Observation (CEACR) - adopted 2007, published 97th ILC session (2008)

Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) - Australia (Ratification: 1973)

The Committee notes the information provided in the Government’s reports dated 22 December 2006 and 15 January, 13 July, 20 September and 5 October 2007, in reply to the request made by the Conference Committee on the Application of Standards in June 2006 for a detailed report on the provisions of the Workplace Relations Amendment (Work Choices) Act 2005 (the Work Choices Act), which introduced extensive legislative amendments to the Workplace Relations Act 1996 (the WR Act). The Committee also notes that the Government’s report of 22 December 2006 provides a reply to the comments made by the Australian Council of Trade Unions (ACTU) in a communication dated 17 May 2006, which were noted in the Committee’s previous observation. The Committee finally takes note of the comments made by the International Trade Union Confederation (ITUC) in a communication dated 27 August 2007 with regard to issues already raised by the Committee and the Government’s reply thereto dated 18 October 2007.

With regard to the building and construction industry in particular, the Committee notes the comments made by ACTU in a communication dated 9 October 2006, as well as the communication of the Trade Unions International of Workers of the Building, Wood and Building Materials Industries (UITBB) in support of the ACTU submission and the comments made by ITUC in a communication dated 27 August 2007. It further notes the Government’s observations in this respect contained in a communication dated 13 July 2007 as well as the communication of 18 April 2007 on the tripartite consultations which have taken place on this subject. The Committee finally notes the ACTU comments dated 14 September 2007 on this subject, as well as the Government’s communication of 9 November 2007 indicating that the upcoming elections prevent it from responding to the ACTU comments at this time. It requests the Government to provide its observations at the appropriate time.

The Committee recalls that in June 2006 the Conference Committee had requested the Government to: (i) provide a detailed report to this Committee for examination in 2006 on the impact of the amendments introduced by the Work Choices Act to the WR Act on the Government’s obligation to ensure respect for freedom of association both in law and in practice; (ii) engage in full and frank consultations with the representative employers’ and workers’ organizations with respect to all the matters raised during the debate and to report back to this Committee in this regard. In previous communications, the Government had announced the conclusion of a tripartite agreement between the Government, ACTU and the Australian Chamber of Commerce and Industry (ACCI) on the following process: the Government would provide a report to this Committee focusing on key issues identified by the social partners, i.e. the level and substance of bargaining rights and the right to strike; the ACCI and ACTU would provide separate comments on the Government’s report, once submitted to the Committee and copied to them; the report and observations of the Committee would then be used as a basis for further tripartite consultations. However, as explained by the Government in subsequent communications, it was not possible to provide a report to the Committee on time for examination in 2006 due to a range of factors. The Committee further notes that in its report of 5 October 2007, the Government provides a summary record of the consultations held with the social partners on 20 August 2007. The Committee observes from the records that the consultations did not lead to any new element as all sides appear to maintain their respective positions. The Committee requests the Government to continue the consultation process so as to allow sufficient time for the parties to discuss their views in full with a view to eventually reaching commonly acceptable solutions, and to provide information on this issue in its next report.

Article 3 of the Convention. Right to strike. The Committee’s previous comments concerned numerous discrepancies between the provisions of the WR Act – as amended by the Work Choices Act – and the Convention. In particular, the Committee had raised the need to amend the following provisions of the WR Act with a view to bringing them into conformity with the Convention: provisions which lift the protection of industrial action in support of: multiple business agreements (section 423(1)(b)(i)); “pattern bargaining” (section 439); secondary boycotts and generally sympathy strikes (section 438); negotiations over “prohibited content” (sections 356 and 436 of the WR Act in connection with the Workplace Relations Regulations 2006); strike pay (sections 508 of the WR Act); and provisions which prohibit industrial action in case of danger to the economy (sections 430, 433 and 498 of the WR Act) through the introduction of compulsory arbitration at the initiative of the Minister (sections 500(a) and 504(3) of the WR Act). Finally, the Committee had raised the need to amend section 30J of the Crimes Act 1914, which prohibits industrial action threatening trade or commerce with other countries or among States and section 30K of the Crimes Act 1914, prohibiting boycotts resulting in the obstruction or hindrance of the performance of services by the Australian Government or the transport of goods or persons in international trade.

The Committee notes that the Government provides detailed information on the economic justification of the provisions in question which are the result of successive reforms of the workplace relations framework since 1996. The aim of these reforms has been, according to the Government, to promote more jobs and better pay through improvements in productivity so as to maintain Australia’s economic prosperity and strength. The Government states that, as a result, real wages have grown by 21.5 per cent since 1996. The reforms ensured that the primary focus of the workplace relations system is agreement-making at the workplace level, as an increased emphasis on direct bargaining between employers and workers is key to greater productivity. The Committee notes that, according to the Government, accepting the Committee’s comments on the need to lift restrictions over industrial action in case of multiple-business agreements (section 423(1)(b)(i)), pattern bargaining (section 439), or secondary boycotts and generally sympathy strikes (section 438) would have the effect of diminishing the focus of the entire system on agreement-making at the workplace level and would in certain respects be unfair to the employer who has reached agreement with its staff but might be subject to industrial action aimed at other employers. Moreover, the provisions on “prohibited content” (sections 356 and 436 of the WR Act in connection with the Workplace Relations Regulations 2006) largely represent, according to the Government, a continuation of the limits that the Australian workplace relations system has always placed on the content of binding industrial instruments, which should be limited to matters pertaining to the relations between employers and employees, to the exclusion of academic, political or social matters. Furthermore, the provisions which lift the protection of industrial action in support of strike pay (section 508 of the WR Act) are reasonable. The provisions prohibiting industrial action in case of danger to the economy (sections 430, 433 and 498 of the WR Act) through the introduction of compulsory arbitration at the initiative of the Minister (sections 500(a) and 504(3) of the WR Act) do not lead to a blanket prohibition of industrial action; since the commencement of the Work Choices Act reforms in March 2006 there have been only eight applications seeking suspension or termination of a bargaining period and the bargaining period was terminated in only three of these instances. Finally, with regard to sections 30J and 30K of the Crimes Act, 1914 (prohibition of industrial action threatening transport, trade and commerce), the Government indicates that the repeal of these sections remains under consideration, but as no action has been taken under the relevant sections of the Crimes Act for over 50 years, any such amendment would be given low legislative priority.

The Committee notes with regret the Government’s statement that it is not intending to adopt amendments along the lines of the Committee’s previous comments. It also notes the statistical information provided by the Government according to which the proportion of employees who are trade union members has been steadily declining from the August 1986 figure of 45.6 per cent to the August 2006 figure of 20.3 per cent and that only 15.2 per cent of employees in the private sector are trade union members compared to 42.6 per cent in the public sector and expresses its concern as to the effect that the Work Choices Act may have on trade union membership. The Committee once again urges the Government to indicate in its next report the measures taken or contemplated so as to bring its law and practice into conformity with the Convention on all the points raised above and to continue to provide information on the impact of the Work Choices Act both in law and in practice on the Government’s obligation to ensure respect for freedom of association.

Building industry. In its previous comments, the Committee, taking note of the conclusions and recommendations of the Committee on Freedom of Association in Case No. 2326 (338th Report, paragraphs 409-457), had raised the need to rectify several discrepancies between the Building and Construction Industry Improvement (BCII) Act 2005, and the Convention.

The Committee notes that in its communication of 9 October 2006, ACTU emphasizes that the BCII Act makes it practically impossible to declare a legal strike, renders virtually all forms of industrial action in the building and industrial sector unlawful and introduces severe financial penalties, injunctions and actions for uncapped damages in case of “unlawful” industrial action (unions are “deemed” legally liable for certain conduct by their members); moreover, it establishes a new enforcement agency known as the Australian Building and Construction Commission (ABCC) which is not sufficiently independent from the Government, has wide-ranging coercive powers akin to an agency charged with investigating criminal matters (capacity to compel a person to attend, produce documents and answer questions under oath without being able to refuse answers which might incriminate the witness and power to publicize “findings” against union members and officials without the guarantees of an impartial judicial procedure; on one occasion, the ABCC denied legal representation to a worker on the basis that his/her legal representative had acted for another person who had also been interrogated over the same industrial matter). According to ACTU, the ABCC has standing to bring legal proceedings in its own right, irrespective of the views of the parties to the industrial relationship, a power it exercised for instance, against 107 workers in the Perth to Mandurah New Metro City Rail construction project in Western Australia; these workers faced fines up to AU$22,000 under the BCII Act plus 6,600 under the WR Act. Moreover, ITUC refers in its communication dated 27 August 2007 to several instances where proceedings were initiated against trade unions and individual workers for their participation in industrial action in the construction industry including a case in which a trade union meeting which ran 15 minutes too long was considered to be unlawful industrial action, and the individual workers faced the prospect of fines up to AU$28,600 each and possible jail sentences while the unions faced penalties of up to AU$220,000. According to ACTU, the ABCC warned trade unions through public statements not to participate in the “National day of community protest” of 15 November 2005, organized by ACTU, by reinforcing the prospect that such action would be deemed unlawful and that workers would face a real threat of prosecution by the ABCC.

The Committee takes note of the Government’s position as set out in its communication of 13 July 2007 that: (i) the right to strike is not unqualified and can be subject to restrictions to be developed with regard to national conditions. These conditions in Australia, as reported by the Royal Commission into the Building and Construction Industry and other independent reports, are that industrial action in the building and construction industry can cause more harm to more people than similar action in other industries and that, over the last 20 years, this industry has been undermined by conflict, lawlessness and inefficiency, which demonstrated an urgent need for structural and cultural reform. (ii) Consequently, the restrictions on industrial action introduced in the BCII Act are reasonable and intentionally broad so as to encompass all conduct that adversely affects the performance of building work, since both employer and employee interests are disadvantaged by strike action. Moreover, penalties are increased so as to ensure a strong deterrent against unlawful industrial action in the industry. (iii) The Government adds that it continues to provide construction employees and their unions with a qualified right to strike. The right to take protected industrial action is restricted to disputes between the parties to the employment relationship and the Government does not intend to enact provisions that would enable parties to take protected action in support of multiple-business agreements; this is, according to the Government, consistent with the Convention; employees can still protest in pursuit of broader industrial, political or economic objectives, like the 15 November 2005 national protest organized by ACTU, if they obtain first the permission of their employer to be absent from work on that day. (iv) The Government also reports that there is a consistent declining trend in trade union membership in the construction industry with only 22 per cent of construction industry employees being trade union members in August 2006. On the contrary, since the entry into force of the BCII Act, wages rose at an above-average rate, output and employment also increased while the number of working days lost to industrial disputation fell to levels consistent with other industries. Notwithstanding the positive indicators of the success of the reforms, the Government considers it necessary to maintain the existing arrangements to address the deeply entrenched culture of disregard for the law. (v) The Government adds that the ABCC is an independent regulatory body aimed to address the culture of lawlessness and intimidation evident in the building and construction industry. For that reason, it is vested with the ability to undertake legal proceedings in its own right, as an independent statutory authority. In the Australian national context, it helps the building industry participants achieve better compliance with their obligations under the Convention. More than 67 per cent of complaints received by the ABCC concern trade unions; of 59 prosecutions brought by the ABCC and concluded by 4 April 2007, 29 involved unions only, 20 involved employers only, six involved both unions and employers, two involved employees only, one involved unions, employers and employees and one involved the Victorian State government. To date, no person has been jailed as a result of any ABCC prosecution, or in relation to the exercise of the ABCC’s compliance powers. The Federal Court ruled on 12 October 2006 that the decision to exclude a solicitor was lawful and reasonable in the circumstances of the case. The decision is now subject to further appeal. To date, the ABCC has used its power to publicize non-compliance with the BCII Act and the WR Act by building industry participants only once, after a work stoppage at a building site in Port Melbourne, Victoria, and the decision has not been challenged in any court by the union. With regard to the proceedings initiated by the ABCC to which ACTU refers, the Government indicates that the intervention of the ABCC was motivated by a dispute caused by continued disruptions to building work including “numerous unauthorized meetings, bans on overtime and strikes of more than two hours”. Even though the parties reached a settlement on penalties amounting to AU$150,000 to be paid by the Construction, Forestry, Mining, Energy Union (CFMEU), this settlement had to be “accepted” by a judge who decided the allocation of the amount among different branches of the CFMEU and its individual members/leaders; in addition to this penalty, a damages claim by the employer is still pending. (vi) Finally, the Government reports on the consultations with building and construction industry participants which took place on 12 December 2006 in Canberra. The Committee notes from the minutes of these consultations that all parties appeared to maintain their positions.

The Committee notes with regret the Government’s statements indicating that there is no intention to amend the BCII Act, as well as the severe penalties imposed on trade unions and individual members for industrial action, including strikes lasting more than two hours, the prosecutions initiated by the ABCC which appear to be targeted on numerous occasions against trade unions and workers, and the declining rate of trade unionism in the industry which, in the Committee’s view, may not be unrelated to impediments placed over collective bargaining in the BCII Act. The Committee wishes to emphasize that the exercise of the right to organize presupposes that trade unions have the right to freely organize their activities and formulate their programmes for furthering and defending the interests of workers, without interference from the authorities. The Committee therefore once again urges the Government to indicate in its next report any measures taken or contemplated with a view to: (i) amending sections 36, 37 and 38 of the Building and Construction Industry Improvement Act 2005, which refer to “unlawful industrial action” (implying not simply liability in tort vis-à-vis the employer, but a wider responsibility towards third parties and an outright prohibition of industrial action); (ii) amending sections 39, 40 and
48–50 of the Act so as to eliminate any excessive impediments, penalties and sanctions against industrial action in the building and construction industry; (iii) introducing sufficient safeguards into the Act so as to ensure that the functioning of the Australian Building and Construction (ABC) Commissioner and inspectors does not lead to interference in the internal affairs of trade unions – especially provisions on the possibility of lodging an appeal before the courts against the ABC Commissioner’s notices prior to the handing over of documents (sections 52, 53, 55, 56 and 59 of the Act); and (iv) amending section 52(6) of the Act which enables the ABC Commissioner to impose a penalty of six months’ imprisonment for failure to comply with a notice to produce documents or give information so as to ensure that penalties are proportional to the gravity of any offence.

The Committee has been informed by the Government of Australia, newly elected on 24 November 2007, that it is committed to making substantial amendments to Australia’s Workplace Relations Act and its legislative framework and to addressing issues the Committee has raised with regard to the Building and Construction Industry Improvement Act 2005. The Committee expresses the hope that its comments will prove useful to the Government in its deliberations on legislative revision.

[The Government is asked to report in detail in 2008.]