Legislative Council Select Committee of Inquiry Industrial Relations
1.	INTRODUCTION
1.1	Hobart Community Legal Service Inc. (HCLS) is a voluntary not-for-profit community organisation funded by the Federal Attorney-General’s Department. HCLS relies upon a paid workforce of eight (8) persons and a volunteer workforce of about seventy (70) persons to provide the following roles: free legal casework community legal education law reform and advocacy.
1.2	In recent years, HCLS has embraced a higher role in initiating, advocating and commenting on areas of law reform. This has especially been so with respect to the state sphere, and on issues which impact upon our client group, most notably lower-income people and those with diminished access to justice.
1.3	HCLS has considered the Industrial Relations Amendment Bill 1999 with particular regard to the extent to which it meets reasonable tests of equity, consistency and effectiveness as enabling legislation. We are well aware of the counterposing viewpoints expressed in the public domain by employer and employee groups. For our part, we consider that the benchmark considerations include that: scope and coverage is comprehensive and consistent decision-making is better informed and transparent outcomes are equitable and effective. We will endeavour to address such criteria in this submission.
1.4	Whilst recognising the many issues implicit in the Bill, this submission confines itself to comment on five aspects: abolition of the Enterprise Commissioner position scope and coverage (amendments to Interpretation) employee industrial matter criteria for testing agreements public interest no-disadvantage rights of employees access to records access to union information, membership and representation unfair dismissals.
2	ABOLITION OF ENTERPRISE COMMISSIONER POSITION
2.1	HCLS strongly supports the abolition of this position for two reasons: any benefits of the position appear to be outweighed by adverse consequences assigning such functions to the Tasmanian Industrial Commission (TIC) is an improvement to current arrangements.
2.2	In its 1996 report, the House of Assembly Select Committee on the Industrial Relations Act 1984 ("the 1996 Inquiry") concluded that "there is no good or justifiable reason why the functions of the Enterprise Commissioner should not be merged fully with the Tasmanian Industrial Commission. This would enable all members of the Commission to consider enterprise agreements. This would ensure that enterprise agreements could be finalised more quickly and thereby adding significantly to capacity of workplaces to enter into these type of arrangements". That is, a reform such as that proposed would improve the efficiency with which agreements could be finalised, as well as the effectiveness of the system in its workplace application.
2.3	Whilst it could be argued that the role of the Enterprise Commissioner is more than simply that of the TIC (viz. in carrying out a broader educative role) it is not apparent that this either has been the case or is the preferred locus of such a role. In fact, the 1996 Inquiry noted the Commissioner’s absence of arbitral powers and corresponding inability to act in the ‘public interest’, basing all decisions on the rules of evidence derived from bargaining between two discrete parties: employer and employee. Importantly, the 1996 Inquiry noted that this process was consistently loaded against the employee: "The Committee was presented with no evidence to show that an employer has on any occasion ensured that employees had professional advice made available to them during the negotiation stage. But in almost every case that the Committee considered the employer had at their disposal expert industrial advice." (emphases added)
2.4	The report of that Inquiry describes the efforts taken by a previous Enterprise Commissioner to better inform employees of their rights during the bargaining process, including the introduction of an1800 number and production of a series of brochures. The transcript of evidence suggests that employees seeking assistance would be referred to a Government Unit, and that external assistance in formulating agreements was confined to consultants engaged by employers. With respect to the Government Unit, its evidence suggested that its assistance to employees was largely due to employee anxiety about involving unions in such a role, presumably given a perception that union assistance may be viewed unfavourably by an employer. The Unit advised that it did not negotiate the terms of an agreement on either party’s behalf.
2.5	Given the 1996 Inquiry’s observation that the current system has placed employees in a quite disadvantageous position, it is clear that whatever provisions have been made to better inform parties in the negotiating process have not been effective (that is, it hasn’t assisted employees, whilst employers have clearly had the resources to acquire external assistance). Furthermore, the abolition of the Enterprise Commissioner position is viewed as consistent with parallel legislative provisions interstate: only Western Australia currently provides for such a role as a separate position (Victoria has no comparable industrial relations legislation at present).
2.6	HCLS submits that the abolition of this position is therefore a welcome reform, for reasons of consistency (with other state jurisdictions), equity (in the treatment of employer and employee), simplicity (a more streamlined system), and efficiency (more resources within the TIC to consider agreements). It is also a reform for which the present government clearly has a mandate, given its public commitment to introduce such a reform during the 1998 election campaign.
3	SCOPE & COVERAGE (EMPLOYEE)
3.1	HCLS notes the increased vulnerability of many employees under a deregulated labour market. Historically, a period of economic recovery has usually meant that workers have generally shared in those benefits through jobs growth and improved income levels. The present nature and structure of the labour market and economy means that economic growth is frequently not accompanied by jobs growth; industrial deregulation has also been more likely to yield few, if any, financial gains to employees at the low-mid range (whilst delivering often quite disproportionately high financial benefits at the ‘upper’ end of white-collar employment).
3.2	Interestingly, the 1996 Inquiry had, as one of its specific terms of reference, "the extent to which enterprise agreements ... have improved productivity" given claims that their adoption would free up the Tasmanian economy in a way which would improve labour productivity and flow-on (trickle down?) to correspondingly benefit the Tasmanian labour force and employee’s wage conditions. The 1996 Inquiry reported that "No factual evidence was presented to the Committee which demonstrated that employment of (sic: or?] business activity levels had grown directly as a result of enterprise agreements."
3.3	At the same time, HCLS expresses concern that, even if the Tasmanian labour force is unlikely to derive the sorts of benefits so often cited in calls for further deregulation (benefits which prove persistently elusive), it ought not to be denied appropriate protection of associated industrial rights and entitlements. Accordingly, we welcome the specific inclusion within the definition of "employee" of those sections of the labour force who are so much more vulnerable, specifically trainees and apprentices (especially since the end of indenturing), and outworkers. We note that the inclusion of outworkers is consistent with the provisions of the Federal Workplace Relations Act 1996 (S 89A(2)).
3.4	We similarly support the extension of coverage to certain employees or former employees under Federal awards, who are denied the right to take a dispute to the Australian Industrial Relations Commission. This especially applies to casual employees, probationary employees and those on fixed-term contracts: again, amongst the most vulnerable within the industrial relations system. The decision of the Commonwealth to deny such workers access to due process in the federal industrial relations system, apparently due to their lack of permanency, can hardly be defended as just. In fact, it simply compounds the disadvantage which such workers face. Whilst this is not an area of law which HCLS is competent to comment on, it would seem that state governments have jurisdiction in this area unless they vest that power in the Commonwealth or unless an interstate industrial dispute gives such power to the Commonwealth. In that sense, the proposed amendment is considered equitable and just, and will strengthen the consistency and effectiveness of the legislative provisions for such workers.
3.5	HCLS therefore supports the amendments to extend coverage of employees in the Act to include many of the most industrially vulnerable categories of employees. We consider that these provisions strengthen the consistency and equity of the legislation with respect to employee coverage.
4	SCOPE & COVERAGE (INDUSTRIAL MATTER)
4.1	The Bill proposes to broaden the definition of ‘industrial matter’ to include "re-employment of ... a former employee who has been unfairly dismissed" "the payment of compensation to ... a former employee if the Commission determines that ... re-employment is impracticable" a dispute relating to long service leave the deduction/payment from an employee’s wages of union membership dues
4.2	HCLS considers it entirely reasonable that the Commission have the power to order re-employment where unfair dismissal has been established. Anything short of such a power seems tantamount to a specific denial of equal industrial rights for one party (the employee). The Bill recognises that reemployment may not always be ‘practicable’, and provides for appropriate compensation in that eventuality. HCLS endorses such expansion of those provisions and powers. As such, these amendments will strengthen the equity and comprehensiveness of the Act.
4.3	With respect to the inclusion of long service leave entitlements as an industrial matter, HCLS simply notes that such an amendment would appear to be consistent with the scope of corresponding legislation in other state jurisdictions. Bypassing the need for an application to the Workplace Standards Authority improves the streamlining of the present system, and better enables such entitlements to be treated as an industrial matter in bargaining. Consequently, this amendment would appear to improve the consistency, simplicity and effectiveness of the system.
4.4	If the legislation is to view employee organisations as relevant to the consideration of industrial disputes and to the Commission’s decision-making process, then policy consistency demands provisions for the deduction and payment of employee union dues as a legitimate industrial matter. This is a very separate issue from that of compulsory union membership. Where employees elect to join a union — to avail themselves of the union’s capacity to represent their industrial interests — then the accompanying payment of dues would seem to logically constitute a part of that industrial matter.
4.5	The proposed broader interpretation of ‘industrial matter’ is therefore supported as being logical and consistent with the overall intent of the amended Act, and as enhancing the equitable treatment of workers, legislative comprehensiveness and consistency and, therefore, the effectiveness of its application.
5	CRITERIA FOR TESTING AGREEMENTS
5.1	The Bill proposes two key amendments to establish the criteria against which enterprise agreements be considered: a "public interest" test a "no disadvantage" test (essentially to give effect to the public interest test). HCLS strongly supports both amendments.
5.2	As was noted earlier, the 1996 Inquiry expressed concern that to be bound by the rules of evidence meant that the Commissioner was unable to act in the public interest. This applied even when the Commissioner clearly believed that an agreement was unfair. The Act’s empowerment of the Minister to require the Commissioner to take account of the public interest had occurred in fewer than 1% of such agreements, despite the Commissioner’s evidence to the Inquiry of having actively sought such intervention on other occasions. The existing provisions to enable due and proper attention to the public interest have been manifestly ineffective.
5.3	The 1996 Inquiry therefore found that "the addition of [an arbitral] power is essential to guarantee public confidence as to the fairness of enterprise agreements, to protect employees against abuse from unscrupulous employers and to ensure that ‘public interest’ issues are considered at the discretion of the Enterprise Commissioner. In testing enterprise agreements in the public interest [the ...] Commissioner should also apply a ‘no disadvantage test’ by comparing the fairness of the totality of the agreement against the totality of the relevant award. This approach would be totally consistent with that adopted for Section 55 [industrial] agreements. ... [T]he decision as to whether or not an agreement is fair is one for the Enterprise Commissioner to determine. It should not be a power that is only granted at the Minister’s discretion." This amendment would simply ensure that enterprise agreements are subject to the same test of public interest as that applicable to industrial agreements.
5.4	Since their introduction in 1993, enterprise agreements have served as the principal means by which conditions of employment, and especially overtime and penalty provisions, have been abolished or diminished. Whilst this has likely been made easier by the weaker and more compliant nature of a labour force under conditions of high unemployment, it has also hit already low-income Tasmanian households very hard, and undoubtedly led to increased financial and domestic stress.
5.5	Quite clearly, the application of the test that an agreement is ‘fair in all the circumstances’ has served employees very poorly. Claims that application of a ‘no disadvantage’ test will lead to a loss of employment would be more credible if the existing criteria — with its widespread erosion of conditions and payments to workers — had led to jobs growth. This has not occurred; more indicatively, Tasmanian employment rates have persisted as the worst in Australia. Unsurprisingly, the 1996 Inquiry recommended that "in taking into consideration the public interest the Enterprise Commissioner is to apply a ‘no disadvantage test’". HCLS notes that similar provisions exist in the federal Workplace Relations Act 1996 (S 170XA), with respect to certified agreements and Australian workplace agreements.
5.6	HCLS therefore believes that the adoption of the ‘public interest’ test improves the equitable treatment of the parties and the effectiveness of the Commission’s roles, and that the adoption of the ‘no disadvantage’ test improves consistency with parallel Commonwealth legislation, provides clearer standards and therefore improved efficiency, and will enable more effective outcomes within agreements.
6	RIGHTS OF EMPLOYEES
6.1	It is clear that employees are at a distinct disadvantage in the process of bargaining enterprise agreements. Compared to the employer, they are frequently ignorant of their industrial rights, unskilled in the negotiation process, and unlikely to have access to professional advice. Such negotiations are generally conducted on the employer’s ‘territory’, lacking public standards of transparency, and can thus be daunting, if not simply intimidating, to the employee. That an enterprise agreement is signed by both parties is insufficient evidence that it has been freely agreed to without any duress on the part of the employee, despite the Act’s requirement that this be so.
6.2	The 1996 Inquiry supported this understanding. "The overwhelming majority of enterprise agreements have been negotiated at workplaces where there is no trade union involvement. Consequently, the employees involved in the negotiation have received little or no support in the bargaining process. ... [T]he employer in these circumstances was in a very strong bargaining position because of the ignorance of employees about their rights."
6.3	It is therefore fundamentally important to the effectiveness and integrity of the Tasmanian industrial relations system that employees have the right to avail themselves of professional advice and assistance in such matters, including at hearings, if they so desire. The proposed amendment to S 27(2) of the Act constitutes a clarification of the existing provision by specifying the criteria of ‘direct interest’ and ‘relevance’ for an organisation such as a union to be granted leave to appear at a Commission hearing. That is, whilst the Commission retains the power to grant a union the right to intervene in proceedings, the test to be applied by the Commissioner would be clearer with the adoption of the proposed amendment. HCLS considers it logical that an organisation considered by the Commissioner to have a ‘direct interest’ in or ‘relevance’ to a hearing be permitted to be present. Given acknowledged disadvantages faced by employees in the bargaining process, this change is also equitable. The amendment would therefore improve the effectiveness of the execution of the Commissioner’s responsibilities and the more equitable treatment of the parties to the hearing.
6.4	The Bill also empowers unions to have access to workplaces where they have potential coverage. This means that employees will be assured of their right to choose to access the sort of professional advice and assistance that they currently often lack. This is necessary in order to address the observed disadvantages to employees in the present system. It will improve an employee’s choice and opportunity to be better informed of appropriate standards and conditions, including within other comparable workplaces. It also improves consistency with the relevant federal legislation (Workplace Relations Act 1996, S 285C(1)) as well as with parallel legislation in other state jurisdictions. The change would therefore improve the equity and consistency of the current system, and be instrumental in improving the transparency of that system.
6.5	The Bill grants employees the right to access their personnel records. HCLS considers this to be consistent with contemporary standards of freedom of access to personal records in other domains: that is, that an individual has a right to access information recorded about them. This seems especially important in the employer:employee relationship, when it is in the interest of the overall integrity and effectiveness of the industrial relations system that records be both factual and fair, open to scrutiny by interested parties, and available to an employee who may consider themselves the subject of an unfair dismissal. In that latter instance, it may surely reduce the likelihood of an unfair dismissal if such records are open to correction by an employee where unwarranted observations have been recorded. The parallel likelihood of such dismissal may also diminish if an employee is more fully and earlier aware of an employer’s concerns about performance, as may be documented on their personnel records. In short, this amendment is viewed by HCLS as consistent with public norms and expectations of transparency and the right to access personal information, and will serve to strengthen the effectiveness of the current system. The only concern about this amendment is whether the reference to "those records" in S 29(1A)(b) is sufficiently clear, given that it aims to specifically relate to records referred to in subclause (1A)(a).
6.6	In summary, the amendments to strengthen the rights of employees are strongly endorsed by HCLS.
7	UNFAIR DISMISSAL
7.1	Various aspects of the unfair dismissal provisions have been canvassed earlier in this paper, such as re-employment powers and the broader coverage of employees. In this section, discussion is confined to the issues of onus of proof and the extension of the time limit for lodging an application.
7.2	HCLS understands that the meaning of the new S 30, subsections (5) and (6), means that an applicant (employee) has the onus of proving that the termination was unfair and, as a result, that the employer then assumes the onus of proving that the reason for the termination was valid. This seems a proper and reasonable assignment of the respective onus of responsibility of each party, and is supported by HCLS.
7.3	HCLS similarly supports the extension from 14 to 28 days for the lodgement of an industrial dispute over a dismissal. Given the acknowledged disadvantages which employees are under in adequately understanding their rights under the legislation and therefore in exercising those rights, the longer period appears totally reasonable. It would also be more consistent with other state jurisdictions, which allow either 21 or 28 days. The additional provision for the Commissioner to grant an extension to this period is proper and reasonable, to the extent that it permits the Commissioner’s discretion in appropriate circumstances.
8	CONCLUDING COMMENTS
8.1	This submission has focussed comments on what appears to HCLS to be the more critical issues contained within the Industrial Relations Amendment Bill 1999. On that basis, HCLS has concluded that the Bill warrants strong support in its entirety, in terms of the appropriateness of the legislation, the improved consistency with similar legislation in other jurisdictions, the redressing of inequities that have been established to exist under current provisions, with respect to employees, the improved transparency and efficiency of the industrial relations system, and the consequential improvements to the overall effectiveness of that system.
8.2	Accordingly, HCLS welcomes the Bill, notes the clear mandate which the Tasmanian Labor Government has to adopt it, and encourages its early passage through the Tasmanian Parliament and commencement in operation.
Hobart Community Legal Service Inc. January 2000 Back to News & Articles