Direct Request (CEACR) - adopted 2016, published 106th ILC session (2017)

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

Article 4 of the Convention. Promotion of collective bargaining. Scope of collective bargaining. Building industry. The Committee notes the observations of the Australian Council of Trade Unions (ACTU) alleging that the Building and Construction Industry (Fair and Lawful Building Sites) Code, which will apply to construction projects funded by the federal Government, restricts the content of collective agreements and discourages the application of existing agreements freely concluded between parties. It notes that the Government intends to formally issue the Code following the passage of the Building and Construction Industry (Improving Productivity) Bill. In this regard, the Committee understands that the Bill was passed into law on 2 December 2016. Pursuant to section 11 of the proposed Code, an entity within the remit of the Code must not be covered by an agreement that contains clauses pertaining to a number of subjects, including clauses: (i) prescribing the number of employees or subcontractors that may be employed or engaged for a particular site, work area, or time; (ii) restricting the employment or engagement of persons by reference to the type of contractual arrangement offered by the employer (such as a limitation of casual or daily hire employees); (iii) requiring consultation with, or seeking the approval of, a building association or an officer, delegate or other representative of the building association in relation to the source or number of employees to be engaged, or type of employment offered to employees or in relation to the engagement of subcontractors; (iv) prescribing the scope of work of subcontractors or terms and conditions of employment for subcontractors; (v) limiting or having the effect of limiting the right of an employer to make decisions about redundancy, demobilization or redeployment of employees based on operational requirements; (vi) providing for the rights of an official of a building association to enter premises other than as provided in the Fair Work Act (FWA); and (vii) providing for the establishment or maintenance of an area which is intended to be designated to be used by members, officers, delegates or other representatives of a building association in that capacity.

The Committee notes the conclusions and recommendations of the Committee on Freedom of Association (CFA) in Case No. 2326 (338th Report, paragraphs 433–457), in its examination of an earlier Australian Code on the building and construction industry, in which it considered that matters which might be subject to collective bargaining, including the type of agreement to be offered to employees, as well as matters such as selection criteria in the case of redundancy and the granting of trade union facilities, including access to the workplace beyond what is provided for in legislation, should not be excluded from the scope of collective bargaining by law or by financial disincentives. In addition, the Committee underlines that, in light of the increasing impact on conditions of employment of the diversification of contractual work arrangements, parties should not be penalized for deciding to include these issues in their negotiations. The Committee requests the Government to review the abovementioned provisions of the Building and Construction Industry (Fair and Lawful Building Sites) Code, in consultation with the social partners, with a view to removing these restrictions on collective bargaining matters. It requests the Government to provide information on the measures taken or envisaged in this regard.

Greenfields agreements. The Committee notes the Government’s statement that the amendments to the FWA of 2015 established a new process for the negotiation of single enterprise greenfields agreements (an agreement between a union and a new employer that has not yet employed any employees, used for new projects to provide more certainty on labour arrangements), providing that an employer can apply to the Fair Work Commission for the approval of its greenfields agreement where an agreement cannot be reached with the relevant employee organization within six months (pursuant to section 182(4) of the FWA). The Government indicates that approval of such agreements would be subject to the existing criteria in the FWA, and agreements would be required to be consistent with prevailing industry standards. It also indicates that the effect of these amendments will be subject to independent review by November 2017.

The Committee notes the observations of the ACTU that these amendments allow employers to have an agreement imposed on union negotiating parties (and employees who are later employed under the terms of such agreements) at the end of a six-month negotiating period, irrespective of the views of those parties. The ACTU states that employers may also be encouraged to withhold consent to an agreement on the basis that the industrial tribunal is required under the legislation to impose an agreement on the parties provided it meets certain minimum requirements. The Committee recalls that under Article 4 of the Convention, measures should be taken to encourage and promote the full development and utilization of machinery for voluntary negotiation, and that, as a consequence, compulsory arbitration is only acceptable in relation to public servants engaged in the administration of the State (Article 6 of the Convention), essential services in the strict sense of the term and acute national crises. Noting that an independent review will be undertaken in 2017, the Committee requests the Government to review section 182(4) of the FWA, on the approval of a greenfields agreement without the agreement of the parties, as indicated above, in consultation with the social partners.

Individual flexibility arrangements. The Committee notes that pursuant to section 202 of the FWA, an enterprise agreement must include a term that enables an employee and their employer to agree to an individual flexibility arrangement varying the effect of the enterprise agreement in relation to the employee and the employer, in order to meet their genuine needs. Such agreements must not include terms that would be unlawful in an enterprise agreement, and the flexibility term must require the employer to ensure that any individual flexibility arrangement results in the employee being better off overall (section 203). It notes that the Fair Work Amendment (Remaining 2014 Measures) Bill 2015 would amend the FWA to specify that, if the enterprise agreement includes terms that deal with certain subjects (particularly arrangements about when work is performed; overtime rates; penalty rates; allowances; and leave loading), the flexibility term must provide that the effect of those terms may be varied by an individual flexibility arrangement agreed to under the flexibility term.

The Committee notes the observations of the ACTU that employers frequently use individual flexibility arrangements to undercut the terms contained in a collective agreement or modern award and apply pressure to employees to accept unfair arrangements. The ACTU alleges that the Fair Work Amendment (Remaining 2014 Measures) Bill 2015 will give primacy to inferior individual agreements, over collective agreements, expand the range of matters subject to individual agreements and modify the operation of the better off overall test to enable non-monetary benefits to be taken into account. Recalling that employers and workers bound by a collective agreement should be able to include in contracts of employment stipulations which depart from the provisions of the collective agreement only if these stipulations are more favourable to the workers, the Committee requests the Government to provide its comments on the observations of the ACTU, and to provide information on the application of the provisions of the FWA concerning individual flexibility arrangements in practice.

Conclusion of an enterprise agreement with a group of employees. The Committee notes the observations of the ACTU concerning the practice permitted under the FWA of the conclusion of an enterprise agreement, negotiated with a small number of employees, and its subsequent extension to cover a larger number of employees hired afterwards. The Committee recalls in this respect that, under the terms of the Convention, the right of collective bargaining lies with workers’ organizations of whatever level, and with employers and their organizations, and that collective bargaining with representatives of non-unionized workers should only be possible when there are no trade unions at the respective level. The Committee considers that direct bargaining between the enterprise and its employees with a view to avoiding sufficiently representative organizations, where they exist, may undermine the principle of the promotion of collective bargaining set out in the Convention (see 2012 General Survey on the fundamental Conventions, paragraph 239). In the light of Article 4 of the Convention, the Committee requests the Government to take measures to ensure that collective bargaining with workers’ organizations is not undermined in practice and to provide detailed information on the application of the provisions of the Fair Work Act on the approval of enterprise agreements in this respect.

State jurisdictions. New South Wales (NSW). The Committee previously noted the observations of the ACTU that the Industrial Relations Amendment (Public Sector Conditions of Employment) Act 2011 of NSW, and the accompanying Industrial Relations (Public Sector Employment) Regulation 2011, required the NSW Industrial Relations Commission to give effect to the Government’s public sector policies when making or varying awards or orders relating to the remuneration or other conditions of employment of public sector employees and removed the right of the public sector unions to bargain effectively for wages and conditions of employment for its members across the State.

The Committee notes that the 2011 Regulation was superseded in 2014 by the Industrial Relations (Public Sector Conditions of Employment) Regulation 2014. Clause 6 of the 2014 Regulations provides that policies regarding the management of excess public sector employees are not to be incorporated into industrial instruments (clause 6(1)(f)). The Committee notes the Government’s statement that there have been no changes to the 2014 Regulations since their adoption. In this respect, it notes the conclusions and recommendations of the CFA in Case No. 3118 (377th Report, paragraphs 177–185), referring the legislative aspects of the case to this Committee. The CFA considered that, with respect to clause 6(1)(f) of the 2014 Regulations, public servants not engaged in the administration of the State should enjoy the right to bargain collectively on all matters related to terms and conditions of their employment, including on the rights of employees on termination, and that rationalization and staff reduction processes should involve consultations or attempts to reach agreement with the trade union organizations. Furthermore, where a staff reduction programme is undertaken, negotiations should take place between the relevant trade union and the employer. The Committee requests the Government to provide information on the measures taken to review the restriction imposed by clause 6(1)(f) of the 2014 Regulations, in consultation with the social partners, so as to promote collective bargaining on all matters related to terms and conditions of employment for public servants not engaged in the administration of the State. The Committee requests the Government to ensure that in the future, any questions or proposed legislation affecting workers’ rights are brought, at an early stage of the process, to the attention of the Industrial Relations Advisory Council or any other appropriate forum so as to permit the attainment of mutually acceptable solutions.

Western Australia. The Committee previously noted the observations of the ACTU and the ITUC concerning recommendations made by the Western Australian government to review state industrial relations so as to give employers the power to insist that their employees sign individual contracts and to remove unfair dismissal protections for employees in small businesses. It also noted the Government’s indication that the draft Labour Relations Legislation Amendment and Repeal Bill was tabled in the Western Australian Parliament in 2012. The Committee notes the Government’s statement that the Western Australian government has not progressed with the Labour Relations Legislation Amendment and Repeal Bill and that the Industrial Relations Act 1979 has not been amended.

Queensland. The Committee notes the information provided by the Government in reply to its previous request concerning the observations of the ACTU that amendments to the Industrial Relations Act 1999 contravened Article 4 of the Convention. In particular, the Committee notes the Government’s indication that the amendments of the Industrial Relations Act 1999 were reversed in 2015, through the Industrial Relations (Restoring Fairness) and Other Legislation Amendment Act 2015.