The Labor Party’s proposed Industrial Relations Laws
Earlier this year the Labor Party proposed its own set of industrial relations reforms, known as ‘Forward with Fairness.’ This policy is how Labor will implement its overhaul of the current industrial relations system, which it states is unfair. It documents both the specifics of the policy and how Labor will handle the transition stage from winning government through to implementing its policy into legislation.
What does this mean if Labor wins government?
After examining this policy, if Kevin Rudd becomes our next Prime Minister, it appears that we can expect – overwhelmingly – more of the same. Since the current Government introduced the “Fairness Test” last May, its agreement system has been largely neutralised in so far as it formerly permitted cuts in wages and conditions (it now does not).
We must now advise clients that an agreement must be “impact neutral” in order to be certain of getting through, so there would have to be a positive business reason to contemplate continuing. The Rudd alternative could in many ways, re-introduce flexibility to workplace bargaining, so long as the new tribunal is given enough flexibility and discretion.
The $100,000 cap will remove all middle management from award coverage. Qantas pilots, school headmasters, employed medical practitioners, all public servants above a certain grade – a surprisingly large list. That means that the trend of the last 25 years, of the common law and market forces being the main determinant of remuneration for more and more people in the community, will be given a significant boost.
A serious loose end will be the willingness of State Governments to cede powers. Once referred, they cannot be recovered, but the “powers” have been side lined at a State level anyway. There is, in reality, little left to “cede”.
The potential conflation of judicial, administrative and public service functions that will all be carried out by the one body, Fair Work Australia, is a cause for concern. It is interesting to observe that the most significant alterations will be those that are most emotionally appealing to employees, and/or parents of employees (i.e., most voters in Australia) – the expansion of the unfair dismissal jurisdiction and the elimination of AWAs by 2013.
There have also been hints that Labor may attempt to introduce paid maternity leave, paid for by government funding rather than small business employers,1 to bring Australia in line with every developed nation apart from the United States. Additionally, the right to bargain collectively looks set to be enshrined, once again, by a Labor government.
The Details:
Forward with Fairness is primarily based on 6 key elements:
1) A uniform national industrial relations system
If Labor wins government, a uniform national industrial relations system will be created for the private sector, including sole traders, partnerships and companies. This will be underpinned by the Corporations power in the constitution. In order to avoid the same gaps as Workchoices when it comes to unincorporated or personal employers, Labor proposes to either have the State Governments refer their relevant powers to the Commonwealth or by using other forms of cooperation and harmonisation with the states.
Hence, all businesses whether large or small, will have the same system of laws apply to
them. Whether this occurs in practice, remains to be seen. Queensland and NSW have already stated that they will not be relinquishing their industrial relations powers to the Commonwealth. Although, it appears that there remains little to be achieved beyond disruption in resisting a full handover.
The public sector and local government arrangements will continue. In these industries, most workers are regulated by State industrial relations jurisdictions. State governments, in conjunction with their employees, will be able to determine the appropriate approach to regulating industrial relations arrangements with their own and local government employees.
In one sense, Labor is intending to go further than Workchoices, by effectively abolishing all of the State tribunals except where they act in connection with the employees of the States. They will become State public service tribunals only.
2) The creation of a new ‘one stop shop’ industrial umpire called Fair Work Australia.
Labor will also introduce what it claims will be a genuinely independent umpire, named Fair Work Australia. This national body will have both a judicial and administrative arm. It is designed to replace the bodies established by Workchoices – the Workplace Authority, Workplace Ombudsman and the Fair Pay Commission. Additionally, the Australian Industrial Relations Commission, State Tribunals and other bodies will also be subsumed within Fair Work Australia.
Fair Work Australia will provide information and advice for employers and employees to understand their rights and obligations at work. Its other obligations will be to undertake formal and informal dispute resolution, determine the minimum wage each year and review awards every four years. It will also have an inspectorate to monitor compliance with the new system. A significant part of Fair Work Australia will be its independent judicial division.
3) A safety net will be included, in two parts:
• There will be 10 legislated national employment standards which will apply to all employees in Australia.
• Awards will provide a safety net of up to 10 additional conditions relevant to particular industries and enterprises, while at the same time simplifying and reducing the overall number of awards.