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1998-1999-2000-2001
THE PARLIAMENT OF THE
COMMONWEALTH OF AUSTRALIA
HOUSE OF
REPRESENTATIVES
WORKPLACE RELATIONS AND OTHER
LEGISLATION AMENDMENT (SMALL BUSINESS AND OTHER MEASURES) BILL
2001
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Employment,
Workplace Relations
and Small Business, the Honourable Tony Abbott
MP)
OUTLINE
The Bill proposes amendments to the
Workplace Relations Act 1996 (WR Act) and the Trade Practices Act
1974. The legislative reforms are designed to ensure that the workplace
relations system better meets the needs and circumstances of small business. A
vibrant and innovative small business sector is crucial to Australia’s
economic growth and social welfare.
Key reforms to be implemented by
the Bill are as follows.
• The Bill proposes new objects for the WR
Act to require the Australian Industrial Relations Commission (the Commission)
to take into account the circumstances of employers and employees in small
business in the exercise of its powers, including through appropriate changes to
its principles, procedures and rules (Schedule 1).
• The Bill
proposes that employees (other than apprentices and trainees) in small
businesses would not be entitled to apply for a remedy in respect of harsh,
unjust or unreasonable termination (‘unfair dismissal’) under the WR
Act. This exclusion would apply to those employees who are first employed in a
small business after the date on which the amendment implementing the exclusion
commences. The Bill also proposes to allow the Commission to reject some unfair
dismissal applications by employees in small businesses, without the employer or
employee having to attend a hearing. This could occur where the Commission is
satisfied that the application is outside the Commission’s jurisdiction,
or where the Commission is satisfied that the application is frivolous,
vexatious or lacking in substance (Schedule 2).
• The Bill
proposes that procedures for Australian Workplace Agreements (AWAs) and
certified agreements would be significantly simplified (Schedules 3 and 4,
respectively).
• The Bill proposes amendments to section 87 of
the Trade Practices Act 1974 to allow the Australian Consumer and
Competition Commission to bring representative actions in respect of
contraventions of sections 45D and 45E of the Trade Practices Act (Schedule 5).
• The Bill proposes to restrict the ability of unions to rope
small business employers into federal awards. Only those small business
employers with at least one employee who is a member of the union issuing the
log of claims would be able to be roped-in to a federal award. Unions would
have to provide employers with prescribed information about the roping-in
process and the rights an employer has to defend itself against the log of
claims. Also, the Commission would be required to enquire into the views of
small business employers affected by being roped into a federal award, rather
than attending only to the views of employers who appear or are represented at
such hearings (Schedule 6).
• The Bill proposes reforms to union
right of entry to businesses. Right of entry would be conditional on a written
invitation from a union member employed in the business, and the provisions of 5
working days notice to the business. Employers and occupiers would be given the
right to propose an alternative date, within 5 working days of the originally
proposed date. For union right of entry for discussion purposes (ie recruitment
purposes), the written invitation would only authorise one entry every 6 months
(Schedule 7).
• The Bill proposes to protect the status of
independent contractors by preventing federal awards and certified agreements
from restricting the use of contractors. There would be an exception for award
provisions in the textiles, clothing and footwear industry (Schedule
8).
The Bill has no financial impact on the Commonwealth
Budget.
REGULATION IMPACT STATEMENT
Time for Business, the 1996 report of the Small Business
Deregulation Task Force, identified that small business found that the
Australian Industrial Relations Commission was not user friendly and that its
rules and procedures were not responsive to its needs. The formal nature of the
Commission’s practices, proceedings and documentation made it difficult to
participate in the Commission’s processes. In addition, little or no
account was taken of the circumstances in which small businesses found
themselves as employers. Unlike large employers, they did not generally have
regular access to legal expertise in fields ranging from common law to workers
compensation when dealing with employment related matters in the
workplace.
This lack of access is partly because many small businesses
are not members of registered employer organisations. Thus, they are not
represented in the Commission’s hearings and cases. They also do not
receive the assistance that employer organisations provide, for example,
assistance with the requirements for agreement-making, advising of award
variations and assistance in interpreting awards. As a result, many small
businesses do not have the knowledge or opportunity to adapt award provisions to
the circumstances of their business and are not able to influence
Commission proceedings.
The Commission is not required to specifically take into account the
needs and circumstances of small business in its hearings or in establishing its
rules and procedures. This situation is compounded by the absence of an
organisation specifically representing the views and interests of small business
in Commission cases which are of particular importance to small business such as
award Safety Net Adjustment (SNA) cases, other test cases such as the recent
case about the employment of casuals in the Metal Industry Award and certain
roping-in cases.
Objectives:
The Government’s
objective is to increase the extent to which the Commission takes into account
the circumstances of small business in its decisions and in its rules and
procedures.
The proposed amended objects address the widespread
recognition that the Commission needs to be more widely accessible and easier to
use by all participants, especially in the small business sector.
Amend the principal object of the Workplace Relations Act 1996 (WR
Act) and the objects of particular parts of the Act, for example Part VI
‘Dispute Prevention and Settlement’, to include reference to the
special circumstances of small business, and in
particular:
• require the Commission to take
into account the circumstances of employers and employees in small business in
performing its functions and in exercising its powers under the Act (including
through appropriate changes to its principles, procedures and
rules).
Within eight months after the commencement of the
Bill:
• the President of the AIRC must
complete a review of the Rules of the Commission made under section 48 of the WR
Act (having regard to the amendments of that Act proposed by this Bill);
and
• the President must give the Minister a
written report about the review; and
• the
President must, under that section, make any new Rules of the Commission, or
make any variations of the existing Rules of the Commission, that the President
considers appropriate as a result of the review.
The objects, as proposed to be amended, would encourage the Commission to
take account of the circumstances of small business employers and employees in
the exercise of its powers (including where appropriate modifying its practices
and procedures to make them less burdensome and complex for small business
employers) but how best this objective is to be fulfilled in particular
instances and in relation to particular issues, such as measures to make
small businesses more aware of AIRC decisions and procedures, would primarily be
a matter for the Commission’s own judgment.
(a) Effect on
employers
The proposal is targeted at small businesses in the federal
jurisdiction. It is estimated that this constitutes approximately 180 000 small
businesses.
The proposal should assist small business as a result of the
Commission’s taking more account of small business circumstances in its
decisions, rules and procedures. Amendments along these lines would require the
Commission to review its rules and procedures to assist small businesses
involved in Commission proceedings. They would also require the Commission to
take more account of small business needs in test cases and Safety Net
Adjustment Cases. This may assist in gaining small business exemptions such as
occurred in the Termination, Change and Redundancy test case in 1984 or in
gaining Commission acceptance of arguments to amend the Incapacity to Pay
Principle in Safety Net Adjustment Cases. This should have indirect, beneficial
effects on small business activity.
For example, at present the only
formal mechanism available to ameliorate the adverse labour cost effects of
arbitrated Safety Net Adjustments on small businesses is the AIRC’s
economic Incapacity to Pay wage fixing principle. Since the introduction of
this principle in 1986 employers have had only very limited success in gaining
relief from arbitrated labour cost increases, causing the Government to support
the modification of the principle in three successive Safety Net Review
submissions after 1996. For the 1999 Safety Net Review decision, the
Commonwealth indicated that some 21.2 per cent of firms employing fewer than
twenty persons were operating at a loss and that safety net adjustments impacted
heavily on businesses in this category. The Commonwealth proposed modifications
to the incapacity to pay principle for respondents or groups of respondents who
were experiencing hardship but who in the past had considered the tests
specified in the principle to be set at a level which did not warrant the
considerable expense associated with mounting a case.
In its decision
(Print R1999) the AIRC decided not to modify the Incapacity to Pay principle as
suggested by the Commonwealth. However, the AIRC amended the principle to
recognize that the impact of an increase in labour costs on employment at the
enterprise level is a significant factor to be taken into account in assessing
the merit of any application. However, it is DEWRSB’s understanding that
there has not been an economic incapacity case pursued in the federal
jurisdiction since this decision.
The Commonwealth remains of the view
that the hurdles set by the Commission in considering incapacity to pay
applications are set too high. Amending the objects of the WR Act to encourage
the Commission to take account of the circumstances of small business employers
would serve a useful purpose if it made the Commission more likely to consider
modifying the Incapacity to Pay principle to make it more accessible to
applications from small businesses.
(b) Effect on employees
This proposal would potentially impact on the employees of small
businesses in the federal jurisdiction. It is estimated that around 35 per cent
of employees in businesses with less than 20 employees are covered by the
federal system (around 770 000 employees in 1999-2000).
To the extent
that the Commission’s taking more account of the circumstances of small
business is reflected in an increase in exemptions such as occurred in the
Termination, Change and Redundancy test case or could occur in more successful
use of incapacity to pay arguments in Safety Net Adjustment cases,
employees in financially vulnerable small businesses may find it harder to
access standard redundancy pay provisions and safety net wage increases provided
for other employees. The overriding intent of such exemptions, however, would
be to protect the employment of the workers concerned.
As indicated above, the AIRC’s wage principles now formally recognise that the impact of an increase in labour costs on employment at the enterprise level is a significant factor to be taken into account in assessing the merit of an incapacity to pay application in relation to SNAs. The Commission’s TCR Test Case standard was framed with a view to minimising any differential cost impact on individual enterprises with consequent adverse effects on employment and the viability of vulnerable companies. In relation to redundancy pay, the Commission in 1984 provided scope for employers to apply for exemption on the grounds of their employing less than 15 employees. Employers who employed more than 15 employees could gain a variation in the general severance pay prescription provided they fulfilled an incapacity to pay test.
(c) Effect on consumers and Australian economy
No direct
effects on consumers. Any indirect beneficial effects on small business
activity would also be beneficial to the Australian
economy.
Consultation:
Over the last six months the
Minister for Small Business has undertaken formal and informal consultations
with small business operators, including over 30 formal roundtable meetings
throughout Australia. No specific consultation on the above option has
occurred.
Implementation and Review:
The option would
require amendments to the WR Act. DEWRSB and the Australian Industrial Registry
would monitor and evaluate the effect of such legislative change.
As a
transitional provision, the President of the Commission would be required to
undertake a review of the rules of the Commission, in the light of the changes
to the Act, in particular the changes to the objects of the Act, and provide a
report to the Minister within an eight month period after the commencement of
the Bill, as to the outcome of the review of the Commission’s rules. The
President would be expected to consult with small business employers and
employees in the process of the review.
REGULATION IMPACT STATEMENT
Problem:
The defence of clearly unmeritorious unfair
dismissal claims is particularly burdensome for small businesses. Regardless of
the merit of the claim a small business is likely to have to seek legal advice
and attending a Commission hearing, which particularly for small businesses in
regional and rural Australia, can be extremely difficult and costly given that
the location of proceedings is usually in capital cities
Anecdotal evidence presented by employers and employer groups to the Senate
Employment, Workplace Relations, Small Business and Education Legislation
Committee suggests that businesses commonly make payments to terminated
employees to avoid contesting an unfair dismissal claim, regardless of the merit
of the claim. For example in evidence to the Committee’s inquiry into the
Workplace Relations Amendment (Unfair Dismissals) Bill 1998, Mr Grant Poulton
from Australian Business Limited stated:
Of the 248 matters that we
dealt with [during 1998] I would estimate that at least three quarters were
settled without regard to the question of merit, of relative strength. They
were settled on the basis that – and it is good, commercial, pragmatic
advice - it was going to cost X dollars; it could be got out of for a figure
somewhat less than X so settle it. Colloquially it is known as ‘piss
off’ money. You get an awful lot of applicants who will try it on in the
sure and certain knowledge that they will obtain
something.[1]
Moreover, the
increased use of legal representatives by applicants to unfair dismissal claims
has increased the impetus for small employers to settle claims, rather than
defend them. In the Senate Committee inquiry into the Workplace Relations
Legislation Amendment (More Jobs, Better Pay) Bill 1999, the witness appearing
for the Victorian Automobile Chamber of Commerce observed that:
Small
businesses such as those that we represent generally are employers who work
their way up through the trades themselves. They run a small shop, perhaps a
panel beating shop or something like that, where they are actually out there
doing the work alongside their staff. There really is no-one there to run or
manage the business while they are absent, so they are really keen to resolve
the matter as soon as possible. It usually involved settling on something, and
it usually means settling on a sum, particularly if those applicants are
represented by consultants or lawyers, to the satisfaction that they will be
able to pay their legal fees as the first priority, and then receive a minimum
of whatever that may be.[2]
Current Situation:
The Australian Industrial Relations
Commission (the Commission) has no discretion to reject an unfair dismissal
claim, once it is lodged, without holding at least one hearing which the
employer or their representative is required to
attend.
Objectives:
The Government’s objective is
prevent small business employers having to attend Commission hearings to defend
unfair dismissal applications which can clearly be determined, on the basis of
documents provided to the Commission, to be unmeritorious or not within the
Commission’s jurisdiction.
Option:
A Registrar or a
member of the Commission would be given the power to decline to deal with unfair
dismissal applications against small business employers, but not unlawful
dismissal applications, eg. dismissal for a discriminatory reason, when they
are first lodged.
The Registrar or Commission would be able to seek
further particulars from an applicant and a response from the small business
employer by correspondence, rather than having the parties appear in person.
Claims that are then determined to be clearly not receivable or unmeritorious
could be rejected without any hearings being convened.
This would
complement the small business unfair dismissal exclusion, by providing a simple
means for rejecting claims by excluded employees. For applications by small
business employees who are not exempt (apprentices, trainees, or employees
employed before the commencement of the exclusion), the Registrar’s or
Commission member’s discretion to dismiss an application could use a
formula such as, being reasonably satisfied the application is frivolous or
vexatious; or that the application is misconceived or lacking in
substance.
Impact analysis (costs and benefits) of the
option:
(a) Effect on employers
It is broadly estimated
that the proposal would potentially affect around 170 000 businesses in the
federal jurisdiction. The number of unfair dismissal application by employees
of small business in the federal jurisdiction has averaged around 7 700
applications in the past four years.
Reducing the number of clearly
unmeritorious claims which small businesses have to defend by engaging legal
advice and attending Commission hearings will reduce costs and inconvenience for
some of the small businesses subject to unfair dismissal applications. It will
also be of some assistance to some of those small businesses which make payments
to dismissed employees to avoid a threatened unfair dismissal
claim.
(b) Effect on employees
It is broadly estimated that
the proposal could potentially affect around 685 000 employees a year, that is,
this is the number of employees in small business that are estimated to be
currently able to seek a remedy for unfair dismissal in the federal
jurisdiction.
(c) Effect on consumers and Australian
economy
To the extent that the prospect of unmeritorious unfair
dismissal applications discourage recruitment in small business, an exemption
would increase small business activity and employment. There would be no direct
effect on consumers.
Consultation:
Over the last six
months, the Minister for Small Business, the Hon Ian Macfarlane MP, has
undertaken formal and informal consultations with small business operators at
which the impact of workplace relations regulation on small business operators
has been broadly identified by employers. No consultation on the specific
proposal above has occurred.
Implementation and Review:
The
option would require amendments to the Workplace Relations Act 1996.
DEWRSB would monitor and evaluate the effect of such legislative change.
REGULATION IMPACT STATEMENT
Simplified Procedures for Australian Workplace
Agreements
Problem:
The current procedures and
tests associated with formalised agreements can be too complex and costly.
Potential use of individual Australian Workplace Agreements (AWAs) by small
business is discouraged by technicalities. There are numerous steps to be
undertaken as a prerequisite for the approval of an AWA. The procedures are
seen as involving a high degree of formality, and some parties (particularly
small business employers without in-house access to specialised knowledge and
assistance) are discouraged from negotiating AWAs.
Concerns have also
been expressed about the fact that an AWA cannot come into effect as soon as the
parties have reached agreement. Small business has been particularly frustrated
by the delays which occur even in the case of new employees. At a minimum,
employers cannot commence new employees on AWAs until a week has elapsed since
the job offer.
Employers and employees who are keen to use an AWA often
inadvertently breach the required period which must be observed between
consideration of an AWA, and when it can be signed. Of AWAs refused by the
Employment Advocate (EA), the highest proportion (61 per cent as at August 2000)
are due to the employee prematurely signing the AWA. The current requirement to
offer AWAs in the same terms to all comparable employees at a workplace has also
been criticised as it precludes employers being able to take into account an
individual’s performance in determining the conditions they are to be
offered. This is incompatible with the concept of individual
agreements.
Existing agreement making provisions for AWAs mandate:
• a
2-stage process, whereby AWAs must be filed with the Employment Advocate, after
which a filing receipt can be issued (typically takes 3 days) and then approved
(typically a turnaround time of 20 days or less), provided various statutory
requirements and tests have been met;
• an employee must be given a
copy of the AWA at least the required number of days before signing the AWA (5
days for a new employee and 14 days for an existing employee);
• an
AWA for an existing employee comes into operation when it is approved by the
Employment Advocate or on any later date specified in the AWA. An AWA for a new
employee comes into operation when the Employment Advocate issues a filing
receipt for the AWA[3], on the date
specified in the AWA, or when the employment commences, whichever is the
latest;
• the Employment Advocate is not currently empowered to
apply for a penalty arising from any breaches of an AWA or recover
underpayments; and
• in the case where an employer has not offered
an AWA in the same terms to all comparable employees (ie employees engaged in
the same kind of work), the employer must not have acted unfairly in failing to
do so.
To date, uptake of AWAs has been limited. While the monthly
approval rate for AWAs by the OEA is now in the vicinity of 5,000 per month, and
altogether more than 170,00 AWAs have been made since the introduction of the
new workplace relations legislation, this accounts for a very small number
overall of employees in Australia. The May 2000 ABS Survey of Employee Earnings
and Hours estimates AWAs cover only 1 per cent of employees in Australia.
Another 0.8 per cent of employees are covered by registered individual
agreements in State jurisdictions. The total proportion of employees on
individual agreements (40 per cent) includes a substantial proportion of
employees paid at overaward rates, as well as those on informal individual
agreements. Where employees are paid at overaward rates, arrangements may be
less flexible as the award cannot be displaced. Therefore, simplifying AWAs may
provide a better avenue for employers and employees who have traditionally
relied on such overaward arrangements.
Objectives:
The
Government’s objectives are to:
• simplify and consolidate
the procedures for making AWAs – so that it becomes a one-stage, more
clearly understood process;
• remove periods before an AWA can come
into effect:
o however, this
would be counterbalanced by allowing employees a cooling off period during which
they could withdraw from the AWA;
• encourage larger uptake of
AWAs; and
• increase scope to tailor AWAs to individual employees.
Option:
The following measures are intended to achieve
these objectives:
• simplification of the approval process by
consolidating the existing filing and approval requirements into a one step
process for approval by the Office of the Employment Advocate
(OEA);
• enabling AWAs to take effect from the day of
signing;
• allowing employees to sign AWAs at any time after
receiving a copy of the information statement from the OEA and an explanation of
the effect of the agreement;
o with provision for an
employee party to an AWA to withdraw consent to the AWA within a cooling-off
period; and
• removal of the requirement to offer identical AWAs to
comparable employees.
Impact analysis (costs and benefits) of the
option:
(a) Effect on employers
The number of
businesses with access to AWAs, that is constitutional corporations or those
operating in Victoria or a Territory is broadly estimated to be 340 000.
All the proposals would make it easier for employers to make AWAs, and
allow them to take effect immediately. Confusion would be reduced and the
process would become much more streamlined. Employers would also have more
discretion to offer different AWAs to each of their employees. Individual
productivity benefits associated with displacing awards would begin to be felt,
but could not be isolated from other factors or separately
quantified.
(b) Effect on employees
The number of employees
estimated to be employed in businesses which can make AWAs is around 6 ¼
employees or around 85 per cent of total non-farm employees.
Employees
would be able to sign an AWA and start working under the new agreement
immediately. Lower paid employees would still be able to change their minds
during the cooling off period and the OEA would be able to seek to recover any
related underpayment on their behalf. Existing statutory protections would be
retained, and still apply, such as provisions to ensure the employee has been
fully informed about the agreement and has received information from the OEA
about the process, that the agreement is not discriminatory and that the
employee genuinely consented to the agreement. There would be more scope to
make an agreement suited to an individual’s needs, such as family
responsibilities.
(c) Effect on Consumers and Australian
Economy
The effect of the proposal would be to further encourage
take-up of AWAs amongst all businesses, and should enhance productivity growth
as working arrangements can be better tailored within an enterprise to meet the
needs of each employee as well as that of the business.
Consultation:
Over the last six months, the Minister for
Small Business, the Hon Ian Macfarlane MP, has undertaken formal and informal
consultations with small business operators at which employers have broadly
identified the impact of workplace relations regulation on small business
operators. No recent direct consultation on the above proposals has occurred.
Implementation and Review:
All of the proposals would
require amendments to the Workplace Relations Act 1996. DEWRSB and the
OEA would monitor and evaluate the effect of such legislative change.
REGULATION IMPACT STATEMENT
Simplified Procedures for Certified Agreements
Problem:
The current procedures for formalising
certified agreements (CAs) are perceived to be too time consuming, complex and
costly and unnecessarily formal, particularly for small business. The
Australian Industrial Relations Commission (AIRC) has an average turnaround time
for certifying agreements of 28 days.
Another main concern is that
parties currently attend hearings of the AIRC for agreements to be certified.
This means that parties must wait for their application to be listed for hearing
and then take time away from their workplaces to participate in hearings in
circumstances where the applications could have been dealt with expeditiously
and with minimal cost on the basis of written applications
only.
Current Situation:
Part VIB of the Workplace
Relations Act 1996 (WR Act) provides for the making of collective agreements
and their certification by the AIRC after considering them against defined
criteria.
The legislation currently specifies that employees must have
a proposed agreement available to them for at least 14 days before they are able
to approve the agreement. An employer must then lodge the agreement for
certification within 21 days of approval of the agreement by a valid majority of
the employees who are to be covered by the proposed agreement.
There is
no current statutory requirement for the AIRC to hold formal hearings for
certification of agreements but it has become practice and it is understood the
AIRC is currently opposed to changing this practice. There is also no current
provision for electronic lodgement of documents. They must be provided in hard
copy to the AIRC to commence the certification process.
Agreements made
since the introduction of the new agreement making provisions under the 1996
legislation now account for over 70 per cent of all formalised federal
agreements made (since the introduction of formalised federal agreements in
October 1991 and for which data has been collected). This increase in the
number of agreements certified under the 1996 legislation demonstrates the
effectiveness of the 1996 provisions in increasing access to agreements, but
there is still considerable potential to further expand uptake of agreements.
The ABS Survey of Employee Earnings and Hours for May 2000 shows 36.7
per cent of employees in Australia were paid by collective agreement. 21.7 per
cent of all employees are covered by a Federal agreement. The remaining
employees are covered by awards (23.3 per cent) or individual agreements (which
includes a very small proportion of registered individual agreements, with
nearly all employees in this category on informal individual agreements, where
these may also account for employees on over-award
payments).
Objectives:
The Government’s objectives
are to make agreement-making at the workplace or enterprise level easier and
more widely accessible, and to reduce the formality and cost involved in having
an agreement certified. These issues can be significant for workplaces not
currently covered by an agreement and also for those workplaces where the
parties wish to replace or otherwise update their existing agreement.
Formalised agreements are associated with more direct employer and employee
relationships which in turn are considered to provide more scope to enhance
productivity growth at the enterprise level.
• approval and variation requirements for making CAs in all
business would be streamlined for example, by merging the current CA
requirements about consultation and lodgement, along the lines of the proposal
to consolidate the existing filing and approval processes for AWAs;
and
• CAs could be approved on the basis of documents submitted to
the Commission without the need for formal hearings unless such a hearing was
requested by the employer or the employees or a union representing employees in
the negotiation of the CA.
(a) Effect on employers
It is estimated that around 365 000
businesses have access to federal certified agreements.
The proposals
would make it easier for employers to make federal CAs, and reduce
“costs” to the business through allowing for electronic lodgement of
relevant documents. In particular, it would remove the current disincentive for
small business arising from the need to attend a formal hearing before an
industrial tribunal as part of the certification process.
(b) Effect
on employees
It is estimated that businesses with access to federal
certified agreements would employ around 86.5 per cent of total non-farm
employees (around 6.4 million employees).
Employees would have greater
opportunity to make formal collective agreements, and introduce more flexible
working arrangements which can accommodate their particular circumstances, such
as family responsibilities.
(c) Effect on Consumers and Australian
Economy
The effect of the proposal would be to further encourage
take-up of CAs amongst all businesses, and should enhance productivity growth as
working arrangements can be better tailored for each enterprise to meet the
needs of its employees as well as that of the business.
Consultation:
Over the last six months, the Minister for
Small Business, the Hon Ian Macfarlane MP, has undertaken formal and informal
consultations with small business operators at which employers have broadly
identified the impact of workplace relations regulation on small business
operators. No recent direct consultation on the above proposals has occurred.
Implementation and Review:
The proposals would require
amendments to the Workplace Relations Act. DEWRSB would monitor and evaluate
the effect of such legislative change.
REGULATION IMPACT STATEMENT
Problem:
The problems addressed by this Bill are
deficiencies in the Trade Practices Act 1974 (the TPA) compliance and
redress mechanisms and barriers to the institution of proceedings under the
TPA.
Current Situation:
At present, section 87 of the TPA
allows the Australian Consumer and Competition Commission (ACCC) to bring
representative actions in respect of contraventions of all of Part IV of the
TPA, except for sections 45D and 45E.
Objective:
The
objective of the proposed amendments is to improve the enforcement aspects of
the regulatory regime contained within the TPA and address the shortcomings in
present legal remedies to encourage compliance with the obligations under the
TPA.
Options:
Option 1 – No
Action
This option would involve a series of legislative amendments to be made
to the TPA to address the identified problems.
Impact analysis (costs
and benefits) of each of the options:
Option
1 – No action
The Australian Law Reform Commission (ALRC) in Australian Law
Reform Commission Report No 68: Compliance with the Trade Practices Act
1974 (1994), documented that business (particularly small business) and
consumers are unable to access appropriate legal remedies under the TPA. The
ALRC noted that the cost of bringing proceedings was a substantial impediment to
bringing an action.
If no action is taken, the difficulties associated
with accessing legal remedies under the TPA will remain. Where the TPA has been
contravened and private individuals are unable to commence their own legal
proceedings (and thereby punish contravening parties for their misconduct), the
ACCC will be required to carry a greater share of the enforcement burden and
associated costs. Maintenance of the status quo will mean that businesses
(particularly small business) and consumers will continue to be denied the
protection purported to be offered by the TPA and hence will bear the costs of
the loss or damage produced by the unlawful conduct. This may be particularly
costly for small businesses wishing to compete with businesses that successfully
gain market share through unlawful conduct. The flow-on from this is the
creation of inefficient and uncompetitive markets, which will produce a negative
result for the community generally.
Amendments would be made to section 87 of the TPA to allow the ACCC to
bring actions for compensation or a representative action in respect of
contraventions of sections 45D and 45E of the TPA.
The general problem
of access to legal remedies under the TPA would be addressed by ensuring that
the ACCC has clear powers to enable it to bring representative proceedings on
behalf of businesses and consumers.
Consumers and businesses that are
presently unable to recover compensation for their loss would benefit from
improved access to legal remedies. This correction of market processes will
produce a more competitive environment for business and hence enhance the
welfare of the community.
Consultation:
The proposed
measures have been subject to broad consultation. The amendments were
originally contained within the Australian Law Reform Commission Discussion
Paper 56: Compliance with the Trade Practices Act 1974. The submissions to
this Paper were considered and a position developed and documented in the
Australian Law Reform Commission Report No 68: Compliance with the Trade
Practices Act 1974.
The ALRC consulted with peak business
organisations, consumer groups, the judiciary, government departments,
enforcement agencies and academia.
The former Minister for Customs and
Consumer Affairs, the Hon Chris Ellison MP released the Legislative Outline:
Amendments to the Trade Practices Act 1974: A Better Deal for Consumers and
Small Business in September 1997. This discussion paper drew on the
recommendations for reform made by the ALRC. The public submissions expressed
general support for the legislative amendments proposed under Option
2.
The proposed measures were also considered by the Joint Select
Committee on the Retailing Sector, in its August 1999 report, Fair Market or
Market Failure? The Committee consulted with peak business organisations,
enforcement agencies and government departments.
Treasury, the
Attorney-General's Department, the Department of Prime Minister and Cabinet, the
Department of Industry, Science and Resources, the Department of Transport and
Regional Services, the Department of Finance and Administration and the
Australian Competition and Consumer Commission have all been consulted.
Conclusion and recommended option:
The preferred option is
to amend the TPA to allow the ACCC to bring representative actions in respect of
contraventions of sections 45D and 45E of the TPA.
If there is no action,
then the current problems of business (particularly small business) and
consumers being unable to access appropriate legal remedies under the TPA will
continue.
Implementation and review:
Implementation of the
preferred option will occur through this Bill. The Government has informed the
public of the intention to amend the TPA in the media.
As the TPA has
fundamental effects on the business environment and establishes the parameters
within which Australian business operates, it is subject to continuing
evaluation and assessment by the Treasury to ensure its continued
effectiveness.
REGULATION IMPACT STATEMENT
Problem:
Small businesses can be roped-into federal
awards without being fully aware of the processes involved and the impact that
it will have on the business. For example, there is a current claim by the Shop
Distributive & Allied Employees’ Association (the SDA) to rope in tens
of thousands of small Victorian retail businesses into a federal award.
Currently, these businesses (formerly covered by the Victorian state system
before the Victorian Government referred most of its industrial relations powers
to the Commonwealth) are covered by the legislated minimum conditions in
Schedule 1A to the Workplace Relations Act 1996 (WR Act) which make no
provision for a number of minimum entitlements common in federal awards such as
overtime and penalty rates. Thus a move to a federal award may have significant
cost implications for many of the businesses concerned.
Many of the
businesses covered by the roping-in claim by the SDA are not members of a
registered employer organisation. Most would not know what to make of the log
of claims contained in the letter sent from the SDA to initiate the roping-in
and dispute finding procedures before the Australian Industrial Relations
Commission (the Commission). They would not, for example, be aware that such
logs are typically ambit in nature. The majority of small businesses have been
unrepresented in the Commission hearings which have been held to date and will
have no opportunity to influence the Commission’s eventual decision.
While roping-in exercises on the scale of the SDA claim are unusual, even
smaller scale claims are bewildering to most of the small businesses
involved.
Roping-in claims occur because federal awards do not operate on a common
rule basis (except in the ACT and Northern Territory), that is, a business
(other than a respondent organisation) must be individually named as a
respondent to an award for the terms and conditions in the award to apply to the
employees and employer in that business. This is due to the limitation of the
conciliation and arbitration power in the Constitution which underpins the
Commission’s powers in the federal jurisdiction. State awards do not
suffer from this limitation and most operate on a common rule basis, that is,
they apply across a sector or occupation within the state. It is estimated that
around 32 per cent of small businesses are covered by state jurisdictions around
35 per cent are covered by the federal jurisdiction and the remainder are not
covered.
If a union wants a federal award to apply to a business it
must ‘rope’ the business into the award. For this to happen the
union must make a log of claims on the business, usually with a high degree of
ambit in it (eg. 26 weeks annual leave) so that the employer could never agree
with the claims, and then ask the Commission to find that a dispute exists
between the union and the employer. This paper ‘dispute’ is
commonly resolved by the employer being made a respondent to the award. Small
businesses which do not belong to an employer organisation, often do not respond
to the union’s claims, are not represented before the Commission, and may
sometimes not even be aware they have been roped into a federal
award.
Objectives:
The Government’s objectives are
to:
• provide all businesses with more information about their
rights and the processes involved with roping-in claims;
• require
the Commission to inquire into the views of unrepresented small business
employers affected by a roping-in claim; and
• constrain the
ability of unions to rope small businesses which employ no union members into
the federal jurisdiction.
Option:
This option contains a
number of measures which are complementary.
The Commission would be
required not to make any finding of dispute in respect of any employer where the
alleged dispute was notified on the ground that the employer had not agreed to
demands set out in a log of claims, unless satisfied that:
• the
log of claims, when served, was accompanied by a notice containing prescribed
information;
• the alleged dispute was not notified until at least
28 days after service of the log;
• the party notifying the alleged
dispute had given the employer at least 28 days notice of the time and place for
hearing of the dispute notification; and
• the log of claims does
not include any demand that requires conduct or provisions contrary to the
freedom of association provisions of the Act, or not pertaining to the
relationship between employers and employees.
The Australian Industrial
Relations Commission would be required to inquire as to the views of small
business employers affected by the making of an award, rather than only
attending to the views of employers who appear or are represented at hearings.
A dispute with an employer with less than 20 employees would only be
taken to exist, in a roping-in or log of claims process, where the union has a
member employed by the employer.
Impact analysis (costs and benefits)
of the option:
(a) Effect on employers
The first
measure would ensure that any employer subject to a roping-in claim would be
more aware of what the process involved and would have more time to consider
alternative responses.
The second measure would improve the prospect
that small business would not be inappropriately affected by federal awards, but
would still depend on the Commission’s exercise of its discretion. It is
estimated that approximately 180 000 small businesses are covered by the federal
system.
The third measure would effectively prevent the vast majority of
small businesses not currently in the federal jurisdiction from being roped-in
to a federal award. It is broadly estimated that around 6 per cent of small
businesses have at least one employee who is a union member.
Those
small business employers without any employees which are union members and not
currently covered by respondent federal awards would remain covered by state
awards and agreements, or in the case of Victoria – Schedule 1A minima, or
in the case of the Territories by common rule federal awards, or would remain
award free.
(b) Effect on employees
Employees in small
businesses which were not roped-in to a federal award under the above proposals
would be covered by state awards or agreements, or would remain award free or,
in Victoria, would remain covered by Schedule 1A in the WR Act, or in the case
of the Territories would be covered by common rule federal awards..
The
impact of these proposals would be different for employees who are or become
union members, as roping-in of their employers would not be
precluded.
(c) Effect on Consumers and Australian
Economy
The third measure would effectively prevent future large
scale roping-in exercises such as the current SDA claim. Where the small
businesses were otherwise award free or in Victoria covered by Schedule 1A
conditions this would prevent potentially significant cost increases being
imposed on small businesses and the possibility that these costs would be passed
onto consumers. Avoiding these potentially significant cost increases would
also prevent any associated job losses. The potential cost increases of
changing from a state award to a federal award would be less significant as
state awards generally provide for penalty and overtime rates although these do
vary between and amongst state and federal awards.
Consultation:
Over the last six months, the Minister for
Small Business, the Hon Ian Macfarlane MP, has undertaken formal and informal
consultations with small business operators at which the impact of workplace
relations regulation on small business operators has been broadly identified by
employers. The first proposal is contained in the Workplace Relations
Legislation Amendment (More Jobs, Better Pay) Bill 1999. No specific
consultation has occurred in relation to the second and third
proposals.
Implementation and Review:
All of the proposals
would require amendments to the WR Act. DEWRSB would monitor and evaluate the
effect of such legislative change.
REGULATION IMPACT STATEMENT
Limit Union Right of Entry
Problem:
The
current right of entry provisions in the Workplace Relations Act 1996 (WR
Act) dictate that officials of registered unions may enter an employer’s
premises for specified purposes if they hold a current permit issued by a
Registrar. An invitation from a union member at the workplace is not currently
required.
Union entry into the workplace without the express invitation
of union members is inconsistent with the Government’s intention that the
focus of the federal workplace relations system should be on the
employer/employee relationship with uninvited third party intervention limited.
Anecdotal evidence suggests that the current arrangements, which allow
unrequested union entry into the workplace, are resulting in unnecessary
disruption for business by allowing unions to engage in ‘fishing
expeditions’ where they enter workplaces for investigative purposes
despite having no actual basis for suspecting a breach. Moreover, the WR Act
currently allows union officials to frequently enter workplaces ‘to hold
discussions’, which may result in the repeated harassment of non-union
members to join a union. In addition, the fact that unions are currently only
required to give 24 hours notice prior to entry may result in problematic
conflicts with business demands when union entry occurs.
At present, under the WR Act, permit holders may enter an
employer’s premises for specified investigative or discussion purposes
without invitation from a union member at the workplace. Permit holders may
enter workplaces where employees belonging to the union they represent work, in
order to investigate possible breaches of the WR Act or of relevant awards or
agreements. Entry is also allowed into workplaces, where work is being
conducted under an award that binds the relevant union, to hold discussions with
any employees who wish to participate, provided that there are employees present
at the workplace who are members of that union or are eligible to become
members. Twenty-four hours notice must be given prior to entry in all cases.
Objective:
The Government’s objective is
to:
• ensure that unions utilise their right of entry in a
responsible manner that reflects their role as membership-based service
organisations by restricting entry to circumstances where there is support at
the workplace from their membership;
• protect non union members
from being repeatedly harassed to join a union by limiting the frequency of
entry for discussion purposes; and
• alleviate some difficulties
that right of entry may cause businesses, especially small business, by ensuring
that the employer (and the occupier, where the employer is not the occupier) has
more reasonable notice of the proposed visit by the union and an opportunity to
propose an alternative date where the date chosen by the union conflicts with
business demands.
Option:
Right of entry to business
premises by a union official would be conditional on a written invitation from a
union member employed in the business, and provision of 5 working days notice to
the business.
• For inspection purposes, the invitation would have
to be made by a union member employed at the workplace, and inspection of time
and wage records would be limited to union members’
records;
• For discussion purposes (that is, where entry does not
relate to an alleged breach of member entitlements) the invitation would have to
be issued by at least one union member, the invitation would only authorise one
entry, and entry would be limited to once every 6 months (to protect non-members
from harassment).
• Employers and occupiers would be given the
right to propose an alternative date to that proposed by the union, within 5
working days of the originally proposed date;
• Union officials
would be required to provide the employer and the occupier, immediately upon
entering the premises, with a card displaying prescribed text on the rights and
obligations of the employer and the union official in respect of right of entry
provisions. The text would include a phone number for the employer or occupier
to call the Office of the Employment Advocate (OEA) if they have particular
concerns.
In addition, legislative protection would be provided for
employees to prevent unions from pressuring or harassing members or employees
into issuing invitations and from disciplining members who refuse to issue an
invitation. Protection would also be provided for employees who issue an
invitation against discrimination by their employer. These protections would
complement the extensive protections for freedom of association already provided
by the WR Act.
Impact analysis (costs and benefits) of the
option:
(d) Effect on employers
The Department broadly
estimates that there are around 200,000 employing businesses which fall within
the jurisdictional ambit of the WR Act right of entry provisions. Under the
proposal, entry for inspection or discussion purposes would also require an
invitation from a union member.
• Data from the Australian
Workplace Industrial Relations Survey 1995 indicates that 43 per cent of
workplaces with more than five employees had at least one union member at the
workplace.[4] The AWIRS data also
indicates that the percentage of workplaces with at least one union member falls
increasingly rapidly with workplace size. The Department estimates that only
around 3 per cent of workplaces with less than five employees have at least one
union member. Because workplaces of this size make up around 64 per cent of all
workplaces in Australia, their inclusion has a dramatic impact on the overall
percentage, which comes out at around 17 per cent of workplaces having at least
one union member.
Assuming that there are 1.27 workplaces per
business[5], this would imply that
there would be roughly around 17 per cent of 254,000 workplaces or 43,200
federal workplaces that would potentially be subject to union entry for both
inspection and discussion purposes.
• Under the proposal, there is
likely to be a reduction in the number of businesses subject to entry for
inspection purposes (as invitation is required), and an even greater
proportional reduction in the number of businesses subject to entry for
discussion purposes (as currently, a union member does not even have to be
present at the workplace, as long as there are employees present who are
eligible to become members). There would also be a reduction in the frequency
of discussion visits. It is not, however, possible to provide a quantifiable
estimate of what entry rates will be.
Businesses would benefit from less
disruption from union entry into the workplace, whilst union entry would be less
intrusive and more appropriately scheduled. To the extent that unions
exercising right of entry under the present arrangements negatively impact on
the productive efficiency of businesses, the proposal may yield productivity
benefits for these businesses, although there exists no way to quantifiably
estimate the impact.
The package of proposals under this option would
also help assuage employer concerns about union right of entry by ensuring,
consistent with Government policy in relation to the proper role of unions as
membership-based service organisations, that unions are only able to enter
workplaces where there is support at the workplace from their
membership.
(e) Effect on employees
The Department broadly
estimates that around 50 per cent of Australian employees are covered by the
federal system. This equates to around 3,687,000
employees.[6]
Under the
proposal, entry for inspection or discussion purposes would also require an
invitation from a union member.
• ABS data from August
2000[7] indicate that the proportion
of employees (in all jurisdictions – no jurisdictional breakdown
available) who were trade union members was 24.7 per cent.
The proposal comprehends that unions should utilise their right of entry
in a responsible manner that reflects their role as membership-based service
organisations. It should be remembered that all employees in the federal
jurisdiction may access the compliance services provided by the Department of
Employment, Workplace Relations and Small Business.
The proposal to limit
the frequency of entry for discussion purposes to once every 6 months will
benefit many employees by protecting non-union members in businesses in the
federal jurisdiction (broadly estimated to be 75.3 per cent or 2,776,000
employees) from being repeatedly pressured to join a union.
(f) Effect on Consumers and Australian Economy
Many
businesses would benefit from less frequent unnecessary union entry and from
less intrusive and better scheduled entry, reducing workplace disruption and
probably yielding productivity benefits for these businesses. Productivity
gains may in turn be passed on to consumers in the form of lower prices or
improved quality, depending on the competitiveness of various product markets.
Such supply-side gains for the economy would also be expected, other things
being equal, to contribute to economic and employment growth. It is impossible
to estimate the magnitude of these benefits, although they would be unlikely to
be particularly large in the context of the national
economy.
Consultation:
Over the last six months, the
Minister for Small Business, the Hon Ian Macfarlane MP, has undertaken formal
and informal consultations with small business operators at which employers have
broadly identified the impact of workplace relations regulations on small
business operators. No recent direct consultation on the above proposals has
occurred. However, the proposal to introduce an invitation requirement for
right of entry was previously included in the Workplace Relations and Other
Legislation Amendment Bill 1996 and in the Workplace Relations Legislation
Amendment (More Jobs, Better Pay) Bill 1999 (the MJBP Bill). The invitation
requirement proposed in Option 1 is substantially the same as proposed in the
MJBP Bill except that the MJBP Bill proposal did not limit either the number of
discussion visits each invitation could authorise or the frequency of discussion
visits.
Implementation and Review:
All of the proposals
would require amendments to the WR Act. DEWRSB would monitor and evaluate the
effect of such legislative change.
REGULATION IMPACT STATEMENT
Independent contractors –
limit regulation
Problem:
The relationship between
a business and a contractor should be essentially a commercial and not a
workplace relations arrangement. However, awards and agreements may contain
provisions that restrict the use of contractors and labour hire and that draw
contractors into workplace relations arrangements.
Contractors are an important part of the small business community. Their
work arrangements take a variety of forms, for example they may have a direct
relationship with another enterprise or work through an intermediary (such as a
labour hire firm), and they may or may not employ staff.
An
‘independent contractor’ is a person who contracts to perform
services for others without having the legal status of an employee. The term is
generally used to refer to persons who operate independently and do not engage
employees. Independent contractors follow their own trade, business or
profession. Independent contractors may be found in highly specialised and
technical fields, such as computer programming, engineering and accounting.
They are also found in a range of other occupations and industries, including
construction, and business services (such as cleaning and security). In fact,
there are very few jobs that independent contractors do not perform.
The broader term ‘contractor’ is generally used where a firm
contracts with another for the supply of goods or services, including labour,
and may engage employees or subcontractors to do the work. Like independent
contractors, contractors are often small businesses that provide specialist
services.
Provisions in agreements may constrain the use of contractors
in a number of ways, for example by:
• defining and limiting the
circumstances in which contractors may be used (eg ‘where it is determined
there are no suitable internal resources available’, ‘to meet peak
workloads’, ‘to perform specialist functions where the employer does
not have the requisite skills’, ‘as relief after permanent drivers
have all been offered overtime’, ‘during periods of dispute the
number of contractors engaged on site will not be
increased’);
• placing procedural requirements on the use of
contractors (eg ‘the use of external contractors requires prior
negotiation with the unions’);
• requiring contractors to
make certain types of industrial agreements (eg ‘all contractors will be
required to negotiate an Enterprise Agreement with the relevant union(s) that is
party to this Agreement within one month of obtaining the contract’);
and
• requiring contractors to observe certain behaviour (eg
‘any work bans imposed by tradespeople will be observed by
contractors’).
Some awards include provisions relating to
contractors to prevent undercutting of employees’ award rates. These
provisions are not limited to outworkers (eg Municipal Employees (Western
Australia) Turf Club Award 1992; Rope, Cordage, Thread Etc Industry Award 1996).
Such provisions may be ‘incidental and necessary’ to the provision
of ‘rates of pay generally’ (an allowable award matter), but this
issue has not been tested. They are, in part, a response to the fact that
federal awards cannot apply as common rules, but can only apply to named
respondents. They commonly require a respondent employer that contracts out
work covered by the award to include a term in the contract binding the
contractor to observe the rates and conditions of the award. Such clauses may
raise complex compliance issues for contractors, as a State award may also bind
them.
Restrictions on the use of contractors are not specified within
the ‘allowable matters’ contained in section 89A of the Workplace
Relations Act 1996 (WR Act). However, the Australian Industrial Relations
Commission has taken the view that certain provisions relating to contractors
can be included as incidental to protections for employees, and necessary for
their effective operation. For example, the Clothing Trades Award 1999 includes
provisions preventing respondent employers from contracting out work except on
condition that the work be performed on terms no less favourable than those
provided by the award, and on condition that the contractor include similar
terms in any subcontracts. (These provisions are intended to protect
factory-based employees, but also tend to protect outworkers, whether employees
or contractors.)
Whether the Clothing Trades Award affects a contract
for services depends on whether the manufacturer (at the top of the chain of
contracting) or any intervening contractor is a respondent to the award. Many
manufacturers and contractors would not be respondents to the award, so the
Award will not affect the outworkers who perform work for them. It is often
unclear whether an outworker’s contract is affected by the
Award—outworkers relationships with manufacturers are typically mediated
by sub-contractors or ‘middlemen’, and outworkers commonly do not
know the identity of parties higher in the chain of contracting than the
individuals they deal with directly.
Objective:
The
Government’s objective is to ensure that the relationship between a
business and a contractor is essentially a commercial and not a workplace
relations arrangement, and more specifically:
• that awards and
agreements do not restrict the use of contractors or draw contractors into
workplace relations arrangements to which they are not respondents or parties.
This broad objective is not intended to detract from the
Government’s objective of maintaining a safety net for TCF
outworkers.
Under pressures for greater international competitiveness,
the TCF industry has undergone major restructuring associated with reductions in
tariffs and bounties. This has resulted in high-volume manufacturing in the
industry tending to move offshore. At the same time Australian manufacturing in
the clothing industry, in particular, appears to have shifted from a
factory-based workforce to one centred around outworkers (who may be employees
or independent contractors).
The Senate Economics References Committee,
which reported in December 1996,[8]
found that most clothing outworkers were migrant women, aged between 25 and 35,
who had young children at home. Typically, they work in isolated conditions in
their own homes, or someone else’s home. Most clothing outworkers were
found to be recent migrants who had very poor English language skills. They had
no educational qualifications that were recognised in Australia. These factors,
together with their family-care responsibilities, reduced their ability to find
other work. The Committee found that there was no shortage of recent migrants
available to do clothing outwork because of the very high rate of unemployment,
particularly among women in that sector.
The interaction of the special
factors that prevail in the TCF industry result in TCF workers typically having
limited bargaining skills and ability. The difficulties this creates for
negotiating commercial arrangements are exacerbated by the contractual
complexity that prevails in the TCF industry (with its chains of contracts
between manufacturers, intermediaries and outworkers).
Given the extent
of public concern about the conditions of outworkers in the textiles, clothing
and footwear (TCF) industry and their particular vulnerability, provision would
be made for an exception for award provisions in that industry. Maintaining the
floor of award entitlements for a group of workers with limited bargaining
skills and ability operating in a complex contractual environment will ensure
that these workers can more confidently enter into commercial arrangements.
The exemption will apply to award provisions. TCF agreements would not
be exempted from the changes, as the no disadvantage test would continue to
protect TCF workers when entering into formal agreements. Provisions in the
award that prevent respondent employers from contracting out work except on
condition that the work be performed on terms no less favourable than those
provided by the award would be taken into account by the Australian Industrial
Relations Commission when applying the no disadvantage test to
agreements.
Option:
The option would prevent federal awards
and agreements from restricting the use of contractors and labour hire. There
would be an exemption for award provisions in the TCF industry. Provisions in
that industry that prevent employers from engaging contractors unless they do so
in a way that does not undercut award rates would be allowed.
Impact
analysis (costs and benefits) of the option:
(g) Effect on
contractors
The proposal would improve the prospect that independent
and other contractors would not be inappropriately affected by awards and
agreements to which they are not respondents or parties. It would improve the
freedom of contractors to make commercial arrangements according to their
business needs, without being drawn into the workplace relations arrangements
made by others. It would thereby benefit an important segment of the small
business community.
Forms of Employment Australia (ABS Cat. No.
6359.0) publishes data on a range of working arrangements. It shows that in
August 1998 there were around 400,000 owner managers of incorporated or
unincorporated enterprises that undertook contract work and did not have
employees (‘independent contractors’). Almost two thirds of owner
managers that undertook contract work and did not have employees were found in
two industries—Construction (147,129) and Property and business services
(105,248).
Forms of Employment Australia also shows that in
August 1998 there were around 212,291 owner managers of incorporated or
unincorporated enterprises that undertook contract work and did have employees
(‘contractors’). Almost two thirds of owner managers that undertook
contract work and did have employees were found in two
industries—Construction (78,810) and Property and business services
(55,572).
These figures are for Australia as a whole. It is not known
how many independent or other contractors come under the influence of the
federal as against the State jurisdictions, or how many are affected by
restrictive provisions in federal awards and agreements.
(h) Effect
on employees
The proposal would enhance the freedom of employees of
contractors to enter into workplace relations arrangements of their choice,
rather than being constrained by the arrangements made by third parties.
Employees and contractors, including outworkers, in the TCF industry
would not be affected by the changes so far as they relate to awards. Because
of the circumstances of outworkers (employees and contractors) in this industry
in particular (see above), the benefits of maintaining provisions of the kind
included in the Clothing Trades Award 1999 outweigh the benefits that would
apply in other industries as a result of the removal of restrictions on
contractors. Maintaining the floor of entitlements to terms no less favourable
than those provided by the award for a group of workers with limited bargaining
skills and ability operating in a complex contractual environment will ensure
that the TCF workers can more confidently enter into commercial arrangements.
(i) Effect on Consumers and Australian Economy
The
proposal offers potential benefits to consumers and the Australian economy. It
has the potential to enhanced labour market flexibility and efficiency by
removing artificial restrictions on the use of contractors and labour hire. It
would enhance freedom of contract for small businesses, and ensure that the
relationship between a business and a contractor is essentially a commercial
arrangement.
Consultation:
Over the last six months, the
Minister for Small Business, the Hon Ian Macfarlane MP, has undertaken formal
and informal consultations with small business operators at which employers have
broadly identified the impact of workplace relations regulation on small
business operators. No recent direct consultation on the above proposals has
occurred.
Implementation and Review:
The proposal would
require amendments to the WR Act. DEWRSB would monitor and evaluate the effect
of such legislative change, including by monitoring decisions of the Australian
Industrial Relations Commission and examining federal awards and agreements to
determine changes in the use of restrictive provisions.
NOTES ON CLAUSES
Clause 1 – Short
title
This is a formal provision specifying the short title of the
Act.
Clause 2 – Commencement
This clause specifies
when various provisions of the Act are proposed to commence.
Schedule 5
(Secondary Boycotts) will commence on Royal Assent. Each other Schedule
commences on a day to be fixed by Proclamation, but if it has not commenced
within 6 months after Royal Assent, it commences on the first day after that
period.
Clause 3 – Schedule(s)
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.
1.1 This Schedule will make changes to the principal object of the
Workplace Relations Act 1996, along with the objects of particular Parts
of the Act.
1.2 The objective of these changes is to increase the extent
to which the Commission takes into account the circumstances of small business
in its decisions and in its rules and procedures. This objective will also be
assisted by the proposed transitional provision, which will require the
President of the Commission to review the Rules of the Commission in light of
the changes made by this and other Schedules.
Workplace Relations Act 1996
Item 1 – After paragraph 3(h)
1.3 This item inserts a new paragraph 3(h)(a) in the principal object of the
Act, requiring the Commission to take into account the circumstances of
employers and employees in small business in performing its functions and in
exercising its powers under the Workplace Relations Act 1996
.
Item 2 – At the end of paragraph 88A(d)
1.2 This
item inserts a new object for Part VI of the Act, which deals with Dispute
Prevention and Settlement. It will require the Commission, in performing and
exercising its functions and powers in relation to making and varying awards, to
take into account the circumstances of employers and employees in small
business.
Item 3 – At the end of section
170CA
1.3 This item inserts a new subsection in section 170CA to
require that Commission must take into account the circumstances of employers
and employees in small business in performing its functions, and in exercising
it powers, under Division 3 of Part VIA (termination of employment) of the
Act.
Item 4 – After subsection 170LA(1)
1.4 This item
inserts a new subsection 170LA(1A), which requires the Commission when
performing its functions under Part VIB of the Act (Certified Agreements) to
take into account the circumstances of employers and employees in small
business.
Part 2 – Application and Transitional
Provisions
Item 5 – Application
1.5 This item provides that items 1
to 4 apply in relation to any proceedings before the Commission (whether
instituted before or after the commencement of those items).
Item 6
– Transitional provision – review of Rules of
Commission
1.6 This item would insert a transitional provision,
requiring the President of the Commission, within 8 months of the commencement
of the Schedule, to complete a review of the Rules of the Commission made under
section 48 of the Act. This review would be conducted with regard to the
amendments of the Act made by this Bill, particularly the changes to the object
provisions concerning the need for the Commission to take into account the
circumstances of employers and employees in small business in performing its
functions, including through appropriate changes to its principles, procedures
and rules. The President would be required to provide the Minister with a
written report about the review.
1.7 The President would then be
required make any new Rules of the Commission, or variations to existing rules,
that the President considers appropriate as a result of the review.
SCHEDULE 2 – UNFAIR DISMISSAL
2.1 This Schedule proposes
two measures to minimise the impact of unfair dismissal claims by employees of
small business. For the purposes of this Schedule, a ‘small
business’ is a business with fewer than 20 employees,
including:
• casual employees who have been engaged on a regular
and systematic basis for a period or sequence of periods of at least 12 months;
and
• the employee whose employment was terminated.
Workplace Relations Act 1996
Item 1 –
Subsection 170CE(1)
2.2 Item 1 proposes to amend subsection 170CE(1)
to include a reference to proposed subsection 170CE(5C) (which would exclude
certain employees of small business from access to a remedy in respect of harsh,
unjust or unreasonable termination of employment.
Item 2 –
Before subsection 170CE(6)
2.3 Item 2 would insert new subsections
170CE(5C), (5D) and (5E) into the Act. The effect of these provisions would be
to prevent certain employees of small business from applying for a remedy in
respect of harsh, unjust or unreasonable termination of employment.
New subsection 170CE(5C)
2.4 New subsection 170CE(5C) will
provide that an application may not be made under subsection 170CE(1) on the
ground that a termination was harsh, unjust or unreasonable (or on grounds that
include that ground) where, at the relevant time, the respondent employer
employed fewer than 20 people.
2.5 Paragraphs (a) and (b) of new
subsection 170CE(5C) will also clarify which employees are to be counted for the
purpose of establishing whether the employer employed fewer than 20 employees at
the relevant time. Paragraph 170CE(5C)(a) will make clear that the employee
whose employment was terminated is to be counted. Paragraph (5C)(b) will
provide that casual employees who had been engaged on a regular and systematic
basis for a sequence of periods of employment of at least 12 months are to be
counted. No other casual employee is to be counted.
New subsection
170CE(5D)
2.6 New subsection 170CE(5D) would provide that the
exclusion in new subsection 170CE(5C) does not apply where the applicant was, at
the relevant time, an apprentice or a trainee under a traineeship in respect of
which he or she had signed a training agreement registered with a State or
Territory training authority.
2.7 The terms ‘apprentice’,
‘trainee’, ‘traineeship’, ‘training
agreement’ and ‘training authority’ are to have their ordinary
meanings.
New subsection 170CE(5E)
2.8 New subsection
170CE(5E) would set out the meaning of ‘relevant time’. This
expression is to be defined as the time when the employer gave the employee
notice of termination, or the time when the employer terminated the
employee’s employment, whichever happened first.
2.9 It should be
noted that apprentices and trainees, although they are not affected by these
proposed provisions, may be excluded from a remedy in respect of harsh, unjust
or unreasonable termination of employment for other reasons. For example,
apprentices may be excluded on the basis that they are engaged under a contract
of employment for a specified period of time within the meaning of paragraph
30B(1)(a) of the Workplace Relations Regulations 1996. However, this
will depend on the terms of the particular contract or indenture of
apprenticeship.
Item 3 – After section 170CE
New
section 170CEAA – Dismissal of application
2.10 New section
170CEAA would give the Commission the power to dismiss applications by employees
of small business in respect of harsh, unjust or unreasonable termination of
employment without being required to hold a hearing, where the
application:
• is outside the Commission’s jurisdiction;
or
• is frivolous or vexatious, or lacking in substance.
2.11 New subsection 170CEAA(1) will provide that the Commission’s
power to dismiss applications without a hearing arises in respect of an
application alleging harsh, unjust or unreasonable termination of employment,
where, the relevant time, the employer employed fewer than 20 people, including
the applicant and any casual employee who had been engaged on a regular and
systematic basis for a sequence of periods of at least 12 months. New
subsection 170CEAA(7) would define ‘relevant time’ as being the time
when the employer gave the employee notice of termination, or the time when the
employer terminated the employee’s employment, whichever happened
first.
2.12 New subsection 170CEAA(2) sets out the Commission’s
power to dismiss an application by an employee of a small business on the basis
that it lacks jurisdiction to deal with it. Where the Commission is satisfied
that the applicant is not entitled to make an application for relief in respect
of harsh, unjust or unreasonable termination of employment (ie the ground in
paragraph 170CE(1)(a)), the Commission may order that the application is not a
valid application.
2.13 New subsection 170CEAA(3) sets out the
Commission’s power to dismiss an application by an employee of a small
business on the basis that it is frivolous, vexatious or lacking in substance.
Where a person applies for a remedy on the basis that his or her termination was
harsh, unjust or unreasonable (or on grounds including that ground) and the
Commission is satisfied that the application is frivolous, vexatious or lacking
in substance, the Commission may dismiss the application, to the extent that it
deals with that ground.
2.14 New subsection 170CEAA(4) would make clear
that the Commission is not required to hold a hearing in relation to the making
of an order. Furthermore, it would require the Commission, in considering
whether to hold a hearing, to take into account the cost that would be caused to
the employer’s business by requiring the employer to attend a hearing.
2.15 New subsection 170CEAA(5) would give the Commission the power to
issue a notice to one or both of the parties requesting further information in
relation to the application within the period specified in the notice. New
subsection 170CEAA(6) would require the Commission to have regard to any further
information received within that period. These provisions would not prevent the
Commission from sending out further notices requesting more information, as a
consequence of information already provided.
Item 4 – At the
end of section 170JD
2.16 Section 170JD of the WR Act provides that
the Commission can vary or revoke an order under Part VIA, on application by a
party (or their representative) who is covered by the order. New subsection
170JD(4) (to be inserted by this item) would make clear that a person who is
covered by an order made under section 170CEAA is not entitled to apply to have
that order varied or revoked.
Item 5 – At the end of section
170JF
2.17 Section 170JF provides of the WR Act provides that a
party who is entitled to apply to vary or revoke an order under section 170JD is
entitled to appeal to a Full Bench of the Commission under section 45 of the WR
Act against an order under Part VIA. New subsection 170JF(3) would make clear
that the right to appeal to a Full Bench does not apply in relation to an order
under section 170CEAA.
2.18 Item 6 would provide that the amendments proposed to subsection
170CE(1) and new subsections 170CE(5C), (5D) and (5E) (the exclusion of new
small business employees from remedies in respect of harsh, unjust or
unreasonable termination of employment) will apply to those employees who were
first employed in the small business after the commencement of this Schedule.
Item 7 – Application of items 3, 4 and 5
2.19 Item 7
would provide that the amendments relating to the Commission’s power to
dismiss applications in respect of harsh, unjust or unreasonable termination of
employment without a hearing apply in relation to terminations of employment
that occur after the commencement of the Schedule.
3.1 This Schedule proposes the amendment of the Workplace Relations Act
1996 (the WR Act) to reform and strengthen the WR Act’s provisions
relating to Australian Workplace Agreements (AWAs). The amendments would:
• provide for AWAs to take effect on the date of signing or, if later,
the date specified in the AWA as the commencing day, or, in the case of a new
employee, the date the employment commences;
• permit employees to
sign AWAs at any time after receiving a copy of the information statement
prepared by the Employment Advocate and an explanation of the effect of the
agreement;
• permit an employee party to an AWA to withdraw
consent within a cooling-off period;
• remove the requirement
relating to offering identical AWAs to comparable employees;
and
• simplify the approval process by:
- consolidating the
existing assessment of filing requirements and approval requirements into a one
step approval process; and
- removing the requirement that the Employment
Advocate refer AWAs to the Australian Industrial Relations Commission where
there is concern that the AWA does not pass the no-disadvantage test – the
Employment Advocate would apply the no-disadvantage test in all cases (subject
to principles which may be developed by the Commission).
Part 1 – Amendments
Item 1 – Divisions 1, 2, 3, 4, 5 and 6 of Part VID
3.2 Item 1 would repeal existing Divisions 1, 2, 3, 4, 5 and 6 of Part VID of the WR Act, and replace them with new Divisions 1, 2, 3, 4 and 5. Whilst the proposed new Divisions would significantly amend the procedures for the making, approval and enforcement of AWAs, a number of existing provisions would be reinserted in their existing form.
New Division 1 – Preliminary
New Subdivision A – Outline of Part
New section 170VA – Outline of Part
3.3 Proposed section 170VA sets out the contents of Part VID as amended.
New Subdivision B – Interpretation
New section 170VAA – Definitions
3.4 New section 170VAA defines a range of terms to be used in Part VID as amended.
New section 170VAB – Proposed AWAs and ancillary documents – interpretation
3.5 New subsection 170VAB(1) would provide that a reference to an Australian Workplace Agreement (AWA) or an ancillary document includes a proposed AWA or ancillary document. (Ancillary documents are agreements to vary, extend or terminate an AWA.)
3.6 In a proposed AWA or ancillary document, a reference to the employer or employee would include a reference to the future employer or employee [new subsection 170VAB(2)].
New Subdivision C – Scope of this Part etc.
New section 170VAC – Scope of this Part
3.7 Proposed section 170VAC reflects the constitutional limitations on the making of AWAs and would require that one of the following criteria apply at the AWA date (as defined in new section 170VAA) for the AWA to have effect:
• the employer is a constitutional corporation;
• the employer is the Commonwealth;
• the employee’s primary workplace is in a Territory;
• the employer is a waterside employer, the employee is a waterside worker and the employee’s employment is in connection with constitutional trade and commerce;
• the employee is a maritime worker and the employee’s employment is in connection with constitutional trade and commerce;
• the employee is a flight crew officer and the employee’s employment is in connection with constitutional trade and commerce.
3.8 Existing section 495 provides for the additional operation of Part VID in Victoria.
New section 170VAD – AWAs and ancillary documents only have effect as provided by this Part
3.9 New section 170VAD would provide that AWAs and ancillary documents only have effect as provided for in this Part.
New Division 2 – Making an AWA
New section 170VB – Employer and employee may make an AWA
3.10 New subsection 170VB(1) would provide that an employer and employee may make a written agreement, called an Australian Workplace Agreement or AWA, that deals with matters pertaining to their employment relationship.
3.11 New subsection 170VB(2) would provide that the requirements in new sections 170VBA (which deals with the making of AWAs) and 170VBB (which deals with the content of AWAs) must be met.
3.12 New subsection 170VB(3) would permit an AWA to be made before an employee commences employment. (The term ‘new employee’ is defined in proposed section 170VAA as an employee who signed an AWA before or at the time of commencing the work to which the AWA relates.)
New section 170VBA – Making an AWA
3.13 New section 170VBA sets out the proposed requirements for making an AWA:
• the AWA must be signed and dated by the employer and the employee who are parties to it [subsection 170VBA(1)];
• the employee must genuinely consent to the terms and conditions in the AWA [subsection 170VBA(2)];
• the employer must give the employee a copy of the AWA [subsection 170VBA(3)]; and
• before the employee signs the AWA, the employer must give the employee a copy of an information statement prepared by the Employment Advocate and explain the effect of the AWA to the employee [subsection 170VBA(4)].
3.14 Proposed subsection 170VBA(5) sets out the information that would be required to be provided in the information statement referred to in subsection 170VBA(4).
3.15 Proposed subsection 170VBA(6) would provide that the employee may withdraw consent to the AWA within a cooling-off period. The cooling-off period is 5 days after the date of signing for new employees and 14 days after signing for existing employees [subsection 170VBA(7)]. Written notice of withdrawal would be required to be given to the employer and to the Employment Advocate [subsections 170VBA(6) and 170VC(5)]. The effect of withdrawing consent is dealt with in new section 170VCA.
New section 170VBB – Content of AWA
3.16 New subsection 170VBB(1) would provide that an AWA must include the provisions relating to discrimination that are prescribed by the regulations. The prescribed provisions relating to discrimination would automatically be included in any AWA that does not include the prescribed provisions.
3.17 New subsection 170VBB(2) would require an AWA to include a dispute resolution procedure. A default procedure (as prescribed by the regulations) would automatically be included in any AWA that does not include a dispute resolution procedure.
3.18 New subsection 170VBB(3) would allow a dispute resolution procedure in an AWA (whether the default procedure or not) to confer powers on the Australian Industrial Relations Commission (the Commission) to settle disputes between the parties to the AWA.
3.19 New subsection 170VBB(4) would provide that the AWA must not include any provisions which would prohibit or restrict either party to the AWA from disclosing details of the AWA to another person.
3.20 New subsection 170VBB(5) would provide that the AWA must not include any objectionable provisions within the meaning of section 298Z of the WR Act. These are provisions that require or permit, or have the effect, or purport to have the effect, of requiring or permitting conduct that would contravene Part XA of the WR Act.
New section 170VBC – Nominal expiry date of AWA
3.21 New section 170VBC would provide that an AWA may specify a nominal expiry date; however, this date could not be more than 3 years after the AWA was signed [new subsection 170VBC(1)]. If no date is specified, then the nominal expiry date would be the third anniversary of the date of signing [new subsection 170VBC(2)].
New section 170VBD – Period of operation of AWA
3.22 Proposed section 170VBD sets out when an AWA would start and stop operating. An AWA would start operating on the later of:
• the AWA date (which is defined in section 170VAA as the date the AWA is signed, or if signed on different dates, the later of those dates) [paragraph 170VBD(a)];
• the date specified in the AWA as the starting day [paragraph 170VBD(b)]; or
• in the case of a new employee (as defined in section 170VAA) as the day the employment commences [paragraph 170VBD(c)].
3.23 An AWA would stop operating at the earlier of any of the following times:
• where the employer fails to make an application for approval of the AWA within the period of 60 days starting on the AWA date - the start of the day after the 60 day period ends [paragraph 170VBD(d)];
• where approval of the AWA is refused - the end of the day the refusal notice is issued [paragraph 170VBD(e)];
• where the AWA is terminated under proposed sections 170VEN, 170VEO or 170VEQ - the time the termination takes effect under the relevant section [paragraph 170VBD(f)]; or
• the time when another AWA between the employer and employee starts to operate [paragraph 170VBD(g)].
3.24 The operation of an AWA would also be affected where an eligible employee withdraws his or her consent to the AWA (see proposed section 170VCA below).
New Division 3 – Approval of AWAs
New section 170VC – Applications for approval of AWAs
3.25 Proposed section 170VC would set out the process for applying for an AWA to be approved:
• An employer must make a written application for approval of an AWA to the Employment Advocate unless the employee withdraws his or her consent during the cooling-off period [subsection 170VC(1)];
• the application would be required to be made within the 60 day period starting on the AWA date [subsection 170VC(2)];
• an application would be required to be accompanied by a copy of the AWA and any other information required by the Employment Advocate. (The Employment Advocate may publish a notice in the Gazette specifying information to be provided by applicants.) [subsection 170VC(3)];
3.26 Proposed subsection 170VC(4) would permit two or more AWAs to be included in the same notice of application, provided that the same employer is a party to all the agreements. There would be no requirement that multiple AWAs filed in a single application contain the same terms.
3.27 Proposed subsections 170VC(5) and (6) would set out further requirements for an employee to withdraw consent to an AWA. In addition to satisfying the requirements in subsections 170VBA(6) and (7), an employee would be required to give the Employment Advocate written notice of the withdrawal of consent within 7 days after giving notice of withdrawal to the employer. A withdrawal of consent would not be effective unless these requirements have been met.
3.28 If consent is withdrawn, the employer would not be required to apply for approval of the AWA. However, if the employer applies for the AWA to be approved before consent is withdrawn, the notice of withdrawal would provide a basis for the Employment Advocate to cease dealing with the application.
New section 170VCA – Consequences for AWA of employee’s withdrawal of consent
3.29 Proposed section 170VCA would provide that where an employee withdraws his or her consent to the AWA before the end of the cooling-off period, the AWA would be taken not to have started to operate.
New section 170VCB – Employment Advocate must approve, or refuse to approve, AWA
3.30 Section 170VCB would provide for the approval of AWAs. New subsection 170VCB(1) would require the Employment Advocate to approve an AWA if:
• the application has been made in accordance with section 170VC [paragraph 170VCB(1)(a)];
• the AWA satisfies the requirements of section 170VBA [paragraph 170VCB(1)(b)];
• the AWA complies with section 170VBB [paragraph 170VCB(1)(c)]; and
• subject to subsection 170VCB(2), the AWA passes the no-disadvantage test [paragraph 170VCB(1)(d)].
3.31 New subsection 170VCB(2) would provide that if the Employment Advocate has any concerns about whether the AWA meets the requirements of subsection 170VCB(1), the Employment Advocate would be required to give the parties to the AWA an opportunity to:
• take any action (including the giving of undertakings) [paragraph 170VCB(2)(a)]; or
• give the Employment Advocate any further information [paragraph 170VCB(2)(b)].
3.32 If these steps resolve the Employment Advocate’s concerns, the Employment Advocate would then be required to approve the AWA [subsection 170VCB(2)].
3.33 New subsection 170VCB(3) would provide that any undertakings accepted by the Employment Advocate are taken to be included in the AWA.
3.34 New subsection 170VCB(4) would allow the Employment Advocate to approve an AWA in certain circumstances where the requirements of subsection 170VBA(1) have not been met in all respects. This requirement would apply only where the Employment Advocate is satisfied that the failure to meet those requirements has not disadvantaged, and will not disadvantage, either party to the AWA
3.35 New subsection 170VCB(5) would provide that where the Employment Advocate is not satisfied that an AWA passes the no-disadvantage test (see Part XIE), the Employment Advocate would be required to approve the AWA if satisfied that it is not contrary to the public interest to do so.
3.36 New subsection 170VCB(6) would provide that in deciding whether the approval of an AWA is not contrary to the public interest, the Employment Advocate would have to apply the principles (if any) established by the President of the Commission under section 170VCC (see below).
3.37 The effect of new subsection 170VCB(7) would be that if none of the preceding subsections require the Employment Advocate to approve an AWA, or the Employment Advocate did not approve the AWA under subsections (4) or (5), the Employment Advocate must refuse to approve it.
New section 170VCC – Principles for deciding whether approval of an AWA etc. is not contrary to the public interest
3.38 Under proposed subsection 170VCC(1), the President of the Commission could establish principles to provide general guidance to the Employment Advocate concerning whether the approval of an AWA (or an AWA as varied) is not contrary to the public interest.
3.39 New subsection 170VCC(2) would permit the President to establish such principles at his or her own initiative, or upon application by the Employment Advocate.
3.40 Under new subsection 170VCC(3), if the Employment Advocate applies to the President for the establishment of principles, the President would be required to take such steps as he or she considers appropriate to ascertain the Employment Advocate’s views about the proposed principles.
New section 170VCD – Employment Advocate must issue approval or refusal notice
3.41 New subsections 170VCD(1) and (2) would require the Employment Advocate to issue either an approval notice or a refusal notice to the employer.
3.42 New subsection 170VCD(3) would require that, where the Employment Advocate has designated an award for the purposes of the no-disadvantage test (see Part VIE of the WR Act), the approval or refusal notice must identify the designated award.
3.43 Under new subsection 170VCD(4), an approval notice would be required to include copies of any provisions included by reason of subsections 170VBB(1) (model anti-discrimination provisions), 170VBB(2) (model dispute resolution procedure) or 170VCB(3) (undertakings).
New section 170VCE – Consequences for AWA of failure to apply for approval, or refusal of approval
3.44 New section 170VCE would set out what happens when an AWA is not approved because of either failure to apply for approval of an AWA within 60 days of the AWA date or the issuing of a refusal notice.
3.45 Proposed subsection 170VCE(1) would provide that if no application is made for approval of an AWA within 60 days:
• where the AWA has started operating, the AWA stops operating after the end of the 60 day period [paragraph 170VCE(1)(a)];
• if the AWA has not started operating, it does not start operating (an AWA may not have started operating in circumstances in which it has been signed well in advance of the commencement of employment or the date specified in the AWA as the start date) [paragraph 170VCE(1)(b)]; and
• where paragraph (a) or (b) applies, the Employment Advocate is not permitted to approve the AWA [paragraph 170VCE(1)(c)].
3.46 New subsection 170VCE(2) would provide that if the Employment Advocate issues a refusal notice in relation to the AWA:
• where the AWA has started operating, the AWA stops operating at the end of the day the refusal notice is issued [paragraph 170VCE(2)(a)];
• if the AWA has not started operating, it does not start operating (an AWA may not have started operating in circumstances in which it has been signed well in advance of the commencement of employment or the date specified in the AWA as the start date) [paragraph 170VCE(2)(b)]; and
• where paragraph (a) or (b) applies, the Employment Advocate is not permitted to approve the AWA [paragraph 170VCE(2)(c)].
New section 170VCF – Employer must give copies of documents to employee
3.47 Proposed subsection 170VCF(1) would require that, as soon as practicable after the employer has received a copy of the approval or refusal notice, the employer must provide a copy of the notice to the employee, together with any material taken to be included in the AWA by reason of section 170VBB(1) (model anti-discrimination provisions), 170VBB(2) (model dispute resolution procedure) or 170VCB(3) (undertakings). (The requirement to provide the employee with a copy of the AWA is provided for in section 170VBA.) Proposed subsection 170VCF(2) would require the employer to provide the employee with any other document if required to do so by the regulations.
New Division 4 – Effect of an AWA
New section 170VD – Effect of AWAs on awards and agreements
3.48 New section 170VD would set out the effect of an AWA on Awards and Agreements. It replicates, in its entirety, existing section 170VQ of the Workplace Relations Act 1996.
3.49 New subsection 170VD(1) would provide that (subject to proposed new subsections 170VD(2) and 170VD(3)), an AWA completely excludes the operation of any federal award which would otherwise apply to the employee’s employment. Where the proposed new subsection applies, therefore, there would be no room for the application of award provisions; the AWA would effectively ‘cover the field’ to the exclusion of any award.
3.50 New subsection 170VD(2) would provide that an award made under subsection 170MX(3) (ie an award made upon the termination of a bargaining period) renders ineffectual an AWA made after the commencement of the award, but before the nominal expiry date of the award.
3.51 New subsection 170VD(3) would provide that an AWA prevails, to the extent of any inconsistency, over an exceptional matters order. In such a case, the AWA will not be taken to ‘cover the field’ to the exclusion of the exceptional matters order. The exceptional matters order could operate in conjunction with the AWA, provided that it was not directly inconsistent with the AWA.
3.52 New subsection 170VD(4) provides that an AWA operates to the exclusion of any State award or State agreement that would otherwise apply to the employee’s employment.
3.53 New subsection 170VD(5) deals with the order of precedence where a certified agreement and an AWA have been made in respect of the same employee.
3.54 A certified agreement will prevail over an AWA to the extent of any inconsistency if:
• the certified agreement is already in operation but has not passed its nominal expiry date at the time the AWA comes into operation; and
• the certified agreement does not expressly allow a subsequent AWA to displace it or to prevail to the extent of any inconsistency
3.55 A certified agreement will prevail over the AWA to the extent of any inconsistency where the certified agreement comes into operation after the nominal expiry date of the AWA.
3.56 In all other cases, an AWA will operate to the exclusion of a certified agreement
New section 170VDA – Effect of AWA on other laws
3.57 New section 170VDA would set out the relationship between AWAs and State and other Commonwealth laws.
3.58 New subsection 170VDA(1) would provide that, subject to the exceptions contained in this section, an AWA prevails over conditions of employment specified in State laws to the extent of any inconsistency.
3.59 New subsection 170VDA(2) proposes exceptions to this general rule. Provisions in an AWA which deal with occupational health and safety, workers compensation, apprenticeship or any other matters prescribed by the regulations would operate subject to the provisions of any State law which deal with those matters. This is intended to ensure that these fundamental matters are dealt with consistently while still enabling the parties to address the issue in the AWA if they wish to do so. The regulations could also prescribe other matters that are to operate subject to a State law.
3.60 New subsection 170VDA(3) would ensure that State laws providing a remedy for termination of employment are still to be available, where they are able to operate concurrently with the AWA.
3.61 New subsection 170VDA(4) would provide that to the extent of any inconsistency, an AWA prevails over prescribed conditions of employment which are specified in a Commonwealth law which is prescribed by the regulations.
3.62 New subsection 170VDA(5) defines the terms Commonwealth law, prescribed conditions and State law.
New section 170VDB – Parties must not breach AWA
3.63 New subsection 170VDB would require that a party to an AWA must not breach the AWA. Contravention of this subsection could lead to the imposition of a civil penalty (see section 170VV).
New section 170VDC – Industrial action etc. by party to AWA
3.64 New subsection 170VDC(1) would prevent an employee whose employment is covered by an AWA from engaging in industrial action in relation to the employment to which the AWA relates during the period of operation of the AWA before its nominal expiry date.
3.65 New subsection 170VDC(2) would prevent an employer locking out an employee who is covered by an AWA during the period of operation of the AWA, but before the nominal expiry date of the AWA, for the purpose of supporting or advancing claims in respect of the employee’s employment.
3.66 A civil penalty could be imposed in respect of a breach of either subsection 170VDC(1) or (2) (see section 170VV).
New section 170VDD – Employer’s successor and AWA to which employer is a party
3.67 Proposed section 170VDD would specify the circumstances in which AWAs bind a successor, transmittee or assignee employer.
3.68 Subsection 170VDD(2) would make it clear that the rights and obligations of the previous employer which arose before the succession of the business or undertaking are not affected.
3.69 Subsection 170VDD(3) would provide that for the purposes of this section, a successor includes a transmittee or assignee.
New Division 5 – Extending, varying or terminating an AWA
New Subdivision A – Extension agreements
New section 170VE – Agreement to extend AWA’s nominal expiry date
3.70 Proposed section 170VE would allow parties to an AWA to make a written agreement to extend the AWA’s nominal expiry date. Such an agreement could only be made before the AWA’s nominal expiry date and the extended date could not be more than 3 years after the AWA date [new subsections 170VE(1) and (2)].
3.71 Proposed subsection 170VE(3) would provide that an extension agreement will be made when it is signed and dated by the parties to the agreement. The employee would have to genuinely consent to making the extension agreement [new subsection 170VE(4)].
3.72 An employee may withdraw his or her consent to the extension agreement by giving writing notice of the withdrawal of consent to the employer and the Employment Advocate before the end of the cooling off period [new subsection 170VE(5)]. The cooling off period is period of 14 days after the day on which the employee signs the agreement.
3.73 The agreement would come into effect on the day when both parties have signed the agreement [subsection (170VE(5)], subject to section 170VEC (which deals with the consequences of failing to apply for approval, or refusal of approval, of the variation agreement).
New section 170VEA – Application for approval of extension agreement
3.74 Proposed section 170VEA would set out the application process for approval of extension agreements.
3.75 Under proposed subsection 170VEA(1), an employer would be required to apply for approval of the extension agreement within 60 days of the day when the agreement takes effect.
3.76 Under proposed subsection 170VEA(2), the application would be required to be accompanied by a copy of the agreement, together with any information required by the Employment Advocate (as specified by a Gazette notice).
3.77 Two or more agreements could be included in the same notice of application for approval. The agreements need not be in the same terms [new subsection 170VEA(3)].
New section 170VEB – Employment Advocate must approve, or refuse to approve, extension agreement
3.78 New section 170VEB would require the Employment Advocate to approve an extension agreement if the application has been made in accordance with section 170VEA and the agreement satisfies the requirements of section 170VE [new subsection 170VEB(1)].
3.79 If the Employment Advocate is not satisfied that the requirements set out in subsection 170VE(3) have been met in all respects, the Employment Advocate may still approve the extension agreement if he or she is satisfied that the failure to meet those requirements has not disadvantaged, and will not, disadvantage either party to the AWA [new subsection 170VEB(2)].
3.80 New subsections 170VEB(3), (4), (5) and (6) would set out the proposed requirements in relation to the issuing of approval and refusal notices by the Employment Advocate and the provision of a copy of the notice, the approved agreement and any other prescribed information to the employee.
New section 170VEC – Consequences for extension agreement of failure to apply for approval or refusal of approval
3.81 Proposed subsection 170VEC(1) would provide that if an employer fails to apply for approval of an extension agreement within 60 days of the starting day of the agreement the agreement would cease operating after the end of that period and the Employment Advocate cannot approve the extension agreement.
3.82 Under proposed subsection 170VEC(2), the issuing of a refusal notice in relation to an extension agreement would cause the extension agreement to cease to operate from the end of the day on which the notice was issued.
New Subdivision B – Variation agreements
New section 170VED – Agreement to vary an AWA
3.83 New subsection 170VED(1) would provide that parties to an AWA may enter into a written agreement to vary the terms of the AWA. (A variation agreement may vary the AWA’s nominal expiry date. That is, where the parties agree to vary the nominal expiry date as well as other terms of the agreement, it would not be necessary to make separate extension and variation agreements). A variation agreement would be made when it is signed and dated by the parties to the agreement.
3.84 New subsections 170VED(2) and (3) would provide for a cooling-off period during which an employee may withdraw his or her consent to the variation agreement. The cooling-off period is the period of 14 days after the day on which the employee signs the agreement. This cooling-off period would operate in the same manner as the cooling-off period applicable to AWAs.
3.85 New subsection 170VED(4) would provide that subject to sections 170VEF (which deals with withdrawal of consent) and 170VEJ (which deals with the consequences of failure to apply for approval and refusal of approval) a variation agreement takes effect on the day on which the parties sign the agreement (or the later day if signed on different days), or, if later, on the day specified in the agreement.
3.86 Proposed subsections 170VBA and 170VBB would apply to the AWA as varied. That is, the employee would be required to genuinely consent to the terms and conditions in the variation agreement, the employer would be required to give the employee a copy of the agreement and before the employee signs the agreement, the employer would be required to give the employee a copy of an information statement prepared by the Employment Advocate and explain the effect of the agreement to the employee. The AWA as varied would have to include the prescribed anti-discrimination provisions and a dispute resolution procedure. The AWA as varied could not include any provisions which would prohibit or restrict either party to the AWA from disclosing details of the AWA to another person and could not include any objectionable provisions within the meaning of section 298Z of the WR Act.
New section 170VEE – Applications for approval of variation agreements
3.87 Proposed section 170VEE would set out the requirements for applications for approval of variation agreements. These requirements would operate in the same way as the proposed requirements for applications for approval of an AWA.
New section 170VEF – Consequences for variation agreement of employee’s withdrawal of consent
3.88 New section 170VEF would set out the consequences of the withdrawal of consent. If an eligible employee withdraws his or her consent to the variation agreement before the end of the cooling-off period, the agreement would be taken not to have started to operate.
New section 170VEG – Employment Advocate must approve, or refuse to approve, variation agreement
3.89 New section 170VEG proposes requirements for approval of a variation agreement. These requirements would operate in the same way as the proposed requirements for approval of an AWA as set out in section 170VCB.
New section 170VEH – Employment Advocate must issue approval or refusal notice
3.90 New section 170VEH proposes requirements applicable to the issuing of approval and refusal notices in respect of variation agreements. New subsection 170VEH(1) would require the Employment Advocate to issue an approval notice in respect of an approved variation agreement and provide a copy of the notice and the agreement to the employer. New subsection 170VEH(2) would require the Employment Advocate to issue to the employer a refusal notice in respect of a variation agreement that has been refused.
New section 170VEI – Employer must give copies of documents to employee
3.91 New section 170VEI would specify the information that the employer must provide to the employee after receiving an approval or refusal notice from the Employment Advocate. Proposed subsection 170VEI(1) would require that as soon as practicable after the employer has received a copy of the approval or refusal notice, the employer must provide a copy of the notice to the employee, together with a copy of the variation agreement and any material taken to be included in the AWA as varied by reason of subsections 170VBB(1) (model anti-discrimination provisions), 170VBB(2) (model dispute resolution procedure) or 170VEG(3) (undertakings).
3.92 New subsection 170VEI(2) would provide for regulations to prescribe additional requirements as to material to be provided to the employee.
New section 170VEJ – Consequences for variation agreement of failure to apply for approval or refusal of approval
3.93 New section 170VEJ would set out what happens when a variation agreement is not approved because of either failure to apply for approval within 60 days of the AWA date or the issuing of a refusal notice.
3.94 Proposed subsection 170VEJ(1) would provide that:
• where the variation agreement has already taken effect, it ceases to have effect after the end of the 60 day period [paragraph 170VEJ(1)(a)];
• if the variation agreement has not already taken effect, it does not take effect [paragraph 170VEJ(1)(b)]; and
• where paragraph (a) or (b) applies, the Employment Advocate is not permitted to approve the AWA [paragraph 170VEJ(1)(c)].
3.95 New subsection 170VEJ(2) would provide that:
• where the variation agreement has already taken effect, it ceases to have effect at the end of the day the refusal notice is issued [paragraph 170VEJ(2)(a)]; and
• if the variation agreement has not already taken effect, it does not take effect [paragraph 170VEJ(2)(b)].
New Subdivision C – Terminating an AWA
New section 170VEK – Terminating an AWA
3.96 New section 170VEK would set out the three ways in which an AWA may be terminated:
• by a termination agreement as provided for in sections 170VEL and 170VEN;
• by the Employment Advocate on application of an AWA party as provided for in section 170VEO; and
• in accordance with a provision in the AWA as provided for in sections 170VEP and 170VEQ.
New section 170VEL – Termination agreement
3.97 New subsection 170VEL(1) would allow the parties to an AWA at any time to make a written agreement to terminate the AWA. Proposed subsection 170VEL(2) would provide that the termination agreement will be made when it is signed and dated by the parties to the agreement. The employee would be required to genuinely consent to making the termination agreement [new subsection 170VEL(3)].
3.98 An employee may withdraw his or her consent to the termination agreement by giving writing notice of the withdrawal of consent to the employer and the Employment Advocate before the end of the cooling off period [new subsection 170VEL(4)]. The cooling off period is period of 14 days after the day on which the employee signs the agreement [new subsection 170VEL(5)].
3.99 A termination agreement would be required to be approved by the Employment Advocate, and if approved, it would come into effect on the day on which the approval notice is issued, or a later date if specified in the termination agreement [subsection 170VEL(4)]. If the agreement is not approved by the Employment Advocate, it does not take effect.
New section 170VEM – Application for approval of termination agreement
3.100 New section 170VEM would set out the requirements for an application for approval of a termination agreement.
3.101 Under proposed subsection 170VEM(1), an employer would be required to apply in writing to the Employment Advocate for approval of the termination agreement. The application would have to be made within 60 days of the agreement being made [new subsection 170VEM(2)].
3.102 Under proposed subsection 170VEM(3), the application would be required to be accompanied by a copy of the agreement, together with any information required by the Employment Advocate (as specified by a Gazette notice).
3.103 Two or more agreements could be included in the same notice of application for approval. The agreements need not be in the same terms [new subsection 170VEM(4)].
New section 170VEN – Employment Advocate must approve, or refuse to approve, termination agreement
3.104 New section 170VEN would require the Employment Advocate to approve a termination agreement if the application has been made in accordance with section 170VEM and the agreement satisfies the requirements of section 170VEL [new subsection 170VEN(1)].
3.105 If the Employment Advocate is not satisfied that the requirements set out in paragraphs 170VEN(1)(a) and (b) have been met in all respects, the Employment Advocate may approve the termination agreement if he or she is satisfied that the failure to meet those requirements has not disadvantaged, and will not disadvantage, either party to the AWA [new subsection 170VEN(2)].
3.106 New subsections 170VEN(3), (4), (5) and (6) would set out the proposed requirements in relation to the issuing of approval and refusal notices by the Employment Advocate and the provision of a copy of the notice, the approved agreement and any other prescribed information to the employee.
New section 170VEO – Termination by Employment Advocate
3.107 New section 170VEO would provide for an AWA party to apply to have the AWA terminated. Applications would be made in writing to the Employment Advocate after the AWA’s nominal expiry date [new subsection 170VEO(1)].
3.108 Before making a determination in respect of an application to terminate an AWA, the Employment Advocate would be required to take such steps as he or she considers appropriate to obtain the views of each of the parties about whether the agreement should be terminated [new subsection 170VEO(2)].
3.109 The Employment Advocate would be required to issue a determination in respect of an application under subsection 170VEO(1). If the Employment Advocate determines that the AWA should be terminated, the termination would take place at the end of the day the determination is issued and or a later time if specified in the determination [new subsections 170VEO(3) and (4)].
New section 170VEP – Termination in accordance with the AWA
3.110 New section 170VEP would provide for the termination of an AWA in the manner provided for in the AWA. Such terminations would need to be approved by the Employment Advocate to ensure that they comply with the terms of the relevant AWA. Applications would be required to be made in writing to the Employment Advocate after the AWA’s nominal expiry date [new subsection 170VEP(1)]. The applicant would be required to notify the other party to the AWA of the application as soon as practicable after it is made [new subsection 170VEP(2)].
3.111 New subsection 170VEP(3) would set out the requirements for an application under subsection 170VEP(1). The application would be required to be accompanied by details of the manner of termination provided for in the AWA and any other information the Employment Advocate requires (as specified by a Gazette notice).
3.112 The termination of two or more agreements could be covered in the same notice of application if the applicant is the employer and the employer is a party to all the AWAs to which the notice of application applies. The terminations need not be in the same terms [new subsection 170VEP(4)].
3.113 New subsection 170VEP(5) would provide that a termination in accordance with an AWA comes into effect on the day on which the approval notice is issued, or a later date if specified in the application.
New section 170VEQ – Employment Advocate must approve, or refuse to approve, terminations under AWAs
3.114 New section 170VEQ would require the Employment Advocate to approve an application if it has been made in accordance with section 170VEP, the applicant has notified the other party of the application and the termination is in accordance with the AWA [new subsection 170VEQ(1)].
3.115 New subsections 170VEQ(2), (3), (4) and (5) would set out the proposed requirements in relation to the issuing of approval and refusal notices by the Employment Advocate and the provision of a copy of the notice and any other prescribed information by the applicant to the other party.
Item 2 – At the end of subsection 170VV(1)
3.116 Section 170VV sets out the penalties for contravening this Part. This item proposes to add a new provision to make it clear that the penalties are civil penalties. A legislative note would replace the existing heading to the section, ‘Penalties for contravening this Part’, with a new heading, ‘Civil penalties’.
Item 3 – Subsection 170VV(3)
3.117 Subsection 170VV(1) provides that an eligible court may impose a penalty on a person who contravenes a penalty provision. Existing subsection 170VV(3) provides that an application for an order under subsection 170VV(1) that relates to an AWA or ancillary document may be made by a party to the AWA or ancillary document. New subsection 170VV(3) would permit an application for an order under subsection 170VV(1) to be made by the Employment Advocate or an authorised officer (as defined in section 83BG) or by a party to the AWA or ancillary document.
Item 4 – Subsection 170VV(4) (definition of penalty provision)
3.118 This item would repeal existing subsection 170VV(4), which lists the sections of Part VID which are penalty provisions, and replace it with a revised list reflecting the repeal and insertions of sections to which penalties apply.
Item 5 – After section 170VV
New section 170VVA – Eligible court may order employer to pay underpayment to employee
3.119 This item would insert new section 170VVA, which would permit a court, in a proceeding under section 170VV, to order an employer to make a payment to an employee in respect of any underpayment of entitlements under an AWA. The power to make such an order is additional to the power to impose a penalty under subsection 170VV(1).
3.120 New subsection 170VVA(2) would limit the scope of orders under subsection 170VVA(1) to exclude underpayments relating to any period more than 6 years before the commencement of the proceedings. This limit is consistent with the time limit on recovery of underpayments imposed by subsection 179(1) in respect of breaches of awards and certified agreements.
Item 6 – At the end of section 170VW
3.121 This item would insert new subsection 170VW(3), which would ensure that, to the extent that the relevant loss had been recovered through an order made under subsection 170VV(3), an employee could not recover damages for a breach of an AWA.
Item 7 – Section 170VX
3.122 This item would repeal existing section 170VX (which deals with compensation for shortfalls for new employees whose AWAs are subsequently refused approval) and insert new sections 170VX, 170VXA, 170VXB and 170VXC. The new sections would also provide for the recovery of compensation for shortfalls, but they substantially widen the circumstances in which compensation may be recovered. The new sections providing for the recovery of compensation take account of the new sections providing for the commencement of AWAs and variation agreements, the effect of which would be that most AWAs and variation agreements (including those for existing employees) would start to operate before they are assessed by the Employment Advocate.
3.123 The new provisions would also widen access to recovery of compensation where an AWA has been approved on the basis of undertakings or other action, and the undertakings have been breached or other action has not been taken as required.
3.124 In each case, the employee (or the Employment Advocate or an authorised officer on the employee’s behalf) could make a claim in an eligible court for this amount (an eligible court is defined in new section 170VA).
New section 170VX – Compensation for shortfall in entitlements – AWA not operating
3.125 New subsection 170VX(1) would allow an employee (or the Employment Advocate or an authorised officer on the employee’s behalf) to claim compensation in the event that he or she was disadvantaged by making an AWA that subsequently stopped operating for one of the reasons set out in subsection 170VX(2). (The reasons specified in subsection 170VX(2) are that the AWA was subsequently refused approval or that the employer failed to apply for the AWA’s approval as required by new subsection 170VC(2).)
3.126 New subsection 170VX(1) would provide a formula for calculating the amount of compensation payable.
New section 170VXA – Compensation for shortfall in entitlements – AWA approved after employer’s action
3.127 New subsection 170VXA(1) would allow an employee (or the Employment Advocate or an authorised officer on the employee’s behalf) to claim compensation where his or her entitlements under an AWA are increased as a result of a requirement that the employee’s employer give undertakings or take other action in order for an AWA to be approved.
3.128 New subsection 170VXA(2) would provide a formula for calculating the amount of compensation payable.
New section 170VXB – Compensation for shortfall in entitlements – variation agreement ceasing to have effect
3.129 New subsection 170VXB(1) would allow an employee (or the Employment Advocate or an authorised officer on the employee’s behalf) to claim compensation where a variation agreement has stopped operating for one of the reasons set out in subsection 170VXB(2). (The reasons specified in subsection 170VXB(2) are that the variation agreement was subsequently refused approval or that the employer failed to apply for the approval of the agreement as required by new section 170VEE(2).)
3.130 New subsection 170VXB(1) would provide a formula for calculating the amount of compensation payable.
New section 170VXC – Compensation for shortfall in entitlements – variation agreement approved after employer’s action
3.131 New subsection 170VXC(1) would allow an employee (or the Employment Advocate or an authorised officer on the employee’s behalf) to claim compensation where his or her entitlements under an AWA, as varied by a variation agreement, were increased as a result of a requirement that the employee’s employer give undertakings or take other action in order for an AWA to be approved.
3.132 New subsection 170VXC(2) would provide a formula for calculating the amount of compensation payable.
Item 8 – At the end of subsection 170WE(1)
3.133 This item would amend subsection 170WE(1) by inserting a note indicating that a civil penalty is applicable to a breach of this provision.
Item 9 – Before section 170WF
3.134 This item would insert a new section 170WAA which sets out the requirements relating to bargaining agents, as follows.
New section 170WEA – Bargaining agents
3.135 New subsection 170WEA(1) would provide that either of the parties may appoint a bargaining agent to negotiate an AWA. This appointment would be required to be in writing. Subsection 170WAA(5) would provide that a bargaining agent may be a group of persons.
3.136 New subsection 170WEA(2) would provide that a party must not refuse to recognise the appointment of a duly appointed bargaining agent by the other party for the purposes of new subsection 170WAA(1). Contravention of this section could lead to the imposition of a monetary penalty. If a person did not wish to negotiate the making of an AWA, that would not constitute a refusal to recognise a bargaining agent.
3.137 New subsection 170WEA(3) would provide that a party is not in breach of new subsection 170WAA(2) if they were not given a copy of the bargaining agents instrument of appointment before the refusal.
3.138 New subsection 170WEA(4) would provide that a party must not coerce or attempt to coerce the other party:
• to appoint or not to appoint a particular person as their authorised bargaining agent; or
• to terminate the appointment of their authorised bargaining agent.
3.139 The contravention of this provision could lead to the imposition of a
civil penalty.
Item 10 – At the end of subsection
170WF(1)
Item 11 – At the end of subsection 170WG(1)
Item 12 – At the end of subsection 170WG(2)
3.140 These items would amend subsections 170WF(1), 170WG(1) and 170WG(2) by inserting notes indicating that civil penalties are applicable to breaches of these provisions.
Item 13 – Section 170WH
New section 170WH – Information must not be false or misleading
3.141 This item would repeal existing section 170WH and replace it with a new provision to the effect that a person must not give the Employment Advocate information for the purposes of this Part that the person knows or ought reasonably to know is false or misleading.
3.142 The contravention of this provision could lead to the imposition of a civil penalty.
3.143 In determining whether a person ought reasonably to know that information is false or misleading, it would be appropriate to have regard to the persons abilities, experience, qualifications and other attributes and to all the other circumstances surrounding the alleged contravention.
Item 14 – Subsection 170WHA(1)
3.144 This item proposes a minor technical amendment consequent upon the replacement of filing requirements with approval requirements.
Item 15 – Sections 170WHB, 170WHC and 170WHD
3.145 This item would repeal sections 170WHB, 170WHC and 170WHD which concern the Commission’s functions with respect to AWAs. These provisions would not be required as a consequence of the repeal of Subdivision C of Division 5 of Part VID and subsections 170VM(3), (4) and (5), which provide for the approval of AWAs and variation agreements and the termination of AWAs by the Commission. These functions would be transferred to the Employment Advocate by item 2.
Item 16 – Subsection 170WI(1)
3.146 This item proposes a minor technical amendment consequent upon the replacement of filing requirements with approval requirements.
Item 17 – Subsection 170WI(1)
3.147 This item would omit a reference to the Commission in subsection 170WI(1) consequent upon the transfer to the Employment Advocate of the Commission’s functions with respect to the approval of AWAs and variation agreements and the termination of AWAs.
Item 18 – Paragraph 170WI(2)(a)
3.148 This item proposes a minor technical amendment consequent upon the replacement of filing requirements with approval requirements.
Item 19 – Paragraph 170WI(2)(b)
3.149 This item would omit a reference to the Commission in paragraph 170WI(2)(b) consequent upon the transfer to the Employment Advocate of the Commission’s functions with respect to the approval of AWAs and variation agreements and the termination of AWAs.
Item 20 – Paragraph 170WI(2)(c)
3.150 This item would repeal existing paragraph 170WI(2)(c) and replace it with a new paragraph to reflect the replacement of filing requirements with approval requirements.
Item 21 – Paragraph 170WL(d)
3.151 This is a consequential amendment to remove existing paragraph 170WL(d), which provides that the regulations may make provision in relation to the witnessing of signatures on AWAs or ancillary documents. Under other amendments proposed in this Schedule, an AWA, extension agreement, variation agreement or termination agreement will be required to be signed only by the employer and employee parties to the AWA. As a consequence, the regulation-making power in paragraph 170WL(d) will no longer be necessary.
Part 2 – Application and saving provisions
Item 22 – Application of items 1, 4, 7, 9 and 13 to 20
3.152 This item would provide that items 1, 4, 7, 9 and 13 to 20 apply only to AWAs, extension agreements, variation agreements and termination agreements made on or after the commencement of those items.
Item 23 – Application of items 3, 5 and 6
3.153 The effect of this item is that items 3, 5 and 6 would apply to AWAs,
extension agreements, variation agreements and termination agreements
irrespective of the date they are or were made.
Item 24 – Saving
– AWAs
Item 25 – Saving – extension
agreements
Item 26 – Saving – variation agreements
Item 27 – Saving – termination agreements
3.154 The effect of these items is to provide for the continuing effect of AWAs, extension agreements, variation agreements and termination agreements approved in accordance with the requirements that applied before the commencement of the new approval provisions.
Item 28 – Saving – regulations made for the purposes of former sections 170VG and 170VR
3.155 This item would save regulations made for the purposes of former subsections 170VG(1) and (3) and 170VR(4). These regulations would continue to have effect as if they had been made under the corresponding new provisions (as indicated in the table set out in this item) that would be inserted by item 1, that is, subject to any new regulations made for the purposes of the new provisions.
Item 29 – Saving – Gazette notices
3.156 This item would save Gazette notices published for the purposes of former paragraphs 170VO(1)(c), (3)(c), (4)(b), (5)(b) and (6)(b). These notices would continue to have effect as if they had been made under the corresponding new provisions (as indicated in the table set out in this item) that would be inserted by item 1, that is, subject to any new Gazette notices published for the purposes of the new provisions.
Item 30 – Saving – prescribed conditions
3.157 This item would save regulations made for the purposes of former subsection 170VR(5). These regulations would continue to have effect as if they had been made for the purposes of the definition of ‘prescribed conditions’ in new subsection 170VDA(5), that is, subject to any new regulations made for the purposes of the new definition.
Item 31 – Saving – appointment of bargaining agent
3.158 This item would save appointments of bargaining agents made under former subsection 170VK(1). Such appointments would continue in force as if they had been made under new subsection 170WEA.
Item 32 – Definitions
3.159 This item defines the terms ‘amended Act’, ‘former provision’ and ‘new provision’ as used in Part 2 of this Schedule.
SCHEDULE 4 – CERTIFIED AGREEMENTS
4.1 This Schedule proposes amendments to the certified agreement provisions of the Workplace Relations Act 1996.
4.2 The new provisions are intended to make agreement making easier and more widely accessible, to reduce the formality and cost involved in having an agreement certified, and to prevent unwarranted interference by third parties in agreement making. These objectives would be achieved by:
• providing that, in cases where an application to certify, extend,
vary or terminate a certified agreement is considered by the Commission, no
formal hearing should be held unless it is necessary in the circumstances
(although allowing employees and other defined persons to request that the
Commission conduct a hearing);
• removing the entitlement of
employee organisations to prevent the extension, variation or termination of
section 170LK agreements, while still retaining a role for such organisations
where requested by a member;
• making a number of minor amendments and correcting technical
defects.
Part 1 – Amendments
Item 1 – Paragraph 170LJ(3)(a)
4.3 This item proposes an amendment to address a technical defect, concerning the process for approval by employees of agreements made under section 170LJ (agreements between employers and organisations of employees). It is intended to provide that, where a new employee or employees commence work with the employer during the 14 day period prior to approval of the agreement, the employer must take steps to provide those employees with access to the agreement before approval is given. The requirement for a minimum of 14 days notice would not apply in relation to such employees. (Paragraph 170LJ(3)(b) continues to require that the agreement be explained, before approval, to all persons whose employment will be subject to the agreement.)
Item 2 – After subsection 170LJ(3)
4.4 This item relates to proposed new section 170LVA, which will provide that the Australian Industrial Relations Commission (AIRC) should generally determine whether or not to certify an agreement without conducting a hearing. However, that section also specifies persons who may apply to the AIRC to request a hearing be conducted in respect of a proposed agreement. One such person is a person whose employment will be subject to the agreement.
4.5 This item will insert a new subsection 170LJ(3A), which will require an employer to take reasonable steps, within 7 days of the agreement being approved by a valid majority of employees, to inform each person whose employment will be subject to the agreement of their right to request such a hearing and that the request must be made no later than 28 days after the agreement is approved.
Item 3 – Subsection 170LK(2)
4.6 This item would effect an amendment to address a technical defect, concerning the process for approval by employees of agreements made under section 170LK (agreements between employers and their employees). It is intended to provide that, where a new employee or employees commence work with the employer during the 14 day period prior to approval of the agreement, the employer must take steps to provide those employees with access to the agreement before approval is given. The requirement for a minimum of 14 days notice would not apply in relation to such employees (new paragraph (c) would require that the agreement be explained, before it is made, to all persons whose employment will be subject to the agreement.)
4.7 This item would also incorporate into subsection 170LK(2) the existing requirement in subsection 170LK(7) for the employer to take reasonable steps to ensure that the terms of the agreement are explained to all the persons employed at the time whose employment will be subject to the agreement.
Item 4 – Subsection 170LK(7)
4.8 This item would repeal existing subsection 170LK(7) (which would be incorporated into new subsection 170LK(2)) and insert a new subsection 170LK(7). The new subsection 170LK(7) would require an employer to take reasonable steps, within 7 days of the agreement being approved by a valid majority of employees, to inform each person whose employment will be subject to the agreement of their right to request the Commission to conduct a hearing regarding whether or not to certify the agreement and that the request must be made no later than 28 days after the agreement is approved (hearings are dealt with in proposed new section 170LVA).
Item 5 – Subsection 170LK(8)
4.9 This item proposes consequential amendments to reflect the changes made by items 3 and 4.
Item 6 – At the end of section 170LK
4.10 This item proposes to add a note after subsection 170LK(8). The note would refer readers to the Commission’s power under the proposed new subsection 170LT(11) to dispense with compliance with subsection 170LK(8) in certain cases.
Item 7 – Paragraph 170LR(2)(a)
4.11 This item proposes an amendment to address a technical defect, concerning the process for approval by employees of agreements made under Division 3 (agreements between employers and organisations of employees). It is intended to provide that, where an employee or employees commence work with the employer during the 14 day period prior to approval of the agreement, the employer must take steps to provide those employees with access to the agreement before approval is given. The requirement for a minimum of 14 days notice would not apply in relation to such employees. (Paragraph 170LR(2)(b) continues to require that the agreement be explained, before approval, to all persons whose employment will be subject to the agreement.)
Item 8 – At the end of section 170LR
4.12 This items proposes a new subsection 170LR(3) which would require an employer to take reasonable steps, within 7 days of the agreement being approved by a valid majority of employees, to inform each person whose employment will be subject to the agreement of their right to request such a hearing and that the request must be made no later than 28 days after the agreement is approved (hearings are dealt with in proposed new section 170LVA).
Item 9 – Subsection 170LT(7)
4.13 This item updates references in subsection 170LT(7) to other subsections that will be renumbered as a consequence of other proposed amendments.
Item 10 – At the end of section 170LT
4.14 This item proposes a new subsection 170LT(11). This would allow the Commission to certify an agreement if the requirements of subsection 170LK(8)(which deals with the variation of a proposed agreement) were not satisfied but the Commission was satisfied that no person whose employment would be covered by the proposed agreement suffered detriment as a result of that failure.
Item 11 – After section 170LV
New section 170LVA – Hearings not required
4.15 This item would insert a new section 170LVA, which would require the Commission to decide whether or not to certify an agreement without holding a hearing unless it is not satisfied that it can make that decision with the information available to it or a hearing is requested by one of the persons set out in subsection 170LVA(b) and the Commission is satisfied that there are reasonable grounds for doing so.
4.16 The persons who may request a hearing are:
• The employer [subparagraph 170LVA(1)(b)(i)];
• A person whose employment will be subject to the agreement [subparagraph 170LVA(1)(b)(ii)];
• For section 170LJ, 170LL or Division 3 agreements– the one or more organisations of employees that made the agreement with the employer [subparagraph 170LVA(1)(b)(iii)];
• For section 170LK agreements – an organisation of employees that has notified the Commission, and the employer, in writing that it wants to be bound by the agreement [subparagraph 170LVA(1)(b)(iv)];
• A person prescribed by the regulations [subparagraph 170LVA(1)(b)(v)].
4.17 New subsection 170LVA(2) would require that the application requesting a
hearing must be made within 28 days of the agreement being approved or
made.
Item 12 – Subsection 170MC(1)
Item 13 –
Paragraphs 170MC(1)(a) and (b)
Item 14 – After subsection
170MC(2)
Item 15 – After subsection 170MC(4)
Item 16
– Subsection 170MC(5)
4.18 These items will make a number of changes to section 170MC, which deals with extending the nominal expiry date of a certified agreement (where a valid majority approves).
4.19 At present, an organisation of employees bound by an agreement made in accordance with section 170LK (ie an agreement between an employer and the employer’s employees) must consent to an extension. The amendments proposed by these items are intended to remove the entitlement of employee organisations to prevent the extension of section 170LK agreements, while still retaining a role for such organisations where requested by a member
4.20 Item 13 would replace paragraphs 170MC(1)(a) and (b). New paragraphs (1)(a) and (b) would provide that an application for Commission approval of an extension to the nominal expiry date must be made by:
• in the case of an agreement between an employer and one or more employee organisations under section 170LJ or Division 3 (the duration of a ‘greenfields’ agreement made under section 170LL may not be extended) - the employer and one or more of the organisations bound by the agreement; or
• in the case of an agreement between an employer and the
employer’s employees made in accordance with section 170LK – the
employer.
4.21 Item 14 proposes to insert new subsections (2A) and (2B) to ensure that an organisation bound by a section 170LK agreement could make submissions in relation to the proposed extension if asked to do so by a member of the organisation:
• whose employment is subject to the agreement; and
• whose industrial interests the organisation is entitled to represent.
4.22 Item 15 reflects that, as with the certification of agreements, the Commission is not required to hold a hearing in respect of an application to extend an agreement (see section 170MHB).
4.23 Consistent with provisions for certification, this item would insert new subsections 170MC(4A) and 170MC(4B) that will require an employer to take reasonable steps, within 7 days of the employer or the employer and the organisation(s) bound to the agreement extending the agreement, to inform each person whose employment will be subject to the agreement, of their right to request such a hearing and that the request must be made no later than 28 days after the agreement is approved (although the employer, or the employer and the organisation(s) bound to the agreement may, in writing, extend the agreement, this has no effect unless the Commission approves it – see existing s170MC(2)).
4.24 Items 12 and 16 propose consequential amendments
Item 17 –
Paragraphs 170MD(1)(a) and (b)
Item 18 – After subsection
170MD(2)
Item 19 – After subsection 170MD(5)
4.25 These items propose amendments to section 170MD, which deals with variation of a certified agreement (where a valid majority approve).
4.26 At present an organisation of employees bound by an agreement made in accordance with section 170LK (ie an agreement between an employer and the employer’s employees) must consent to a variation. The amendments proposed by these items are intended to remove the entitlement of employee organisations to prevent the variation of section 170LK agreements, while still retaining a role for such organisations where requested by a member.
4.27 Item 17 would replace paragraphs 170MD(1)(a) and (b). New paragraphs (1)(a) and (b) would provide that an application for Commission approval of a variation must be made by:
• in the case of an agreement between an employer and one or more
employee organisations under section 170LJ, section 170LL or Division 3 - the
employer and one or more of the organisations bound by the agreement;
or
• in the case of an agreement between an employer and the
employer’s employees made in accordance with section 170LK – the
employer
4.28 Item 18 proposes to insert new subsections (2A) and (2B) to ensure that an organisation bound by a section 170LK agreement could make submissions in relation to the proposed variation if asked to do so by a member of the organisation:
• whose employment is subject to the agreement; and
• whose industrial interests the organisation is entitled to represent
4.29 Consistent with provisions for application for certification of an
agreement, item 19 would insert new subsections 170MD(5A) and 170MC(5B) that
will require an employer to take reasonable steps, within 7 days of the
employer, or the employer and the organisation(s) bound to the agreement,
extending the agreement, to inform each person whose employment will be subject
to the agreement, of their right to request such a hearing; and that the request
must be made no later than 28 days after the agreement is approved (although
the employer, or the employer and the organisation(s) bound to the agreement
may, in writing, vary the agreement, this has no effect unless the Commission
approves it – see existing s170MC(2)).
Item 20 – Paragraphs
170MG(1)(a) and (b)
Item 21 – After subsection
170MG(2)
Item 22 – At the end of section 170MG
4.30 Items 20, 21 and 22 propose amendments to section 170MG, which deals with termination of a certified agreement at any time (where a valid majority approves).
4.31 At present, an organisation of employees bound by an agreement made in accordance with section 170LK (ie an agreement between an employer and the employer’s employees) must consent to a termination. The amendments proposed by these items are intended to remove the entitlement of employee organisations to prevent the termination of a section 170LK agreement, while still retaining a role for such organisations where requested by a member.
4.32 Item 20 would replace paragraphs 170MG(1)(a) and (b). New paragraphs (1)(a) and (b) would provide that an application for Commission approval of a termination must be made by
• in the case of an agreement between an employer and one or more
employee organisations under section 170LJ, section 170LL or Division 3 - the
employer and one or more of the organisations bound by the agreement; or
• in the case of an agreement between an employer and the employer’s employees made in accordance with section 170LK – the employer
4.33 Item 21 proposes to insert new subsections (2A) and (2B) to ensure that an organisation bound by a section 170LK agreement could make submissions in relation to the proposed termination if asked to do so by a member of the organisation:
• whose employment is subject to the agreement; and
• whose industrial interests the organisation is entitled to represent
4.34 Consistent with provisions for application for certification of an
agreement, item 21 would insert new subsections 170MD(5A) and 170MC(5B) that
will require an employer to take reasonable steps, within 7 days of the
employer, or the employer and the organisation(s) bound to the agreement
extending the agreement, to inform each person whose employment will be subject
to the agreement, of their right to request such a hearing; and that the request
must be made no later than 28 days after the agreement is approved (although
the employer, or the employer and the organisation(s) bound to the agreement
may, in writing, vary the agreement, this has no effect unless the Commission
approves it – see existing subsection 170MC(2)).
Item 23 –
Paragraph 170MH(1)(c)
Item 24 – After subsection
170MH(2)
4.35 Section 170MH provides for termination of a certified agreement after the nominal expiry date. Such an agreement may be terminated where to do so is not contrary to the public interest
4.36 Under subsection (1), an application for termination of an agreement that has passed its nominal expiry date may be made by the employer, a valid majority of employees or an organisation bound by the agreement.
4.37 The effect of the amendment proposed by item 23 would be to remove the entitlement of employee organisations to seek termination of a section 170LK agreement. The right of such organisations to put their views on a proposed termination is governed by existing subsection (2) and proposed subsection (2A).
4.38 Item 24 proposes to insert new subsection 170MH(2A). The amendment
would provide that the Commission may only obtain the views of an organisation
bound by a section 170LK agreement in respect of a proposed termination if it
has been requested to make a submission by at least one member whose employment
is subject to the agreement, and whose industrial interests the organisation is
entitled to represent in relation to work that is subject to the
agreement.
Item 25 – Paragraph 170MHA(2)(c)
Item 26 – After subsection 170MHA(3)
4.39 Items 25 and 26 propose amendments to section 170MHA, which deals with termination of a certified agreement in a manner provided for by the agreement
4.40 Under subsection (1), an application for termination of an agreement that has passed its nominal expiry date may be made by the employer, a valid majority of employees or an organisation bound by the agreement
4.41 The effect of the amendment proposed by item 25 would be to remove the entitlement of employee organisations to seek termination of a section 170LK agreement.
4.42 Such organisations would retain, as a result of amendments proposed by item 26, a right to make submissions in relation to a proposed termination if asked to do so by a member of the organisation:
• whose employment is subject to the agreement; and
• whose industrial interests the organisation is entitled to represent.
Item 27 – At the end of Division 7 of Part VIB
4.43 This item would insert a new section 170MHB, which would require the Commission to decide whether or not to extend, vary or terminate an agreement without holding a hearing unless it is not satisfied that it can make that decision with the information available to it or a hearing is requested by one of the persons set out in subsection 170MHB(b) and the Commission is satisfied that there are reasonable grounds for doing so.
4.44 The persons who may request a hearing are:
• the employer [subparagraph 170MHB(1)(b)(i)];
• a person whose employment will be subject to the agreement [subparagraph 170MHB(1)(b)(ii)];
• one or more of the organisations bound by the agreement [subparagraph 170MHB(1)(b)(iii)]; and
• a person prescribed by the regulations [subparagraph 170MHB(1)(b)(iv)].
4.45 New subsection 170MHB(2) would require that the application requesting a
hearing must be made within 28 days of the agreement to extend, vary or
terminate, or, in the case of sections 170MH and 170MHA, within 28 days of the
application to terminate being made to the Commission.
Part 2 – Application and transitional provisions
Item 28 – Application of items 1 to 11
4.46 This item provides that the amendments made by items 1 to 11 would apply in relation to any agreement where the application to certify the agreement is made on or after the commencement of the Schedule. The amendments also apply in relation to the applications to certify those agreements.
Item 29 – Application of items 12 to 27
4.47 This item provides that the amendments made by items 12 to 27 would apply to a decision made by the Commission on or after the commencement of the Schedule, about the extension, variation or termination of a certified agreement in respect of applications for the extension, variation or termination made on or after that commencement.
Item 30 – Transitional provision – Rules of Commission
4.48 This item would insert a transitional provision requiring the President to exercise his powers under section 48 of the Workplace Relations Act 1996 to vary the rules of the Commission to allow for the electronic lodgement of applications (and ancillary documents in relation to such applications) to the Commission under Part VIB of the Act.
SCHEDULE 5 – SECONDARY BOYCOTTS
Part 1 – Amendments
Item 1 – Paragraph 87(1A)(b)
5.1 This item would remove the words “(other than section 45D or 45E)” from Paragraph 87(1A)(b) of the Trade Practices Act 1974 (TPA). The effect of this change would be to enable the Australian Consumer and Competition Commission (ACCC) to seek orders from the Federal Court on behalf of one or more persons who have suffered, or are likely to suffer, loss or damage by conduct of another person where the conduct engaged in is in contravention of sections 45D or 45E.
5.2 This change would remove the current limitation, where the ACCC is able to seek such orders for all of Part IV of the TPA other than sections 45D or 45E
Item 2 – Paragraph 87(1B)(a)
5.3 This item would remove the words “(other than section 45D or 45E)” from Paragraph 87(1B)(a) of the Act, which prescribes the conditions the ACCC must satisfy before they may commence a representative action on behalf of a person or persons who have suffered loss or damage, or likely to suffer loss or damage, as a result of conduct in contravention of the TPA
5.4 This change would allow the ACCC to initiate representative actions in
respect of breaches of sections 45D and 45E. The ACCC may currently initiate
such representative actions for all of Part IV of the TPA, other than sections
45D and 45E.
Part 2 – Application provision
Item 3 – Application
5.5 Item 3 makes it clear that the ACCC may only bring actions for compensation or representative actions for contraventions of Sections 45D and 45E in relation to conduct that occurred on or after the commencement of the amendment
SCHEDULE 6 – FEDERAL AWARDS
6.1 This Schedule proposes amendments to Part VI and Part IX of the
Workplace Relations Act 1996.
6.2 Consistent with the proposed
amendments to the principal object of the Act (and the objects of Part VI),
these amendments are directed towards:
• providing all businesses with more information about their rights
and the processes involved with roping-in claims;
• restraining the
ability of unions to rope small businesses which employ no union members into
the federal jurisdiction; and
• requiring the Commission to inquire
into the views of unrepresented small business employers potentially affected by
a roping-in claim.
Item 1 – Subsection 101(1)
6.3 This amendment is
consequential upon the amendment proposed by item 2. It would provide, in
relation to an alleged industrial dispute notified in the Commission, that the
Commission’s powers to determine the parties to the industrial dispute and
the matters in dispute and to record its findings are subject to the
requirements set out in proposed new sections 101A and 101B.
Item 2
– After section 101
New section 101A – When Commission
must not make findings under section 101
6.4 New section 101A would
provide that where an alleged industrial dispute has been notified to the
Commission on the grounds that a party has not agreed to demands set out in a
log of claims, the Commission must not make any findings under section 101
unless it is satisfied that the requirements set out in paragraphs (a) to (d)
were met.
6.5 Proposed new paragraph (a) would require the log of claims
served by the party notifying the alleged industrial dispute to be accompanied
by a notice containing prescribed information.
6.6 The purpose of the
requirement contained in paragraph (a) is to ensure that the recipients of logs
of claims, especially recipients that are unfamiliar with the log of claims
process, such as small business or new business operators, are provided with
basic information about the process and their rights and obligations at the time
the log is served. The notice is required to state that small business
employers (that is, employers who employ less than 20 people on the day the log
of claims was served on the employer, including any casual employee who has been
engaged on a regular and systematic basis for a sequence of periods of
employment of at least 12 months) will be able to identify themselves to the
Commission at a later date and if they do not employ a union member, will not be
able to be made a party to a dispute finding. Other relevant information would
include, for example, explanations of the processes of the Commission for
dealing with logs of claims, the Commission’s powers with respect to
matters contained in logs of claims and the rights of parties who have been
served with logs.
6.7 Proposed new paragraph (b) would require that the alleged industrial dispute was notified under section 99 of the Act at least 28 days after the service of the log.
6.8 Proposed new paragraph (c) would require that the party notifying the alleged industrial dispute had, at least 28 days before the day fixed for the initial proceedings in relation to the alleged dispute, served each person alleged to be a party to the dispute with a notice of the time and place fixed for proceedings.
6.9 The purpose of the requirements contained in paragraphs (b) and (c) is to ensure that the recipients of logs of claims and notices of proceedings, especially recipients that are unfamiliar with the logs of claims process, such as small business employers, are allowed adequate time to seek advice about their rights and obligations, and to prepare for any relevant proceedings.
6.10 Proposed new paragraph (d) would require that the log of claims does not
include any demand that:
• requires conduct that would contravene Part XA of the
Act;
• a provision be included in an award that the Commission is
prevented from including under new subsection 89A(6A), or an objectionable
provision within the meaning of new section 170MDB be included in an agreement
[these new provisions are proposed by Schedule 8 to this Bill – the effect
of this element is that the log of claims may not include demands to restrict
the use of contractors that cannot be implemented in awards or
agreements];)
• an objectionable provision (within the meaning of
section 298Z) be included in an award or agreement; or
• does not
pertain to the relationship between employers and employees.
6.11 Proposed new paragraph (d) is designed to ensure that where a log of claims is served with a view of notifying the Commission of an alleged industrial dispute in relation to the log, such a log of claims should only include demands in respect of matters that may be included in an award or agreement under the Act.
New section 101B – Findings in relation to employers in small
business
6.12 New section 101B would provide that where an alleged
industrial dispute has been notified to the Commission on the grounds that a
party has not agreed to demands set out in the log of claims, the Commission
must not make any findings under section 101 unless it is satisfied that the
requirements set out in subsections (1) to (3) are met.
6.13 Proposed new
subsection 101B(1) states that it applies where an organisation of employees
notifies an alleged industrial dispute on the grounds that one or more employers
(notified employers) have not agreed to demands set out in a log of claims
served by that organisation on those employers.
6.14 The purpose of the requirement contained in subsection 101B(1) is to make clear that it applies where an organisation of employees notifies an alleged industrial dispute.
6.15 Proposed new subsection 101B(2) would require that, before making any dispute finding in respect of such an alleged industrial dispute, the Commission give each notified employer a notice in writing requesting that the employer inform the Commission within the time specified in the notice, whether the employer employed less than 20 people on the service day (defined in subsection 101B(5) as the day the log of claims was served on the employer).
6.16 The purpose of the requirement contained in subsection 101B(2) is to
give all small business employers an opportunity to identify themselves to the
Commission. The Commission would accept the employer's statement as prima facie
evidence that they are a small business employer unless evidence to the contrary
was provided. The notice is intended to contain a warning that providing any
false or misleading information to the Commission may result in prosecution
under the Criminal Code Act 1995 (Cth). Where evidence that contradicts
the employer’s assertion is provided, the Commission must weigh up whether
it accepts that the employer fits the definition of a small business. The
Commission would provide a list of all employers identifying as small businesses
to the relevant organisation(s) of employees, in order for the organisation to
have an opportunity to satisfy the Commission that the employer was not a small
business, or employs a union member.
6.17 Proposed new subsection 101B(3) prevents the Commission from determining
that a notified employer is party to any dispute finding in respect of such an
alleged industrial dispute unless:
§ the Commission is not satisfied that the
employer who informed the Commission under subsection 101B(2) was a small
business on the service day; or
§ the Commission is satisfied that the
employer employs a member of the relevant organisation.
6.18 The purpose of the requirement contained in subsection 101B(3) is to
ensure that a small business employer who identifies themselves to the
Commission and who does not employ a union member is not determined to be a
party to a dispute finding in respect of an alleged industrial dispute. The
onus of proof lies with the organisation of employees which would need to
satisfy the Commission that the employer was not a small business, or employs a
member. (New section 290A, proposed by item 3 of this Schedule, would allow an
organisation of employees to apply to the Industrial Registrar to obtain a
certificate that states that a particular small business employer employs a
member of the organisation.)
6.19 Proposed new subsection 101B(4) would
require the Commission, before making an award in relation to such a dispute, to
give a notice in writing inviting each party determined to be a party to that
dispute, who the Commission is satisfied employed less than 20 people on the
service day, to make comments on the proposed award within the period specified
in the notice.
6.20 The purpose of the requirement contained in
subsection 101B(4) is to ensure the Commission provides an opportunity for the
views of unrepresented small business employers potentially affected by a roping
in claim (ie those businesses employing at least one union member) to be
expressed, by a means other than attending a hearing.
6.21 Proposed new
subsection 101B(5) defines ‘service day’, in relation to a notified
employer, as the day on which the log of claims was served on the
employer.
6.22 Proposed new subsection 101B(6) makes clear that, for the
purposes of working out whether a notified employer employed less than 20 people
on the service day, a casual employee who had been engaged on a regular and
systematic basis for a sequence of periods of employment of at least 12 months
should be counted, but not any other casual employee.
6.23 New section 290A which would provide that an organisation of employees, for the purposes of section 101B may apply to the Industrial Registrar for a certificate certifying that an employee is a member of that organisation. The certificate will identify the organisation and the employer and is for all purposes of the Act evidence of what it certifies.
6.24 The purpose of the section is to provide a mechanism for an organisation
of employees to apply to the Industrial Registrar to prove that a small business
employer employs their members. The certificate will identify the employer and
the organisation of employees but will assure employee confidentiality as it
will not identify employees.
6.25 This item proposes that the amendments made by items 1, 2 and 3 of this Schedule, which would restrict the capacity for small business employers to be roped-in to Federal awards, apply to alleged industrial disputes notified after the commencement of this Schedule.
SCHEDULE 7 – ENTRY AND INSPECTION OF PREMISES BY
ORGANISATIONS
7.1 This Schedule proposes to introduce new requirements for entry to premises by employees and officials of organisations by amending Division 11A of Part IX of the Workplace Relations Act 1996 (WR Act).
7.2 The proposed amendments build on the current permit system, by introducing a requirement that, as a prerequisite to exercising right of entry to a workplace, a union have a written invitation from an employee who is a member of that organisation.
7.3 Provision is made to ensure the confidentiality of employees who give invitations. An employee’s decision to give or refuse to give an invitation is further protected by new prohibitions on certain conduct by employers and organisations.
7.4 The current notice requirements will be extended to 5 working days, and
a new requirement will provide that a person exercising right of entry show the
employer or occupier a card outlining the rights and obligations of the
employer, occupier and the permit holder under the WR Act.
7.5 This item proposes to insert a new subsection 285B(2A). This subsection would ensure entry under subsection 285B(2) (ie, for inspection purposes) could only occur if the permit holder’s organisation has received an invitation that meets the requirements of proposed new section 285CA.
7.7 The amendment proposed by this item would ensure that a permit holder, having entered for the purpose of investigating a suspected breach, may only interview employees who are willing to be interviewed, about the suspected breach.
Item 4 – After subsection 285B(3)
7.8 The amendment proposed by this item will prohibit a person from inspecting or making copies of documents referred to in paragraphs 285B(3)(ii) to (iii) that do not relate to the employment of members of the organisation of which the person is an officer or employee. This is a civil penalty provision.
7.9 This item proposes to replace existing subsection 285C(2) with new subsections 285C(2), 285C(2A) and 285C(2B). [The new subsections are numbered in this way to accommodate amendments to section 285C proposed by the Workplace Relations (Registered Organisations) (Consequential Provisions) Bill 2001.]
7.10 Subsection 285C(2) would ensure that entry under section 285C (ie, for the purpose of discussion with employees) could only occur if the permit holder’s organisation has an invitation as required by proposed new section 285CA.
7.11 Proposed subsection 285C(2A) would require that permit holders are only to enter premises during working hours and that discussions between employees and permit holders can only occur during employees’ meal time or other breaks. (This replicates existing subsection 285C(2).)
7.12 Proposed subsection 285C(2B) provides that an organisation can only enter a particular premises for discussion purposes once every 6 months. It is not intended to restrict an organisation from accessing other premises of the same employer in the 6 month period.
Item 6 – After section 285C
7.13 This item relates to the new invitation requirement.
New section 285CA – Requirements of employee invitation to enter premises
7.14 New section 285CA sets out the requirements for a valid invitation to enter premises. Those requirements are as follows:
• the invitation must be in writing and signed by at least one employee who works at the premises and is a member of the organisation to which it is issued;
• the invitation must be given to the organisation or to an officer or employee of the organisation; and
• the invitation must be current.
7.15 A ‘current invitation’ is one that has been given within 3 months of the proposed entry, or has been certified under proposed section 291B within 3 months of the proposed entry [proposed section 291B is described in the notes on item 10 of this Schedule].
New section 285CB – Protection of inviting employee’s identity
7.16 New section 285CB (together with proposed new section 291B) would provide for the protection of the identity of an employee who has given an invitation.
7.17 An invitation may state that the identity of the inviting employee or employees is confidential [proposed subsection 285CB(1)].
7.18 New subsection 285CB(2) would require the organisation receiving the invitation to ask the employee or employees who have signed the invitation if they wish their identity to be confidential if there is no statement as to confidentiality in the invitation. This is a civil penalty provision.
7.19 If an employee has indicated a preference for confidentiality, the organisation must not reveal the employee’s identity to the employee’s employer or the occupier of the premises to which the invitation relates [proposed subsection 285CB(3)]. This subsection is a civil penalty provision.
7.20 Current section 285D requires a permit holder to comply with certain requirements in exercising the right of entry conferred by sections 285B and 285C. Section 285D would be repealed, and new sections 285D, 285DA, 285DB and 285DC – which extend these requirements – would be inserted.
New section 285D – Obligations on entering premises
7.21 Proposed subsection 285D(1) would require a permit holder to comply with a request to see the invitation or permit relating to the proposed entry by the employer of the employees who issued the invitation (known as the ‘relevant employer’) or the occupier. If the permit holder does not comply with such a request he or she cannot not enter or remain on the premises. This subsection is a civil penalty provision.
7.22 Under proposed subsection 285D(2), a permit holder requested to show the invitation would be able to comply with the request by showing the employer and occupier a copy of the invitation or a confidentiality certificate issued under section 291B [on which see item 10 of this Schedule]. Proposed subsection 285D(3) provides that this would not limit the ways in which a request may be complied with.
7.23 New subsection 285DA(4) is a civil penalty provision which would require the permit holder to take all reasonable steps to provide the relevant employer or occupier with a card containing specific information about the rights and obligations of the employer, occupier and permit holder (see proposed section 285DC and schedule 9), immediately upon entering the premises.
7.24 Proposed subsection 285D(5) would define, for the purpose of section 285D, the term ‘relevant employer’ as the employer of the employee or employees who issued the invitation.
New section 285DA – Notification of entry to premises
7.25 New section 285DA specifies requirements in relation to notice of entry to premises.
7.26 Subsection 285DA(1) is a civil penalty provision and would require the permit holder to give both the relevant employer and the occupier of the premises (each known as a ‘notified party’) at least 5 working days written notice of the intended entry. This notice must:
• specify the day on which entry is proposed (the ‘nominated day’);
• specify whether entry to the premises is proposed under section 285B or 285C (ie whether inspection is for the purposes of inspection or discussion with employees); and
• contain the information set out in Schedule 9 to the Act [to be inserted by Item 11 of this Schedule].
7.27 A legislative note advises that the information must contain phone numbers for the Office of the Employment Advocate, as per proposed paragraph 285DC(1)(b).
7.28 Proposed subsection 285DA(2) would allow a notified party to give the person seeking entry a notice in writing specifying an alternative day on which the person may enter the premises. This notice must be given at least one day before the ‘nominated day’ and must propose a day no more than 5 working days after the nominated day.
7.29 Subsection 285DA(3) would provide that the notified parties must provide to one another a copy of any notice they give to the person seeking entry. Subsection 285DA(4) provides that if an alternative day has been proposed, the permit holder may only enter on that day, and subsection 285DA(5) provides that if both notified parties give a notice which specify alternative days, then the person seeking entry may only enter the premises on the later of those days.
7.30 Proposed subsection 285DA(6) would define the term ‘relevant employer’ for the purpose of section 285DA.
New section 285DB – Premises used for residential purposes
7.31 New section 285DB would replicate subsection 285D(3) of the WR Act (which will be omitted because of the amendments proposed by this item – see above).
New section 285DC – Entry cards
7.32 This section would deal with the new requirement for entry cards.
7.33 Subsection 285DC(1) would provide for the preparation and issue to permit holders of cards containing information set out in Schedule 9 (information relating to entry to premises) by the Industrial Registrar. This subsection would also require that the cards contain phone numbers of the Office of the Employment Advocate.
7.34 These cards are to be in a form considered appropriate by the Industrial Registrar (proposed subsection 285DC(2)).
7.35 This item would insert new sections 285EA and 285EB to prohibit conduct by employers and organisations relating to an invitation to enter premises.
New section 285EA – Prohibited conduct – employers
7.36 New subsection 285EA(1) (which is a civil penalty provision) prohibits specified conduct by an employer, where engaged in for a prohibited reason or reasons including a prohibited reason:
• dismiss an employee;
• injure an employee in his or her employment;
• alter the position of the employee to the employee’s prejudice; or
• discriminate against an employee.
7.37 Threats to engage in such conduct are also prohibited.
7.38 New subsection 285EA(2) specifies as a prohibited reason for engaging in conduct of the type listed in subsection 285EA(1) the fact that an employee gives or proposes to give an invitation to enter premises.
New section 285EB – Prohibited conduct – organisations
7.39 This section prohibits certain conduct by organisations, or officers or members of organisations.
7.40 Subsection 285EB(1) prohibits taking, or threatening to take, industrial action where the aim (or one of the aims) is to coerce a person to breach proposed section 285EA.
7.41 New subsections 285EB(2) and (3) prohibit the following conduct, if done for a ‘prohibited reason’ (or reasons which include a prohibited reason) – as defined in subsection 285EB(4):
• taking or threatening to take any action whose aim, or one of whose aims, is to prejudice a person in the person’s employment;
• imposing, or threatening to impose, a penalty, forfeiture or disability of any kind on a person who is a member of the organisation.
7.42 Proposed subsection (4) defines ‘prohibited reason’ for the purposes of section 285EB. Conduct against a person is engaged in for a ‘prohibited reason’ if the conduct was engaged in because the person has refused to give an invitation to enter premises under sections 285B or 285C or because a person has given such an invitation to another organisation.
7.43 Subsection 285EB(5) would prohibit an organisation, or an officer or member of an organisation, from making a right of entry invitation a condition of membership.
7.44 Subsection 285EB(6) would provide that an organisation or an officer or member of an organisation must not harass a member of an organisation to give an invitation to enter premises. The word ‘harass’ in this subsection is to have its ordinary meaning.
7.45 Each of subsections (1), (2), (3), (5) and (6) are civil penalty provisions.
7.46 This item proposes to repeal the existing definition of ‘penalty provision’ and substitute a new definition. The new definition reflects the fact that additional conduct is subject to civil penalty as a result of the amendments proposed by this Schedule.
7.47 Item 10 would insert new section 291B. This section would provide for a certificate to be issued to the effect that an invitation that meets the requirements of the WR Act has been given to an organisation. This is designed to ensure that the identity of inviting employees need not be revealed.
7.48 A Registrar would be required to issue a certificate to an organisation which has an invitation to enter specified premises which has given to the organisation no earlier than 3 months before the application was made, and which meets the requirements of section 285CA [proposed subsection 291B(1)]. An invitation would be taken to have been given to the organisation if it was given to one of the organisations’ officers or employees – proposed subsection 291B(2).
7.49 Proposed subsection 291B(3) would provide a certificate could not identify the inviting employee. It would, however, be required to identify the organisation to whom the invitation was given, the premises to which the invitation relates and the employer and occupier of the premises.
7.50 A certificate would be taken to be sufficient evidence that the invitation was given and meets the requirements of section 285CA (proposed subsection 291B(4)).
7.51 This item would insert a new Schedule 9 to the WR Act, which would set out the text to be included in written notification to employers and occupiers of intention to enter premises and on entry cards. The information on these cards would include:
• the rights of union officials to enter workplaces under federal law;
• the purposes for which union officials can enter business premises;
• the obligations of union officials entering business premises;
• the rights of employers and occupiers, including the right to specify an alternative day for right of entry;
• the rights and obligations of union officials in investigating a suspected breach; and
• the obligations of employers and occupiers in relation to union
officials exercising right of entry and inspection of documents.
7.52 Part 2 contains specific application and transitional provisions relating to the amendments in Part 1.
7.53 This item provides that, subject to the exceptions below, the amendments made by all items in Part 1 (except item 8) apply on and after the commencing day (that is, the day on which the amendments proposed in Part 1 of this Schedule come into effect).
7.54 Certain requirements of the new scheme being established by the amendments would not apply until 14 days after the commencing day.
• The new requirement for an invitation would not apply to an entry to premises within 14 days of the commencing day. Notice given before the commencing day under current subsection 285D(2) of the WR Act would continue in relation to any entry to the premises within 14 days of the commencing day.
• An entry made within 14 days of the commencing day for which a notice was given under subsection 285D(2) would also be disregarded for the purposes of new subsection 285C(2B) (which limits entry for discussion purposes to once each 6 months).
• New subsection 285D(1)(b), insofar as it requires a person to comply with a requirement to show an occupier or employer the person’s invitation to enter premises, would not apply to a person within 14 days after commencement.
• Proposed subsection 285DA(5) would not apply within 14 days of commencement.
7.55 In addition, the amendment made to paragraph 285B(3)(a) (which limits access to documents to documents relevant to the employment of members - item 2 of Part 1) is not to apply to a notice given before the commencing day under current subsection 285D(2) of the WR Act.
7.56 This item provides that the amendments made by item 8, which would insert new sections 285EA and 285EB, only apply in relation to conduct engaged in on or after the commencement of that item.
SCHEDULE 8 – CONTRACTS FOR SERVICES
8.1 This
Schedule proposes to amend the Workplace Relations Act 1996 (WR Act) to
prevent awards and certified agreements from restricting the use of contractors.
The Australian Industrial Relations Commission will not have the power to
include such clauses in awards, and existing clauses will be removed, with an
exception for the textiles, clothing and footwear industry. The Commission will
not be able to certify agreements which it was satisfied contained such clauses,
any such clause in an agreement will become void, and such clauses will be able
to be removed from agreements.
Part 1 – Amendments
Item 2 – After paragraph 45(3)(ba)
8.2 These items are
consequential upon item 7, which proposes that the Commission have the power to
vary a certified agreement so as to remove a provision restricting the use of
contractors. The first amendment adds to the list of decisions against which
appeals may be made to a Full Bench of the Commission, a decision to vary or not
vary a certified agreement in this way. The second amendment identifies the
classes of persons who can lodge such an appeal; these are the same as the
classes of persons who can apply to the Commission for the removal of such a
provision.
8.3 Section 89A(2) of the WR Act sets out a number of allowable award
matters. These matters may be the subject of an industrial dispute, and are the
only matters about which the Australian Industrial Relations Commission
(Commission) may make awards. Subsection 89A(6) allows provides that the
Commission may include in an award matters that are incidental to the matters
set out in subsection (2) and necessary for the effective operation of the
award. This item proposes to introduce two new subsections in section 89A.
8.4 Subsection 89A(6A) would limit the Commission’s power under
subsections 89A(2) and (6) to ensure that awards do not contain provisions that
restrict employers from:
• entering into contracts for services;
or
• including particular terms or conditions in contracts for
services.
8.5 This provision is intended to ensure that awards do not
contain provisions that restrict employers in relation to the use of independent
contractors, labour hire firms or other non-employee
labour.
8.6 Subsection 89A(6B) is an exception to subsection 89A(6A),
which will apply in relation to awards for the textiles, clothing and footwear
industry. This is a limited exception that will allow certain award provisions
to continue to operate in that industry. Acceptable award provisions are those
that restrain an employer from entering into contracts for services unless those
contracts provide that the work concerned is to be performed on terms and
conditions that are at least as favourable as those that would otherwise apply
under the award in relation to that work. An explanation of the particular
circumstances of the textiles, clothing and footwear industry, which make this
exception necessary, is provided in the regulation impact statement for this
Schedule, in this Explanatory Memorandum.
8.7 New subsection 89A(6C)
provides a definition of ‘TCF award’ for the purposes of subsection
89A(6B). A TCF award means an award regulating employment in the textiles,
clothing and footwear industry.
Item 4 – After subsection
170LU(2A)
8.8 This item proposes a new criterion in certifying
agreements. The Commission will be unable to certify an agreement, if satisfied
that it contains provisions restricting entry into contracts for services. Such
provisions will be rendered void by new section 170LZA, proposed by the
following item. However, it is preferable for agreements containing ostensible
provisions of this type not to be certified.
8.9 The new subsection
parallels existing subsection 170LU(2A), which prevents certification of
agreements containing ‘objectionable provisions’, within the meaning
of Part XA of the Act.
Item 5 – At the end of Division 5 of Part
VIB
New section 170LZA – Provisions of certified agreements
restricting employers from entering into contracts for
services
8.10 This new section renders void existing or future
clauses in certified agreements which purport to restrict employers in the use
of contractors. This section parallels existing section 298Z, which renders
void provisions in industrial instruments which purport to authorise or require
conduct contrary to Part XA of the Act.
Item 6 – After paragraph
170MD(7)(c)
8.11 Section 170MD deals with the process for
varying certified agreements made under Part VIB of the WR Act. Under
subsection 170MD(7), a certified agreement is not to be varied except in
accordance with a number of specified provisions.
8.12 This item would
include a new paragraph in subsection 170MD(7) which will refer to new section
170MDB proposed to be added by the following item.
Item 7 –
After section 170MDA
8.13 This item proposes to include a new section
in Part VIB of the WR Act.
8.14 This new section provides for removal from certified agreements of
provisions restricting the use of contractors, on application. Applications
will be able to be made by:
• a person bound by the
agreement;
• an employee whose employment is subject to the
agreement;
• a person who wishes to enter into a contract for
services with an employer bound by the agreement; or
• the
Minister.
8.15 Part 2 contains the application and transitional provisions for the
amendments contained in Part 1 of the Schedule.
Item 8 –
Application of items 1, 2, 4, 5, 6 and 7
8.16 The proposed item would
ensure that the amendments made by Part 1 would apply in relation to all
certified agreements, whether certified before or after commencement of this
Schedule.
Item 9 – Application of item 3
8.17 The
proposed item would ensure that the amendments made by Part 1 would apply (after
commencement) to industrial disputes, whether or not the Commission had been
dealing with those disputes before the commencement of Part 1.
Item 10
– Transitional provision – review of certain
awards
8.18 These provisions provide a process for the consideration
and removal of clauses in awards that will no longer be allowable after the
commencement of Part 1.
8.19 Within 12 months after the commencement of
this Schedule, the Commission is to review all awards that contain clauses that
restrict use of contractors, other than clauses within the exception for the
textiles, clothing and footwear industry.
8.20 After considering
appropriate alternatives, the Commission may vary the awards to remove the
provisions. If the Commission does not remove the clauses they will cease to
have effect at the end of twelve months after the commencement of the Schedule.
Any provisions that cease to have effect may be removed by the
Commission.
[1] Evidence, Mr Grant Poulton, 29 January 1999, EWRSBE 6
[2] Evidence, Mrs Leyla Yilmaz, 7
October 1999, EWRSBE 187.
[3] The Employment Advocate is
required to issue a filing receipt when certain procedural requirements are met
- see subsection 170VN(2). The issuing of a filing receipt does not amount to
approval of an AWA - assessment of an AWA for compliance with the statutory
approval requirements is a separate (and later) process.
[4] This data does not relate
exclusively to workplaces in the federal
jurisdiction.
[5] Based on
private sector data for Australian workplaces from the 1995 Business
Longitudinal Survey.
[6] Based on
employee numbers from ABS Wage and Salary Earners (Cat. No. 6248.0),
March Quarter 2001.
[7] ABS
Employee Earnings, Benefits and Trade Union Membership (Cat. no.
6310.0), August 2000.
[8] Senate
Economic References Committee, Parliament of the Commonwealth of Australia,
Outworkers in the Garment Industry, Senate Printing Unit, Parliament
House, Canberra, December 1996, pp. xiii, 13-16.