integral part of Australian industrial institutional
arrangements. The Committee emphasises that its support for these amendments is
not in any way to be taken as a reflection on the professionalism of the
Commission and its Commissioners.
The Committee considers that most of the
evidence opposing these amendments demonstrates why the amendments are
necessary: many participants in Australia’s industrial system continue to take
the view that they are locked into an adversarial process where the focus is
not on reaching mutually acceptable outcomes, but arguing before the Commission
why one party is right and the other wrong. For this reason, the Committee
considers that it is necessary to limit access to the ‘safety blanket’ of
That the amendments proposed in Schedule 4 to
limit compulsory conciliation to matters where the Commission could later
arbitrate, and to allow the Commission to conciliate on a voluntary basis in
other circumstances, and associated amendments, be enacted.
Fees for voluntary conciliation
The Bill requires that the Commission charge
$500 for parties to use its new voluntary conciliation services. The Department
submitted that it would be necessary to charge a fee for the Commission’s
voluntary conciliation services to:
...encourage employers and employees to resolve minor disputes
directly in the workplace...encourage employers and employees to consider more
fully whether conciliation provided by the Commission, or private mediation is
best suited to their needs and the particular circumstances of the dispute
[and] remove the current disincentive to using alternative dispute resolution
services which may be more appropriate, but for which fees are payable..
Some witnesses were opposed to the introduction
of fees on the basis that this would disadvantage those on low incomes.
However, it should be noted that item 54 of Schedule 4 introduces a provision
to allow the Commission to waive all or part of this fee where the Commission
is satisfied that charging the fee would cause a person hardship. Other witnesses opposed the
amendments, as they would tend to discourage the use of relatively flexible and
non-legalistic conciliation procedures to resolve disputes.
A majority of the Committee believes that there
is merit in the proposal to create a ‘level playing field’ to allow private
sector firms to compete in the dispute resolution market.
That the amendments in Schedule 4 regarding the
new voluntary conciliation powers of the Commission be enacted.
There is a difference between ‘conciliation’ and
‘mediation’. The Committee received evidence about the technical difference:
In the terms of the AIRC,
you will have a commissioner who is conciliating who will frequently express
the point of view during the process. A mediator will attempt to get the
parties to look at all the opportunities and do some lateral thinking. They
will talk to the parties one on one privately and get to know what they are
thinking. A conciliator does the same thing, but a conciliator will express
views during the process, and will say, ‘This is a point of view in the legislation.
Have you looked at that?’ It is really a situation of mediation with a little
more involvement. But having said that, the Americans tend to use the words
‘conciliation’ and ‘mediation’ as meaning exactly the same thing.
It was generally accepted that the introduction
of legislative provisions to recognise private mediation as an alternative to
Commission conciliation procedures would be a positive step. There was some
opposition to the amendments contained in Schedule 5, but this opposition was
generally associated with the perception that the mediation provisions were
part of a ‘package’ of amendments to reduce the Commission’s powers and
standing, rather than opposition to the principle of mediation:
We see mediation as being
appropriate in matters to do with equal opportunity and harassment. The problem
with mediation for us is that people have to agree, they have to abide by the
outcome. We believe that the existing disputes resolutions procedures, when
helped by the independent umpire, provide the most commonsense resolution. Some
of the debate about mediation is really about the privatisation of the
Industrial Relations Commission...We have no objection to mediation in some
areas, but we think in workplace relations and industrial relations the existing
system provides an adequate alternative...It depends on the dispute. With matters
which are easy to resolve, mediation is good, but with matters which are
protracted, that is not so.
Some witnesses indicated that they considered
the amendments in Schedule 5 unnecessary, as parties could already access
private mediation if they chose to do so:
The empirical evidence is
the almost total absence of mediation from our current system. Mediation is
available now and has always been available. It is not used because it does not
work and because it is unnecessary.
the use of mediation as an alternative dispute resolution mechanism, but did
not agree with the proposed model:
...there is merit in
introducing mediation as an alternative means of dispute resolution. The AI
Group proposes, however, that the mediation process should be built into the
existing system, be carried out by accredited members of the commission and be
publicly funded. We strongly favour dispute resolution through conciliation or
mediation rather than through litigation....if
you want to introduce mediation—and there might be some advantages—then it
ought to be on the same basis, without a fee. However, it should not prevent
private providers, if they wish to enter the market, from being there, for
which understandably they would charge a fee.
Some witnesses supported the amendments on the
basis that the provisions would promote mediation as an alternative dispute
A process of rational
analysis, discussion and negotiation can occur in a confidential form without
legal jargon and where mutually agreed resolutions can be achieved. In my view,
mediation provides such a process. The amendments in the Bill encourage the
greater use of mediation whilst ensuring standards and accreditation to
maintain the professionalism of the mediators. Legislation which encourages
mediation will help to change the mind-set of some parties and voluntary
mediation will become more common.
The Committee was
also given evidence that small businesses would be likely to support the
increased use of mediation to resolve industrial disputes:
The optimum is to resolve it
in the workplace without a third party. Between that and going before the
Industrial Relations Commission, I have no doubt that mediation in some form
would be far more acceptable to small firms as it is in so many other
areas—taxation law and trade practices law. There are all sorts of mediation
processes. Small business wants to get the job done and stay on the job. That
has got to be the principal objective. But between that and the industrial
relations process, without question I think mediation is a better option.
A majority of the Committee agrees with measures
to support and extend the use of mediation, a non-adversarial and
non-legalistic means of resolving disputes similar to the conciliation function
exercised by the Commission. It is noted that businesses may prefer to use the
option of private mediation as an alternative to conciliation by the Commission,
which is still perceived by some to be adversarial and formal in its processes.
That the new provisions to formally recognise
mediation as a mechanism for resolving industrial disputes, and to establish a
system of accredited workplace relations mediators be enacted.
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