Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

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

The Committee notes the comments of the Australian Council of Trade Unions (ACTU) in a communication dated 31 August 2011, and of the International Trade Union Confederation (ITUC) in a communication dated 4 August 2011 on the application of the Convention.

The Committee notes that the Government indicates that from 1 January 2010, all states other than Western Australia referred their industrial relations powers to the Commonwealth, essentially creating a new national industrial relations system for the private sector known as the national system. Pursuant to the Fair Work Act 2009, the Fair Work Regulations 2009, the Fair Work (Registered Organizations) Act 2009 and the Fair Work (Registered Organizations) Regulations 2009, the national system covers constitutional corporations, the Commonwealth and its authorities, employers who employ flight crews, maritime employees or waterside workers in connection with interstate or overseas trade and commerce, all employers in Victoria, the Northern Territory and the Australian Capital Territory, private sector employers in New South Wales, Queensland, South Australia and Tasmania and local government employers in Tasmania. The Committee notes that the following employers are not covered by the Fair Work Act: (1) state public sector or local government employment or employment by non-constitutional corporations in the private sector in Western Australia; (2) state public sector and local government employment in New South Wales, Queensland and South Australia; and (3) state public sector employment in Tasmania.

Article 3 of the Convention. Right of organizations to freely organize their activities and to formulate their programmes. In its previous observation, the Committee had noted the concerns raised by the ACTU that most of the restrictions in place under the Workplace Relations Act, 1996, (WR Act) remained in place in the Fair Work Act and had requested the Government to review the following provisions in consultation with the social partners concerned, so as to bring them into conformity with the Convention:

• (i) absence of protection for industrial action aimed at achieving:

– multiple business agreements (section 413(2));

– “pattern bargaining” (sections 409(4), 412, 422, 437(2));

– secondary boycotts and general sympathy strikes (sections 408–411 and Trade Practices Act 1974);

• (ii) negotiations over “unlawful terms” including: to extend unfair dismissal benefits to workers not yet employed for the statutory period; to provide strike pay ; to pay bargaining fees to a trade union; and to create a union right to entry for compliance purposes that are different or superior to those contained within the Act (sections 172, 194, 353, 409(1) and (3) and sections 470–475); and
• (iii) provisions which allow for restrictions or prohibitions of industrial action, including through the introduction of compulsory arbitration at the initiative of the Minister, when industrial action is threatening to cause harm to the Australian economy or the life, personal safety or health, or the welfare of the population or a third party (sections 423, 424, 426 and 431).

As regards pattern bargaining, the Government reaffirms that industrial action taken in support of pattern bargaining is not protected under the Fair Work Act but that making common claims across multiple workplaces is not considered to be pattern bargaining if the bargaining representative is genuinely trying to reach an agreement and is willing to negotiate claims at each enterprise (section 412); relevant considerations under section 412(3) include whether the bargaining representative is: (1) demonstrating a preparedness to take into account the individual circumstances of the particular employer; (2) bargaining in a manner consistent with the terms of the agreement being determined as far as possible by agreement between that employer and its employees, and; (3) meeting the good faith bargaining requirements.

As regards industrial action in support of claims for unlawful terms, the Committee takes note of the decisions by Fair Work Australia (FWA) to refuse an application for a protected action ballot order on grounds that it was satisfied that the union’s proposed agreement included an unlawful term, with the result that the proposed industrial action would not have been protected and which led to the issuance of an order terminating the proposed action. The Committee further notes that the Government reaffirms that it is unlawful, under the Fair Work Act, for an employer to pay, or an employee to demand or request, strike pay and that this provision is consistent with the general common law rule that employees are not entitled to receive payment for employment services they do not perform. The Government nevertheless indicates that the Federal Magistrates Court dismissed an employer’s claim that the union had impermissibly asked the employer to pay strike pay, on the basis that expressing a view that employees “should” be paid did not constitute a “demand” for payment in the circumstances.

In respect of the prohibition of secondary boycotts and sympathy strikes, the Committee notes that the Government indicates that the Competition and Consumer Act 2010 has replaced the Trade Practices Act 1974 but that the secondary boycott provisions have not been amended and that it is not contemplating making such amendments. Furthermore, the Committee had previously noted the need to amend sections 30J and 30K of the Crimes Act, 1914, which respectively prohibit industrial action threatening trade or commerce with other countries or among states and 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. In addition, section 419 of the Fair Work Act requires FWA to suspend or terminate industrial action in non-national enterprises or by non-national employees, if the event will or would be likely to have the effect of causing substantial loss or damage to the business of a constitutional corporation. The Committee observes that the Government has taken note of its request to review sections 30J and 30K of the Crimes Act 1914 and further notes its indication that there has been one interim order made by FWA under section 419 of the Fair Work Act which was revoked shortly thereafter and no written decision has yet been published in relation to this matter. The Committee nevertheless notes with regret that the Government has not made any amendments to sections 30J and 30K of the Crimes Act 1914 and has maintained the prohibition of secondary boycotts in the Competition and Consumer Act 2010 despite the repeal of the Trade Practices Act 1974 and its long-standing comments in this regard.

As regards FWA authority to suspend or terminate protected industrial action where it causes or threatens to cause significant economic harm pursuant to section 423, the Committee notes the Government’s indication that FWA must be satisfied that the threat of significant economic harm is imminent, that the industrial action is protracted and that the dispute will not be resolved in the reasonably foreseeable future as well as further factors listed in section 423(4). The Committee takes note that FWA has considered applications but had not, at the time of reporting, suspended or terminated protected industrial action under section 423 of the Fair Work Act. The Committee further notes that FWA declined to suspend or terminate a protected industrial action on the grounds that it was not convinced that the dispute would not be resolved in the foreseeable future and that FWA did not consider that an action which was causing considerable economic harm to the employer was significant enough in terms of it being exceptional in either its character or magnitude, and further considered that terminating the protected industrial action at that time would not assist in facilitating bargaining and resolving the dispute in the reasonably foreseeable future.

As regards FWA authority to suspend or terminate protected industrial action where it threatens to endanger the life, personal safety or health, or welfare, of the population or part of it or cause significant damage to the Australian economy or an important part of it under section 424 of the Fair Work Act, the Committee notes the Government’s indication that applications have been received by FWA under this section and that, like under section 423, FWA has set a high threshold for ending industrial action on these grounds. The Committee however notes comments made by ACTU with regard to a decision of FWA, upheld in appeal, to suspend protected action for two weeks in the context of industrial action in the education sector, on the basis that a union ban on recording and transmitting exam results threatened the welfare of graduating students by prejudicing their ability to secure future employment. ACTU indicates that this decision was taken despite the union having taken steps to set up an exemptions committee to ensure that any student with a genuine need to obtain results could do so. The ACTU considers that a broad interpretation of section 424 unduly restricts the rights of workers to take industrial action. The Committee further notes that the Government indicates that FWA considered cases concerning actions causing damage to the Australian economy and started applying the decision of the High Court of Australia which ruled that there must be a rigorous basis for deciding that protected industrial action is causing significant damage to the Australian economy over and above “generalized predictions” as to the likely consequence of the industrial action in question.

As regards FWA authority to suspend protected industrial action where it is threatening to cause significant harm to a third party under section 426 of the Fair Work Act, the Committee notes the Government’s indication that FWA may take into account the extent to which the protected action threatens to damage the ongoing viability of an enterprise carried on by a person, disrupt the supply of goods or services to an enterprise carried on by the person, reduce the person’s capacity to fulfil a contractual obligation or cause other economic loss to the person. FWA must also be satisfied that the suspension is appropriate, taking into account whether the suspension would be contrary to the public interest or inconsistent with the objects of the Act. The Government indicates that section 426 was considered by FWA which concluded that the expression “significant harm” required the identification of harm that was exceptional in its character or magnitude, out of the ordinary and over and above harm of the sort that is commonly a consequence of protected industrial action.

The Committee takes due note of the detailed information provided by the Government concerning the limitations on the use of the abovementioned provisions. It also notes the Government’s indications that it has not amended the abovementioned provisions as it considers that, overall, the industrial action provisions of the Fair Work Act strike the right balance between an employee’s right to strike and the need to protect life and economic stability in a manner that is appropriate to Australia’s national conditions and that FWA has set a high threshold for allowing for suspension or termination of protected industrial action in specific circumstances under sections 423, 424, 426 of the Fair Work Act.

The Committee further notes the conclusions and recommendations of the Committee on Freedom of Association in Case No. 2698 (357th Report, paragraphs 213–229) concerning the abovementioned provisions. The Committee recalls that the right to strike is one of the essential means available to workers and their organizations for the promotion and protection of their economic and social interests. These interests not only have to do with better working conditions and pursuing collective demands of an occupational nature, but also with seeking solutions to economic and social policy questions and to labour problems of any kind which are of direct concern to the workers (General Survey of 1994 on freedom of association and collective bargaining, paragraph 147). The Committee further recalls that the right to strike may only be restricted or prohibited: (1) in the public service only for public servants exercising authority in the name of the State; or (2) in essential services in the strict sense of the term. The Committee recalls that a broad range of legitimate strike action could be impeded by linking restrictions on strike action to interference with trade and commerce. While the economic impact of industrial action and its effect on trade and commerce may be regrettable, such consequences in and of themselves do not render a service “essential” and thus do not justify restrictions on the right to strike. The Committee requests once again the Government to take all appropriate measures, in the light of its previous comments and in consultation with the social partners, to review the abovementioned provisions of the Fair Work Act, the Competition and Consumer Act 2010 and the Crimes Act 1914 with a view to bringing them into full conformity with the Convention. In the meantime, the Committee requests the Government to continue providing detailed information on the application of these provisions by the FWA.

Strike ballots. The Committee recalls the concerns raised by the ACTU that the ballot process could be used by employers to frustrate or delay the taking of protected industrial action. In this regard, the Committee recalls that under the Fair Work Act, industrial action must be authorized by a protected action ballot of employees except where employees are taking protected industrial action in response to industrial action taken by their employer. Section 459 of the Fair Work Act requires at least 50 per cent of employees on the roll of voters to vote, and of these, more than 50 per cent must approve the proposed action. The Committee notes that the Government indicates that for FWA to make a protected action ballot order where an application is made under section 437 it must be satisfied that each applicant has been, and is, genuinely trying to reach an agreement with an employer (section 443(1)). Whether an applicant has been genuinely trying to reach an agreement is a question of fact to be determined in the circumstances of the particular case. The Government further indicates that a substantial body of case law has developed about the meaning of “genuinely trying to reach an agreement” in the context of protected action ballot applications. The Committee takes note in particular of the general indicia set out by FWA including: (1) the length of negotiations, including the amount of explanation and detail exchanged between the applicant and other parties; (2) the extent of progress in negotiations and steps taken to try to reach an agreement; and (3) whether the applicant has articulated its claims and has provided responses to proposals made by other parties. The Committee further notes that the recent statistics provided by FWA indicate that in the December 2010 quarter, 189 protected application ballots were made and 184 granted and that in the March 2011 quarter, 134 applications were made and 115 granted.

The Committee requests the Government to continue to take steps to ensure that the exercise of the right to strike in practice is not restricted by unduly challenging and complicated strike ballot procedures and to continue providing statistics on the number of protected action ballots authorized out of a total number of applications, as well as to any important or excessive delays resulting from this procedure.

Access to the workplace. The Committee recalls that it previously raised the need to amend the restrictive conditions set for granting a permit allowing trade union representatives to have entry to the workplace in order to meet with workers. In its previous observation, the Committee had noted that, under the Fair Work Act, a union official must hold a permit provided by FWA in order to have the right of entry for a certain workplace. In determining whether to grant an entry permit, FWA will consider any matter it considers relevant, including whether the applicant has ever been convicted of violating an industrial law or convicted of a crime involving fraud, entry into premises, or intentional use of violence or destruction of property (section 513). The Committee had further noted that the Fair Work Act permits union officials to hold discussions with employees who are members, or eligible to be members, of a union and to enter workplaces to investigate suspected breaches of the Act or an instrument made under the Act and had requested the Government to provide information on the practical application of this provision, including statistics relating thereto.

The Committee notes that the Government indicates that it considers that the Fair Work Act retains a fair and balanced framework for right of entry for officials of organizations and empowers FWA to deal with abuses of rights by officials, unreasonable requests by employers and disputes. The Government further indicates that FWA has reported in its quarterly reports that 1,079 applications for a right of entry permit have been received since July 2010 and 866 have been granted. The Committee requests the Government to continue providing information on the practical application and impact of these provisions concerning workers representatives’ access to the workplace in its next report, including on the delay in which entry permits are granted and the grounds provided for denying applications or revoking permits.

Building industry. The Committee recalls from previous comments that the Building and Construction Industry Improvement (BCII) Act of 2005: (i) renders virtually all forms of industrial action in the building and industrial sector unlawful (sections 36, 37 and 38 of the BCII Act 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) introduces severe financial penalties, injunctions and actions for uncapped damages in case of “unlawful industrial action” (sections 39, 40 and 48–50 of the BCII Act); (iii) gives the enforcement agency known as the Australian Building and Construction Commission (ABCC) wide-ranging coercive powers akin to an agency charged with investigating criminal matters, which have allegedly resulted in interference in the internal affairs of trade unions, including through the use of the power to impose a penalty of six months’ imprisonment for failure to comply with a notice to produce documents or give information (sections 52, 53, 55, 56 and 59 of the BCII Act); and (iv) grants the capacity to the Minister for Workplace Relations to regulate industrial affairs in the building and construction industry by ministerial decree through a device referred to as a building code which is inconsistent with the Convention on several points and is implicitly “enforced” through an “accreditation scheme” for contractors who wish to enter into contracts with the Commonwealth. The Committee recalls that it previously requested the Government to indicate any progress made concerning the adoption of new legislation in respect of the building and construction industry in full conformity with the Convention.

The Committee notes that the Government indicates in its report that the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009, introduced into the Parliament on 17 June 2009, was not adopted before the Parliament was prorogued when the 2010 Federal election was called, and has been placed on the legislative agenda to be reintroduced in the 2011 spring sitting of Parliament. The Committee further notes the Government’s indication that in early 2011, the ABCC Commissioner conducted a review of the practice and procedure relating to the use of powers under section 52 of the BCII Act and has, where possible, voluntarily adopted the Wilcox report recommendations and put in place some safeguards which should be respected before issuing a notice under section 52 of the BCII Act. The Government further indicates that the Commonwealth Ombudsman will be invited to conduct its own investigation on each occasion where section 52 powers are used as well as asked to review the way in which the ABCC Commissioner intends to use these powers.

The Committee notes with regret that the abovementioned restrictions remain unchanged in the construction and building industry and observes with concern the allegations made by the ITUC and the ACTU respectively that ABCC inspectors continue to harass trade union members and officials in the construction sector, including by conducting secret interrogations of individual workers, and that the ABCC investigations and prosecutions show a strong bias in targeting trade unions and workers. The Committee requests the Government to provide its observations on the ITUC and the ACTU comments and to take all necessary measures to ensure that trade union members and officials in the construction sector are not victim of harassment and targeting by the ABCC. The Committee further expresses once again the firm hope that the legislative reform undertaken in the building and construction industry will soon be completed and will bring the legislation into full conformity with the Convention. The Committee requests the Government to provide further information in this respect in its next report, including information related to the use of section 52 powers by the ABCC and to related investigations conducted by the Commonwealth Ombudsman.