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

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

The Committee notes the comments of the Australian Council of Trade Unions (ACTU) in a communication dated 31 August 2011 and the International Trade Union Confederation (ITUC) in a communication dated 4 August 2011 on the application of the Convention, in particular as regards: (1) the alleged intention of the Government of South Australia to unilaterally cut entitlements of public sector workers which had been agreed upon in good faith through collective agreements; and (2) the recommendations of the review of state industrial relations made by the Western Australian Government to give employers the power to insist their employees sign individual contracts and to remove unfair dismissal protections for employees in small businesses. The Committee requests the Government to provide its observations on these matters in its next report.

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 commencer, 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 1 of the Convention. Adequate protection against acts of anti-union discrimination in respect of employment. In its previous comments, the Committee raised the need to ensure that workers are adequately protected against anti-union discrimination, especially against 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). Pursuant to sections 347 and 772 of the Fair Work Act, 2009, and to information provided by the Government, the Committee understood that protections against anti-union discrimination, including against dismissals, covered pattern bargaining to the extent that the parties were genuinely trying to reach an agreement. The Committee requested the Government to provide information on the manner in which industrial action related to pattern bargaining was protected in practice, including any relevant decisions from Fair Work Australia. The Committee further requested the Government to indicate the steps taken or envisaged to ensure protection against anti-union dismissals related to actions taken in respect of multiple business agreements.

The Committee notes that the Government indicates in its report that the industrial activity protection under Part 3-1 of the Fair Work Act only prohibits adverse action being taken against a person who engages in lawful activity and that industrial action related to pattern bargaining is not considered to be a lawful industrial activity under the Act unless the parties are genuinely trying to reach an agreement. As the Government has not provided any further information in relation to protection of industrial action related to pattern bargaining, the Committee once again requests the Government to provide information on any relevant decisions emanating from FWA and the steps taken to ensure protection in relation to action aimed at achieving multiple business agreements.

Article 4. Promotion of collective bargaining. The Committee previously noted with satisfaction that individual statutory agreements were not part of the new system established under the Fair Work Act but that, in line with the Government’s prior policy commitments, existing Australian Workplace Agreements (AWAs) would continue to apply until they are terminated. The Committee requested the Government to provide information on the application of these provisions in practice.

The Committee notes that the Government reiterates that the Fair Work Act does not allow for “employer greenfields agreements” and that the making of greenfields agreements between employers and relevant employee organizations is regulated by section 172(2)(b) of the Act. The Government indicates that as of 31 December 2010, greenfields agreements represented 6.1 per cent of all Fair Work Act agreements (551 out of 9,077) and reaffirmed that AWAs and Individual Transitional Employment Agreements (ITEAs) can no longer be made but AWAs lodged on or before 27 March 2008 and ITEAs lodged on or before 31 December 2009 continue to operate until they are terminated or replaced: they can be terminated by common agreement of the employer and employee at any time, or unilaterally when they reach their nominal expiry date and, once terminated, any new enterprise agreement that covers the employee will then apply. Unilateral conditional termination can also be made pending the making of a new enterprise agreement to enable the employee to participate in collective bargaining for an enterprise agreement.

The Committee draws the attention to the conclusions and recommendations reached by the Committee on Freedom of Association in Case No 2698 (357th Report, paragraphs 213–229) regarding the possibility for employers pursuant to the Fair Work Act to enter into agreements directly with employees, even where a union exists. The Committee underlines that the Committee on Freedom of Association recalled that direct negotiation between an undertaking and its employees, bypassing representative organizations where these exist, might, in certain cases, be detrimental to the principle that negotiation between employers and organizations of workers should be encouraged and promoted, and requested the Government to ensure respect for this principle and to provide detailed information on the application of section 172 of the Fair Work Act in practice. The Committee requests the Government to continue to provide information on the application and impact of section 172 in practice, as well as, on the current situation with regard to AWAs and ITEAs, including further statistical data on the number of AWAs and ITEAs terminated since the entry into force of the Fair Work Act, the number of remaining AWAs and ITEAS applicable and their expected termination dates.

In several of its previous comments, the Committee had raised the need to repeal or amend sections 151(1)(h), 152, 331(1)(a)(ii) and 332(3) of the Workplace Relations Act so as to ensure that multiple business agreements were not subject to a requirement of prior authorization at the discretion of the employment advocate. The Committee had noted that section 186 of the Fair Work Act requires that any enterprise agreement be authorized by the FWA and that FWA may only approve multi-employer agreements if it is satisfied that no person coerced, or threatened to coerce, any of the employers to make the agreement. The Committee had further noted that the Fair Work Act allowed employers who wish to voluntarily bargain together for a multi-enterprise agreement to do so with no public interest test and no requirement of FWA approval but that, in this instance, employers and employees would not have access to protected industrial action.

The Committee notes that the Government indicates in its report that during the period of 1 July 2009 to 31 December 2010, 56 per cent of the agreements approved by FWA were multi-enterprise agreements. The Committee further notes that the FWA provides a special stream of bargaining for multi-enterprise agreements for low paid workers who have not historically participated in enterprise level bargaining: FWA must make a low paid authorization if it is satisfied that making the authorization is in the public interest pursuant to section 243 of the Fair Work Act. The Committee observes that the Government states that the first low paid authorization was made by FWA on 5 May 2011 and will cover aged care employees. As regards pattern bargaining, the Committee notes that the Government reaffirms that the Fair Work Act does not prevent employer and employee representatives from engaging in discussions at the industry level and provides examples of cases in which parties have been involved in discussions at the industry level including in universities and independent schools, in the offshore oil and gas industry as well as in the metal and in the construction and building industries. The Committee notes that FWA took into account the factors listed under section 412(3) to determine whether a bargaining representative was genuinely trying to reach an agreement and was willing to negotiate claims at each enterprise.

The Committee further draws the attention to the conclusions and recommendations reached by the Committee on Freedom of Association in Case No. 2698 (357th Report, paragraphs 213–229) in this respect.

Finally, the Committee observes that the Government explains that the effect of terminating protected industrial action under sections 423, 424 or 431 is that bargaining representatives have a negotiating period of 21 days (extendable to 42 days by FWA) in which to resolve the matters at issue and that, if the parties are unable to reach agreement, FWA must make a binding industrial action related workplace determination which has effect as an enterprise agreement (sections 266–268 of Part 2–5 of Division 3 of the Fair Work Act). The Committee notes that no such determination has yet been made. The Committee further observes that under section 240 of the Act, a bargaining representative may request FWA to deal with a dispute about a proposed enterprise agreement if the bargaining representatives are unable to resolve the dispute and that the application may be made by one bargaining representative, whether or not the other bargaining representatives for the agreement have agreed to the making of the application if the proposed agreement is a single-enterprise agreement or a multi-enterprise agreement in relation to which a low-paid authorization is in operation. The Committee recalls that arbitration imposed by the authorities at the request of one party is generally contrary to the principle of the voluntary negotiation of collective agreements established under the Convention, and thus the autonomy of bargaining partners and that, based on the premise that a negotiated agreement, however unsatisfactory, is to be preferred to an imposed solution, the parties should always retain the option of returning voluntarily to the bargaining table (see General Survey of 1994 on freedom of association and collective bargaining, paragraphs 257 and 259). The Committee requests the Government to clarify the role of FWA in case of continuing disagreement between the parties and whether the parties remain able to resume negotiations at any point.

Building industry. The Committee recalls that it previously requested the Government to: (i) revise section 64 of the Building and Construction Industry Improvement (BCII) Act to ensure that the determination of the bargaining level is left to the discretion of the parties and is not imposed by law or the decision of the administrative authority; and (ii) promote collective bargaining, especially by ensuring that there are no financial penalties or incentives linked to undue restrictions on collective bargaining. The Committee had previously noted with interest the Government’s indication that it has introduced the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill, 2009 in order to amend the BCII Act and it would: (i) repeal section 64 of the BCII Act with the effect that the level of bargaining would be determined in accordance with the Fair Work Act; and (ii) retain the capacity currently for the Minister to issue a Building Code though, to date, the Government has not issued a Building Code under section 27 of the BCII Act.

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 the ABC Commissioner is engaged with the social partners about the content and production of a Guide to Good Faith Collective Bargaining in the Building and Construction Industry to be published in 2011. The Committee takes note of the information and expresses once again the firm hope that the undertaken legislative reform in the building and construction industry will soon be completed in full conformity with the Convention. The Committee requests the Government to provide information in this respect in its next report as well as information on the progress made in the development of the Guide to Good Faith Collective Bargaining in the building and construction industry.