The Labor Party's Policy Implementation Plan released on 28 August 2007 provides some further detail on its policy Forward with Fairness issued on 28 April.  Areas of detail are still missing, however, and likely to remain unknown until legislation is drafted should the ALP be elected to government after the federal election.

A summary of the current policy position combining details from both Forward with Fairness and the Policy Implementation Plan is set out below.

A national system

1. Labor will support a national system for the private sector; it has given State governments 2 opt outs - government employees would not be included and a State could "harmonise" at its discretion rather than actually referring power to the Commonwealth.  It appears local councils will also not be included.

CCI Comment

2. Both government and Labor should commit to a full national system.  It is wrong and wasteful to allow the States to use taxpayer money's to fund all the infrastructure of a State IR system just for government and local council employees.

3. The private sector wants an efficient public sector.  Industrial relations laws can drive efficiency and they should also be the same basic system for both.  The private sector also competes with the government sector in some commercial matters.  Different industrial relations frameworks can alter cost structures.

National employment standards - increased safety net

1. A combination of legislated minima and award minima will constitute a new safety net under Labor.

2. 10 legislative standards

• Hours of work of 38 per week; comment: appears to be consistent with existing Standard;
• Parental leave of 12 months with right to request 24 months; comment: employers have the right to refuse a request on reasonable business grounds;
• A right for parents to request flexible work arrangements until their child reaches school age; comment: employers have the right to refuse a request on reasonable business grounds;
• Annual leave of 4 weeks; comment: appears to be consistent with the existing Standard;
• Personal and carers leave of 10 days plus 4 days combined paid and unpaid leave; comment: appears to be consistent with the existing Standard;
• Community service leave such as jury and emergency services leave; comment: catered for at State level (different entitlements) and no need for additional or possibly increased legislative standards;
• Public holidays as per state laws; comment: appears to be consistent with existing Standard though it would be inappropriate if Labor includes provisions preventing employees being required to work on a PH;
• Information statement on employment to every new employee; comment: emphasis appears to be on encouraging union membership and as such it is inappropriate;
• Termination notice up to 5 weeks and redundancy pay up to 16 weeks; comment: Notice appears to be consistent with existing minimum, proposed redundancy provisions will, however,  have the effect of significantly extending entitlements;
• Nationally consistent long service leave; comment: currently significant inconsistency between states and so consistency may be costly if it results in levelling up.

3. Further 10 minimum award standards:

• Minimum wages: this will include skill based classifications and career structures, incentive based payments and bonuses, wage rates and other arrangements for apprentices and trainees;
• The type of work performed including whether permanent, casual, and flexible working arrangements;
• Arrangements for when work is performed including hours of work, rostering, rest breaks, and meal breaks;
• Overtime;
• Penalty rates;
• Provisions for annualised wage or salary arrangements as an alternative to payment of penalties;
• Allowances;
• Leave, leave loadings;
• Superannuation; and
• Consultation, representation and dispute settling procedures.

CCI comment 

4. The legislative standards will apply to all employees and are unchangeable.  They can be increased by orders of Fair Work Australia (FWA) in specific industries or occupations.

5. The combination of legislative standards and awards as proposed by Labor would return the system to the traditional features of centralized and industry wide regulation and arbitration that existed in the last century. 

6. The new bargaining obligations would be on top of that system and not in substitution for it.

AWAs

1. Labor will abolish the AWA system. It has confirmed there will be no statutory individual contracts. Common law contracts will apply for employees earning over $100,000 per year.

2. From 1 January 2010 awards will not apply to employees earning more than $100,000 p.a. for employees who agree their terms and conditions under a common law contract.

3. The $100,000 threshold will be the employee's guaranteed ordinary earnings. It will be indexed against annual growth in ordinary time earnings for full time adult employees. There are protections against artificial devices being used to inflate wages above this $100,000 threshold. For example "manifestly unreasonable rostered overtime hours" will not be considered where they take an employee’s remuneration over this threshold.

AWA Phasing out

4. AWAs will continue for their term.  The last possible expiry date for all AWA's is 31 December 2012.

Individual Transitional Employment Agreements (ITEAs)

5. ITEAs may be made between an employer who has any employee engaged on an AWA as at 1 December 2007 and a new employee or an existing employee whose terms and conditions are governed by an AWA. 

6. Any ITEA will expire no later than 31 December 2009.

7. An ITEA will be subject to a no-disadvantage test against the relevant award or collective agreement and AFPC Standard.

CCI comment

8. Common law contracts are not an effective or workable reform measure.  

• 95.1% of employees earn less than $100,000 per year. For every one of those employees common law contracts will be subject to the regulation of awards and the regulation of collective agreements.   This reinforces award coverage for the 95.1% of employees earning less than $100,000 per year.
• For the 4.9% of employees earning over $100,000 per year, common law agreements will be subject to the regulation of collective agreements and union rights under collective bargaining.
• For the 4.9% of employees earning over $100,000 per year, common law agreements will also be subject to Labor’s legislated employment standards - which Labor is increasing, thereby reducing flexibility. 
• Rarely, if ever, did the award system apply to employees earning over $100,000 per year. 
• Every employer of employees on common law agreements is exposed to strikes in support of collective bargaining demands every day a collective agreements exists (whereas under AWAs strike action was banned during the life of the AWA). In effect, the Labor announcement increases the days available for unions or employees to exercise a right to strike against a business. 
• There will be two classes of employees under different rules, and different rules if an employee gets a wage increase from $99,000 to $101,000 (for example), creating anomalies and confusion.  

Awards

1. Awards will not apply to employees earning over $100,000 per annum. They will be further simplified so they deal with only the ten matters described above and additional clauses that concern the application of the legislative conditions in particular industries. A process similar to the 1996 "award simplification" process appears to be suggested.

2. Labor will require "flexibility clauses" to be inserted into awards and collective agreements allowing individual agreements.  Individual agreements will be subject to a no-disadvantage test against the relevant award or collective agreement.

3. The modernisation and simplification process will commence from the time an incoming Labor government takes office (or 1 January 2008). Labor's aim is for the process to be mostly completed by the time the new system takes effect in January 2010.

4. The AIRC will be required to identify a priority list of key awards to be simplified within 12 months with all awards mainly completed within 2 years.

5. Priority will be given to industries and occupations with a high incidence of AWAs and NAPSAs.

6. Enterprise awards will continue in their current form and will only be reviewed where requested by the current parties to those awards.

7.  New simplified awards and national employment standards will commence operation from 1 January 2010.

CCI comment

8. There is potential for concern over the content of awards as many of the 10 award matters contain multiple concepts and therefore awards may continue as comprehensive, restrictive documents.

9. Flexibility clauses are not new and not an effective reform measure.

10.   Flexibility clauses were allowed in awards between 1993-2006. They were a failure because:

• unions generally intervene in award regulation to prevent amendments; 
• unions are part of the collective bargaining system; 
• industrial tribunals establish awards for collective purposes; 
• employers are deterred by the cost and expense of using formal award processes to seek permission to introduce flexibilities; 
• an example is that from a dozen individual flexibilities in awards sought by ACCI in the national work and family test case in 2005, they were all opposed by unions and all State Labor governments and not granted.

Collective Bargaining

1. Labor's policy would introduce a compulsory obligation on employers to collectively bargain, whether the employer wanted to bargain or not.
   
   
2. If the majority of employees in a workplace want to bargain collectively, the employer would have a statutory obligation to bargain collectively in good faith.
   
   
3. If the employer refused to bargain collectively the employees or their union would be able to apply to FWA for an order requiring the employer to bargain collectively.  Upon receipt of an application for a collective bargaining order, FWA would be obliged to determine whether collective bargaining is preferred by a majority of employees in the workplace.  It would have discretion regarding the method it uses to determine the level of support for collective bargaining, such as secret ballot.
   
   
4. Collective agreements would need to comply with the 10 legislated minimum conditions but would not need to comply with every condition in the relevant award as long as the employees are "better off overall".
   
   
5. Protected action would be available if approved by employees in a secret ballot supervised by FWA.
   
6. At the commencement of bargaining, employers would have an obligation to inform employees that they are entitled to be represented by a union.
   
   
7. Unions would be able to make demands on "whatever matters suit them".  They would therefore not be restricted to demands about wages and employment conditions.  The "prohibited content" provisions in the Workplace Relations Act 1996 would be repealed.   The High Court’s Electrolux decision that held that agreements could only contain, and strikes can only be taken over, matters pertaining to the employment relationship would be overturned.
   
8. Good faith bargaining would not require the employer to make concessions but if industrial action is causing significant harm to one of the parties (even if the party is inflicting the harm or damage), FWA would have the power to end the strike and arbitrate an outcome.
   
   
9. Compulsory bargaining such as is proposed by Labor has been examined by the Australian Industrial Relations Commission and rejected.  In the 1994 Asahi case a five member Full Bench expressed a strong view that it would not be sound policy for legislation to force parties to bargain.  The Full Bench expressed support for, and set out arguments why a voluntary bargaining system is appropriate. 
   
10. The AIRC expressed the view that "compulsion" and "bargaining" are incompatible holding that bargaining is voluntary and "an agreement cannot be reached with a person who does not want to agree and negotiations for an agreement cannot take place with a person who does not want to negotiate".

CCI comment

11. Put simply, not all businesses want to bargain to pay more, and not all businesses should be forced to do so.
    
12. Nor should 'good faith bargaining' require an employer to bargain with a union where the employees of the business are not union members and do not seek the involvement of the union.
    
13. Nor should good faith bargaining require employers to disclose against their will commercial information or material that is private to the business, or to disclose to uninvited unions staff employment contracts, or to give union officials with no union members right of entry to the business, or to force the employer to engage in time consuming meetings or red tape when the employer does intend to make or register agreements in the system.
    
14. Good faith bargaining should not (except in very limited circumstances) give an industrial tribunal a power to arbitrate the terms of the 'agreement' if the employer refuses the over award demands of unions or employees.
    
15. In summary, once 'good faith bargaining' forces employers to bargain, and once it forces over award arbitration on employers then it is not the benign concept it appears.  It becomes compulsory bargaining, and compulsory arbitration under the label of 'good faith bargaining'.  It affects rights and outcomes.  Compulsory union bargaining and compulsory union arbitration of above award wages and employment conditions does not concern 'good faith'.
    
16. It appears that a non-union agreement will not be an option for employers so long as they have one union member in their workforce.

Strikes

1. Labor's policy would allow strikes over matters that don't pertain to the employment relationship.  This is not current law.  It opens the prospect of strikes being taken over union matters and not purely wages and conditions of employment.
   
   
2. Areas where unions have in the past made bargaining demands over union matters that could potentially be included under Labor policy in the right to strike include:
• Preference in employment, promotion or redundancy to unionists;
• Paid trade union training leave;
• Restrictions on non union contractors;
• Restrictions on non union business restructuring (labour hire firms and outsourcing restricted without union approval);
• Compulsory union superannuation;
• Compulsory union insurance (employer pays income protection insurance of all employees from a union sponsored policy);
• Compulsory union payroll deductions;
• Union approval of site entry;
• Expanded union entry into businesses.

Right of entry

1. Labor says it will retain restrictions on union right of entry.

CCI comment

2. Current laws require at least 24 hours notice before entry.  It is not clear whether Labor will retain this as the policy announcement refers only to unions giving "proper notice".
   
3. Abolishing AWAs also abolishes current restrictions on union right of entry during the term of AWAs. Common law contracts may allow union entry for a wider range of purposes than was permitted under AWAs. 
   
4. Unions have used OHS laws made by State governments to get around right of entry restrictions.  This is a loophole not addressed by the Labor announcement.

Unfair dismissals

1. Labor policy removes the current small business exemption (less than 100 employees) from unfair dismissal laws.  
   
   
2. The only exemption concerns businesses employing fewer than fifteen employees. These businesses can still be the subject of an unfair dismissal claim but only in respect of an employee who has at least twelve months' service.
   
3. Labor also removes the following exemptions:
• Casual employed for a short period (ie less than 12 months)
• Fixed term employees;
• Fixed task employees;
• Probationary employees;
• Trainees/apprentices;
• Seasonal employees;
• Employees serving a qualified period of up to 6 months;
• Employees dismissed for genuine operational reasons.
  
  
4. Labor's system will have provision for Fair Work Australia to provide advice and assistance for small business and will facilitate the preparation of a fair dismissal code, the purpose of which is to provide small business owners with clear information in relation to dismissal.
   
5. Labor policy will require that claims be made within 7 days of dismissal (an improvement on current law of 14 days although extensions to time can be granted in appropriate cases).

Unfair dismissal procedure

6. Claims will be lodged with Fair Work Australia which will have multiple offices in shopping centres and Centrelink offices.
   
   
7. There will be a compulsory conference convened by FWA.  Employers and employees can be represented with a "representative or support person" but must attend in person and must directly answer questions.
   
   
8. FWA will rule on an issue in this informal way.  Orders can be made requiring re-employment or compensation.  There will be no written submissions, no hearing and no examination.  Neither the employee nor the employer will be put on oath to tell the truth.  There will be no lawyers involved.
   
9. Fair Work Australia will be able to rule on unlawful (discrimination based) dismissal claims.
   
   
10. Labor will develop a Fair Dismissal Code which it says will give certainty because it will tell small business when it can dismiss staff.   Where the Code is genuinely complied with, the policy says that the dismissal will be judged to be fair. 

CCI comment

11. A 12 month qualifying period as proposed by Labor is not the same as an exemption - staff or business problems can occur after 12 months. 
    
12. Governments writing the rules about when a business can dismiss staff has not been legislated before; while well intentioned, this change could backfire with governments regulating management decisions before dismissals; previously governments only regulated unfair dismissals, now government would be making rules covering all dismissals. 
    
13. Informality is a double edged sword and may deny natural justice.  Employers must attend, must answer questions, cannot be legally represented, cannot require the employee to sit in a court room and on oath tell the truth, cannot subject the process to public scrutiny and must accept a desk-top ruling by FWA that determines the matter and interferes with the employers legal rights and business management.
    
14. The Fair Dismissal Code is also a double edged sword.  If compliance with the Code means a dismissal is fair, then it would be likely that substantive non compliance would, in practice, mean a dismissal is prima facie unfair.  Labor does say that errors of a procedural or technical nature will not automatically presume a dismissal to be unfair.  The terms of the Code will therefore be significant in deciding if an employer can dismiss fairly.
    
15. The proposed accessibility of FWA may encourage more claims especially if it is placed in the same venue a dismissed employee applies for unemployment benefits (Centrelink).
    
    
16. The Code will, whatever the intention, be a regulatory document about employer conduct prior to dismissal.  This has not been the practice of the past where, for all the problems with unfair dismissal laws, the courts tried to objectively rule on fairness rather than substitute their decision or the decision of management.  The Code regulates the decision of management and could be seen as more intrusive than the former system.  This depends on how it is applied.

Australian Industrial Relations Commission

1. The AIRC will have responsibility for simplifying awards during the 2 year period from 1 January 2008 to 1 January 2010.
   
2. The AIRC will be abolished on 1 January 2010 and Fair Work Australia will commence operation.

CCI comment

3. It is important that the powers and role of the AIRC is the following areas continue:
• Revoking union official entry permits in cases of inappropriate behaviour;
• Suspending or terminating bargaining periods where industrial action is threatening to damage the economy or the welfare of the population and to prevent pattern bargaining;
• Suspending industrial action;
• Overseeing secret ballots to authorize industrial action;
• Overseeing registration of unions and employer associations; and
• Issuing orders to prevent and stop unlawful industrial action.
  
4. There is some doubt about the Constitutional legitimacy of Labor's proposed FWA.  The High Court in the 1956 Boilermakers Case found it was unconstitutional to have the same body creating rights as well as enforcing those rights.  As a consequence the AIRC has had the role of creating rights through awards and also dispute settlement and prevention while the role of enforcement of rights has been the role of the Federal Court.

New national body - Fair Work Australia

1. FWA is said to assume the functions of the AIRC, and expand those functions to include dispute conciliation and forms of safety net arbitration, unfair dismissal arbitration, good faith bargaining oversight, secret ballot oversight, regulating registered industrial organizations and in limited cases last-resort arbitration of collective agreements.
   
2. FWA will review minimum wages once each year with updated wages taking effect from the first pay period on or after 1 July each year.
   
3. FWA will also assume functions associated with collective agreement making (because of the proposed abolition of the Workplace Ombudsman) and minimum wage setting (because of the proposed abolition of the Australian Fair Pay Commission).  It will also undertake advisory and compliance functions (because of the proposed abolition of the Workplace Authority).
   
4. A separate independent division has been said to be established to exercise court-based judicial power.
   
5. FWA will have offices in suburbs and regional centres such as shopping centres and Centrelink offices.

CCI comment

6. FWA would be a powerful new national regulator.
   
7. Creating a powerful national regulator increases the prospect of greater regulation of wage and employment matters on both an industry basis and an enterprise basis.  Outcomes as well as process will be regulated and arbitrated.
   
8. In terms of conciliation FWA could:
• Conciliate disputes over agreement-making demands at the joint request of parties; and
• Conciliate unfair dismissal claims.
  
9. In terms of arbitration FWA could:
• Order if collective bargaining should occur (ie decide if a majority of employees seek collective bargaining);
• Make orders to enforce good faith collective bargaining obligations;
• Arbitrate agreements where industrial action is causing significant harm to the wider economy or community welfare;
• Arbitrate unfair dismissal claims;
• Arbitrate unlawful dismissal claims;
• Arbitrate(annually) minimum wages;
• Arbitrate (making, reviewing and simplifying) the award safety net;
• Conduct inquiries and recommendations (to government/parliament) on changes to the legislative safety net;
• Make orders to ensure freedom of association is protected; and
• Make administrative decisions whether to approve agreements.
  
10. In terms of advice, FWA could:
• Provide employees and employers advice, assistance and settle grievances';
• Advise whether agreements comply with Labor's "genuinely better off" test;
• Provide advice and guidance on "simple flexible agreements"; and
• Produce guidelines on family friendly workplace arrangements.
  
11. In terms of compliance, FWA could:
• Undertake general inspectorate functions (investigation, education, prosecution etc); and
• Establish specialist inspectorate divisions for the building and the hospitality industries.

Building industry regulation

1. Labor says building watchdog (ABCC) will be abolished in 2010 with current powers and resources until then.

CCI comment 

2. ABCC abolition retrograde and will damage industry and economy and should be retained  

3. Labor has only committed to retaining powers and resources "for this period" (ie until 2010) - no commitment by Labor to its new regulator having same powers or resources, only a commitment to "consult" on those matters and retention of the "principles of the current framework", meaning important detail (such as powers of the proposed regulator) are currently unknown.

• Click here for Government response to the Unions TV & radio advertisements
• Click here for link to the official Government website outlining the proposed changes
• Government fact sheet for Employees
• Government fact sheet for Employers
• Government fact sheet for Small Business

Comment by CCI Executive Director, Policy & Advice, Bruce Williams

The Howard Government plans to reform Australia's workplace relations system, the direction of which generally aligns with CCI’s long-held policy stance on industrial relations.

The current unfair dismissal legislation is just one of many burdens Australian businesses have been constrained by, which along with a complex industrial award system and over regulated individual workplace agreements, are soon to be fundamentally changed.

The Federal Government plans to introduce a number of sweeping changes to address these and other obstacles for business having assumed a Senate majority on 1 July.

The quality of the reform will depend on the detail of the final legislation which will be unclear for some months yet.

The central features of the new system are set out below.

A national system

The Government will work towards a national system in a cooperative manner with the States.  The States will be invited to refer their powers on workplace relations to the Commonwealth. In the absence of referrals, the Government will move towards a national system relying on the corporations' power. Given the public position of the states to date, this is the most likely outcome. It is estimated that such a national system will then cover 85 per cent of Australian workers.

Minimum Wages

A new body, the Australian Fair Pay Commission (AFPC) will be established to adjust minimum award wage rates. Award wages will not fall below the level set after the inclusion of the recent increase from the 2005 Safety Net Review, and will be capable of future upwards adjustment by the AFPC.  Decisions of the AFPC will be guided by the legislation to ensure minimum wages operate as a genuine safety net.

The AFPC will not arbitrate claims and counter claims in a court based process but rather will come to its conclusions via research and inquiry into the issues.

Minimum conditions

The Government will legislate key minimums of annual leave, personal/carer's leave, parental leave (including maternity leave) and maximum ordinary hours of work.

These legislated conditions, together with the minimum wages set by the AFPC will form the "Australian Fair Pay and Conditions Standard".

Agreements

The Australian Fair Pay and Conditions Standard will replace awards as the point of comparison for the no disadvantage test for all agreements. In the new system, all collective agreements, union and non union and individual agreements will be lodged with the OEA.

The process for making and lodging agreements will be simplified. All agreements, both collective and individual, will take effect from the date of lodgement rather than the date of certification or approval. Agreements will be able to run for up to five years. This much simplified approach removes many of the barriers to making agreements, is consistent with the approach we put to government and is a significant win for CCI.

Awards

Four allowable matters will be removed from awards: jury service, notice of termination, long service leave and superannuation. These are covered by separate legislation.  Provision will be made for the review of award classification structures and a taskforce will be established to rationalise existing awards and classification structures, finalising its work within 12 months.

The Australian Industrial Relations Commission

The AIRC's role will be refocused on dispute resolution. The AIRC's powers to end unlawful industrial action will be strengthened. New requirements will be introduced for unions seeking to initiate protected industrial action, including the prerequisite of a positive secret ballot of employees endorsing the action. The AIRC will retain its responsibilities regarding further simplified awards.

Unfair dismissals

The Government will exempt businesses that employ up to 100 employees from unfair dismissal laws. The legislation will, however, continue to provide a remedy for unlawful termination, which prohibits dismissal for discriminatory grounds such as race, sex, union membership, pregnancy and so on. For businesses with over 100 staff, employees will be required to have been employed for six months before they can pursue an unfair dismissal claim. The qualifying period is currently three months.

Building and Construction Industry

The Government will re-introduce the Building Industry Improvement Bill based on the recommendations of the Cole Royal Commission. The legislation will require employers in the industry to notify the Australian Building and Construction Commission (ABCC) of unlawful activity (eg. strikes and demands for strike pay) and empower the ABCC to investigate and initiate legal action independently of employers, against any party failing to comply with the law. The provisions provide for independent assessment of the financial loss suffered by an employer from unlawful industrial action and for the ABCC to prosecute unions for recovery of such losses and for the imposition of penalties.

The Government will also:

• protect the status of independent contractors;  
• exempt small business from redundancy payments; 
• establish the Australian Safety and Compensation Council to oversee imple-mentation of national occupational health and safety standards and pursue a national approach to workers' compensation; 
• remove 'industrial' barriers to the take up of school based apprentices and part-time apprentices;  
• provide a single improved right of entry regime, and; 
• introduce provisions to discourage pattern bargaining.

CCI expects further details to become available in the future and is running a series of workshops for members explaining the proposals and considering the immediate consequences for employers.

CCI has taken an active interest in the Royal Commission into the Building and Construction Industry making submissions in response to Discussion Paper 6 - Workplace Health and Safety in the Building and Construction Industry, to Discussion Paper 8 - Codes of Practice for the Building and Construction Industry and concluded with a separate final submission that proposed a range of issues in the context of Term of Reference (c) which required the Royal Commission to report on measures to improve the industry.

Download the PDF
Contact Bruce Williams on (08) 9365 7599 or e-mail: williams@cciwa.com for more information.

The Review into working hours in Western Australia established by the State Government is subject to Terms of Reference that limit the consideration to making recommendations "for the improvement of the State's occupational safety and health framework that applies to issues arising from extended working hours".

Download the PDF
Contact Bruce Williams on (08) 9365 7599 or e-mail: bruce.williams@cciwa.com for more information.