G'day. Many Webdiarists want to know the detail of what the nation is arguing about over John Howard's IR revolution. He hasn't given us detail yet, but the Parliamentary Library has pulled together the background, what's on the table so far, and who is playing how. For more, go to Workplace Relations [1]. Let's add the twists and turns through comments.
Workplace relations reforms: a chronology of business, community and Government responses
Introduction
The Government plans to repeal the Workplace Relations Act [2] (WR Act) either in part or in full, replacing key sections of it with either new or minimal prescriptions, possibly introducing ancillary legislation to the WR Act. The chronology outlined in the table below dates from the federal election of 9 October 2004. However, the background to the Government’s IR proposals, in 2005, derive from its legislative agenda since 1996.
The major change to the Australian labour law of the Coalition Government was the Workplace Relations and Other Legislation Amendment Act 1996 [3] (WROLA Act). The Act, inter alia, introduced Australian Workplace Agreements (individual employment agreements) as a bargaining outcome; reduced the content of industrial awards to 20 allowable matters and permitted traditional arbitration in respect of the 20 allowable matters only, or in certain circumstances when enterprise bargaining failed, usually between a union and an employer. Bargaining required agreements to pass a No Disadvantage Test based on a relevant or other ‘designated’ award. The WROLA Act passed with support of the Australian Democrats and their insistence on 176 amendments.
The period since 1996, however, could be characterised as being of limited success in respect of subsequent legislation. Three key issues have been behind the legislation since WROLA. These have been:
1. unfair dismissal, and particularly the attempt to exempt small business from the WROLA provisions on termination of employment: Workplace Relations Amendment Bill 1997 [4], and its successors.
2. a re-write of all of the provisions of the WR Act via the Workplace Relations Legislation Amendment (More Jobs, Better Pay) Bill 1999 [5] (MOJO Bill) following the 1998 federal election and back toward the original intent of WROLA before Democrat amendments. The MOJO Bill was opposed by non-government senators and ultimately lapsed at the 2001 federal election. The schedules of the WROLA Bill were introduced as separate bills, more or less covering the subject matter of the relevant MOJO schedule over the 39th and 40th Parliaments. Some of these passed the Parliament: Workplace Relations Amendment (Genuine Bargaining) Act 2002 [6]; others did not: Workplace Relations Amendment (Award Simplification) Bill 2002 [7], and also the small business exemption bill/s: Workplace Relations Amendment (Fair Dismissal) Bill 2004 [8]. Over the period of the 38th to 40th Parliaments, 14 bills were rejected by the Senate, including three which would pass subsequently and five bills which were rejected twice; 17 bills became Acts, including three which were rejected earlier and 22 bills lapsed [see Workplace Relations Legislation: Bills Passed, Rejected or Lapsed, 38th—40th Parliaments (1996–2004) [9]].
3. the Australian Industrial Relations Commission’s (AIRC) role in setting the safety net of wages and employment conditions has been the third area of contention. The AIRC’s role of setting safety net awards is specified under the WR Act (section 88B). The Government and employers believed that minimum wages have been set too high, evident in criticism of AIRC decisions which did not adequately countenance the view that high minimum wages cause unemployment. An attempt to correct this tendency was made via the Workplace Relations Amendment (Protecting the Low Paid) Bill 2003. This Bill failed to pass the Senate.
However, with a Coalition majority in the Senate from 1 July 2005, previous obstacles to workplace relations reform are likely to be overcome or substantially lessened. The Government plans to introduce amending legislation in late 2005 or perhaps in 2006, which should expand federal jurisdictional coverage of employers and employees most probably at the expense of State industrial relations (IR) jurisdictions. It would not be surprising to find that the legislation takes the form of separate bills, due to the difficulties of over-riding state industrial law.
Though there is no bill/s, an outline of the new IR scheme was made by the Prime Minister in a statement to Parliament on 26 May 2005 (cited below). The Minister for Employment and Workplace Relations, the Hon Kevin Andrews, had earlier canvassed the form that the new legislation would take.
Key points of the PM’s address are provided below:
Employment Advocate
Australian Workplace Agreements and Certified Agreements will in future be filed with the Office of the Employment Advocate without any reference to the Australian Industrial Relations Commission and will be ‘approved on lodgement with the Office of the Employment Advocate’. It is likely that a consequence will be less or no independent audit of the contents of agreements. In any case, the current No Disadvantage Test (NDT) which compares provisions of AWAs and CAs against relevant or designated award provisions is to be discarded. A new NDT will be based on 5 minimum employment conditions, a wage rate and four minimum conditions is to be stipulated in legislation. According to PM Howard:
Currently workplace agreements are assessed against a test which is unduly complex and which acts as a hindrance to agreement making. For this reason, the Government will introduce a new Australian Fair Pay and Conditions Standard. This new Standard will be the test for all agreements. It will make it easier for employers and their employees to compare any agreement against this new safety net of fair pay and conditions.
Australian Fair Pay Commission
A new Australian Fair Pay Commission, will set a new minimum wage and junior, training and disability wages, award classification wages and casual loadings, i.e. wages above and below the minimum wage. However:
No worker can have their relevant award classification rate lowered.
Awards to be reviewed by Task Group
A special Task Group will be set up to review existing awards and award classification structures with the aim of rationalising them. The Task Group will attempt to complete its work within 12 months. Matters such as: jury service, notice of termination, long service leave and superannuation will be removed from awards. However, as the proposed NDT does not include provisions such as penalty rates, awards can effectively be by-passed by agreements at one dollar above the Australian Fair Pay Standard. It is not clear whether employers will be able to take industrial action against employees in making AWAs (as is currently the case).
Australian Industrial Relations Commission
The institution of the Australian Industrial Relations Commission is to be maintained while its key functions will be directed to other institutions. Devoid of responsibility for collective agreements, no role in setting minimum wages and employment conditions and many fewer unfair dismissal cases to consider (see below) the AIRC will focus on resolving ‘legitimate’ interstate industrial disputes (which are likely to be stipulated as illegal), as well as the further simplification of awards, presumably under direction from the Taskforce. The Government may move the resolution of ‘illegitimate’ industrial disputes to the court system.
Unfair dismissal
The Government will extend the number of employees which give employers exemption from unfair dismissal claims from 20 to 100. For those employers above the 100 employee limit, employees will not be able to take unfair dismissal action until they have been employed for six months. Further detail of the proposals will clarify as to whether applications for a remedy against an unfair dismissal are to commence in a court, or before the AIRC as is currently the case that is, where the employee worked in a business with more than 100 employees. The current prohibitions against unlawful termination (on the grounds of trade union membership, pregnancy, gender and so-on) are to remain although the onus of proof may be altered.
Powers to be referred from the States
At the 3rd June 2005 Council of Australian Government’s meeting, the States (other than Victoria) were invited by the PM to refer their powers on workplace relations to the Commonwealth.
In the absence of referrals by the States, the Government will move towards a national system by relying on the Corporations power in the Constitution.
All States refused the Commonwealth offer, and battle lines are being drawn over a hostile take-over State labour law by the Commonwealth.
Other proposed legislation
The PM forecast other legislation, including legislation stalled in the Senate, to:
* protect the status of independent contractors and support the right of people to make a choice about their working arrangements
*ensure the rule of law is restored to the building and construction industry
*restore the exemption for small business from making redundancy payments
*establish the Australian Safety and Compensation Council to oversee implementation of national occupational health and safety standards and pursue a national approach to workers’ compensation, and
* remove barriers to the take up of school based apprenticeships and part-time apprenticeships
* provide stronger laws in relation to industrial action (including secret ballots)
* establish a single right of entry regime, and
* ban pattern bargaining, which is the pursuit of common claims by employers or unions across an industry.
Note that seven Bills dealing with these matters, for example, small business redundancy exemption, permitted entry into workplaces and the prohibition of union bargaining fees (and others) are currently before the Parliament. For more detail on these see: Bills Amending the Workplace Relations Act 1996 (41st Parliament) [10].