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.