Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Australia (Ratification: 1973)

The Committee notes with interest the general statement made in the Government’s report to the effect that the new Australian Government acknowledges that the aspects of federal workplace relations laws, previously commented on by the Committee, did not, in a number of important respects, meet the key requirements of ILO standards ratified by Australia relating to collective bargaining and freedom of association. These aspects related primarily, but were not limited to, amendments made in 2005 to the Workplace Relations Act 1996 (WR Act) by the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices Act). A critical component of the new Government’s legislative programme is to enact new laws governing workplace relations in Australia having due regard to the issues canvassed in the report of the Committee of Experts. The first stage of the Government’s legislative programme is now in place following the entry into force of the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Transition Act) on 28 March 2008. The Transition Act amends the WR Act and provides for a measured transition to the Government’s new workplace relations system which will be fully operational from 1 January 2010.

The Committee notes with interest that according to the Government, key changes introduced by the Transition Act include: (i) preventing the making of further Australian Workplace Agreements (AWAs – a form of statutory individual agreement putting emphasis on direct employee–employer negotiations over collective negotiations with trade unions aimed at concluding collective agreements); since the Transition Act took effect on 28 March 2008, no new AWAs can now be made; AWAs have been used to undermine the safety net set by awards and are the least used industrial instrument in Australian workplaces, estimated by the Government at fewer than 10 per cent of Australian employees; (ii) providing for Individual Transitional Employment Agreements (ITEAs) to be available in limited circumstances during the transition period, until 31 December 2009; the aim is to provide employers and employees with time to work through their transition to the new system without major disruption or confusion; (iii) enacting a new “no disadvantage” test for all workplace agreements which provides better protection to employers’ terms and conditions of employment in relation to the provisions of the applicable collective agreement, or in the absence of a collective agreement, the applicable award and the Australian Fair Pay and Conditions Standard; in other words, ITEAs must pass a no-disadvantage test which ensures that they cannot be used to reduce the wages and conditions of employees covered by them; (iv) enabling the Australian Industrial Relations Commission to create new, modern awards.

The Committee also notes with interest that, according to the Government, collective bargaining will be placed at the centre of the new workplace relations system, which is being developed through wide consultations with union and business representatives. The current complex agreement-making process will be replaced with a simple, flexible and fair system, and the current onerous, complex and legalistic restrictions on agreement content will be removed. In the new workplace relations system, Fair Work Australia will be responsible for a range of functions including the following: (i) assisting the parties to resolve grievances; (ii) resolving unfair and unlawful dismissal claims; (iii) facilitating collective bargaining and enforcing good faith bargaining; giving bargaining parties reliable advice in order to make collective agreements and assisting employees, particularly those who are not unionized, to understand how to collectively bargain; (iv) reviewing and approving collective agreements; (v) adjusting minimum wages and award conditions; (vi) monitoring compliance with and ensuring the application of workplace laws, awards and agreements; and (vii) regulating registered industrial organizations.

The Committee also notes with interest from the Government’s report that the new laws will recognise that freedom of association is vital for the proper functioning of a fair workplace relations system built on the concept of democracy in the workplace. It will be unlawful for anyone to try to stop a working person (whether by threat, pressure, discrimination, victimization or termination) from exercising their free choice to join and be represented by a union, or participate in collective activities. The Government will ensure that the new industrial arbiter, Fair Work Australia, has the power to make orders to ensure freedom of association is protected. The Committee requests the Government to communicate with its next report a copy of any draft legislation under consideration, so as to examine its conformity with the Convention.

A. Federal jurisdiction. 1. In its previous comments, the Committee raised the need to amend sections 659 and 693 of the WR Act so as to ensure that there is no possibility of introducing exemptions from the right to be protected against anti-union dismissal for particular classes of employees (employees “in relation to whom the operation of the provisions causes or would cause substantial problems because of: (i) their particular conditions of employment; or (ii) the size or nature of the undertaking in which they are employed”). The Government indicates that, as no regulations have been made under section 693 of the WR Act to exclude certain classes of employees from protection, all Australian employees continue to be protected against anti-union dismissal. The Committee notes, however, that the issue raised in its previous comments relates to the possibility of introducing exemptions to protection against anti-union discrimination by regulation. The Committee hopes that the substantive workplace relations reform will address the need to amend sections 659 and 693 of the WR Act so as to ensure that there is no possibility of introducing exemptions from the right to be protected against anti-union dismissal for particular classes of employees. It requests the Government to indicate in its next report the measures taken in this regard.

2. In its previous comments, the Committee raised the need to amend section 643 of the WR Act so as to ensure that establishments with less than 100 employees are not excluded from protection against harsh, unjust or unreasonable dismissals. The Government indicates that the exemption of workplaces with less than 100 employees from unfair dismissal laws will be removed; protection against harsh, unjust or unreasonable dismissals will be restored, subject to a 12-month qualifying period for employees who work in a small business with fewer than 15 employees and six months for employees who work in large businesses. The Committee notes that dismissals on anti-union grounds (which is a narrower category in relation to harsh, unjust or unreasonable dismissals) should be available to all workers at all times and should not be subject to a qualifying period. The Committee therefore hopes that the substantive workplace relations reform will address the need to ensure that protection against anti-union discrimination is available to all workers at all times and is not subject to a qualifying period. It requests the Government to indicate in its next report the measures taken in this regard.

3. In its previous comments, the Committee raised the need to amend sections 400(6), 793 and 400(5) of the WR Act so as to ensure that workers are adequately protected against any discrimination at the time of recruitment related to their refusal to sign an AWA. The Committee notes that the Transition Act prevents new AWAs from being made and that, until the end of 2009, sections 400(6), 793 and 400(5) of the WR Act apply in relation to ITEAs instead of AWAs. The Committee also notes with interest that, according to the Government, there will be no place for any form of statutory individual employment agreement in the new workplace relations system and thus the question of discrimination will not arise. The Committee expresses the hope that the substantive workplace relations reform will address the need to ensure that workers are adequately protected against discrimination at the time of recruitment related to their refusal to sign any form of statutory individual employment agreement. It requests the Government to indicate in its next report the measures taken in this regard.

4. In its previous comments, the Committee raised the need to amend sections 423 and 431 of the WR Act so as to ensure that workers are adequately protected against anti-union discrimination, especially dismissals for industrial action taken in the context of negotiations of multiple business agreements and “pattern bargaining” (i.e. negotiations seeking common wages or conditions of employment for two or more proposed collective agreements with different employers or even different subsidiaries of the same parent company). The Government indicates that it is committed to continuing provisions for protected industrial action authorized by a secret ballot during bargaining for a collective agreement; it will be unlawful for an employer to dismiss an employee wholly or partly because the employee is proposing to engage, is engaging, or has engaged, in protected industrial action.

In this regard, the Committee notes the comments made by the Australian Congress of Trade Unions (ACTU) in a communication dated 1 September 2008 to the effect that the Government has indicated its intention to retain the existing provisions rendering action in favour of “pattern bargaining” illegal. The Committee once again recalls that action related to the negotiation of multiple business agreements and “pattern bargaining” is legitimate trade union activity for which adequate protection should be afforded in the law and that the choice of the bargaining level should normally be made by the parties themselves. The Committee therefore once again requests the Government to indicate in its next report any measures taken or contemplated to amend sections 423 and 431 of the WR Act, so as to ensure that workers are adequately protected against acts of anti-union discrimination, in particular dismissal, for acts linked to negotiating collective agreements at whatever level deemed appropriate by the parties.

5. In its previous comments, the Committee raised the need to establish a mechanism for the rapid and impartial examination of allegations of acts of interference in the context of the selection of a bargaining partner in the enterprise; this was considered necessary, given that under section 328(a) of the WR Act, an employer had the widest possible discretion to select a bargaining partner and to negotiate with organizations which had “at least one member” in the enterprise. Moreover, the Committee had taken note of comments made by the International Trade Union Confederation (ITUC) in 2007 on the possibility for employers to bypass unions in negotiations, even when the workers wished to be represented by their union, and had raised the need for measures to ensure that “employee collective agreements” did not undermine workers’ organizations and their ability to conclude collective agreements and that, therefore, negotiations with non-unionized workers took place only where there was no representative trade union in the enterprise. Finally, the Committee had raised the need to address various provisions of the WR Act which gave preference to individual agreement-making over collective bargaining and, in particular, to amend section 348(2) of the WR Act so as to ensure that statutory individual agreements (AWAs) might prevail over collective agreements only to the extent that they were more favourable to the workers.

The Committee notes with interest that, according to the Government, since the Transition Act took effect on 28 March 2008, no new AWAs can be made, while ITEAs may be concluded in limited circumstances until 31 December 2009; moreover, a new no-disadvantage test has been put in place for all new workplace agreements, which provides better protection to employees. In addition to this, the Committee notes the Government’s commitment that under the new system, at the commencement of bargaining, employers will be obliged to inform employees of their right to be represented. Employees will be free to choose who represents them in collective bargaining. Employees who are union members will be able to be represented by a union that is eligible to represent them. All bargaining participants must respect that choice and bargain in good faith with all other bargaining participants. An independent arbiter, called “Fair Work Australia”, will be able to determine the level of support for collective bargaining amongst employees in a workplace. Where a majority of employees at a workplace want to bargain collectively, their employer will be required to bargain collectively with them in good faith.

The Committee also notes, however, that in its latest comments the ACTU regrets the fact that the Transition Act did not immediately abolish statutory individual agreements. The ACTU also draws attention to recent cases in which employers have sought to take advantage of the transitional arrangements to impose non-union collective agreements containing AWA-like conditions on their workforce so as to prevent them from being covered by collective agreements negotiated with representative unions for years to come. This is significant in light of the fact that when AWAs expire, workers will potentially be covered by these non-union agreements. The ACTU urges the Government to ensure that enforceable “agreements” cannot be made applicable to existing employees without them having participated in the decision to endorse the agreements.

Finally, the Committee notes that the Government does not make any observation as to the incident communicated by the ITUC in its previous comments concerning a call centre which had allegedly forced workers out of a collective agreement and into AWAs, and the related investigation by the Workplace Rights Advocate of the State of Victoria.

The Committee requests the Government to provide additional information on the provisions which will govern the transition from the previous system, based on statutory individual agreements (AWAs), to the new system which will have collective bargaining at its centre and to specify, in particular, the conditions under which workers covered by AWAs will be free to be represented in collective bargaining, as well as the relationship between AWAs already concluded and new collective agreements. The Committee hopes that in the framework of the substantive labour reform, measures will be taken to ensure that: (i) there is no possibility of acts of interference by the employer in the context of the selection of a bargaining partner; and that (ii) “employee collective agreements” may not be used to undermine workers’ organizations and their ability to conclude collective agreements. The Committee requests the Government to indicate in its next report the measures taken in this regard.

6. In its previous comments, the Committee raised the need to repeal or amend sections 151(1)(h), 152, 331(1)(a)(ii) and 332(3) of the WR Act so as to ensure that multiple business agreements are not subject to a requirement of prior authorization at the discretion of the employment advocate and that the determination of the bargaining level is left to the discretion of the parties and is not imposed by law or by decision of the administrative authority. The Committee notes that, according to the Government, under the new system Fair Work Australia will be able to facilitate multi-employer collective bargaining for low paid employees or employees who have not historically had access to the benefits of collective bargaining. Further, the Government’s policy is that where more than one employer and their employees or unions with coverage in the workplaces voluntarily agree to collectively bargain for a single agreement, they will be free to do so. Nevertheless, the Committee also notes that according to the ITUC, the Government has indicated its intention to retain the prohibition of “pattern bargaining” (i.e. negotiations seeking common wages or conditions of employment for two or more proposed collective agreements with different employers, which might therefore lead to a form of multi-employer business agreement).

The Committee once again recalls that the level of collective bargaining should be decided by the parties themselves and not be imposed by law and that legislative provisions which make the entry into force of a collective agreement subject to prior approval by the administrative authority at its discretion, is incompatible with the Convention. The Committee hopes that in the framework of the substantive labour reform under way, all types of multiple business agreements, including “pattern bargaining”, will be allowed so that the determination of the bargaining level is left to the discretion of the parties and is not imposed by law or by decision of the administrative authority. The Committee requests the Government to indicate in its next report any measures taken in this regard.

7. In its previous comments, the Committee raised the need to amend section 330 of the WR Act so as to ensure that the choice of bargaining agent, even in new businesses, may be made by the workers themselves so that they will not be prohibited from negotiating their terms and conditions of employment in the first year of their service for the employer even if an “employer greenfields agreement” has been registered (enabling the employer to unilaterally determine the terms and conditions of employment in a new business including any new activity by a government authority, or a body in which a government has a controlling interest, or which has been established by law for a public purpose as well as a new project which is of the same nature as the employer’s existing business activities). The Committee notes that, according to the Government, under the new system where an employer commences a genuinely new business or undertaking and they have not yet engaged any employees, the employer and a relevant union may bargain for a collective greenfields agreement for the new business. The Committee requests the Government to specify the modalities according to which an employer may negotiate with a union the terms and conditions of employment in a new business before engaging any employees and the safeguards which ensure protection against employer interference in this framework. The Committee also requests the Government to indicate whether it is still possible to conclude “employer greenfields agreements” which enable the employer to determine unilaterally the terms and conditions of employment in a new business; if that is the case, the Committee requests the Government to indicate the measures taken or contemplated in the framework of the substantive labour reform, to ensure that workers in new businesses are able to choose the bargaining agent themselves, and that they are not prohibited from negotiating their terms and conditions of employment even if an “employer greenfields agreement” has been registered.

B. 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 and the Convention.

The Committee recalls that, according to the comments previously made by the ACTU, section 64 of the BCII Act prohibits project agreements, which have been a common feature of the building industry and are particularly suited to the industry’s nature as an efficient means of ensuring that all employees on a building site, who may be employed by a large number of small subcontractors, are covered by one agreement setting standard wages and conditions.

The Committee notes that the Government has commenced a process of extensive consultation in relation to the BCII Act and the regulatory arrangements that will apply after 31 January 2010. The Government’s policy is that collective bargaining will be based at the enterprise level using a well understood definition of “enterprise” which may include a single business or employer, a group of related businesses operating as a single business or a discrete undertaking, site or project. However, pattern bargaining and industry-wide bargaining will not be permitted. The new system contemplates multi-employer bargaining in the circumstances delineated above.

Taking note of the extensive comments made by the ACTU on this issue, under the Committee’s comments concerning Convention No. 87, and also noting that, according to the Government, under the new workplace relations system there will be no place for any form of statutory individual agreements, which means that certain provisions of the BCII operating in conjunction with the WR Act may be substantially modified in the future, the Committee regrets that the Government has not provided more detailed information on the specific steps contemplated to bring the BCII into full conformity with the Convention.

The Committee therefore once again urges the Government to indicate in its next report the measures taken or contemplated so as to bring the BCII Act into conformity with the Convention with regard to the following points: (i) the revision of section 64 of the Act so as to ensure that the determination of the bargaining level is left to the discretion of the parties and is not imposed by law or by decision of the administrative authority; (ii) the promotion of collective bargaining, especially by ensuring that there are no financial penalties or incentives linked to undue restrictions on collective bargaining (sections 27 and 28 of the Act authorize the Minister to deny Commonwealth funding to contractors bound by a collective agreement that, although lawful, does not meet the requirements of the building code; the latter: (i) excludes a wide range of matters from the scope of collective bargaining; and (ii) contains financial incentives to ensure that statutory individual agreements may override collective agreements).

C. Higher education sector. In its previous comments the Committee raised the need to amend section 33-5 of the Higher Education Support Act 2003, as well as the Higher Education Workplace Relations Requirements (HEWRRs) which raised obstacles to collective bargaining similar to those raised by the WR Act and the BCII Act, by: (1) providing economic incentives to ensure that collective agreements contain exceptions in favour of AWAs; and (2) allowing for negotiations with non-unionized workers even where representative trade unions exist in the unit. The Committee notes with interest that the Government has introduced into the Australian Parliament draft legislation to abolish the HEWRRs. The Committee requests the Government to indicate in its next report progress made in the adoption of legislation aimed at abolishing the HEWRRs.

A request on another point is being addressed directly to the Government.