Chapter 9 - Schedule 8 - Certified agreements, Schedule 9 - Australian workplace agreements
9.1
This chapter deals with amendments proposed in
regard to certified agreement provisions, Australian Workplace Agreements
(AWAs) and relevant and designated awards. Schedule 8 of the Bill streamlines
the requirements for certification of agreements; simplifies processes for
making and approving AWAs; and effects a number of technical changes in
relation to agreements. The changes are intended to facilitate the spread of
agreement making and provide greater encouragement to employers and employees
to decide the working arrangements which best suit them.
Schedule 8 – Outline of proposed amendments
9.2
This Schedule proposes amendments principally
directed at streamlining the requirements for certification of agreements,
including:
- providing for applications for certification of 'Division 2'
agreements to be made to the Workplace Relations Registrar, without the need
for scrutiny by the Commission;
- providing that applications for certification considered by the
Commission need not involve hearings unless necessary in the circumstances;
- clarifying the right to be heard;
- removing the restriction on the certification of an agreement for
part of a single business;
- clarifying the obligations of employers in relation to providing
employees with 14 days notice in respect of agreements
- providing a mechanism for ‘switching’ from the section 170LJ
stream of agreement-making (agreements with employee organisations) to the
section 170LK stream (agreements with employees) in certain circumstances;
- removing the capacity of employee organisations to prevent the
variation or extension of section 170LK agreements (while retaining a
representation role for organisations, where requested by a member); and
- prohibiting anti-AWA provisions.[1]
9.3
This report does not address the minor technical
and consequential amendments also made by this schedule of the Bill.
Evidence
9.4
The Committee received evidence in respect of
some, but not all, the changes effected by this schedule. This report focuses
on the main aspects.
Certification of agreements by the Registrar, and by the Commission without
hearings
9.5
The Department gave evidence that:
The ‘fast track’ approach to certification (by the Registrar) is
a more targeted approach, and ensures that only those agreements which need to
be tested will be tested by the Commission, on an exceptions basis...[2]
The requirement for parties to attend AIRC hearings for
agreements to be certified has been identified as a major concern for parties
to agreements and their organisations. The requirement to attend hearings
(which are often very brief and straight forward) requires parties to wait for
their application to be listed for hearing and then take time away from their
workplaces to participate in hearings...where the applications could be dealt
with expeditiously and with minimal cost on the basis of written applications
only...[3]
9.6
In supporting these amendments, some employer
organisations put to the Committee their concerns about what they see as
unnecessary formalities surrounding certified agreements. The Australian
Chamber of Commerce and Industry submission referred to a case study, in which
an agreement was negotiated with staff and included consultation with the
relevant union, within about five months, but was followed by a formal
certification process which proved to be more onerous and frustrating than
negotiating the agreement itself. This culminated in a 10-minute hearing
before the Commission, which was best regarded as a formality.[4]
9.7
Australian Business told the Committee of its
view that the majority of applications for certified agreements were ‘job
lots’, and in the vast majority of these proceedings the Commission did not
require any submission of substance from the parties. In most cases the
Commission formed its view on the basis of the agreement and a statutory
declaration.[5]
Australian Business stated as follows:
In the case of agreements which clearly pass on the paperwork,
the requirement for formalised hearings seems onerous, both on the Commission’s
time, since the Commission has already come to the view that it is able to
certify the agreement without the hearing, and also the time of the parties to
the agreement, not all of whom are in capital cities. We are supportive of all
these amendments because, in fact, it is not inconsistent with what is
happening now and is clearly a saving of time and resources on all parties,
including the Commission.[6]
9.8
On the other hand, some unions opposed these
amendments. For example, the Shop, Distributive and Allied Employees’
Association put to the Committee its view that:
...the whole purpose of a public hearing is to ensure that the
body charged with approval of the certified agreement or AWA has acted
properly. It would, in our submission, be a retrograde step to remove from the
Commission, or the Workplace Relations Registrar, the obligation to have public
hearings for each and every agreement which is to be certified.[7]
9.9
The Community and Public Sector Union referred
to the importance of public hearings to ensure what appears on paper is
genuine. They state in their submission that:
There have been many cases of agreements coming before the
Commission for certification where employer declarations and submissions,
particularly in relation to the no-disadvantage test and process requirements,
have been found to be superficial or misleading. These deficiencies are
exposed only through the submissions of union parties or inquiries by the
Commission itself in a public hearing.[8]
Switching from s170LJ stream to s170LK stream, and extension, variation and
termination of agreements made under s170LK
Switching between section 170LJ
agreements and section 170LK agreements
9.10
Proposed section 170LVA allows the Commission to
certify an agreement purportedly made under section 170LJ (ie. an agreement
negotiated with one or more unions) as an agreement made under section 170LK
(ie. an agreement made directly with employees) if a valid majority of
employees who would be covered by the agreement have approved the agreement, in
circumstances where one of the unions which negotiated the agreement later
claims that it did not validly execute the agreement.
9.11
In support of the amendment, the Department submitted:
This amendment will address concerns raised by employer
organisations about situations in which unions have purported to make
agreements under section 170LJ...and the union subsequently claims, for
example, that the person purporting to enter into the agreement was not
authorised to do so. In these circumstances, an employer is currently obliged
to repeat the entire agreement making process in order to make an agreement in
the same terms directly with employees under section 170LK.[9]
9.12
Some employer groups provided evidence about
cases where senior officials of particular unions had refused to sign off
agreements made by other union officers because they did not comply with union
‘policy’.[10]
9.13
The Australian Chamber of Commerce and Industry
provided the example of the refusal of the Australian Manufacturing Workers’
Union to sign off an agreement negotiated by another union (the Australian
Workers’ Union) under section 170LJ at Crown Scientific and Pharmaglass Pty
Ltd. The AMWU had only 4 members at the workplace, but refused to sign the
agreement because it did not contain the common expiry date for the AMWU’s
‘Campaign 2000’.[11]
9.14
There was little evidence from other witnesses
about the proposed amendment.
Extending, varying and terminating
section 170LK agreements
9.15
Under the current provisions of the WR Act,
unions can become bound by an agreement made directly between an employer and
employees under section 170LK. This often occurs where unions have some members
at a workplace covered by a section 170LK agreement.
9.16
In circumstances where a union is bound by such an
agreement, the union currently has the right to veto any proposed changes to
the agreement. The Bill amends the provisions of the WR Act to remove the
capacity of unions to prevent the variation, extension, or termination of
section 170LK agreements, while still retaining a role for such organisations,
where requested by a member, to represent the interests of employees.[12] The Department submitted that:
The existing provisions are inconsistent with the
agreement-making framework established by the WR Act because they have the
potential to undermine the capacity of employers and a majority of
employees...to give effect to agreed decisions on matters relating to their
working arrangements.[13]
9.17
Some employers supported the proposed
amendments:
It is inappropriate for an employee organisation that may be
representing only a minority of employees (indeed, only one employee) to have a
right of veto over the extension or variation or termination of a certified
agreement or the right to apply for termination of a certified agreement.[14]
9.18
Unions generally opposed the proposed
amendments:
This reform proposal is designed to further circumscribe unions’
democratic rights to properly represent the interests of their members. Not
only is this proposal contrary to principles of natural justice, but it runs
counter to the continuous nature of collective bargaining which must be able to
adapt to changing circumstances.[15]
Prohibition of anti-AWA provisions in certified agreements
9.19
The Bill will prohibit the certification of
agreements which purport to restrict the use of AWAs. The Department stated to
the Committee that:
The capacity of collective agreements to restrict or prevent
individual agreements represents a curtailment of the freedom of individual
agreement making, and tends to put the collective rights of a majority ahead of
individual rights...[16]
9.20
The Business Council of Australia supported this
view in its submission, stating that:
[An Anti-AWA provision] in effect imposes the collective (or
majority) will of employees over those of the individual – even if the
individual and his/her employer are in agreement. This seems inappropriate in
these circumstances where the legislation has specifically provided for
individual arrangements.[17]
9.21
In supporting the amendments, the Australian
Industry Group put to the Committee that:
If a collective agreement is on foot and applies to the
workplace, why cannot the employer have the opportunity to offer individual
contracts to people in the workforce? At the moment in union shops that is not
open to you. In most cases unions will prevent AWAs being made by forcing the
employer to make an agreement in their collective certified agreement that AWAs
will not be made for the life of the agreement. The employer is therefor
hamstrung for the life of that agreement. If they want to choose a group of
employees or one employee in respect of whom they wish to make an AWA – it
cannot be done.[18]
9.22
Some union groups stated their opposition to the
amendment. The Australian Liquor, Hospitality and Miscellaneous Workers Union
told the Committee that:
It is not unusual for collectively bargained agreements to
contain a non-AWA provision. This merely reflects the choice of the employees
and their employer to enter into collective agreements. ...The proposed amendment
is, in effect, saying that people are not free to make this choice...indeed...it is
a choice that is not legal.[19]
9.23
The Newcastle Trades Hall Council argued that
the provision did not allow employers and employees to determine what the most
appropriate agreement should be. They stated that:
This reform is dictating the contents of agreements and is thus
contrary to the WR Act.[20]
Schedule 9 – Outline of proposed amendments
9.24
In summary, these amendments make AWAs more
widely accessible, easier to make, and provide scope for greater flexibility to
encourage working arrangements which better suit the needs of business and
employees. The major amendments include removing the current requirement that
an employer provide an employee with a copy of an AWA at least 5 days (or in
some cases 14 days) before signing it; permitting AWAs to take effect from the
day of signing; removing the requirement that identical AWAs be offered to
comparable employees; introducing modified ‘no disadvantage test’ procedures
for AWAs with employees whose remuneration is more than $68 000; removing
requirement that Employment Advocate refer AWAs to the Commission where there
is concern that the AWA does not pass the ‘no disadvantage test’; removing the
current ability to take protected industrial action in support of a claim for
an AWA; allowing an AWA to prevail over a certified agreement; and giving the
Employment Advocate power to take legal action against employers who breach
AWAs.
Evidence
Filing and approval of AWAs
9.25
The Bill removes the requirement that an
employer provide an employee with a copy of an AWA at least 5 days (or in some
cases 14 days) before signing it, and permits AWAs to take effect from the day
of signing. The Department’s submission stated:
The proposal to permit parties to an AWA to agree that it should
take effect from the day of signing allows employers and employees to give
immediate effect to, and benefit from wages, conditions and working
arrangements to which they have agreed. It also enables the Employment
Advocate to dispense with the time consuming and resource intensive task of
issuing filing receipts.[21]
9.26
In supporting these amendments, some employer
groups suggested that the current provisions in these regards are a
disincentive to adopt AWAs, especially in the recruitment of new staff. The
Australian Chamber of Commerce and Industry referred in its submission to:
A recent (and not isolated) case where a manager recruited 23
staff with the intention of offering them AWAs...the recruits had already commenced
when the offer of an AWA was made. They had to be employed under Award
conditions for several weeks until the offer was made and fourteen days had
elapsed. Both the manager and the recruits found this situation convoluted and
absurd.[22]
9.27
The SDA was one of the unions which criticised
these amendments suggesting that:
...the Government's approach is to put the 'cart before the
horse', namely to provide that an AWA will become legally operative from the
date it is signed or from the date the employment commences, even though that
AWA has not been sighted or approved by the Employment Advocate.[23]
9.28
In relation to the repeal of provisions
requiring employees to receive a proposed AWA 5 or 14 days prior to signing it,
the Community and Public Sector Union state that:
Substituting a cooling-off period will be to the detriment of
the employee interest, as it will allow an employer to press for an immediate
signature. Employees will always be put in a more difficult position if they
have to withdraw from an agreement they have previously accepted.[24]
AWAs for comparable employees
9.29
The Bill will removing the requirement that
identical AWAs be offered to comparable employees. The Department put to the
Committee that:
The obligations imposed by the current provision can be
confusing for employers (for example, many employers are unaware that
individual performance may be taken into account in determining what conditions
should be offered) and can limit the scope for flexibility in tailoring AWAs to
the particular circumstances of both employees and employers (for example,
improved balance between work and family commitments).[25]
9.30
The ACCI put its support for this amendment as
follows:
In one line of business fifteen comparable staff were offered
AWAs. ...Eleven wanted to tailor the contract to align with their personal
requirements. They rejected the AWA because it did not have this flexibility.
One staff member complained ‘these are not individual contracts. People who
have asked for minor alterations have been told it cannot be changed. It is a
sham. ...’[26]
9.31
Some witnesses opposed this amendment, on the
basis that it may allow employers to provide different pay and conditions to
employees performing the same job. For example, the National Union of Workers
stated in their submission that:
Employers will be free to discriminate between employees and
will be free to progressively bid down wages and conditions through the
selective application of AWAs to individual employees.[27]
AWAs for high income earners
The Bill introduces modified ‘no disadvantage
test’ procedures for AWAs with employees whose remuneration is more than $68
000; and removes the requirement that the Employment Advocate refer AWAs to the
Commission where there is concern that the AWA does not pass the ‘no disadvantage
test’. The Department submitted to the Committee that:
The current requirement that the Employment Advocate refer an
AWA to the Commission where there is concern about whether the AWA passes the
no disadvantage test adds an unnecessary layer to the approval process, places
additional resource demands on both the Commission and the parties to the AWA,
and delays commencement of AWAs...According to statistics provided by the Office
of the Employment Advocate in the period 20 April 1998 to 31 July 1999 only...1.8
per cent of all AWAs processed during this period...were referred to the AIRC.
Of the 972 AWAs which have been dealt with by the AIRC...only 106 AWAs were
refused approval. However, from the time an AWA was referred to the AIRC to
when the EA was notified of the result, has been’ on average 151 calendar days.[28]
9.32
The Australian Council of Trade Unions did not
support the amendment and stated that:
...it is important that the EA be required to refer cases where
there is concern about whether the no-disadvantage test has been complied
with...to the Commission. A number of such cases have been referred to the
Commission, which has produced reasons for decisions which are important in
maintaining at least a little confidence in the integrity of the system.
9.33
The Australian Manufacturing Workers Union
opposed the amendment relating to the application of the no-disadvantage test
for higher income earners. They put to the Committee that the no-disadvantage
test should not be waived for AWAs with remuneration greater than $68,000
because it could not be assumed that these workers were any more informed about
their award entitlements or that they are in a stronger bargaining position.[29] However, the Committee notes
that an employee in these circumstances is able to request that the Employment
Advocate assess the AWA for the purposes of the no-disadvantage test.
AWAs and protected industrial action
9.34
The Bill removes the current ability to take
protected industrial action in support of a claim for an AWA. The Committee
notes the following comments made in the Department’s submission:
The Implementation Discussion Paper...foreshadowed that provisions
enabling protected action to be taken in the negotiation of AWAs would be
repealed as they are not relevant to the negotiation of individual, as distinct
from, collective, agreements...the AWA industrial action provisions only appear
to have been used in very rare circumstances...[30]
9.35
Some employer groups stated their support for
this amendment. For example, the Australian Industry Group said:
AI Group strongly supports AWAs as an important agreement making
option for employers and employees and in the light of the experience of the
use of AWAs, believes the amendments which are proposed are necessary and
appropriate.[31]
9.36
Some other witnesses opposed the amendment. For
example, the Australian Catholic Commission for Employment Relations stated:
While it is acknowledged that it might be an unusual occurrence
for an individual employee to take protected industrial action, nevertheless
this could arise in some circumstances. This provision also creates an
inconsistency in the legislation as protected industrial action is allowed
during the bargaining of a certified agreement.[32]
Allowing an AWA to prevail over a certified agreement
9.37
The Department put to the Committee that:
Overall, the amendments free up the interaction between AWAs and
certified agreements so that the workplace relations system provides parties
with effective choice about the regulation of terms and conditions of
employment in ways that suit their particular circumstances. Under the
existing provisions, these options have been limited. Flexibility to use AWAs
during the life of certified agreements can assist, for example, where market
rates for particular groups or specialists move erratically and an employer
wishes to use AWAs to retain such staff. Where a certified agreement is in
place, employers and employees should not be precluded form further negotiation
of terms and conditions of employment.[33]
9.38
The Shop, Distributive and Allied Employees’
Association linked this amendment with the amendment prohibiting certified
agreements from containing anti-AWA clauses and said:
...not only can an employer, during the life of a validly
operating collective agreement enter into AWA's, but...each AWA which comes into
existence after and during the life of a certified agreement will prevail over
the contents of the certified agreement.
In other words, AWA's are given absolute paramountcy over
collective agreements...
...This...is nothing more or less than a total attack on the whole
concept of collective agreement making.[34]
9.39
The New South Wales Minerals Council in support
of the amendment stated:
...the ability of Australian Workplace Agreements to operate over
Certified Agreements to the extent of any inconsistency is important in order
to give affect to individual requirements in the workplace and to prevent
persons taking the best from both types of agreements.[35]
Enforcement powers of the Employment Advocate
9.40
Amendments contained in the Bill will give the
Employment Advocate the power to take legal action against employers who breach
AWAs. In supporting these amendments, the Employment Advocate said:
...it would be better for the
Employment Advocate to have the power to actually take legal action in its own
right for breaches of part VID and...breaches of AWAs and...seek recovery of any
shortfall that occurred, rather than having to rely on the party doing it themselves...[A]t the end of the day it should be the primary
responsibility of the parties to protect their rights. I think practical
experience shows that really it is important to have a body that can assist
employees, particularly, to ensure that their rights are observed.[36]
9.41
A majority of the Committee also believes that providing the Employment Advocate with
enhanced powers to enforce AWAs will improve the operation of the Act and
ensure that employees who cannot afford to take legal action themselves are not
disadvantaged.
Conclusion
9.42
A majority of the Committee supports the
facilitation of agreements at the workplace; removing obstacles to choices
about agreements; reducing the cost and formality involved in having an
agreement approved; and preventing unwarranted interference by third parties in
agreement making. Making legislative requirements as simple and straight
forward as possible will assist employers and employees in taking more direct
responsibility for determining their own employment conditions.
9.43
A majority of the Committee believes that the
Bill achieves these aims, at the same time as maintaining and improving
important protections for employees. In particular, a majority of the
Committee agrees that providing the Employment Advocate with enhanced powers to
enforce AWAs will improve the operation of the Act and ensure that employees
who cannot afford to take legal action themselves are not disadvantaged.
Recommendation
9.44
A majority of the Committee recommends
the enactment of the amendments in Schedules 8 and 9.
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