At the recent ALP National Conference in Sydney the ALP released Forward with Fairness: Labor’s plan for fairer and more productive Australian workplaces. This policy document sets out the ALP’s industrial relations agenda for the upcoming federal election. An analysis of the document reveals many aspects of the policy will have quite a dramatic impact on employers, particularly those with AWAs and those with one hundred or fewer employees currently exempt from the federal unfair dismissal system.
Many key questions about how the ALP would change the present system remain unanswered, with the document raising more questions than it answers. ARA recently met with Julia Gillard MP, the ALP industrial relations spokesperson to seek clarification on many aspects of the policy. ARA will maintain an ongoing dialogue with the ALP about the policy in the lead up to the next election and will keep members informed of any further policy announcements by the ALP.
What is known is that “good faith collective bargaining and democracy will be at the heart of Labor’s industrial relations system”. An individual statutory agreement making option will not be part of the system leaving the tens of thousands of retailers with currently operating Australian Workplace Agreements with massive uncertainty. The ALP has publicly mooted its intention and is to have some type of transitional provisions operating for those with AWAs, though those arrangements and the legislative underpinning for employees to opt out of AWAs remain unclear. Unfair dismissal will be back for all under Labor, albeit with some limited exceptions with what the document refers to as a “fresh approach”.
A massive bureaucracy to be known as Fair Work Australia (FWA) will replace the Australian Industrial Relations Commission, the Australian Fair Pay Commission, the Workplace Authority (formerly the Office of the Employment Advocate) and the Workplace Ombudsman (formerly the Office of Workplace Services). The FWA will have extensive powers with special divisions that will “focus on persistent or pervasive unlawful behaviour” in particular industries or sectors. FWA will have offices in suburbs and regional centres as well as in shopping centres. The appropriateness of one body carrying out functions traditionally separated such as law making, enforcing and umpiring have been called into serious question by employer groups including the ARA.
A unitary system of workplace relations
The ALP will use all available constitutional powers and state cooperation (either through the state referral of their industrial relations powers to the Commonwealth or by “harmonisation” with the states) to create a single national industrial relations system for the private sector. Unspecified transitional arrangements will operate for those brought into the system.
A new safety net under Labor
A new safety net will be comprised of:
- Ten minimum legislative employment standards called National Employment Standards;
- “New” awards; and
- Minimum wages.
National Employment
Standards
National Employment Standards (NESs), which will apply to all Australian employees (including non award employees), cannot be removed or replaced. Whilst there is no mention in the document of minimum rates of pay the ALP has stated that minimum rates will also be included in the NESs. The NESs will comprise:
Hours
38 hour week, additional hours may be required but not if unreasonable.
Parental leave
12 months unpaid parental leave for both parents of separate periods of 12 months but where families prefer one parent take longer, that parent will be entitled to request up to an additional 12 months unpaid leave, subject to an employer being able to refuse on reasonable business grounds.
Flexible work for parents
A right for parents to be able to request flexible work arrangements until their child reaches school age. Employers will only be able to refuse on reasonable business grounds.
Annual leave
Four weeks for full-time employees, an additional week for shift workers and pro rata for part-time employees.
Personal/carer’s/
compassionate leave
Ten days paid leave per year for full-time employees, pro rata part-time and two days paid compassionate leave (death or serious illness) and two days unpaid leave for genuine caring purposes and family emergencies.
Community service leave
For prescribed community service activities paid leave for jury service and reasonable unpaid leave for emergency services duties.
Public holidays
Guaranteed public holidays and a guarantee to an appropriate penalty rate of pay or other compensation as set out in the applicable award.
Information in the workplace
A Fair Work Information Statement to be provided by employers to employees about the employee’s rights and entitlements including the right to choose to join a union and where to go for information and assistance.
Termination and redundancy
Notice of termination for employees and severance pay in the event of a retrenchment for those with 15 or more employees based on the same quantum as the current AIRC Test Case standard.
Long service leave
A nationally consistent long service leave standard with current arrangements to transitionally be in force so no Australian employees are disadvantaged.
New awards
Awards will build on and also provide industry detail on the NESs. The document states that awards will not extend to those that have been historically award free. Awards will be reviewed every four years to ensure they remain relevant to those covered. A further ten matters may be included in awards:
- Minimum wages including skill based classifications and career structures, incentive based payments and bonuses, wage rates and other arrangements for apprentices and trainees;
- The type of work performed, for example whether the employee is permanent or casual and the facilitation of flexible working arrangements, particularly for employees with family responsibilities including quality part-time work and job sharing;
- Arrangements for when work is performed, including hours of work, rostering, rest breaks and meal breaks;
- Overtime rates for employees working long hours;
- Penalty rates for employees working unsocial, irregular or unpredictable hours, on weekends or public holidays and as shift workers;
- Provisions for minimum annualised wage or salary arrangements that have regard to the patterns of work in an occupation, industry or enterprise as an alternative to the payment of penalty rates;
- Allowances including the reimbursement of expenses, higher duties and disability payments;
- Leave, leave loadings and the arrangements for taking leave;
- Superannuation;
- Consultation, representation and dispute settling procedures.
Minimum wages
Fair Work Australia will review minimum wages in a process conducted once every year with increases operating from the first pay period on or after 1 July each year. FWA will be required to consider a range of economic and social factors in adjusting minimum wages.
Good faith collective bargaining and democracy
In what would be a first for Australian industrial relations the ALP will impose a system of compulsive “good faith” collective bargaining affording employees industrial democracy in the workplace. Employees (not the employer) will be able to decide if they want to negotiate better terms and conditions of employment with their employer. If a majority of employees wish to do so (and this will be ascertained by Fair Work Australia), employers will be compelled to come to the negotiating table and bargain in “good faith”. Forward with Fairness states that “good faith bargaining encourages and assists employers and employees to consider the issues central to bargaining and work efficiently towards an agreement”. It seems under Labor employers will not be free to make critical business decisions about the business without significant third party interference.
Good faith “bargaining rules” will compel employers to:
- Attend and participate in meetings at reasonable times; • Disclose “relevant information” in a timely manner, subject to protection for commercial in confidence information;
- Respond to proposals made by a party in a timely fashion;
- Give genuine consideration to the needs of other parties, and provide reasons for their responses; and
- Refrain from capricious or unfair conduct that undermines freedom of association or collective bargaining.
Fair Work Australia will have the power to make orders where bargaining participants are not regarded as bargaining in good faith. A return to third party approval of agreements will see Fair Work Australia being required to approve agreements in seven days “on the papers”. Employees will need to be better off overall for an agreement to be approved by Fair Work Australia. Collective agreements will operate for up to four years.
Claims on the negotiation table will include “whatever matter that suits” the parties and include any matter that the employees/union want to put on the table and, despite recent assurances to the contrary, concerns continue that this may include some type of union bargaining fees for non-union members and a host of other matters not relevant to the employment relationship.
Fair Work Australia may also facilitate multi-employer collective bargaining for “low paid employees who have not historically had access to the benefits of collective bargaining”. This aspect of the proposal is of significant concern, given retail employees are generally un-unionised and amongst the lower end of the minimum rates scale.
Protected industrial action will be available during “good faith” collective bargaining where approved by a secret ballot. Industrial action during the life of an agreement will not be protected, although there is no indication of what penalties/remedies will be available to employers in the event of such action. There is also no mention in Forward with Fairness in relation to any protections from secondary boycotts, although again recent statements reported in the media suggest the ALP will retain present rights, albeit perhaps not in the trade practices legislation.
Where agreement cannot be reached a party may, in certain circumstances, take protected industrial action or the parties may agree to ask FWA to arbitrate an outcome, or agree to walk away and remain under existing industrial arrangements.
Fair Work Australia
A new body, Fair Work Australia, will oversee Labor’s industrial relations system. It will replace the Australian Industrial Relations Commission, the Australian Fair Pay Commission, the Workplace Authority (formerly the Office of the Employment Advocate) and the Workplace Ombudsman (formerly the Office of Workplace Services).
The FWA will have extensive power including:
- Assisting parties to resolve workplace grievances;
- Resolving unfair/unlawful dismissal claims;
- Facilitating collective bargaining and enforcing “good faith bargaining”;
- Reviewing and approving collective agreements;
- Adjusting minimum wages and award conditions;
- Monitoring compliance with and ensuring the application of workplace laws, awards and agreements;
- Conducting inquiries;
- Adjusting the National Employment Standards;
- Promoting working arrangements that assist employees balance work and family responsibilities and “champion family friendly workplaces”;
- Regulating registered industrial organisations.
The FWA will have special divisions that will “focus on persistent or pervasive unlawful behaviour” in particular industries or sectors as well as a special judicial arm to deal with judicial decisions such as unlawful termination. FWA will have offices in suburbs and regional centres as well as in shopping centres.
Unfair dismissal
A “fresh approach” to unfair dismissal will see all employers once again subject to unfair dismissal applications by employees. Forward with Fairness only indicates limited exemptions to
Labor’s unfair dismissal system being: • A six month qualifying period for employers of 15 or more employees; • A twelve month qualifying period for employers of less than 15 employees; and • Where an employee is award free, a remuneration cap of $98,200 per annum (to be indexed).
A claim for unfair dismissal will usually need to be made within seven days of the dismissal, to ensure reinstatement remains a viable option.
FWA will convene a conference at the workplace or other agreed venue. During this conference FWA will be required to reach a conclusion about the fairness of the dismissal. If the officer (there is no indication who will be appointed to such FWA roles) decides the termination was unfair they will need to determine an appropriate remedy. The primary remedy will be reinstatement, although the FWA officer may award compensation capped at an unspecified amount.
A Fair Dismissal Code will be developed for small business. Genuine compliance with the code, states Forward with Fairness, will render a dismissal fair.
A separate division of FWA, a judicial arm, will hear discriminatory or unlawful termination applications.
Employee rights at work and unions
Labor’s industrial relations system will revolve around employee rights at work and “democracy” for employees. Employee rights are:
- A right to collective bargaining;
- A right to freedom of association;
- A right to representation, information and consultation;
- A right to protection from “unfair treatment”;
- A right to access an effective procedure to resolve grievances and disputes;
- A right to freedom from discrimination; and
- A right to equal remuneration for work of equal value.
Employees will have a right to representation by unions and freedom to join or not join a union, but the concern is that the system described in the ALP policy will see unions at the forefront of the industrial relation system despite declining union rates.
Conclusion
There are many legitimate concerns retailers will have with Forward with Fairness.
Of particular concern is the abolition of any individual agreement making option, the return to an unfair dismissal system, and the proposed compulsory collective bargaining system – forcing employers to the negotiating table and interfering with a business’s right to make key financial decisions such as entering into or not entering into collective agreement negotiations.
Of equal concern is that nowhere in Forward with Fairness is there any mention of junior rates of pay; a matter about which ARA is seeking further clarification from the ALP. Also of real concern for retailers is what might be on the agenda for the future of casual employment. An additional resolution moved by Joe de Bryn (Shop, Distributive and Allied Employees Association), at the ALP Conference states, “the erosion of full-time employment, growth in casual, part-time, contracting and other forms of employment is adversely affecting the ability of families to meet their financial, family and other social needs and responsibilities”. It goes on to state that the “ALP will initiate an inquiry to examine the growth of insecure and contingent employment and its effects on workers and their families, and to recommend measures to promote greater employment stability. Labor will work with employers, unions and other parties to develop effective and viable solutions to these important issues.”
Under the ALP policy that inquiry would likely be conducted by the new Labor body Fair Work Australia.
ARA will communicate further announcements by the ALP on their industrial relations policy to members in the lead up to the federal election. There is no doubt as Forward with Fairness states, Australia is clearly at a fork in the road.
The ARA has already put its list of concerns to Julia Gillard and intends to continue discussions with the ALP to resolve as many of our issues as possible. However many will be unresolvable. In the event that Labor is elected and Australian industrial relations laws change once again, we intend to be in the best position to give retailers practical advice and assistance.
A copy of Forward with Fairness is available to access on the ARA website www.ara.com.au. Members with comments should forward them to ARA Employee Relations at employeerelations@ara.com.au
