Chapter 5 - Standing of the office of the employment advocate
It has been our experience with the Employment
Advocate that the office should be renamed the ‘Office of the Employer
Advocate’.
- Ms Linda Carruthers, Australian Rail Tram and Bus Industry Union,
Hansard, Sydney, 22 October 1999, p. 286
Role of the OEA
5.1
The Office of the Employment Advocate (OEA) has
a dual role of administering Australian Workplace Agreements (AWAs) and to
assist in enforcement of the compliance aspects of the Act. The terms of reference
of this inquiry with regard to the OEA require an examination of the powers,
standing and procedures of this body. A great deal of evidence was presented
indicating the manner in which the OEA has undertaken its role since its
inception in 1997.
5.2
The OEA defines its role as;
- providing assistance and advice to employers (especially in small
business) and employees on the Workplace Relations Act 1996,
particularly AWAs and the freedom of association provisions;
- filing and approving AWAs, ensuring that they meet all statutory
requirements;
- handling alleged breaches of AWAs and the AWA and freedom of
association provisions; and
- assisting parties in taking action in relation to alleged
breaches of AWAs and the AWA and freedom of association provisions..[1]
5.3
This inquiry has put the spotlight on the
performance of the Office of Employment Advocate as an impartial facilitator of
fair employment agreements. The title of the office suggests a commitment to
fitting both employers and employees into mutually acceptable employment
arrangements. The OEA has instituted a performance measure that appears to be
statistically based: the number of AWAs approved; number of employers covered;
number of AWAs refused or referred and the time taken to approve them.
5.4
While such measure are obviously important, they
ignore or at least relegate other important tasks and responsibilities, which
by their nature are less measurable in statistical terms, but which go to the
manner in which AWAs operate. As a consequence of the OEAs activities the
measure of success for promotion will be numbers achieved. The submission and
evidence presented by the OEA support this conclusion. Labor Senators conclude
that this dependence on quantifiable measures at the expense of qualitative measures
is indicative of a conflict of interest.
5.5
Dr David Peetz has suggested to the Committee
that there is a clear bias in the way the Employment Advocate operates to
promote and facilitate the use of AWAs as the preferred form of workplace
agreement.[2] Dr Peetz
stated that some organisations use AWAs as a means to deunionising the
workplace, and suggested that it was for this reason that the OEA was created.
While there is a lot of rhetoric about freedom of association,
the reality is that the Employment Advocate was established to implement the
incoming government’s agenda in relation to shifting the balance of power. Two
of the elements in this were promoting individual contracts and prohibiting
compulsory unionism.
In order to prohibit compulsory unionism you have to prohibit
discrimination against employees on the grounds of their being union members as
well as not being union members. ...The great majority, as far as I can tell, of
the Employment Advocate’s activities in relation to freedom of association issues
have been in dealing with people or situations where people do not want to
belong to a union ...There has been disproportionably less of the other side
where people who have been wanting to belong to a union have not been able to,
yet the evidence does suggest that the latter is the biggest problem.[3]
5.6
When questioned about its attitude to complaints
it received, the OEA released figures to show that since its beginnings in
March 1997 it had investigated 397 complaints where the primary issue is
freedom of association. Of those complaints, 60 were complaints made by
employees against employers. Of those complaints, 45 were regarding the right
to be, or not to be, a member of a union. 44.5 per cent of those 45 complaints
were from employees who wanted to join or who were in a union. 55.5 per cent of
those complaints were from employees who were not in or who did not want to
belong to a union.
5.7
No doubt from the Employment Advocate’s
perspective these figures bear out a pleasing trend toward a more compliant workforce,
and one which is more likely to resist unionism than embrace it. There is
another, and more plausible interpretation. In the current climate, when the
pressure to be a non-unionist is particularly strong, the 44.5 per cent of
complaints against employers is a significant proportion. There would be very
few NESB women working in the TCF industry who would have heard of the
Employment Advocate. There would be very few employees in any industry who
would put in a formal complaint against their employer. As was noted above, the
dependence of the Office of the Employment Advocate on quantifiable measures of
performance at the expense of qualitative measures, assisted by some policy
assumptions identified by Dr Peetz, distorts the picture of workplace reform
which the OEA envisages.
5.8
There is ample evidence to justify the claim
that the end of compulsory unionism has had a much less significant impact on
those who are reluctant unionists than those who would prefer to belong to a
union but are denied access. Surveys conducted by the Australian Workplace
Industrial Relations Survey show that while 5 to 8 per cent of all employees
were ‘unwilling conscripts’, up to 24 per cent were ‘unwillingly excluded’.[4] Despite this the OEA does not
identify issues of concern to employees in the situation where they are denied
access to unions, nor investigate employee satisfaction with the AWA system.
Australian Workplace Agreements
5.9
Despite certain claims made by the Employment
Advocate about the benefits of AWAs it is difficult to be persuaded in the
absence of empirical evidence. From the first appearance by the then
Employment Advocate, Alan Rowe, in Budget Estimates the Senate has consistently
requested that the OEA undertake a content analysis of AWAs. After further
requests for some content analysis during the course of this inquiry, the OEA
has provided the Committee with four case studies.
5.10
Unfortunately, these case studies are of little
assistance to the Committee, attempting to ascertain the manner in which AWAs
have been drafted since their inception. With a figure of 73,057 AWAs approved
to September 1999, covering some 1,695 employers, and even allowing for the
‘pattern bargaining’ nature of these documents, a more comprehensive study was
expected.
5.11
There should be no
reason why the Employment Advocate cannot provide more detailed analysis of AWA
content. The argument that the Act requires confidentiality seems a convenient
reason for denying data to the Committee. General information about the
employer and employee who are party to each AWA could be provided by the
Employment Advocate, while ensuring confidentiality for individual identities.
In addition suitably ‘sanitised’ AWAs could be made available for researchers
and the public in order to collect data to assess the impact of these
agreements on women and other vulnerable employees.
5.12
Despite the lack of analysis of AWAs a great
deal of evidence about the affect of AWAs on individuals was made available to
the Committee. The global nature of the no disadvantage test has resulted in
terms and conditions of employment being ‘traded off’ for marginal pay
increases and in some case for no increases at all. Of concern to Labor
Senators is the issue of employees being able to make an informed decisions that
see the permanent removal of conditions of employment for a one off pay
increase. Mr Tim Lee of the Australian Services Union described the situation
as:
... how do you reconcile the loss – permanently, I would argue –
of an entitlement to be recompensed for working extraordinary hours out of the
normal Monday to Friday spread versus a one-off pay increase which is going to
diminish in terms of its relevance over time?[5]
5.13
The comments by Mr Lee raise the important point
about the diminishing relevance of one-off pay increases in an agreement that
may be in place for up to three years and potentially beyond that period if no
action is taken to draft a new agreement. Potentially, an employee may agree
to an AWA that trades off conditions and over time will also see a reduction in
real wages. Without access to more data the long term affects of AWAs on
individuals cannot be quantified. However, the weight of anecdotal evidence
showed that such arrangements were common.
5.14
The issue of vulnerable and disadvantaged
workers is discussed at length in Chapter 7 of this report. With regard
to AWAs the evidence presented by Ms Susan Halliday, the Sex Discrimination
Commissioner, should be noted. Ms Halliday highlighted the fact that while she
is able to intervene with respect to awards and agreements this was not the
case for AWAs[6]. This
means that another check on the exploitation of women workers is effectively
removed.
5.15
Further comments from Ms Halliday indicate that
employers are able to disregard the information produced by the Employment
Advocate, with serious consequences:
Sadly, we see the practical, day to day evidence where an
employer goes in and collects the information from the Employment Advocate,
bins it on the way out, never talks to the employees about their rights and
responsibilities. When you have women in that situation who do not speak the
language, who are not unionised, who cannot access a working women’s centre,
what happens? Where do they go? What do they do? In some of the sadder
cases, to keep their job, they terminate their pregnancy[7].
5.16
Wage outcomes for women is more fully discussed
in the section on workers vulnerable to discrimination, however it should be
noted here that major concerns were raised that women, who were perceived to be
in a weaker bargaining position than men, have not done well under AWAs. This
is particularly the case in part-time and casual employment. Evidence to the
effect was anecdotal. However, the anecdotal evidence was supported by a study
into wage outcomes in Western Australia which demonstrated a distinct, and
growing, wage gender gap under the state individual agreements. The Labor
Senators conclude, on balance, that women are disadvantaged under AWAs.
5.17
The lack of transparency and ability to review
decisions of the Employment Advocate was discussed in the 1996 report.[8] This lack of transparency was seen as a particular problem in a
considerable number of submissions and by many witnesses. The RTBU described
the situation as:
...the Employment Advocate is a law unto himself and that there is
no review of his decisions. We have asked that he give us reasons for his
determinations and he has simply said, ‘I don’t have to’.[9]
5.18
The CEPU expressed their concern as:
It was a bit like the 13th century papacy: we had to
accept what the decision was....[10]
5.19
The situation is particularly well illustrated
in the case studies supplied by the Employment Advocate to the Committee. Case
study 2, D & S Concreting was undertaken by ACIRRT. Mention was made in the
submission that an officer of the OEA alerted the employer that an undertaking
may be required for an employee paid a ‘low concreters allowance’. The case
study reports on the next page that no undertakings were sought. Due to the
lack of transparency it is not possible to ascertain why the Employment
Advocate subsequently approved the AWAs without an undertaking. This would be
a pertinent question given the statement by ACIRRT that only one employee was
better off under the AWA as opposed to the former employment arrangements.[11]
Case Studies
5.20
Throughout the inquiry process, several
disturbing allegations were made concerning an apparently inherent bias in the
manner in which staff of the OEA have undertaken their duties. These
allegations have ranged from a refusal by OEA compliance staff to investigate
alleged Award breaches to the deliberate designation of incorrect Awards for
the purposes of frustrating a fair and equitable administration of the ‘no
disadvantage test’ (NDT).
- The ALHMWU described a case where a 17-year-old employee from
Essentials Pide Bread in Canberra was dismissed within two weeks of joining the
Union. The dismissal was made following threats by the employer to do so.
This case apparently breaches the Freedom of Association provisions of the WR
Act, which the OEA administers.[12]
- The CFMEU advised of the use of illegally recorded material by
the OEA in evidence.[13]
- In the sale of Australian National Rail and the subsequent
contracting by Great Southern Railway Limited of certain services to Serco
Australia Pty Limited, staff from the former ANL were required to sign AWAs as
a condition of employment. Serco requested designation of an award for the
purposes of the NDT and the Employment Advocate determined a South Australian
state motel award. The employees were previously covered by a Federal rail
award that provided for superior terms and conditions. The initial AWAs were
approved against this award. Subsequently the RTBU applied to the AIRC for
registration of a new Federal award in the same terms as the previous Federal
award. Further AWAs would be compared to the new award for the purposes of the
NDT however there was no review of the initial AWAs and no right of appeal or
review concerning the Employment Advocate’s award designation.[14]
The union made the following comment:
...it reveals that the Office of the Employment Advocate does not
operate in the public interest, and in addition operates and is seen to operate
in a manner which exhibits gross conflicts of interest and a lack of regard for
procedural fairness or any possibility of independent review of the decisions
made.[15]
- The SDA advised of a case in Sportsmart where young employees
where told to sign AWAs without explanation as required by the WR Act, and that
if they did not sign they would have their hours reduced.[16]
This case was reported to the OEA by the union for investigation. The employees
requested the OEA to involve the SDA during the process. The OEA however
ignored this request with no satisfactory resolution after 12 months.
- Julia Ross Personnel was a case dealt with by the CEPU. It
involved Julia Ross Personnel taking over functions previously undertaken by
Telstra. The union detailed apparent cases of duress as well as a
deterioration in working conditions. The union dealt directly with the OEA to
resolve these issues. Despite the union lodging complaints on behalf of
members the OEA did not seek to interview or discuss allegations however it
appears that the OEA considerably assisted the employer. The union comment is
pertinent in regard to public confidence; ‘The re-writing of the AWA’s on OEA
letterhead doesn’t help the perception of objectivity’[17]
- The AMIEU provided a detailed history of events for the
Australian Food Corporation Pty Ltd plant in Coominya, Queensland. It is evident
that there was a great deal of disputation on this site. With regard to the
involvement of the OEA it seems unreasonable that the OEA required the union to
submit their comments on an AWA in less than 24 hours. Particularly as the AWAs
in question were approved on the afternoon of the day the Union’s submission
was due..[18]
- The CPSU raised concerns about the transparency of the OEA. In
the case of the formation of APRA, the agency wrote to the OEA asserting it was
award free which was apparently accepted at face value. In addition the issue
of coercion for transferring staff to sign AWAs as a condition of continued
employment is a continuing problem, notwithstanding the Employment National
decision. This was also flagged as a requirement for promotion.[19]
- The situation at Civic Video stores in Sydney where the OEAs
guidelines have been apparently ignored with no subsequent action.[20]
- New Breed Security of Western Australia made an apparent blatant
attempt to breach the Freedom of Association provisions of the WR Act, when
they wrote to employees to make an offer which included the cessation of
‘victimisation’ conditional upon:
... the withdrawal of the Unions from this negotiation and the
withdrawal of consent for them to inspect records and act as your bargaining
agent.[21]
- The Federal Office of the TWU in its submission expressed its
lack of confidence in the OEA dealing with agreements in the long distance road
transport industry. The union made clear how an understanding of the industry
was crucial in approving agreements. Remuneration for a long distance driver
is calculated in the Award on a cents per kilometre basis. The submission
demonstrated how the increase in the average speed a vehicle is to travel could
have dire consequence.[22]
- The Queensland TWU advised of an incident where the State
Secretary, when on site at the On Line depot in Brisbane, informed an officer
of the OEA who was in attendance of an apparent award breach. The breach
involved a 16 hour driving shift without break. The officer declined to assist
in any manner.[23]
- There has been a failure of the OEA to act on requests by the
CPSU for assistance with regard to duress to its members in the Northern
Territory Tourist Commission.[24]
5.21
This list is not exhaustive of the number of
cases that were mentioned in connection with the OEA during the course of this
inquiry. While the Employment Advocate has provided a response to these
allegations in the main this is merely a rejection of the claims. The
responses themselves indicate fundamental deficiencies in the manner in which
the Employment Advocate sees his role. In particular, the Employment
Advocate’s assertion that the subsequent making of an interim award by the
Commission in the above mentioned Serco case, that was not retrospective, absolves
him from any concern, ignores the fundamental fact that the interim award was
in the same terms as the rail award that the employees were employed under
previously. It would appear that the award that should properly been
designated by the Employment Advocate was the rail award.
An independent umpire
5.22
In evidence before the Committee Professor
McCallum discussed the standing of the AIRC as part of a ‘fairness compact’
provided for in the Constitution. Professor McCallum talked about how
this concept was being eroded
[WROLA] ... chipped away at part of this fairness compact by
allowing the concluding and vetting of Australian Workplace Agreements by the
Office of the Employment Advocate, which is not a certifier but in truth a
compliance agency.[25]
5.23
Without public confidence in the impartiality of
bodies such as the AIRC, these institutions can not function effectively. It
is apparent from the evidence that the OEA is gaining responsibility for
approval at the expense of the AIRC but without the historical perception of
fairness and impartiality enjoyed by the Commission.
5.24
With regard to the functions outlined in the
legislation, the Employment Advocate is required to pay particular attention to
the need of workers in a disadvantaged bargaining position which is deemed to
include women. For family friendly clauses in agreements, evidence from ACIRRT
indicates that union negotiated certified agreements are better at realising
these sorts of proposals. A more comprehensive discussion of Work and Family issues
is canvassed at Chapter 8 of this report.
5.25
Overall Labor Senators were not persuaded that
the OEA has undertaken its role in an unbiased manner. In any event, lack of
public confidence in the impartiality of the OEA would be enough to dissuade
employees from attempting to seek redress through this office.
The 1999 amendments
5.26
Proposed amendments in this Bill:
- allow AWAs to take effect from date of signing, rather than from
the date of approval by the Employment Advocate (OEA);
- remove the requirement that the employer must offer the same AWA
to all comparable employees, thus allowing a discriminatory approach to
offering agreements;
- remove the requirement that the OEA refer an AWA to the
Commission when unsure about whether or not it disadvantages employees;
- allow AWAs providing for total remuneration of more than $68,000
to be approved without any checking by the OEA; and
- allow AWAs to be made undercutting a collective certified
agreement, even while the latter is in operation.
5.27
The following statement from the OEA should be
regarded as significant, particularly when considering his role in undertaking
legal action for breaches of Part 6D of the Act:
The philosophy, as I understand it, based on the legislation as
it currently is, is that AWAs devolve responsibility focus on the parties and
that, while there is an OEA role, at the end of the day it should really 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. So my
personal view is that yes, it would be better for the Employment Advocate to
actually have that power.[26]
5.28
It appears that the Employment Advocate has
actually recognised the fundamental imbalance in the power relationship between
an employee and an employer, as noted by Justice Higgins over 90 years ago,
when he likened the relationship between an employee and an employer to that of
a wolf and a lamb.
Conclusion
Labor Senators conclude that there is a conflict of interest
in the role played by the Office of the Employment Advocate who has been given
the task of simultaneously promoting and adjudicating on Australian Workplace
Agreements. The result has been a diminution of wages and condition of
employment, agreements settled under duress, and a denial of the rights of
freedom of association for those most in need of this protection.
The submission to this inquiry from Office of the Employment
Advocate addressed only peripherally the terms of reference. It provided
lengthy response to answers placed on notice, drawing heavily from its data
banks, but Labor Senators believe the OEA was unable to effectively refute
evidence placed before it, charging the OEA with bias in its operations. For
this reason Labor Senators believe the OEA has lost the confidence of unions
and they believe the organisation should be abolished.
5.29
In addition to the abolition of the OEA, Labor
Senators recommend the following general amendments to the Act with regard to
AWAs:
- the protection from duress to new employees offered AWAs needs to
be provided. This protection must be in the same terms as that currently
provided for existing employees, and should provide that employees are not to
be treated as new employees in cases of transmission of business;
- a prohibition should prevent the offering of AWAs as a means of
undermining collective agreement making;
- the registration and approval of individual agreements should
reflect the transparency and accountable processes that are applied to
certified agreements; and
- on application by any interested party, any decision made with
respect to AWAs or award designations must be subject to independent review by
the AIRC.
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