With the election due on September 7, it is an appropriate time to assess the major parties’ industrial relations policies.
The Coalition policy could be seen as a return to more measured progress along a 20 year+ trend, in which WorkChoices was consistent with that trend, but possibly a too rapid move along the trend line.
The aspects of WorkChoices that received the most criticism were removing unfair dismissal rights from almost half of Australian employees (who are engaged by smaller businesses) and allowing individual agreements to undercut minimum award conditions. However, arguably at least the second of these changes was consistent with what Paul Keating thought was appropriate back as early as 1993 when, speaking to the Institute of Company Directors, he said:
Let me describe the model of industrial relations we are working towards. It is a model which places primary emphasis on bargaining at the workplace level within a framework of minimum standards … Over time the safety net would inevitably become simpler. We would have fewer awards, with fewer clauses … We need to find a way of extending the coverage of agreements from being add-ons to awards … to being full substitutes for awards.
Much is made of the so called ideological divide between the potential governing parties. However, rather than there being an ideological divide on industrial relations policy between them, the potential governing parties agree on all the main policy elements, namely:
- Less centralised control of employment conditions;
- Conditions are best set at an enterprise level, with appropriate individual departures;
- Unions’ involvement in workplaces to be within closely prescribed parameters;
- Industrial action to be limited to bargaining disputes and only after prescribed hurdles are cleared;
- There should be some universal minimum conditions for all employees and greater prescription of conditions for those seen as having less individual bargaining power; and
- The rule of law should apply to industrial relations as in other areas. Moving away from the position existing, in part, up until recent times where industrial action was deemed to be unlawful, but the available legal sanctions to correct the unlawful behaviour were not enforced.
In the context of bipartisan agreement on the key principles behind our workplace laws, the Coalition’s policy simply refines the current laws and only allows the possibility of a further more significant development in the laws after a full review, debate and a further federal election.
To explain this in more detail, it is necessary to briefly summarise the Government’s recent and proposed changes and then those set out in the Coalition’s policy.
Following the Review of the Fair Work Act 2009 in 2012, the Government undertook to make legislative changes in line with a small number of the Review Panel’s recommendations as well as other changes. A number of these changes came into effect on 1 January 2013 and included:
- Amending the Fair Work Act 2009 to ensure that State public sector employees’ existing and accrued entitlements are protected where there is a transfer of business from a state employer to a national system employer (this provision came into effect on 4 December 2012);
- Extending the time frame for filing unfair dismissal applications from 14 days to 21 days, and shortening the time frame for filing adverse action applications from 60 days to 21 days;
- A prohibition on clauses which permitted employees to opt-out of enterprise agreements and a prohibition on enterprise agreements with individual employees;
- A prohibition on unions and their officials acting for persons that don’t fall within their eligibility rules;
- Relaxing the service requirements for Scope Order application notifications; and
- A prohibition on departing or adding to notices informing workers of their representational rights.
Additionally, more recently, the Fair Work Amendment Act 2013 added to the Government’s changes, with those changes taking effect progressively from 1 July 2013.
Those changes include:
From 1 July 2013:
- Extending the period of unpaid concurrent leave available to parents following the birth or adoption of a child from 3 weeks to 8 weeks;
- Extending the circumstances in which employees who are entitled to request flexible work arrangements to include those employees who are carers, have a disability, are over 55 or are experiencing or providing assistance and support to a family member experiencing domestic violence; and
- A provision which entitles any pregnant employee to be transferred to an appropriate safe job in circumstances where it is inadvisable for the employee to continue working in the existing role because of illness or risks arising out of the pregnancy or hazards connected to the position.
From 1 January 2014:
- The introduction of provisions that provide workers with an ability to apply to the Fair Work Commission to resolve complaints about workplace bullying;
- The ability of the Fair Work Commission to arbitrate general protections claims involving dismissal with the consent of the parties;
- A variation to modern awards which requires employers to consult with employees about changes to rosters or working hours. Enterprise agreements made after the commencement of this provision will also be required to include a provision requiring consultation;
- The insertion of a new modern award objective dealing with the provision of additional remuneration for employees working overtime, unsocial, irregular or unpredictable hours, weekends, public holidays and shifts; and
- Changes to the Right of Entry provisions including the setting of default locations for meetings (being rooms where employees take their meals or other breaks), allowing the Fair Work Commission to make orders regarding frequency of entry and requiring employers to facilitate union official travel to remote work locations.
The Coalition’s policy, if implemented, would:
1. Keep employment minimum protections in the national employment standards, modern awards and enterprise agreements, but provide for slightly more ability to individually depart from those standards, provided the individual deal is better than what lies under the deal. This is in the form of individual flexibility arrangements (IFAs) not being able to be restricted by enterprise agreements. The unions’ general rationale for limitations on the use of IFAs, even where they provide individuals with better conditions than the minimum, is that the collective of workers’ ability to lift the overall base line will be reduced if individuals are allowed to negotiate better deals. This can be viewed as requiring the lowest common denominator to hold back individuals who are able to do better. Unsurprisingly, the Coalition policy supports advancement of individuals where they can negotiate a better deal for themselves above the collective.
2. The Coalition policy proposes some changes to the closely prescribed parameters for union involvement in workplaces. Their changes essentially require prior involvement in the workplace by a union or current union membership at the workplace. The Coalition requires initial organising of the workplace to happen without access to that workplace. Labor’s laws, within closely prescribed limits, allow entry to a workplace by a union, provided there is merely potential membership there.
3. In the area of enterprise bargaining, the Coalition proposes to reintroduce limits on the topics that can be dealt with in enterprise agreements, but only in the building and construction industry. This will be done via the code of practice already in existence, but it will be varied along the lines of the eastern states procurement guidelines which have been introduced in Victoria, New South Wales and Queensland.
The Coalition will reintroduce something similar to employer Greenfield’s agreements under WorkChoices. Where a Greenfield’s agreement cannot be reached within 3 months of negotiations commencing with the appropriate union(s), an employer will be able to seek approval from the Fair Work Commission for its proposed agreement. The Fair Work Commission will be required to approve that agreement where it meets an industry standards test, a public interest test and not just be better than the relevant modern award(s).
The Coalition will also place greater limits upon when protected industrial action can occur during enterprise agreement bargaining. They will do this via:
- Prohibiting industrial action before bargaining commences, overturning the JJ Richards decision; and
- Changing the hurdle for a protected action ballot from “genuinely trying to reach agreement”, to there first needing to be genuine and meaningful talks.
Finally, the Coalition’s policy requires productivity to be discussed during enterprise agreement negotiations as a pre-condition to approval of the agreement. The policy does not require measurable productivity outcomes from the negotiations only the discussion of the topic.
4. As noted above, the Coalition’s policy tweaks the hurdles required for a protected action ballot to be allowed. In a small minority of cases, it will push out when protected action can occur. Recognising protected action in the early stages of bargaining is not common.
5. In terms of universal minimum conditions, the Coalition will greatly increase the paid parental leave available to mothers. This is an average increase of $21,500 for a mother on average wages who takes the full 6 months parental leave. The Coalition’s paid parental leave scheme would commence on 1 July 2015 with the funding to come from a 1.5% levy on those companies who earn more than $5 million in taxable income (to compensate affected businesses, the Coalition would also introduce company tax cuts at the same time).
6. In the area of rule of law, the Coalition’s policy has the following elements:
- Maintenance of virtually all of the current Fair Work Act, including the Government’s two tranches of amendments noted above;
- In terms of the approach to change beyond what is in their policy, it is not to come before a Productivity Commission Review, further debate and a further federal election;
- They will reinstitute the Australian Building & Construction Commission which was abolished by the Government in 2012 and provide it with stronger powers than the Government’s equivalent body, Fair Work Building and Construction. Bringing back the ABCC can be viewed as reinstituting a strong cop on the beat, or as allowing for different regulation of one industry and one group of employees.
- They will tighten the requirements on industrial organisations and increase the penalties for those organisations if they breach the regulations. The new benchmark will be the equivalent of that applying to incorporated entities;
- They will help small business in its compliance with the laws. In this way they are assisting in the rule of law in that they are helping the laws to be better known and complied with;
- They will provide for the payment of interest on recovered underpayments, where the money is held by the Fair Work Ombudsman whilst an underpaid worker is being located;
- They intend to adopt a significant number of the changes recommended by the Fair Work Act Review Panel. This is related to the rule of law in that sensible advice for legislative change is to be followed as opposed to using such panels as a political tool, ignoring most of their recommendations and then implementing other changes which have been suggested with less considered review as arguably the Labor government has done;
- The Coalition will review the applicability of the Road Safety Remuneration Tribunal which will potentially remove duplication of administrative bodies. Such review will presumably have the effect of testing whether the existence of this body is an appropriate measure or merely a wasteful action aimed at appeasing the Transport Workers Union; and
- They will consider instituting an independent appeal jurisdiction. This may be supportive of the rule of law in that it helps achieve consistent decisions of the relevant tribunal. Alternatively, depending upon how any appeal body is constituted, it may be a mechanism to overrule the decisions of an independent body where the Coalition government does not like the decisions being made.
So what will the outcome of the election mean in relation to industrial relations policy? No radical change to the current situation. If the Coalition wins and can pass its laws through the Senate (something that is far from certain) we will see some modest changes that continue the development of the laws along the consensus trend line. As such, if the Coalition’s policy is able to be implemented, I suspect we will probably not see most of those laws reversed by a future Labor government.