As first published in Thomson Reuters’ BarQ Spring 2010, August 4, 2010.
Co-editor of Thomson Reuters’ Industrial Reports, Vice President Graeme Watson was appointed to the AIRC in June 2006 and appointed to his current role in FWA in July 2009.
He was previously a partner of Freehills Solicitors where he worked for 23 years, the last 19 years as a partner. In that time, he worked exclusively in employment and industrial law and was involved in many landmark cases and industrial disputes as both adviser and counsel. At FWA, he is head of the panel of industries that includes airlines, ports, maritime, health and welfare services, food manufacturing, retail, restaurants, and hospitality.
Here he discusses the transition to Fair Work and recent developments.
FWA has been operating for over a year now – how would you assess the transition?
Just a description of the process is enough to send the head spinning. One tribunal replaced by another tribunal with a six month overlap period. Working under rewritten legislation, including a separate transitional Act, while the old legislation continued to apply to events that occurred before 1 July 2009. The final function of the Australian Industrial Relations Commission was to replace 1700 awards with 122 ‘modern awards’. A wider jurisdiction, additional powers and some totally new functions were also involved.
Such a process could never be described as ‘seamless’. But the continuity of members of the tribunal and staff and its enhancement with additional appointments has made the process at least manageable.
Australia has a 100 year history of industrial tribunals. It is accustomed to dealing with change. Parties are generally constructive and well represented. Technological innovations have been utilised. I think these factors have enabled the tribunal to handle the transition well. The tribunal is now a national forum for resolving employment disputes for the entirety of the private sector and large parts of public sector employment. Consistent with the legislation its functions are discharged quickly and informally.
I think the transition is complete – even though many representatives still announce their appearance by saying “If the Commission pleases…”
What issues are emerging in the application of the good faith bargaining requirements?
It is clear that the good faith bargaining jurisdiction is developing from its unique Australian context and history. Contrary to some predictions decisions have not been influenced by the application of similar concepts in other jurisdictions. The good faith bargaining powers are intended to assist the bargaining process by ensuring that parties comply with basic standards of fair conduct in dealing with each other. FWA has been reluctant to prevent or defer ballots of employees, intrude into the merits of the matters at issue or interfere with legitimate tactics undertaken by parties during the bargaining process. It has held that communicating with employees is not, of itself, unfair conduct. The parties are free to bargain in the manner they deem fit – so long as their conduct is fair and complies with the specific good faith bargaining requirements. These obligations will continue to be the focus in future cases.
What issues are arising in the operation of Modern Awards?
To assist in the transition to modern awards the operative date of wage increases was deferred form 1 January to 1 July 2010. Additional transitional provisions permit substantial changes to be phased in over a five year period. These provisions are unavoidably complex but are expected to be simplified by explanatory material produced by organisations and representative bodies. Modern award provisions reflect the content of pre-existing instruments in the industry and are required to be nationally uniform. Employers and employees who have been covered by different instruments will need to understand and apply the new national obligations. This could require operational changes.
The content of all modern awards will be reviewed in 2012. This will permit parties to seek changes to achieve the modern awards objectives and eliminate anomalies and technical problems. In this review there will be more scope to consider the merits of award provisions than existed in the award modernisation process and through subsequent award variation applications. However, because modern award provisions have a history in pre-existing instruments, it will be very much for the parties who seek to changes to make out a strong case for change.
The modernisation of enterprise awards must occur prior to the end of 2013. Parties who wish an enterprise award to continue will need to establish a case based on the criteria in the Act. If a case is not established the enterprise award will be terminated and the enterprise will become covered by the relevant modern industry award.
Are there any other significant trends emerging under the new system?
The establishment of a national safety net with industry specific award terms is intended to underpin the bargaining system. Award modernisation has been a major focus for many. Now that the national safety net is in place their attention will shift to bargaining issues if it has not already done so. Bargaining is intended to produce mutual benefits but the tools available to parties include coercive options. The challenge for many parties is to ensure that bargaining occurs in a collaborative and constructive manner and that relationships are enhanced by the process. Successful processes will produce cooperative and productive workplace relations. That is the key object of the Fair Work Act.
What do you find to be the most challenging aspects of sitting on FWA?
The Fair Work Act produces challenges of two kinds. First there is the sort of challenge that arises from any new legislation. Difficult problems emerge from decided cases and appeals will assist in clarifying the operation of the provisions. These case require a lot of consideration of the legislative objects and the intent of the reforms. There are legal challenges and fine judgments arising from practical fairness considerations.
There is an additional category of challenge arising from the fact that the functions of the tribunal are intended to be applied more quickly and informally than in the past. Mediation skills are necessary in conferences and a more inquisitorial approach is required in some hearings. This requires a different approach, more preparation and great care in exercising the functions in a fair and practical manner.
What do you find most rewarding?
The challenges are also the rewards but every outcome is rewarding. Fairness in employment and productive enterprises are objectives that constantly affect most in the community. At an individual level, disputes can be devastating. At a workplace level they can affect enterprise viability. At a macro level significant social and economic issues are at stake. Positive workplace relations on the other hand have enormous individual and community benefits.
The Fair Work Act, as with its predecessors, has noble objectives. To assist the parties minimise and resolve their disputes from a position of neutrality and impartiality is a rewarding experience. I find that the most rewarding outcomes are those that the parties reach themselves –where necessary through the injection of objectivity rather than value judgements.
When decisions are required they must be legally sound, consistent with the intention of the legislation and performed to the highest standard. The work of the tribunal is multidisciplinary – it involves a mix of psychology, sociology, economics, politics and law. Performing this important public service is both challenging and rewarding.
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