Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2002
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
EXPLANATORY
MEMORANDUM
(Circulated by authority of the Minister for Employment and
Workplace Relations, the Honourable Tony Abbott MP)
WORKPLACE RELATIONS AMENDMENT (GENUINE BARGAINING) BILL 2002
OUTLINE
This Bill will amend the Workplace Relations
Act 1996 (the WR Act) to:
• provide guidance to the Australian
Industrial Relations Commission (the Commission) when it is considering whether
a party is not genuinely trying to reach agreement with other negotiating
parties, particularly in cases of so-called
‘pattern-bargaining’;
• empower the Commission to make
orders preventing the initiation of a new bargaining period, or attaching
conditions to any such bargaining period, where a bargaining period has been
withdrawn; and
• empower the Commission to order
‘cooling–off’ periods in respect of protected industrial
action to facilitate resolution of the issues in dispute.
FINANCIAL
IMPACT STATEMENT
The measures in this Bill will have no significant
impact on Commonwealth expenditure.
REGULATION IMPACT STATEMENT
Under section 170MW of the Workplace Relations Act 1996 (the WR
Act), the Australian Industrial Relations Commission is empowered to
suspend or terminate a bargaining period (and thus protected industrial action)
on a number of grounds, including that a party is not genuinely trying to reach
agreement or that industrial action is threatening to endanger the life,
personal safety, health or welfare of the population or a part of it, or to
cause significant damage to the Australian economy or a significant part of it.
If a bargaining period is terminated on the ground of danger to life,
health or the economy the Commission must conciliate and if necessary arbitrate
an award under section 170MX to settle the differences between the
parties.
The power of suspension under section 170MW has been used in a limited
number of cases by the Commission and parties as a means of establishing a
cooling-off period during the bargaining process to assist the resolution of
disputes by enabling parties to negotiate in a less charged atmosphere.
Problem identification and specification of regulatory
objectives
The WR Act does not currently contain any direct provision
for cooling-off periods to address cases of stalemate or to act as a circuit
breaker in cases of protracted industrial action. While section 170MW provides
some scope for the Commission to establish cooling-off periods, it generally can
only be invoked in defined and limited circumstances, for example when
industrial action is threatening the national economy.
Cooling-off
periods can play a valuable role in the negotiation process and would allow the
parties, in the specified circumstances, further time to negotiate without the
pressure of continued industrial action. Cooling-off periods would also give
the parties time to investigate and consider the use of alternative means for
resolving a stalemate situation, for example with the assistance of voluntary
conciliation.
The lack of any direct arrangements for the establishment
of cooling-off periods may also encourage parties to continue with industrial
action, for example, to establish the basis for termination on grounds which
result in arbitration, as the means to resolve disputes rather than encouraging
them to step back from industrial action and settle their differences by
negotiation.
The Government’s broad objective is to provide
legislative arrangements that encourage and assist parties to negotiate at the
enterprise level without recourse to industrial action and to settle their
disputes without arbitral intervention.
Options
Option 1: Status quo
Retain
the current procedures for suspension of bargaining periods which enable the
Commission to grant an informal cooling-off period in situations where the
requirements of section 170MW for suspension can be met.
Option 2:
Provide for cooling-off periods
Clear provision for cooling-off
periods could be included in the WR Act by allowing the Commission to suspend a
bargaining period on application from a negotiating party. In deciding if a
suspension of the bargaining period would be appropriate, the Commission would
have regard to whether or not suspending the bargaining period would assist the
negotiating parties to resolve the matters at issue, the duration of any
protected action that is being taken (or has been taken) in respect of the
proposed agreement, whether or not suspending the bargaining period would be
contrary to the public interest and any other matter the Commission considers
relevant.
If an order were made, the Commission would specify the length
of the suspension period. A negotiating party could apply to have the
suspension of the bargaining period extended. The Commission would have regard
to the same matters listed above. An extension of a suspension of a bargaining
period could only occur once.
In addition, to assist the resolution of
the dispute, the Commission would be required to inform the negotiating parties
that they may voluntarily submit the matters at issue to an agreed mediator for
the purposes of mediation or to the Commission for the purposes of conciliation.
Parties’ views
Employer associations have supported
the concept of cooling-off periods, although they have expressed some differing
views on their implementation.
The ACTU has stated that ‘widening the ability of the IRC to suspend a
bargaining period in cases of protracted action ...is an attempt to tilt the
balance in negotiations even further towards employers, without giving unions
and employees any additional access to arbitration of their
claims’.
Option 1: Status quo
Costs
Because
the WR Act does not formally establish provision for cooling-off periods,
application of the suspension powers under s.170MW to establish cooling-off
periods is at the discretion of individual members of the Commission with only
limited legislative guidance as to how and when these powers should be invoked.
As the suspension powers of s.170MW were not designed for the purpose of
providing scope for cooling-off periods, they cannot be easily used in that role
and so cannot be invoked in many circumstances.
Maintaining the existing
provisions would prevent many parties from accessing the benefit of cooling-off
periods as a circuit breaker in cases of stalemate or protracted disputes. More
businesses are therefore likely to experience situations in which reaching
agreement is made more difficult because of the continuation of industrial
action during negotiations. Such protracted action can result in substantial
long-term costs to employers and to productive workplace relationships.
Similarly, little legislative guidance is provided as to whether the
Commission should suspend or should terminate a bargaining period when the
relevant criteria are met. This results in some uncertainty amongst the parties
as to what consequences their actions will bring and may also provide incentive
for some parties to escalate industrial action in order to obtain access to the
arbitration powers of the Commission under
s.170MX.
Benefits
In some cases the Commission has been
able to utilise the powers available to it to establish cooling-off periods, and
it could continue to do so to this limited and informal extent even if the
legislation were not amended.
Option 2: Providing for cooling-off
periods
Costs
The introduction of cooling-off
periods will mean that the WR Act contains another regulatory mechanism.
Benefits
The current limited use of s.170MW to establish
informal cooling-off periods is recognition of the benefits that can be gained
by such an approach. Introducing formal arrangements for cooling-off periods
will extend the potential benefits to a much wider range of parties in a wider
range of circumstances which have been clearly defined. Cooling-off periods
will assist parties to resolve disputes over certified agreements by enabling
them to negotiate in a less charged environment than that which is likely to
exist when prolonged industrial action is continuing. This will tend to improve
the parties’ ability to negotiate agreements to their mutual benefit and
will concomitantly assist in reducing the overall extent and duration of
industrial action and associated costs to employers and employees.
Drawing parties’ attention to voluntary mediation and conciliation
will assist to resolve disputes without further industrial action.
Conclusion and recommended option
The Government believes
that the WR Act should explicitly provide for cooling-off periods by amending
the current provisions for suspension of bargaining periods. Explicit provision
for cooling-off periods will allow the opportunity for parties to resolve issues
directly (or with the assistance of voluntary conciliation and/or mediation) and
will have particular value in cases of protracted action or where a stalemate
has arisen.
Clause 1 – Short title
1. This is a formal provision
specifying the short title of the Act.
Clause 2 –
Commencement
2. This clause specifies when the various provisions of
the Act are proposed to commence.
3. Sections 1 to 3 will commence on
Royal Assent. Schedule 1 will commence on a day to be fixed by Proclamation.
However, if it has not commenced within 6 months after the Royal Assent, it
commences on the first day after the end of that period.
4. Schedule 2
will commence immediately after the commencement of item 2 of
Schedule 1.
Clause 3 – Schedule(s)
5. Clause 3
provides that an Act specified in a Schedule to this Act is amended or repealed
as set out in the Schedule, and that any other item in a Schedule operates
according to its terms.
SCHEDULE 1 – BARGAINING PERIODS
Part 1 – Amendments
Workplace Relations Act 1996
Item 1 – After subsection 170MW(2)
1. Section 170MW of
the Workplace Relations Act 1996 enables the Australian Industrial
Relations Commission to suspend or terminate a bargaining period in specified
circumstances, including the circumstance where a negotiating party is not
genuinely trying to reach agreement (paragraph 170MW(2)(b)). The aim of the
proposed subsection is to provide guidance to the Commission by clarifying the
meaning of ‘not genuinely trying to reach an agreement’ within the
context of paragraph 170MW(2)(b), rather than changing it.
2. This item
would insert a new subsection 170MW(2A) which would list a number of factors
that the Commission would have to consider when it is determining whether, for
the purposes of paragraph 170MW(2)(b), a negotiating party is not genuinely
trying to reach agreement with the other negotiating parties. These factors are
not exhaustive nor are they determinative of the issue. They are drawn from the
decision of the Commission in Australian Industry Group v Automotive, Food,
Metals, Engineering, Printing and Kindred Industries Union & Ors [Print
T1982]. In that case, Munro J terminated Campaign 2000 bargaining periods at a
number of workplaces on the basis that the parties were not genuinely trying to
reach agreement.
3. Proposed paragraphs (a), (b) and (c) describe
behaviour that has been called ‘pattern bargaining’, although the
phrase is not actually used. Pattern bargaining refers to a situation
where parties organise bargaining campaigns with a view to obtaining
standardised (or ‘pattern’) outcomes in respect of terms and
conditions of employment across a number of employers or an industry, in lieu of
genuine workplace-level bargaining.
4. Proposed paragraph (a) refers to
a circumstance where a negotiating party’s conduct indicates an intention
to reach agreement on an industry-wide basis and not on the basis of a specific
enterprise or workplace only. Proposed paragraph (b) covers a circumstance
where the negotiating party’s conduct is indicative of an intention to
bargain across an industry on an ‘all or none’ basis. Proposed
paragraph (c) targets a circumstance where the focus of the negotiations is
primarily on obtaining agreement beyond the other negotiating party.
5. The factors in proposed paragraphs (d) and (e) deal more generally
with behaviour that is indicative of a failure to negotiate or attempt to reach
agreement. Proposed paragraph (d) requires the Commission to consider whether
the behaviour of the negotiating party is indicative of a refusal to meet and
confer. Proposed paragraph (e) focuses on behaviour that is indicative of a
refusal to consider or respond to proposals made by the other negotiating
parties.
6. The proposed subsection would require the Commission to have
regard to all factors in proposed paragraphs (a) to (e), to the extent relevant,
when considering whether a party was not genuinely trying to reach agreement
with the other negotiating parties for the purposes of paragraph 170MW(2)(b).
No single factor is determinative of the issue and it is open to the Commission
to take other factors into account.
7. It is a matter for the
Commission to determine whether the existence of any or all of these factors
amounts to a finding that a party is not genuinely trying to reach agreement for
the purposes of existing paragraph 170MW(2)(b). Even if the Commission reaches
such a conclusion, it is not obliged to suspend or terminate the relevant
bargaining period. Rather, this conclusion is a matter to be taken into account
and accorded appropriate weight by the Commission when it is considering whether
to exercise its discretion to make an order under subsection 170MW(1) to suspend
or terminate the relevant bargaining period.
Item 2 –
After section 170MW
New section 170MWA – Power of Commission
in relation to new bargaining periods
8. This item would insert a new
section 170MWA, which would empower the Commission to make orders to prevent the
initiation of a new bargaining period or to order that conditions attach to any
such bargaining period, even if an earlier bargaining period has ended because
of paragraph 170MV(b) of the Act.
9. Proposed subsection 170MWA(1)
provides that the Commission may make orders of the type referred to in proposed
subsection 170MWA(2) even if a bargaining period (the former bargaining period)
has ended under paragraph 170MV(b). Section 170MV describes the circumstances
in which a bargaining period ends. Paragraph (b) provides that a bargaining
period ends where a party provides notification to other negotiating parties
that an agreement with those parties under Division 2 or 3 is no longer desired.
10. Where a bargaining period ends in these circumstances, proposed
subsection 170MWA(2) would enable the Commission to order that any subsequent
bargaining period not be initiated within a particular period of time or that
any such bargaining period be initiated only on certain conditions. The
Commission may make similar orders under existing subsection 170MW(10) in the
context of an application under subsection 170MW(1) for orders to suspend or
terminate an existing bargaining period. The intention is to ensure that
negotiating parties do not manipulate bargaining periods to deny the Commission
jurisdiction under section 170MW while also taking advantage of the WR
Act’s statutory immunities for protected industrial action.
11. Proposed subsection 170MWA(3) sets out the factors to be taken into
account by the Commission before making an order under proposed subsection
170MWA(2). Before issuing an order the Commission must give the former
negotiating parties the opportunity to be heard. The Commission must also
conclude that the making of the order is in the public interest.
12. Proposed subsections 170MWA(4) and 170MWA(5) describe the
circumstances in which applications may be made for orders under proposed
subsection 170MWA(2) and the circumstances in which orders may be made. These
circumstances, and the persons who may apply for orders in various
circumstances, are drawn from existing section 170MW.
13. Proposed
subsection 170MWA(4) enables the Commission to make an order under subsection
(2), if, but for the bargaining period ending under paragraph 170MV(b), the
Commission could have made an order under existing subsection 170MW(1) to
suspend or terminate a bargaining period because a circumstance described in
existing subsections 170MW(2), (4), (5), (6) or (7) exists or existed. An order
in this case requires an application from a former negotiating
party.
14. Proposed subsection 170MWA(5) enables the Commission to make
an order in the similar case, where a circumstance described in
subsection 170MW(3) exists or existed. An order in such a case can be made
on the Commission’s own initiative, or on application by a former
negotiating party or the Minister.
15. These parallel the requirements
of existing subsection 170MW(8), indicating who can apply for an order on the
basis that a circumstance specified in section 170MW exists or existed, as
described in subsection 170MW(1).
Part 2 – Application
Item 3 – Application of item 1
16. This item proposes
that the amendment in item 1 is to apply even if any relevant bargaining period
began before the item commences. This will assist the Commission to deal with
genuine bargaining issues where disputes are already underway.
17. This item proposes that the amendment in item 2 is to apply even if
any relevant bargaining period began before the item commences. This will
assist the Commission to deal with genuine bargaining issues where disputes are
already underway.
SCHEDULE 2 – COOLING-OFF PERIODS
Workplace
Relations Act 1996
Item 1 After section 170MWA
1. This item proposes to insert new section 170MWB which would provide
that the Commission may, in certain circumstances, exercise a discretion to
suspend a bargaining period to allow for a ‘cooling–off’
period during which negotiating parties could attempt to settle the matters at
issue between them. A suspension under proposed section 170MWB would differ
from a suspension under existing section 170MW in that the latter is intended to
put a stop to industrial action because of the existence of circumstances set
out in existing subsections 170MW(2)-(7).
2. Proposed subsection
170MWB(1) would give the Commission discretion to suspend a bargaining period
for a specified period, on application by a negotiating party (proposed
paragraph 170MWB(a)), in circumstances listed in proposed paragraphs (b)-(c) of
this proposed subsection.
• Proposed paragraph 170MWB(1)(b)
requires that there be protected action being taken in relation to a proposed
agreement.
• Proposed paragraph 170MWB(1)(c) requires the
Commission to have regard to a number of factors for the purpose of determining
whether the suspension is appropriate. These factors
include:
o whether suspension of
the bargaining period would be beneficial to the negotiating parties because it
would assist in resolving the issues between them (proposed subparagraph
170MWB(1)(c)(i));
o the duration
of protected action (proposed subparagraph 170MWB(1)(c)(ii)). In considering
this factor, it is anticipated that the Commission could order suspension of the
bargaining period following a protracted period of industrial action. However,
ultimately this is a matter for the Commission to
determine;
o whether suspending
the bargaining period would be contrary to the public interest or inconsistent
with the objects of the WR Act
(proposed subparagraph 170MWB(1)(c)(iii));
o any
other matters the Commission considers relevant (proposed subparagraph
170MWB(1)(c)(iv)).
3. Proposed subsection 170MWB(2) makes it clear that
the duration of a suspension period is a matter to be left to the
Commission’s discretion. In considering the application, the Commission
must give the negotiating parties the opportunity to be heard (proposed
subsection 170MWB(5)).
4. The Commission may extend the period of
suspension on the application of a negotiating party (proposed paragraph
(3)(a)), after hearing the other negotiating parties. In determining whether to
extend a period of suspension, the Commission is to have regard
to:
• the matters referred to in paragraph 170MWB(1)(c);
and
• whether the negotiating parties genuinely tried to reach an
agreement during the period of the initial suspension.
5. Only one
extension of the cooling-off period is allowed (proposed
subsection 170MWB(4)). The period of any extension has been left to the
Commission’s discretion. There is no prescribed period for a cooling-off
as the appropriate length of a suspension or extension will vary according to
the nature of the dispute and the industry in which the dispute
occurs.
5. Proposed subsection 170MWB(6) provides that if the Commission
suspends the bargaining period under this section (or extends the initial
suspension) the Commission must inform the negotiating parties that they may
choose to attend mediation or ask the Commission to conciliate.
6. Any
industrial action taken in relation to a proposed agreement while the bargaining
period is suspended would not be protected action (proposed
subsection 170MWB(7)).
7. This item proposes that the amendment in item 1 is to apply even if
any relevant bargaining period began before the item commences. This will
assist the Commission to order a cooling-off periods where disputes are already
underway.