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AUSTRALIAN MANUFACTURING WORKERS' UNION
Submission to the Fair Work Act Review Panel Post-Implementation Review
February 2012
AMWU Submission to Fair Work Act Post-Implementation Review
The context of workplace and industrial regulation
1.1. The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” is
known as the Australian Manufacturing Workers’ Union (AMWU). The AMWU represents
over 100,000 members working across major sectors of the Australian economy, in
manufacturing including in the printing, automotive and food industries, in building and
construction, in the mining industry and metals manufacturing. The AMWU has members
across all skills, classifications, and occupations, and the vast majority of them are employed
by private corporations. The AMWU is an affiliate of the ACTU, and supports the submission
of the ACTU to the Fair Work Review Panel.
1.2. It is the view of the AMWU that it is in the interests of its members and the industries in
which they work that the industrial relations legislation that regulates their employment and
their working lives:
is fair and enforceable for all workers equally;
allows for representation and for the voices of workers to be heard;
fits the purpose of regulating work throughout the Australian economy;
is enforceable;
is reliable and stable in its form and the institutional framework that supports it.
1.3. It is the view of the AMWU that the Fair Work Act 2009 (“the Act”) is a vast improvement on
the legislation that preceded it, brought about particularly by the WorkChoices amendments
to the Workplace Relations Act 1996 (“WorkChoices”), which, amongst other things:
stripped awards of much their content, including classification structures and wage rates;
removed unfair dismissal protection from the vast majority of Australian workers;
denied employers and employees to make agreements about a list of “prohibited matters” made under Regulation;
allowed employers to impose individual AWAs and employer-determined “greenfields agreements” on workforces; and
removed arbitration and minimum-wage determination powers from the Australian Industrial Relations Commission.
1.4. The Act began the job of restoring an independent umpire in Fair Work Australia, restoring
Awards as an effective safety net for workers nationally, restoring rights to be protected
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AMWU Submission to Fair Work Act Post-Implementation Review
from unfair dismissal and returned bargaining to being a conducted between employers and
groups of workers rather than corporations imposing “individual agreements” on workers
with no bargaining power, or corporations making agreements with themselves on
greenfield sites.
1.5. That said, this submission will focus primarily on the areas where we think the Act should do
better. To do better, several themes emerge in the following submission. Amendments to
the Act are required so that improvements are achieved in terms of its provision for the:
A. capacity to bargain;
B. capacity to represent employees and for employees to be represented;
C. enforceability of standards; and
D. arbitration of disputes where agreement cannot be reached.
1.6. The Act can do better to achieve its stated aims, and it must do better, if it is to provide
Australian workers with fairness in their working lives in a dynamic Australian economy: to
be fairer, more easily enforceable, allow for better representation, be supported by a
reliable framework and institutions and be fit for purpose overall.
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AMWU Submission to Fair Work Act Post-Implementation Review
2. The Productivity Question
2.1. The AMWU accepts the role that productivity growth plays in driving economic growth, and
the material standards of living of society, and potentially workers. When the impact of
particular legislation on “Australian productivity” is considered, however, it is important to
ensure that people are debating the same concept. When we discuss productivity, the
concept we describe is productivity as a measure of economic output relative to inputs.
Productivity is increased if the same output can be generated with fewer inputs, or if the
same quantity of inputs can be used to generate more outputs.1
2.2. Labour productivity describes the value of total output produced during a period of time
divided by the number of hours of labour spent producing that output during that period. 2 In
the context of labour productivity, more outputs might be generated from fewer hours
worked, or more output might be generated from the same hours worked. What labour
productivity is not is simply producing the same output for less money. What that might do
is increase the profits that a corporation might make from their workers, but not the
productivity of their labour.
2.3. We accept that low productivity growth is a challenge which Australia and Australian
industries must work to overcome. We do not accept that industrial legislation designed to
increase profits made from workers is the answer. The continuing decline in Australia’s
labour productivity since at least 2002 is testament to that, with that period encompassing
the operation of WorkChoices
2.4. In the context of the review of the Act, it is the view of the AMWU that the Australian
national industrial legislation for the last twenty years has been obsessed with bargaining
being only at the enterprise level. It is also our view that this slavish adherence to an
enterprise-level bargaining orthodoxy has been to the detriment of labour productivity
growth in Australia, for at least the last decade.
2.5. The object of the Act at s.3(f) is:
“achieving productivity and fairness through an emphasis on enterprise-level collective bargaining
underpinned by simple good faith bargaining obligations and clear rules governing industrial action;”
1 Australian Council of Trade Unions, “Working By Numbers, Separating rhetoric and reality on Australian productivity,” ACTU Working Australia Paper 11/2011, October 2011, p.32 Hancock, Keith, “IR offers no panacea for productivity,” Australian Financial Review, 16 February 2012, p.63.
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AMWU Submission to Fair Work Act Post-Implementation Review
2.6. It is our contention, however, that the very “emphasis on enterprise-level collective
bargaining” constrains the productivity for which the Act purports to aim. Multi-factor
productivity is a problem beyond an individual employer squeezing greater economic output
from unit labour costs. What eventuates there is the same output for the number of hours
worked, but just with the worker taking home less at the end of the day, with reduced real
wages, no penalty rates, and less job security. The employer gets increased profits, but not
increased productivity. This was the story of WorkChoices. The economy certainly doesn’t
get increased productivity in this scenario, and that’s why WorkChoices continued to see a
downward trend in labour productivity.
2.7. When employers call for a return to the “flexibility” of WorkChoices for the sake of increased
labour productivity, we submit that those assertions should be interrogated for what they
are. Whilst is could be expected to be in the interests of employers to reduce labour costs to
increase profits, the link from increased profit to increased productivity is simply illusory.
Productivity and enterprise agreement making
2.8. Labour productivity is a measure to be used with caution, as “output is influenced by many
factors that are outside of workers' influence - including the nature and amount of capital
equipment that is available, the introduction of new technologies, management practices
and so on.”3 When productivity depends on matters such as:
multi-factor productivity;
training, including apprenticeships;
consistent classification structures;
innovation;
investment in research and development; and
infrastructure and government procurement
it is folly to suggest that a framework of industrial regulation can “achieve productivity”
when negotiations, agreements and bargaining are limited to the enterprise level alone.
3 Productivity Commission, Productivity Primer, at http://www.pc.gov.au/research/productivity/primer/measures
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AMWU Submission to Fair Work Act Post-Implementation Review
2.9. Multi-factor productivity (or “total factor productivity”) divides the value of output by both
labour and capital combined.4 What multi-factor productivity needs is:
investment in infrastructure, including along supply chains;
investment in skills, including in transferable skills that other parts of an industry or
economy can use when a project or a business rotates its workforce into different
skill sets;
training of managers, so that they know how to work smarter, not just cheaper;
consideration of workplace design and organisation;
examination of industry sectors and supply chains, beyond the individual business.
2.10. How are any of these matters resolvable in an individual employer’s enterprise agreement?
If the legislative framework for industrial and workplace relations is to have any positive
impact on “achieving productivity” for the Australian economy, then in our submission the
constraints imposed by the legislation on improving multi-factor productivity must be
addressed.
2.11. At s.172(1), the Act provides for the making of agreements that are about one or more of
the following matters:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
2.12. The constraints on bargaining, particularly at s.172(1)(a) and (b) prevent participants in
bargaining being able to bargain about the matters that must be bargained about in order to
address Australia’s productivity. This is a fundamental disjunction which, in our submission,
means that the object of the Act at s.3(f) cannot be achieved.
4 Hancock, ibid at note 2; Productivity Commission, id.
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2.13. Section 172(1)(b) continues the line of confusing authority which was inherited from the
constitutional constraints which led to the drafting of the Conciliation and Arbitration Act
1904 (Cth). This concept of “matters that pertained to the relationship between employers
and employees” was used to determine the extent of the powers to settle industrial
disputes, and making awards, that could be exercised by the Conciliation and Arbitration
Commission.5 This concept was imported into the agreement-making function of the then
Australian Industrial Relations Commission,6 maintained through WorkChoices, and is now
found at s.172(1)(a).
2.14. Section 172(1)(b) is novel to federal industrial regulation in Australia. It broadens the
previous constraint on agreement making that is embodied at s.172(1)(a), but again
constrains itself to the immediate employer and the unions covered by that employer’s
immediate agreement. This provision has been little considered,7 but the examples provided
in the Explanatory Memorandum to the Fair Work Bill 2008 (“the Explanatory
Memorandum”) confirm the view that s.172(1)(b) is not intended to authorise agreement
terms that deal with matters beyond the concerns of the individual employer.8
2.15. The point of understanding this history is to realise that there is no constitutional constraint
any longer which requires the maintenance of the legislative constraint at s.172(1)(a). The
constitutional constraint was found in the Conciliation and Arbitration power, not the
Corporations power under which the Act is made. There is no similar constraint that confines
the terms of s.172(1)(b).
2.16. So if the Act fails to provide for bargaining that can address the multi-factor productivity
requirements of the Australian economy, then it is a failure which is amenable to legislative
reform. This reform is crucial. Without it, all the Act allows is to bargain to squeeze
economy-wide or industry-wide issues into a format digestible to the individual employer
and an agreement made under the Act.
2.17. An issue such as training, including apprenticeships, is essential for industry-wide or
economy-wide productivity. Good training means that workers work smarter, with more
skills. But training needs can’t be achieved by an individual employer in the short term.
5 See, inter alia, Re Manufacturing Grocers’ Employees Federation (1986) 160 CLR 341; R v Coldham; Ex parte Fitzsimons (1976) 137 CLR 153; Wesfarmers [2004] FCA 1737.6 s.170LI Workplace Relations Act 1996; See Electrolux Home Products Pty Ltd v Australian Workers Union (2004 221 CLR 309.7 See however AMWU v Bitzer Australia Pty Ltd t/as Buffalo Trident [2009] FWA 962.8 Explanatory Memorandum to the Fair Work Bill 2008, at paragraph 676.
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AMWU Submission to Fair Work Act Post-Implementation Review
2.18. As an example, the resources sector has dramatically increased its demands for a labour
force in recent years. There is an inadequate supply of tradespersons due to a long period of
underinvestment in apprentice training. The annual average apprentice training rate over
the eleven years between 1982 and 1992 was 13%; between 1993 and 2003 it declined to
11%. The recent discussion paper by the National Resource Sector Task Force (“NRSET”)
shows a fall in trade apprenticeship commencements of 23.2% for the year to the March
quarter 2009.9
2.19. A further critical factor is the declining completion rate for apprenticeships which has been
tracking down for some considerable time. Completion rates for trade apprenticeships are
between 55 and 70% depending on the trade which is a serious decline. Increasing
commencements is a wasted effort if the result is they do not complete. Any lift in
commencements must translate into qualified tradespeople hitting the market through
completions. We note with alarm the research cited in the NRSET discussion paper indicating
only a 47% completion rate for apprenticeships commenced in 200210
2.20. Also endemic to the resources industry in recent years is a drawing away of tradespersons
trained in other parts of the economy (and other geographical locations) to work as
tradespersons in the resources sector. High wages provide a strong incentive for employees.
This reduces the incentive for the resources sector to train its own tradespeople, and the
rest of the economy suffers again from a lack of skilled tradespeople available elsewhere.
2.21. An industry-wide problem requires industry-level solutions. Enterprise-level solutions are
solutions only for the enterprise. These are concerns integral to the labour productivity of
the nation, but they are not resolvable at individual workplaces. If training is bargained for
with an employer, often “workplace-specific” training is on the agenda, not training for a
broad skillset that will be useful to the worker and the wider economy once the job or the
project is done.
2.22. One employer will train its workers to increase that employer’s profits. The more short term
the employment of the worker by that employer, the less interested the employer will be in
the formation of skills that will be transferable outside that employer’s business. Project
work in the mining sector is a prime example of this, but its not the only example. Labour
9 National Resources Sector Employment Taskforce (“NRSET”), Resourcing The Future - National Resources Sector Employment Taskforce Discussion Paper, March 2010, p.9.10 id.
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AMWU Submission to Fair Work Act Post-Implementation Review
hire work, casual work and other precarious employment reduces skill-sets, and reduces our
productivity.
2.23. The implication of agreements with only job-specific training is a depletion of the amount of
trained workers in the economy, so that other sectors’ productivity decreases. The
implication of a legislative prohibition on terms of agreements that seek to control the use
of contractors is another constraint on achieving productivity-improving skill-sets
throughout industries and the economy.
2.24. The Explanatory Memorandum intends to constrain the types of clauses regulating
contracting which may be included in an agreement under s.172(1)(a)11. The extent to which
that constraint applies continues to be the subject of FWA and judicial proceedings. 12
Certainly, without making an agreement on similar terms with every employer (including
subcontractor or labour hire employer) in an industry, it is difficult to see how consistent
standards about matters such as industry-wide training requirements, or matters that
influence productivity along supply chains, can be agreed in individual enterprise
agreements. Further, if an employer maintains the capacity to contract out of their
employment of employees under such an agreement to a labour hire provider which is not
bound by the same terms and conditions relating to training, then productivity-enhancing
industry standards are again lost. Another potential limitation would be the prohibition on
pattern bargaining contained in the Act.13
The multi-enterprise agreement option
2.25. There is provision for the making of multi-enterprise agreements in the Act. Unfortunately,
the procedures providing for the negotiation and making of such agreements is a faint
shadow of the mechanisms available for the making of enterprise-level agreements.
2.26. A multi-enterprise agreement can be made under s.172(3) of the Act by two or more
employers. Multi-enterprise agreements can involve employers who do not have any
obvious relationship to one another or a common enterprise. For example, the employers
may simply operate in the one industry.
11 Explanatory Memorandum at paragraph 673.12 See for example, Federal Court appeal filed by Australian Industry Group v Fair Work Australia and Ors (VID1388/2011), from Australian Industry Group v ADJ Contracting Pty Ltd [2011] FWAFB 6684.13 ss.412 and 422.
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AMWU Submission to Fair Work Act Post-Implementation Review
2.27. There are distinct limitations on the procedures for making such an agreement, however.
Good faith bargaining orders are specifically prohibited from being made (s.229(2)). Neither
protected action ballots and nor protected industrial action are available during negotiations
for such a proposed multi-employer agreement (s.413).
2.28. For these reasons, employee bargaining representatives would only enter such a negotiation
where positive outcomes were assured, because they are not entitled to good faith
bargaining, and cannot use the economic pressure of protected industrial action to achieve a
multi-employer agreement that is interests of the employees whom they represent.
2.29. Where a multi-employer agreement is made, such an agreement must be approved by
employees on an employer by employer basis. That is, if only employees of a particular
employer vote up the agreement will they and their employer become covered by it. The
potential for consistent standards to address industry-wide concerns is further weakened.
2.30. It is possible for an employer to be party to negotiations for the multi-employer agreement
where that employer is already covered by an extant enterprise-level agreements for which
the nominal expiry date has not passed. However, for the negotiated and approved multi-
employer agreement to come into effect, the extant agreement would need to be
terminated by agreement of covered employees under ss.219-220 and this termination
would need to be approved by FWA (ss.222-223). This could happen simultaneously with
approval of the multi-employer agreement, or afterwards, but may again undermine the
achievement and enforceability of industry-wide standards under a multi-employer
agreement made under the Act.
Conclusions and recommendations
2.31. When productivity depends on industry-wide concerns, or economy-wide concerns, to have
enterprise level answers alone is simply too shallow an approach. This state of affairs is
ensured when the Act limits the subject matter of collective agreements, limits the parties to
collective agreements and undermines the achievement of multi-employer agreements
through the absence of good faith bargaining or protected industrial action during their
negotiation, and a prohibition on “pattern bargaining”.
2.32. To address the serious decline in Australia’s productivity growth, it is therefore the
recommendation of the AMWU to the Panel that the Act be amended so that:
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AMWU Submission to Fair Work Act Post-Implementation Review
A. the limitations on the subject matter of agreements at s.172 are removed;
B. multi-employer agreements may be negotiated under the same good faith bargaining and protected action principles and negotiations for enterprise agreement;
C. appropriate industry-wide agreements may be made and enforced;
D. prohibitions on “pattern bargaining” are removed.
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AMWU Submission to Fair Work Act Post-Implementation Review
3. Bargaining under the Act
3.1. The AMWU has no difficulty with the principles behind the “good faith bargaining
requirements” at s.228(1) of the Act. However, we do submit that the Act must be amended
to reduce the capacity of employers to avoid bargaining under those principles, and to
undermine those principles whilst bargaining to render them meaningless. To address this
manipulation of the legislation, the principles must be enunciated more clearly and must
apply consistently to all negotiations, and FWA must be given a greater ability to intervene in
bargaining where employers are preventing progress being made towards negotiation of a
collective agreement capable of approval under the Act.
Avoiding good faith bargaining - Timing
3.2. The most obvious way that the AMWU has experienced avoidance of good faith bargaining
in negotiations under the Act is with employer manipulation of the timing of bargaining.
3.3. Bargaining may commence at any stage. An employer simply has to decide to bargain, and
give employees a notice of representational rights under s.173, for bargaining to commence
at the instigation of an employer under the Act. This contrasts with the situation where an
employer does not wish to commence bargaining. Bargaining representatives of employees
must apply to FWA for a majority support determinations under s.236, which is subject to
FWA’s discretion as to the reasonableness of any determination.
3.4. Importantly though, commencement of bargaining does not trigger the commencement of
the ability to enforce good faith bargaining obligations. Section 229(3) provides:
(3) The application may only be made at whichever of the following times applies:
(a) if one or more enterprise agreements apply to an employee, or employees, who will be covered by the proposed enterprise agreement:
(i) not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be); or
(ii) after an employer that will be covered by the proposed enterprise agreement has requested under subsection 181(1) that employees approve the agreement, but before the agreement is so approved;
(b) otherwise—at any time.
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AMWU Submission to Fair Work Act Post-Implementation Review
3.5. So whilst the obligations at s.228 might be thought to apply to a bargaining representative at
any time that they are acting in that capacity, such obligations are unenforceable until the
“90 day trigger” is activated.
3.6. Many enterprise agreements negotiated by the AMWU replace earlier collective agreements
made under the Act or previous legislation. Unsurprisingly then, the AMWU on several
occasions has found itself forced to commence bargaining which has been instigated by an
employer well before the AMWU is able to enforce the good faith bargaining obligations
which s.228(1) purport to require of that employer.
Case Study – Coates Hire
3.7. In the case of Coates Hire, the employer advised the AMWU in May 2011 that it intended to
commence bargaining in July 2011, despite the nominal expiry date for the existing
agreement not being until the end of March 2012. This would give the employer more than
nine months to bargain without the risk of good faith bargaining enforcement proceedings!
Case Study – ALS
3.8. On 23 May 2011, AMWU members at Australian Laboratory Services Pty Ltd (“ALS”) received
a notice of representational rights under s.178 of the Act, almost six months prior to the
nominal expiry date of the existing agreement, and that ALS would be forming a
“Negotiating Committee” comprising ALS human resources department representatives, and
an employee representatives nominated and elected at each site. In June 2011, the AMWU
was informed that bargaining meetings would commence on 6 July 2011, more than five
months prior to the nominal expiry date. This would be a meeting of the “Negotiation
Committee” to which the AMWU could choose to attend or not. AMWU had concerns that
this “Negotiation Committee” structure was contrary to the good faith bargaining provisions
of the Act, failed to provide for the appropriate appointment of employee bargaining
representatives under the Act, and failed to properly recognise the existing employee
bargaining representative, being the AMWU. But the timing of the negotiations meant our
concerns could not be tested or remedied in the making of any bargaining order.
3.9. In each of the above examples, it is true that a bargaining order application may be brought
after an employer has invited employees to approve an agreement under s.181(1). However,
the period between the invitation to approve the agreement and the actual vote to approve
the agreement in only seven days. After perhaps months of trying to bargain in the face of
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AMWU Submission to Fair Work Act Post-Implementation Review
an employer ignoring their good faith bargaining obligations, an employee’s bargaining
representative has only seven days to commence proceedings at FWA to apply for an order
for the employer to comply with s.229(1). Unless a bargaining order to revoke the invitation
to employees to approve the agreement is made by FWA, the agreement may be
nonetheless approved by employees, notwithstanding the breaches of good faith bargaining
obligations that may have taken place throughout the preceding months.
3.10. Our submission is not that all employers will intend to abuse the good faith bargaining
framework by “bargaining early”, but that the prohibition on applying for a bargaining order
prior to the “90 day period” needlessly undermines the general application of good faith
bargaining, for no discernable reason. Particularly where an employer has commenced
bargaining, it is our submission that there is no reason why they should not owe the same
enforceable good faith bargaining obligations as any other bargaining representative.
3.11. Where bargaining commences because of a majority support determination, the employee
bargaining representative has already made an application to FWA for the determination.
FWA retains a wide discretion at s.237(2)(d) to not issue a majority support determination.
If, for example, there were an allegation that a bargaining representative made the majority
support determination vexatiously, just to tie the employer up in good faith bargaining
obligations, then FWA could be directed to such an allegation during the application hearing
for the majority support determination, and could find that a determination should not issue
for that reason.
3.12. Similarly, where a scope order commences bargaining, it is made only where FWA has
determined that the scope order “…will promote the fair and efficient conduct of
bargaining…”, and it is reasonable in all the circumstances.14 A scope order may also be
revoked at any time.15A low paid authorisation, which may also commence bargaining, is also
only made after a clear determination by FWA, and no doubt extensive submissions on its
merits.16
3.13. It is the submission of the AMWU that good faith bargaining obligations must be enforceable
throughout bargaining. If an employer commences bargaining, there is no reason why they
should be excused from bargaining in good faith simply because they “go early”. If an
employee bargaining representative commences bargaining, FWA can take into account the
14 s.238(4)(b), (d)15 s.239(b).16 s.243.
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timing of application in determining whether to issue a majority support determination,
scope order or low paid bargaining authorisation. To meet the objects of Part 2-4 of the Act,
to enable FWA to facilitate good faith bargaining and the making of enterprise agreements
by making bargaining orders, dealing with disputes, and ensuring that agreement-making
and approval proceeds without delay,17 the ninety day requirement for making a bargaining
order application at s.229(3) must be removed.
3.14. Conciliation at FWA is available where a s.240 bargaining dispute has been filed, without a
similar “90 day” qualifying requirement. The option for conciliation where parties are in
dispute is to be welcomed. The utility of FWA only having the capacity to conciliate can,
however, be highly frustrating. Particularly where bargaining orders are unavailable, due to
the time that bargaining is taking place, conciliation will achieve little where one or more
parties to the dispute to not want to resolve the dispute.
Avoiding good faith bargaining – ignoring s.240 conciliation
Case Study – Schneider Electric
3.15. In the case of Schneider Electric (“Schneider”), the AMWU filed a s.240 bargaining dispute.
The circumstances of the bargaining were that the AMWU informed Schneider in writing
that it wished to bargain for an enterprise agreement. Immediately after receiving this
correspondence, Schneider agreed to meet with the AMWU only under the following
conditions:
The meeting would only be only over the phone
It would be with a Sydney-based Partner of a large corporate law firm.
The AMWU were not allowed to talk to other bargaining representatives
The AMWU were not allowed to know the identities of other bargaining representatives
Schneider dictated a strict bargaining timetable according to the minimum statutory period.
3.16. A bargaining dispute before Senior Deputy President Richards resulted in a recommendation
that the relevant AMWU Organiser be allowed to attend meetings in person – after all,
Schneider was located only ten minutes away from the AMWU office! Nonetheless,
17 s..171
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Schneider retained a hostile attitude to the AMWU’s position in bargaining, and an
agreement drafted by Schneider was put to the workforce close to the bare minimum time
provided in the Act. The entire bargaining process took little more than 28 days.
3.17. A s.240 recommendation is unenforceable. It bears little persuasive value when a bargaining
representative does not have a reason to comply with it. In the case where bargaining has
“commenced early”, the threat of an application for a bargaining order in similar terms
being made does not exist until 7 days prior to the vote by employees to approve an
agreement.
Avoiding good faith bargaining – weakened protection for industrial action
3.18. A second issue which might give an employer pause against ignoring good faith bargaining
obligations, or s.240 recommendations, is the threat of protected industrial action. Quite
plainly, this is only of persuasive value where a workplace is organised and workers have the
economic capacity to bear the impact of the industrial action. But the bargaining framework
also limits the capacity of workers to take protected industrial action during bargaining.
3.19. Section 438(1) of the Act provides that an application for a protected action ballot (“PAB”)
order “must not be made earlier than 30 days before the nominal expiry date of [the]
enterprise agreement.” This is notwithstanding that bargaining may have commenced much
earlier than 30 days prior to the previous agreement’s nominal expiry date. Where
bargaining has commenced, the AMWU is of the view that there should be no reason why an
application for a PAB order could not be made. Where the employer has commenced
bargaining, employees should not be denied the opportunity to use the only economic
pressure which they have against that employer to robustly bargain for the enterprise
agreement which the employer has proposed. Where employee bargaining representatives
have commenced bargaining, as noted above, FWA has a discretion to order the issue of any
order which would commence bargaining at the employee bargaining representative’s
instigation.
3.20. Below, we make further submissions about technical confusion in provisions of the Act
relating to taking protected industrial action. Each of these technical issues undermines the
legitimate right of employees to take industrial action with the reassurance that s.415 of the
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Act provides them immunity from suit. We therefore make further recommendations below
as to how such technical confusion may be addressed.
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AMWU Submission to Fair Work Act Post-Implementation Review
Avoiding good faith bargaining – Not relevant to FWA approval.
3.21. Good faith bargaining requirements at s.228, in the absence of the threat of industrial action
or bargaining orders being made, can be little more than hollow aspirations of employee
bargaining representatives. If an agreement is approved by the employees within its scope,
in circumstances where an employer has not complied with s.228(1) throughout the period
of “bargaining”, the Act again frustrates the ability of other bargaining representatives to
bring this to the attention of FWA.
Case Study – Philmac
3.22. In the case of the Philmac Production, Distribution and Maintenance Enterprise Agreement
2010 (South Australia), on the basis of the evidence before him, Senior Deputy President
O’Callaghan made the following findings in his decision of 16 March 2011:
“[38] I do not consider that the employee feedback process can be taken to usurp or replace the continuing requirement for consultation to be available to all the employee bargaining representatives. I am not satisfied that the process applied by Philmac provided an opportunity for all of the employee bargaining representatives to be made aware of Philmac’s revised proposals that may have been put by other bargaining representatives both before and after the employee survey. Further, the advice to employees suggests consultation with employee bargaining representatives, which in fact, is not entirely accurate.
[39] As a consequence, I am unable to conclude that the good-faith bargaining requirements have been met so as to enable the agreement to be
approved.”18
In doing so, O’Callaghan SDP relied upon s.187(2) of the Act as requiring him to be satisfied as to the requirements of s.187(2) before he could approve an enterprise agreement:
“187 When FWA must approve an enterprise agreement—additional requirements
Additional requirements
(1) This section sets out additional requirements that must be met before FWA approves
an enterprise agreement under section 186.
Requirement that approval not be inconsistent with good faith bargaining etc.
18 [2011] FWA 1639
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(2) FWA must be satisfied that approving the agreement would not be inconsistent with
or undermine good faith bargaining by one or more bargaining representatives for a
proposed enterprise agreement, or an enterprise agreement, in relation to which a
scope order is in operation.” (emphasis added).19
3.23. On appeal, however, the decision of O’Callaghan SDP was overturned. Quite properly, the
Full Bench found that s.187(2) only applied in circumstances where a scope order
operated.20 We do not doubt that the Full Bench was correct in its interpretation of s.187(2),
but we must ask why the operation of s.187(2) is so limited. The Full Bench did not find that
O’Callaghan SDP’s findings as to whether the employer’s good faith bargaining obligations
had been met were incorrect, simply that these findings were legally irrelevant in the
absence of a scope order.
3.24. In the view of the AMWU, there is no reason that s.187(2) should not apply to all
applications for approval of an enterprise agreement. If good faith bargaining obligations
have not been met, then to deny FWA the opportunity to consider whether approving the
agreement is inconsistent with or undermines good faith bargaining again renders hollow
the obligations at s.228(1). When good faith bargaining obligations can be avoided in
circumstances that the application for good faith bargaining orders are prohibited, it is even
more essential that there is an opportunity to raise with FWA an employer’s conduct
contrary to s.228(1). The AMWU therefore recommends that s.187(2) be amended to
remove the words “in relation to which a scope order is in operation”.
Undermining good faith bargaining
3.25. Even when bargaining takes place at a time when the requirements at s.228(1) may be
enforced, decisions of FWA have allowed employer behaviour to undermine the integrity of
those requirements.
3.26. Much was made at the time that the Act came into operation, that employers could no
longer “refuse to bargain” when their employees wanted them to bargain. Unfortunately,
the intervening two and a half years have seen a tick-the-box approach to bargaining
permitted even where employers, according to the Act, “must bargain”. In the view of the
AMWU, this is for four primary reasons:
19 ibid at paragraph [21].20 [2011] FWAFB 2668 at paragraph [4]
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AMWU Submission to Fair Work Act Post-Implementation Review
A. the absence of a requirement to reach agreement;
B. the absence of a requirement to bargain in a manner reflecting a genuine intention
to reach agreement;
C. the capacity of an employer to stop bargaining and put a proposed agreement to the
workforce for a vote at a time determined by the employer apart from minimal
statutory requirements;
D. absence of a defined framework for communications and consultation with
employees, so that employers can effectively directly communicate and negotiate
with employees to undermine good faith bargaining negotiations and the prospects
of reaching agreement.
3.27. What these phenomena mean is that employers do not have to actually engage in
bargaining with a view to reaching an agreement. This disempowers employees and their
bargaining representatives, and undermines the framework of good faith bargaining
established in the Act. A requirement to bargain for an enterprise agreement is meaningless
if there is no requirement for there to be a prospect of reaching agreement.
3.28. Subsection 228(2) makes it plain that the intention of the legislation is to allow for “hard
bargaining:
“(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the
agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be
included in the agreement.
3.29. The AMWU disagrees with the absence of a requirement to reach agreement. We
recommend the deletion of s.228(2). We are of the view that the lack of such a requirement
is a key reason why negotiations can and have dragged over months and years without
reaching agreement, notwithstanding that employees have repeatedly indicated a desire to
reach agreement. We will make some recommendations below as to how to we believe the
Act should curtail bargaining tactics designed to unreasonably wear down the patience and
forbearance of employees and their bargaining representatives.
20
AMWU Submission to Fair Work Act Post-Implementation Review
3.30. However, even if there remains a requirement that bargaining representatives do not have
to reach agreement, the AMWU believes that there should at least be a good faith
bargaining requirement for bargaining representatives to be genuinely trying to reach an
enterprise agreement made under the Act. This is a requirement of employee bargaining
representatives who make application for a protected action ballot order under the Act, 21 as
was the case under previous legislation.22
3.31. A key component of genuinely trying to reach agreement is making proposals for an
enterprise agreement that is capable of approval by employees and FWA under the Act.
Genuinely trying to reach agreement does not mean surface bargaining – of turning up to
meetings and exchanging correspondence until other bargaining representatives lose
interest. Also integral to genuinely trying to reach agreement is not taking steps to regulate
the terms and conditions of employment outside of an enterprise agreement to be made
under the Act. If a bargaining representative can ignore the bargaining and agreement
framework of the Act, then the Act does nothing to enforce the right of employees to
bargain for an agreement. Effectively, an employer can still “refuse to bargain”. The
invention of the “majority support determinations” is pointless if the Act allows surface
bargaining which denies good faith bargaining any integrity.
Undermining good faith bargaining - Single employee agreements
3.32. One way in which employers have manipulated the collective bargaining requirements of
the Act is to make agreements with just one employee. This contrasts quite dramatically
with the quite clear description of enterprise agreements in the Explanatory Memorandum:
“Part 2-4 provides for the making of enterprise agreements through collective bargaining…
Enterprise agreements are collective agreements that will cover a group of employees.”23
It is also resoundingly obvious at s.3(c) that statutory individual employment agreements are
inimical to the Act:
“(c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum
wages and conditions can no longer be undermined by the making of statutory individual
21 s.443(1)(b).22 See, for example s.461(1)(b) of the Workplace Relations Act 1996.23 Explanatory Memorandum at paragraphs 640-641.
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AMWU Submission to Fair Work Act Post-Implementation Review
employment agreements of any kind given that such agreements can never be part of a fair
workplace relations system;” (emphasis added).
3.33. Commissioner Gooley, correctly in our view, found that the Act did not permit collective
agreements to be made with an individual:
“[45] The Applicant contends that because an employee can appoint her or himself as a
bargaining representative an enterprise agreement can be made with a single employee. I do
not accept this submission. That an individual employee may appoint him or herself or
someone else as a bargaining representative does not support a conclusion that an
agreement can be made with a single employee. Enterprise agreements are not made with
bargaining representatives but with employees. It does not logically follow that because an
employee can appoint a bargaining representative that an enterprise agreement may be
made with a single employee.
[46] Further support for the conclusion that the FW Act did not intend that enterprise
agreements can be made with a single employee can be discerned by the context in which
the FW Act was enacted.
[47] Parliament, when it enacted the FW Act, repealed legislation which permitted an
employer to make a statutory agreement with a single employee. Prior to the enactment of
the FW Act the legislation permitted an employer to make an agreement with an employee
namely an Individual Transitional Employment Agreement and prior to that an Australian
Workplace Agreement. If Parliament had intended that an enterprise agreement could be
made with a single employee it would have made this explicit.”24
3.34. Surprisingly, then, a Full Bench in AMWU v Inghams25 found to the contrary:
“[30] We add that we are not persuaded an enterprise agreement cannot be made with only one employee. There is nothing explicitly in the FW Act to suggest an enterprise agreement cannot be made with only one employee and it would not be consistent with the objects of the FW Act or Part 2-4 of the FW Act concerning enterprise agreements to so construe the FW Act. Such objects include “achieving productivity ... through an emphasis on enterprise-level collective bargaining” and “to provide a ... framework that enables collective bargaining ..., particularly at the enterprise level, for enterprise agreements that deliver productivity benefits”. A conclusion that an enterprise agreement cannot be made with only one employee would mean that both an employer with only one employee and that employee would be deprived of a potential source of productivity benefits. Although an individual flexibility arrangement can be agreed between an employer and an employee pursuant to
24 Re Fourth Furlong Motel [2011] FWA 3256.25 AMWU v Inghams Pty Ltd Re Somerville Maintenance Enterprise Agreement 2011 [2011] FWAFB 6106.
22
AMWU Submission to Fair Work Act Post-Implementation Review
the flexibility term of a modern award, such an arrangement can be terminated by either party giving written notice of not more than 28 days.
[31] We were referred to the decision in Re Fourth Furlong Motel wherein a single member of FWA concluded an enterprise agreement could not be made with a single employee. With respect, we are unable to concur with the Commissioner’s conclusion.” (references omitted).
3.35. With respect, to provide that a collective enterprise agreement can be made with a single
employee flies in the face of a structure of bargaining and agreement making in an Act
premised upon collective bargaining, that is, employees negotiating collectively with their
employer. The extensive public discussion, and phasing out of Australian Workplace
Agreements through the use of Individual Transitional Enterprise Agreements prior to the
commencement of the Act, together with the explicit provisions of the Explanatory
Memorandum make it abundantly clear that an individual agreement is not a collective
agreement, and collective agreement making provisions in the Act should not be able to be
manipulated in this way.
3.36. The ability to split and divide workforces into individual units that can make their own
“collective agreements” applying to only one worker must be addressed, in our submission.
It is difficult to see how an individual employee could be accommodated by the good faith
collective bargaining mechanisms of the Act – it is difficult to see how bargaining with an
individual would not mean an employer was engaging in unfair conduct which undermined
collective bargaining, as is prohibited at s.228(1)(e). It is very difficult to see how an
“individual” collective enterprise agreement could be made with a “fairly chosen” group, as
is required by ss.186(3) and (3A).
3.37. If individual “collective enterprise agreements” are enabled by the Act, then these
individuals will be denied their rights to good faith bargaining. Individual statutory
agreements were eliminated from federal industrial regulation because of the patent
inequality of bargaining strength between an individual worker and a corporate employer. In
the face of such inequality of bargaining power, the requirements at s.228 are empty
platitudes. If the Full Bench in Inghams was of the view that the Act lacked clarity about that
principle, then the Act must be made clear. The AMWU strongly recommends that a
definition of “group of employees”, for the purposes of s.186, is defined to be “more than
one employee who is to be covered by the proposed agreement.”
23
AMWU Submission to Fair Work Act Post-Implementation Review
Undermining good faith bargaining – opting out of enterprise agreements
3.38. A similar manipulation of the intention of the legislation has emerged in decisions of FWA
which have held that an agreement which permits employees to “opt out” of an agreement.
In the scope clause of such an agreement, the agreement is expressed to cover a certain
group of employees, except for those who choose to opt out and be governed by some
other form of instrument outside the agreement.
Case Study – Newlands Coal
3.39. In June 2011, Katzmann J26 of the Federal Court quashed a FWA Full Bench decision in
Newlands Coal v CFMEU 27 which had approved an agreement that included an “opt out”
scope clause. As the Full Bench noted in a later decision:
“[5] On 24 June 2011, Katzmann J of the Federal Court of Australia issued writs quashing the
decision of the Full Bench for jurisdictional error and remitting the matter to Fair Work
Australia for determination according to law. The Court rejected the CFMEU’s principal
argument that FWA had no power to approve the agreement because it was not an
enterprise agreement within the meaning of the Fair Work Act 2009 (the Act). However it
accepted the alternative position put by the CFMEU that the majority of the Full Bench in
approving the agreement had erred in applying the “Better off Overall Test” (‘the BOOT’) and
constructively failed to exercise their jurisdiction when deciding whether the group of
employees covered by the agreement was fairly chosen, because they failed to have regard
to a mandatory consideration.”28
3.40. In short, her Honour found that the agreement could not pass the “BOOT” because an
employee who opted out of the agreement would no longer be “better off” than the
underlying award, because that award would now form the statutory underpinning of the
terms and conditions of their employment. That is, the opting-out employee would be “no
worse off” than the award, but not “better off” than it.
3.41. Subsequent to her Honour’s decision, the original Full Bench was reconstituted, and by a
majority of two to one approved the agreement again. Hamberger SDP approved the
agreement only on the basis of an undertaking provided by the employer:
26 CFMEU v FWA [2011] FCA 71927 [2010] FWAFB 7401.28 [2011] FWAFB 7325
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AMWU Submission to Fair Work Act Post-Implementation Review
“‘Newlands Coal Pty Ltd undertakes that in the event an employee elects to “opt out” of the Newlands Coal Surface Operations Agreement 2010 (Agreement) pursuant to clause 2.2, then that employee will receive pursuant to his or her common law contract of employment:
a) A Base Salary at least equal to the Base Salary for their employment level as provided for in Clause 9.1 of the Agreement; and
b) A Roster Allowance at least equal to the applicable Roster Allowance provided for in Clause 9.2 of the Agreement.’
[3] These rates are significantly in excess of those contained in the Black Coal Mining Award 2010. The applicant has also reaffirmed its commitment to an undertaking given to the Full Bench on 5 November 2010 in the following terms:
‘Newlands Coal Pty Ltd undertakes that prospective employees will not have their employment made conditional on agreeing to “opt out” of the Newlands Coal Surface Operations Agreement 2010. Employees will be given a free choice as to whether or not they wish to be covered by the Agreement.’”29
3.42. A first difficulty with the decision to accept this agreement arises: how can an employee who
opts out of the agreement so they are no longer covered by the agreement be protected by
an undertaking which forms part of that agreement? It is difficult to see how such an
employee could recover under the Act any entitlements pursuant to an undertaking that no
longer covers or applies to that employee.
3.43. But the point of greatest concern to the AMWU is the manner by which the facility of “opt-
out agreements” can lead to manipulation of bargaining and agreement making to
undermine good faith bargaining entirely, and it is perhaps the employees who do not opt
out who are most at risk from such manipulation.
3.44. In a simple hypothetical the manipulation that is facilitated by FWA’s approval of “opt-out
clauses” is made plain:
An employer proposes an agreement in a workplace with a group of line managers, a group
of tradespeople and a group of production workers.
The employer proposes a tough agreement, pleading that there are difficult economic
conditions which means that certain allowances are removed from the agreement for all
employees, but which particularly affect tradespeople.
29 Re Newlands Coal Pty Ltd [2012] FWAFB 721
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AMWU Submission to Fair Work Act Post-Implementation Review
The employer is therefore concerned that the tradespeople will not approve the agreement,
and the split between tradespeople and production workers is such that this would mean
that the agreement is not approved overall.
Under previous agreements, line managers were excluded from the scope of the agreement.
Line managers are covered by common law agreements which provide greater salaries and
more controls over their hours of work than applies to tradespeople and production workers
under the agreement.
Line managers are reluctant to be constrained by an enterprise agreement, and accept
worse terms and conditions than their current situation. However, the employer proposes
an opt-out clause for the agreement for line managers, and these line managers know that
they won’t truly be under the enterprise agreement at all.
Line managers all vote to approve the agreement, overwhelming the negative vote of the
tradespeople. The line managers all then opt-out of the agreement, leaving the reduced
terms and conditions to the tradespeople and production workers.
3.45. In such a scenario, which is now available to employers who wish to manipulate approval of
an agreement, the genuine agreement of employees who remain covered by the
agreement30 was never obtained, but the genuine agreement of those employees who were
covered at the day of the vote was obtained, because the line managers were then included
in the count.
3.46. Further, the group that was “genuinely chosen” at the vote to approve the agreement has
become a very different group. Even where an “opt out clause” is not restricted to a specific
classification or group, the ability of some employees to opt out and others to remain
covered by an agreement must mean that any geographical, operational or organisational
distinction which made the original group “fairly chosen”31 disintegrates further with every
opt-out.
3.47. In Re New Acland Coal,32 Lawler VP held that he was bound by the Full Bench in Newlands
Coal as to the effect of an opt-out clause on the “genuinely chosen test”. However, he
strongly disagreed with their decision:
30 Under s.188.31 Under s.186(3A).32 Re New Acland Coal Pty Ltd [2011] FWA 9075.
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AMWU Submission to Fair Work Act Post-Implementation Review
“[16] For myself, I consider that the reasoning of Roe C on this topic is correct. If employees in
a given group can opt-out of the coverage of an enterprise agreement then I do not see how
that group can properly be described as a “group of employees who will be covered by the
agreement” within the meaning of s.186(3). This language connotes certainty of coverage by
the agreement if an employee is employed in a particular role while the agreement is in
operation. If an employee who is otherwise within the scope of an enterprise agreement has
the right to elect not to be covered by the agreement then it cannot be said that the
employee will be covered by the agreement while it is in operation but only that they may be
covered by the agreement. That is not what s.186(3) requires. Further, in my view, the
objects, purpose and scheme of the FW Act in relation to enterprise bargaining is inconsistent
with an ”opt-out” clause permissibly forming part of an enterprise agreement.”
3.48. With respect, the views of Vice President Lawler are patently correct – an opt-out clause is
impermissible. When the good faith bargaining framework provided by the Act is premised
on a majority vote for an agreement following good faith negotiations with the group of
employees to be covered by that agreement, the facility of “opting out” of an agreement
renders the framework meaningless.
3.49. That an opt-out clause threatens the integrity of bargaining framework of the Act is made
obvious when consideration is given to the employees who have opted out of an agreement,
and are no longer covered by it. Those employees are able to negotiate a new enterprise
agreement. Those employees are able to seek approval to take protected industrial action in
support of a new enterprise agreement. Where whole groups of employees who were
covered by an agreement choose to opt out, then the prohibition at s.417 on industrial
action until the nominal expiry date of that agreement no longer applies to the negotiation
of a new agreement which only covers those employees.
3.50. In order that the “fairly chosen” requirement of a collectively bargained enterprise
agreement retains any integrity, and that s.417 retains relevance, the AMWU believes that
that the Act must be amended to provide at s.12 that the definition of “ objectionable term”
includes:
“(d) that one or more employees may choose to no longer be covered by an agreement.”
Such an amendment would preserve the ability to take steps under the Act to terminate an
enterprise agreement or vary an agreement. The prohibition would simply be on the
agreement providing for a “choice” to not be covered.
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AMWU Submission to Fair Work Act Post-Implementation Review
Undermining good faith bargaining - Railroading.
3.51. When an employer bargains within the time frame when bargaining orders can be made,
that is within the 90 days prior to the expiry of any existing agreement, there is little
protection in the Act where an employer wishes to adopt a steamroller mentality to pushing
through an agreement to a vote under s.181 of the Act without real consultation or
bargaining in good faith.
3.52. The minimum time frames from an employer deciding to negotiate for an agreement and
providing a notice of representational rights to inviting employees to vote to approve an
agreement is 21 days, including an “access period” to the written text of a proposed
agreement of seven days.33
3.53. The bargaining framework established by the Act allows only an employer to invite
employees to vote under s.181 – discussed further below. The only mechanism in the Act to
prevent an employer who intends to take this course is an urgent bargaining order.
Particularly in workplaces with little industrial organisation, satisfying the procedural and
jurisdictional requirements for an application for such an order are hurdles which are
beyond the capacity of most workforces.
3.54. In most instances, unorganised groups of employees will simply be unaware of whether an
employer has complied with the Act, let alone be in a position to articulate opposition to the
opportunity that have been provided to them to negotiate an agreement. In many
workplaces within the eligibility rules of the AMWU, a majority of workers will be from non-
English speaking backgrounds. In these and other workplaces, negotiating sophisticated legal
instruments is not the specialty of any non-management members of the workforce. To
expect such workforces to understand and co-ordinate a sophisticated legal response to an
employer’s carefully drafted and planned documentation and industrial strategy in just three
weeks is simply fanciful.
3.55. We therefore repeat our submission that an employer must be required to satisfy FWA, at
the time of seeking approval for an agreement, that good faith bargaining requirements
have been complied with, not just where a scope order operates.
33 Though there is a contrary view, expressed by a member of FWA that the invitation to vote must be made entirely separately from the “access period”. See Re Australia Char Pty Ltd [2011] FWA 1627; Re Boral Resources (Country) Pty Ltd [2011] FWA 6796, per Ryan C.
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AMWU Submission to Fair Work Act Post-Implementation Review
3.56. Further, it is the recommendation of the AMWU that more concrete steps must be instituted
in the Act, or Regulations, to provide for proper consultation with a workforce prior to an
request to approve an agreement being made under s.181. Without statutory requirements
for such steps, there is no hurdle to jump for an employer who wishes to railroad through an
agreement which is in the interests of that employer.
3.57. Below, we make a recommendation for a model code of good faith bargaining, to be
adopted as a Regulation to the Act. To avoid employees being railroaded by an employer-
drafted agreement, it is necessary to require of employers that they genuinely inform and
consult with employees about the process to reach, and content of, any proposed
agreement, and the rights of those employees in respect of these.
Undermining Good Faith Bargaining – Surface Bargaining
Case Study – Cochlear Limited
3.58. Where a bargaining representative does not want to reach any enterprise agreement, and
where that bargaining representative is not required to conduct itself with a view to trying
to actually reach any agreement, there is no disincentive in the Act to that bargaining
representative acting to avoid or undermine good faith bargaining. In such circumstances,
the requirement in the Act for an employer to bargain where a majority support
determination has been made, is just meaningless.
3.59. Cochlear Limited (“Cochlear”) is a successful Australian company. Since the mid 1990s, the
AMWU has had members employed by Cochlear at its manufacturing premises at Lane Cove
in Sydney. The Company plans to transfer some or all or its manufacturing operations from
Lane Cove to new premises at Macquarie University in Sydney’s North-West, over which
Cochlear has taken a lease for an extended period.
3.60. In January 2006, the “Cochlear Limited Enterprise Partnership Agreement 2005” was
approved by the NSW Industrial Relations Commission. This agreement has an expiry date of
30 June 2007, but remains in operation by virtue of the fact that it has not been lawfully
terminated, and is now a collective agreement-based transitional instrument under the Fair
Work (Transitional Provisions and Consequential Amendments Act) 2009 . Since 2007, the
AMWU has attempted to negotiate a collective agreement with Cochlear to replace the
expired 2005 agreement.
29
AMWU Submission to Fair Work Act Post-Implementation Review
3.61. In February 2007 the AMWU held a ballot of workforce in which 195 out of 266 employees
participated. The result of the ballot was that 100% of ballot participants said that they
wanted the AMWU to negotiate an Enterprise Agreement on their behalf.
3.62. On 26 March 2007 Cochlear circulated a non-union agreement to all employees to be
balloted. The result of the ballot was that the majority of employees voted no to the
company offer.
3.63. On 29 May 2007 the AMWU sought endorsement by secret ballot for a draft collective
agreement. 201 employees participated in the ballot, with 198 endorsing the union
collective agreement.
3.64. On 22 June 2007 Cochlear circulated a second non-union agreement and held a ballot. A
vote of 75% of employees rejected the agreement.
3.65. In January 2009 the AIRC conducted a postal ballot of Cochlear employees as a part of
proceedings C2007/3736. 196 of 316 employees participated in the vote. The result of the
ballot was that 192 employees vote that they would prefer a union-negotiated collective
agreement and supported the AMWU’s actions in attempting to prevent the existing
collective agreement being terminated.
3.66. In July 2009, after the Act came into operation, Cochlear again refused to agree to negotiate
for an enterprise agreement. The AMWU applied for a majority support determination,
which Cochlear opposed (in matter B2009/10335). As part of these proceedings,
Commissioner Harrison ordered a further ballot of Cochlear employees. On 19 August 2009
the secret ballot was conducted by the AEC on the question of support for bargaining an
enterprise agreement. 312 employees voted in that ballot, with 185 employees (60%) voting
in favour of bargaining for a new enterprise agreement.
3.67. On 20 August 2009 a majority support determination was made by Commissioner Harrison
([2009] FWA 125).
3.68. Between the making of that determination and this submission, 30 months have passed. The
employees at Cochlear who repeatedly have indicated that they wish to negotiate a
collective agreement at Cochlear have not even had the opportunity to vote on any
proposed agreement.
30
AMWU Submission to Fair Work Act Post-Implementation Review
3.69. Between August 2009 and November 2009, Cochlear would not have a meeting to discuss a
proposed agreement as they took time to appoint a bargaining representative on their
behalf. Between then and August 2010, Cochlear refused to meet to discuss the terms of any
proposed agreement until the AMWU agreed to the terms of a “bargaining protocol” to
frame negotiations. Despite arguing and negotiating for a more useful document which
would facilitate consultation with employees, and arrangements for negotiations which
would allow progress towards the making of an enterprise agreement, the AMWU agreed to
sign the “bargaining protocol” in August 2010. Any further delay before a substantive
bargaining meeting was seen as simply too much.
3.70. Between September 2010 and December 2011, the AMWU and Cochlear have met on
several occasions in formal “bargaining meetings”, together with two self-appointed non-
union employee bargaining representatives. At a bargaining meeting in November 2010, the
AMWU outlined to Cochlear its bargaining claim and provided a “bargaining issues”
document. In December 2010, the AMWU provided Cochlear with a draft agreement. In
March 2011, the AMWU provided Cochlear with an updated “bargaining issues” document,
further clarifying the source of each of its claims.
3.71. Throughout this period, the AMWU sought a response from Cochlear, further to the
company’s good faith bargaining requirements. At first, Cochlear stated that they would
respond to our claim and provide their own claims for a proposed enterprise agreement
once they had received “all of the claims of the bargaining representatives”. In July 2011, the
AMWU received a joint response to its claim from the two non-union bargaining
representatives. Neither made any claims of his own, but rejected the AMWU claim, stating
that neither believed that making an agreement was necessary.
3.72. At a bargaining meeting in August 2011, Cochlear gave a verbal response to the AMWU
claim. This was later confirmed in writing on 30 August 2011, some nine months after the
AMWU put its claim in writing to Cochlear. Cochlear rejected the bulk of the AMWU claim,
stating, inter alia:
matters which currently were dealt with in common law agreements would
remain in common law individual employee agreement and would not be dealt with in
any collective enterprise agreement;
the company would not accept any schedule of wage rates being included in the
agreement, and that Cochlear would retain a discretion to increase wage rates or not;
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AMWU Submission to Fair Work Act Post-Implementation Review
any enterprise agreement would be for a maximum of one year, and that the AMWU
must agree to not oppose the termination of the agreement after a year;
Cochlear would not be putting any “specific claims” for inclusion in an enterprise
agreement.
3.73. After thirty months of bargaining, despite being “required to bargain” by the majority
support determination made in August 2009, Cochlear refuses to propose any enterprise
agreement that would be capable of approval by FWA. In the least it must be said that an
enterprise agreement which included a capacity for the employer alone to determine wage
rates would not satisfy the “Better Off Overall Test”. We say that Cochlear is not bargaining
genuinely, or in good faith.
3.74. Further, it is the view of the AMWU that a failure to put any proposals for an enterprise
agreement makes a mockery of being “required to bargain”. it is our view that what
Cochlear has done is tick-the-boxes. It is the view of the AMWU that a bargaining
representative must accept that once bargaining has commenced, they must be required to
put proposals for an enterprise bargaining agreement. If the requirements at s.228 do not
require that, then they are insufficient and must be amended.
3.75. At the same time as rejecting the premise of the negotiations into which they were required
to enter by the employee vote for a majority support determination, Cochlear increased
wages of all employees by 4% on 1 November 2011. No notice of this was provided to the
AMWU, the bargaining representative of over a hundred of its employees. Cochlear
continues to regulate the terms and conditions of its employees on its own terms, without
recognition that a majority support determination means that those terms and conditions
must be negotiated within an enterprise agreement made under the Act.
3.76. The AMWU has made application for bargaining orders against Cochlear. This application is
yet to be heard. We will be making the argument that “surface bargaining”, such as has been
engaged in by Cochlear since a majority support determination was made, is contrary to the
Act, and that Cochlear must truly engage in bargaining for a collective enterprise agreement
as the majority support determination in August 2009 required of them.
3.77. But this must be made clear in the Act. The undermining of the requirements to bargain in
good faith, by an employer surface bargaining and actually choosing to regulate the terms
and conditions of employment entirely outside any proposed enterprise agreement, cannot
32
AMWU Submission to Fair Work Act Post-Implementation Review
be permitted by an Act which has the object of “achieving productivity and fairness through
an emphasis on enter-prise level collective bargaining underpinned by simple good faith
bargaining obligations and clear rules governing industrial action.”
3.78. In this context, we are not saying that the parties must agree to the terms of an enterprise
agreement, given that s.228(2) excuses bargaining representatives from this. What we say is
that bargaining representatives, when they are bargaining under the Act, must properly
recognise that they are bargaining for an enterprise agreement to be made under the Act.
That is, a collective enterprise agreement that can be approved by its employees and by
FWA. This is the concept which, we say, is captured by the phrase “ genuinely trying to reach
agreement”. We therefore recommend, in the least, that this concept be made a
requirement of s.228.
3.79. An additional formulation of a similar concept is found in New Zealand’s “Code of Good Faith
in Collective Bargaining”, made in 2005 under the Employment Relations Act 2000. This code
includes a requirement that parties bargaining for an enterprise agreement have a “duty…to
conclude a collective agreement unless there is a genuine reason not to, based on reasonable
grounds”.34 Such a formulation, in addition or in alternative to the requirement to be
“genuinely trying to reach agreement” would again provide a legislative bulwark against
surface bargaining.
Undermining Good Faith Bargaining - Direct Communication
3.80. In the case of Cochlear, as noted above, the employer is able and has provided direct
variation to the terms and conditions of employment of employees to be covered by the
purported “proposed agreement” without any restriction to confine itself to bargaining for a
collective agreement. In addition, Cochlear has continued access to its workforce while they
are at work, when it may discuss terms and conditions of employment, but has refused the
AMWU any access during work time to meet with the employees we represent, to discuss
the claim for the proposed enterprise agreement or the conduct of the bargaining.
3.81. It is a feature of several overseas jurisdictions that true recognition of a bargaining
representative means that, during bargaining, any proposals about terms and conditions of
employment must be proposed through those representatives. After all, that is the nature of
34 “Code of Good Faith in Collective Bargaining” made under s.35 Employment Relations Act 2000 (New Zealand) at paragraph 3.1.
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representation. By contrast, FWA has found that “recognising” a bargaining representative
under s.228(1)(f) does not prevent an employer putting bargaining proposals direct to the
employees represented by that bargaining representative.
3.82. In LHMU v Mingara, Vice President Watson rejected an application for a bargaining order,
finding:
“[17] The LHMU has not established that holding a preliminary information meeting with staff in the absence of a bargaining representative is inconsistent with the good faith bargaining requirements of the Act. Mingara has not refused to meet with the LHMU. It will be doing so shortly to specifically discuss an enterprise agreement. It has not denied the LHMU any relevant information. It has not denied the LHMU access to its staff. All it has done is refuse to allow an LHMU official to attend a particular meeting Mingara held with its staff prior to the commencement of negotiations.
[18] In my view, communicating with staff is good management practice. If such communications are not accompanied by a refusal to meet and communicate with a bargaining representative, then in my view there is no breach of the good faith bargaining requirements of the Act.
[19] The obligations under the Act relate to genuine recognition and genuine bargaining activities with other bargaining representatives. They do not preclude concurrent communication and discussions with the employees who may be requested to approve the agreement. In my view, an employer is free to meet with its employees to discuss employment issues, including matters relevant to enterprise bargaining in the absence of bargaining representatives. Widespread communication is to be encouraged – not regulated, diminished or monopolised.”35
3.83. It appears that this has now become a “well established principle” that it is important to
encourage communication between employers and employees both directly as well as
through their representative organisations”36 With respect, this position does not adequately
comprehend the capacity of employers, in meeting with employees outside of the
bargaining process, to undermine that bargaining process. If good faith bargaining principles
are held to allow an employee’s bargaining representative to not represent that employee in
discussions about their terms and conditions, then representation of that employee is
meaningless. The right to be represented, a further object of the Act at s.3(e), should not
stop when bargaining commences. To the contrary, if an employee nominates a bargaining
representative, including by joining a union, that employee is expressing their right and
desire to be represented. Employees are free, during bargaining, to withdraw their
35 Liquor, Hospitality and Miscellaneous Union v Mingara Recreation Club Ltd, [2009] FWA 1442, 1 December 2009.36 Liquor, Hospitality and Miscellaneous Union-Western Australian Branch v Hall & Prior Aged Care Organisation and Others [2010] FWA 1065 per Cloghan C referring to QNU v Lourdes Home Hostel (2009) FWA 1553, at paragraph [56], and LHMU v Mingara.
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authorisation for bargaining representation at any time.37 Absent such a withdrawal,
allowing employers to take negotiations directly to those employees makes a mockery of the
ability of employees to nominate others to do their bargaining for them.
3.84. We do not advocate that employers would be prevented from communicating with their
workforce during bargaining. The strong view and recommendation of the AMWU is that
what a “requirement to collective bargain” requires is that communications which are
proposals about or variations to terms and conditions of employment of employees to be
covered by the proposed enterprise agreement must be made through the bargaining
representative of any such employee. Where an employee does not have a bargaining
representative, such communications could be made directly.
3.85. In the very least, if “widespread communication is to be encouraged”, in Watson VP’s words,
then bargaining representatives must have equality of communication with employers. If
employers are to have meetings with employees about bargaining, notwithstanding that
those employees have bargaining representatives, then employee bargaining
representatives must have the opportunity to be present at such meetings and a right to
communicate at such meetings. It is the recommendation of the AMWU that good faith
bargaining requirements be amended to provide for equality of opportunity of bargaining
representatives to communicate with employees to be covered by a proposed agreement.
Concurrent communication without equality of communication has the capacity to sideline
the good faith bargaining for collective enterprise agreements which is provided for in the
Act.
Good faith bargaining circuit breakers
3.86. The framework of the Act also strengthens the hand of employers in any bargaining process
by providing employer with a self-determined circuit breaker for bargaining. At s.181, it is
the employer alone which may request employees to vote for a proposed agreement. FWA
has repeatedly found38 that after a period of bargaining and disagreement about the terms
of a proposed agreement, the employer has a “right” to put a proposed “final offer”
agreement to the workforce. This has been variously described as negotiations “reaching an
impasse”, of bargaining having “ended”.
37 s.178A38 For example, LHMU v Hall-Prior and Ors [2010] FWA 1065, AMWU and APESMA v DTS Food Laboratories [2009] FWA 1854.
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3.87. The AMWU does not oppose the idea that a “circuit breaker” should be part of a good faith
bargaining process, particularly where parties are not required to reach agreement under
s.228(2)(b). We do oppose this circuit breaker being only in the hands of employer
bargaining representatives. We are of the firm view that employee bargaining
representatives also should be able to apply to FWA for a “circuit breaker” determination.
What such a determination could encompass would be a matter for FWA to determine in the
particular circumstances of bargaining.
3.88. Currently, such circuit breakers are heavily weighted in favour of employers. First, there is
the circuit breaker after surface bargaining for a period, to put a “final” proposal to a
workforce when the employer determines that there is an “impasse”. It is plain that such
circumstances encourage bargaining by attrition – wearing down employees and their
bargaining representatives until an employer’s proposal is accepted – or by railroading
before employees have a chance to bargain, rather than bargaining towards an enterprise
agreement in good faith.
3.89. Second, In the context of protected industrial action, the Act provides three different ways
to force a termination of industrial action which would allow a workplace determination to
be made by FWA. This is the Qantas example.
Case study - Qantas
3.90. It is now notorious that in the face of low-level industrial action by three unions who were
bargaining representatives for three separate enterprise agreements, Qantas grounded its
fleet and proposed a lockout of employees. This self-inflicted economic harm and resultant
damage to the Australian economy triggered an application by the relevant Minister for a
termination of the Qantas lockout and low-level industrial action of the Unions under s.424
of the Act.39 Following the termination of the industrial action, jurisdiction to make a
workplace determination under s.266 was enlivened.
3.91. The industrial tactics of Qantas demonstrated an employer who had decided that good faith
bargaining under the Act was not going to achieve the terms and conditions they desired in
an enterprise agreement. Pursuing arbitration, Qantas “brought matters to a head” by
grounding its fleet and locking out its workers. Clearly, for Qantas, enterprise-level
bargaining without third party intervention was not going to achieve the industrial ends they
desired. In the view of the AMWU, bargaining at Qantas was requiring the company to look
39 Minister for Tertiary Education, Skills, Jobs And Workplace Relations [2011] FWAFB 7444, 31 October 2011
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at investing in their workforce, to look at long term productivity, not just profit. When so
challenged, enterprise bargaining did not appear the avenue to profit that it might have
been.
Case Study - Schweppes
3.92. Qantas is not alone in the tactic of creating an apparent crisis for the purpose of escaping
bargaining to jump straight to FWA arbitration. On 19 December 2011, Schweppes filed an
application under s.423 of the Act, that FWA terminate protected industrial action. The
supreme irony was that it was Schweppes’ own indefinite lockout that the company sought
to terminate. Schweppes’ pleaded the consequences of the lockout for employees’ incomes,
despite the source of that harm being the company’s own actions. Of course, Schweppes
could have withdrawn their lockout voluntarily at any time. Instead, to elevate the situation
they imposed the lockout in an attempt to attract FWA’s discretion to terminate all
protected industrial action. On the first occasion, this discretion was not exercised by FWA.40
It appears Schweppes have been more successful on a second occasion,41 after an eight
week lockout, with the power to arbitrate now enlivened.
3.93. It may be the case that certain employee bargaining representatives, with enough support
and enough industrial power, in certain parts of the economy, could engender as much
economic damage to the economy to spark a similar application by the Minister or an
employer for terminate industrial action and a consequent workplace determination. This
doesn’t make such a dramatic course of action any more fit-for-purpose as a bargaining
circuit breaker. Why should this be the only arbitration option available to employee
bargaining representatives, when it is of such limited availability and requires such industrial
action?
3.94. The third “circuit breaker” in the Act is arbitration of matters by agreement of bargaining
representatives under s.240. This provision has been used,42 but remains rare. In the context
of a bargaining framework where an employer can simply put their “last offer” to a vote of
employees without agreement, it is unsurprising that agreement is rarely reached on
allowing FWA to arbitrate disputed terms first.
40 Schweppes Australia Pty Ltd v United Voice – Victorian Branch [2011] FWA 9329.41 [PR520061], 10 February 2012 by Kaufman SDP42 For example TransAdelaide v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Another [2010] FWA 3849; Boral Resources (NSW) Pty Ltd T/A Boral Concrete V Transport Workers’ Union of Australia-New South Wales Branch [2010] FWA 6249.
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3.95. The fourth possible “circuit breaker” has never been used to the knowledge of the AMWU.
This is where, following the making of bargaining orders, application is made for a serious
breach declaration – that there has been a serious and sustained contravention of one or
more bargaining orders that have significantly undermined the bargaining process are made.
The AMWU does not oppose the retention of such declarations or consequent
determinations, but notes that the lack of use indicates that this mechanism has not acting
as a bargaining circuit breaker – and has not promoted good faith bargaining.
3.96. For these reasons, the AMWU proposes that s.240 of the Act be amended to provide for
“circuit breaker” arbitration of a bargaining dispute, without the requirement for consent of
all bargaining representatives. As a corresponding mechanism to the intended role of a
majority support determination to require an employer to bargain, , we would propose the
introduction of majority support arbitration. That is, where bargaining is either prolonged
(for example, beyond 120 days), or where a bargaining representative has failed to bargain
in good faith, we propose that a majority of employees to be covered by an agreement can
vote to require FWA to arbitrate the content of a proposed agreement. As with a majority
support determination, we propose that FWA retains a discretion as to whether and to what
extent to arbitrate.
3.97. It may be that FWA forms the view that an application for majority support arbitration is
premature or without adequate grounds. It may be that a twenty-one day compulsory
conciliation period could be incorporated into this new mechanism, or ordered at the
discretion of FWA. This would be a similar provision to the compulsory 21 day negotiation
period required before a bargaining related workplace determination is made.
3.98. The AMWU firmly proposes that a majority vote of employees should trigger an application
for arbitration. Currently, a majority support determination is intended to force an employer
to bargain in good faith. The Cochlear example shows that, in reality, this is not the case. If
employers can avoid bargaining in good faith towards making a collective enterprise
agreement, despite a majority support determination, then that majority must be able to
ask FWA to determine the terms and conditions of their employment.
3.99. We make these proposals because the bargaining framework in the Act facilitates the
avoidance and undermining of the good faith bargaining principles at s.228(1). Bargaining
representatives require the “circuit breaker” of FWA to bring discipline to good faith
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bargaining. If this discipline is still lacking, bargaining representatives require the
opportunity to apply for FWA to determine disputes between the parties.
3.100. The further recommendation of the AMWU is that a model code of good faith bargaining be
made by the Minister, as a Regulation under s.796 of the Act. In our view such a code should
provide for:
A. Bargaining representatives to exchange proposals for inclusion in an enterprise
agreement which can be made and approved under the Act;
B. The opportunity for joint communication meetings with all bargaining
representatives and employees to be covered by the proposed agreement every
thirty days or sooner by agreement;
C. Proposals in respect of terms and conditions of employment the subject of
bargaining to be put to bargaining representatives, and directly to employees with
consent;
D. The opportunity for employees to be covered by a proposed agreement to meet
and discuss a proposed agreement during the “access period” provided at s.180 of
the Act, prior to an request by an employer to employees to approve a proposed
enterprise agreement, with any employee bargaining representatives but in the
absence of employer representatives;
E. The opportunity for bargaining representatives for reasonable consultation with the
employees whom they represent during work time;
F. Proposals to be put to employees for approval by vote under s.181 of the Act to be
agreed by the bargaining representatives of a majority of employees to be covered
by a proposed agreement, with majority support arbitration available where matters
remain in dispute;
G. The above code to be varied as determined by FWA on application by one or more
bargaining representatives.
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AMWU Submission to Fair Work Act Post-Implementation Review
4. Protected Industrial Action – legislative confusion
4.1. The AMWU supports the submissions of the ACTU about the complicated and excessively
bureaucratic mechanisms required by the Act before employees to exercise their right to
strike without threat of prosecution or legal suit. We also wish to make specific submissions
about technical requirements of the Act which are confused and undermine the ability of
employees to use the economic persuasion of industrial action to bargain for fair terms and
conditions in enterprise agreements made under the Act. That legislative confusion
constrains the ability of employees to take protected action, even where they have complied
with all of the legislative hurdles which exist in the Act.
Case study – Department of Defence
4.2. Where industrial action is authorised by a protected action ballot, one might assume that
any action taken pursuant to the authorisation of that ballot will be clearly “protected
industrial action” under the Act. However, in the case of negotiations for the Department of
Defence, the AMWU and two other union bargaining representatives applied for a PAB order
on 1 June 2011, 30 days prior to the existing agreement’s nominal expiry date. That ballot
was declared on 22 June 2011, authorising the industrial action, eight days prior to the
nominal expiry date, and the first day which s.417 of the Act ceases to prohibit industrial
action being “organised or engaged in”.
4.3. However, s.414 provides that at least three clear days written notice of an intention to
engage in industrial action. The Act is unclear as to whether this giving of notice itself
constitutes “organising” industrial action. In the Department of Defence bargaining context,
this meant notice was not given until the actual nominal expiry date, and with the
intervention of a weekend, actual protected industrial action could not being until six days
after the date which s.417 would ostensibly be thought to authorise industrial action. Given
the often tight time frames in which bargaining for an agreement can operate, particularly if
it commences prior to a nominal expiry date, and given that a bargaining representative only
has thirty days in which to commence each form of industrial action authorised by a PAB, 43 a
six-day delay can be extremely significant.
4.4. To address this further frustration of the ability of employees to make properly authorised
protected industrial action, the AMWU recommends that the prohibition on “organising or
engaging in” industrial action in s.417 be returned to a simple prohibition on “engaging in”
43 s.459(d)(i)
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AMWU Submission to Fair Work Act Post-Implementation Review
industrial action that existed at s.170MN of the Workplace Relations Act 1996, prior to the
insertion of s.440 into that Act by WorkChoices. An additional subsection 459(3) also could
be added, to state:
“(3) Despite any other provision of this Act, organising industrial action which is
authorised by subsection 459(1) is protected industrial action and is not prohibited
by subsection 417(1).”
This would reflect similar wording at s.438(2) which specified that organising and making a
protected action ballot does not constitute “organising industrial action”.
Case study - Mammoet
4.5. In October 2011, the Federal Magistrates Court in CFMEU v Mammoet44 further undermined
the ability of employees to exercise their right to take protected industrial action. Under the
existing enterprise agreement, Mammoet was required to provide accommodation for its
employees to be covered by the proposed agreement about which negotiations were
occurring. The CFMEU made an application that Mammoet had contravened the general
protections provisions of the Act by not providing accommodation to its workers during
strike action and a lockout. In his reasons for dismissing the application, Federal Magistrate
Lucev found that the employer-provided accommodation "is a payment which Mammoet is
prohibited from making to [the striking employees] by reason of s.470(1)of the FW Act".
4.6. Section 470 prohibits an employer making a payment to an employee whenever an
employee takes industrial action that is not a partial work ban or an overtime ban. Section
473 prevents an employee or a union asking for a payment that would contravene s.470,
and prevents an employee accepting a payment that would contravene s.470.
Contraventions of these provisions leave employees are liable for penalties up to $6600, and
$33000 for unions and employers. In addition, s.474 mandates that the minimum non-
payment period for en employee who takes unprotected industrial action is 4 hours, with
prohibitions on asking for or accepting payment at s.475 (similar to s.473).
4.7. This decision has the far-reaching potential to require employees to be turned out of any
employer-provided accommodation which forms a “payment” for their services whenever
an employee taken industrial action. Where this did not happen, both employer and
employee would be liable for civil remedies. This is patently a ridiculous outcome that
44 Construction Forestry Mining and Energy Union v Mammoet Australia Pty Ltd [2011] FMCA 802
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undermines the basic rights of any worker who receives accommodation or a living away
from home allowance as part of their remuneration.
4.8. The AMWU strenuously recommends that the Act be amended so that the definition of
“payment” for the purposes of Division 9 of Part 3-3 of the Act excludes accommodation-
related payments. Without such an amendment, employees are liable not only to be denied
their basic rights to shelter and accommodation, but further financial penalty should they be
prosecuted under the Act for simply accepting the provision of their accommodation for the
duration of any employee industrial action.
4.9. The capacity of employees to use the full array of industrial action at their disposal is also
undermined by provisions of the Act relating to partial work bans. This, somewhat ironically,
has the effect of increasingly the tenor and impact of industrial action than might otherwise
be desired by those engaging in employee industrial action.
4.10. This anomaly came to light in respect of a group of AMWU members at Bulwer Island in
Queensland. A two hour ban on paperwork was imposed, as part of authorised protected
industrial action.
4.11. Section 470(1) provides that an employer must not pay an employee who engages in
protected industrial action, for the duration of that industrial action on that day. However,
subsection 470(2) excludes a “partial work ban” from that rule. The two hour paperwork
ban in question here is included in the definition of “partial work ban” at s.470(3):
“(3) A partial work ban is industrial action that is not:(a) a failure or refusal by an employee to attend for work; or(b) a failure or refusal by an employee who attends for work to perform any work at all; or(c) an overtime ban.”
This means that a complete cessation of work for two hours would be covered by the rules
regarding payment at s.470, but a particle work ban for the same 2 hour period would not.
4.12. Section 471 deals with payments for partial work bans. This section gives an employer the
option to provide a that the employee’s payment will be reduced by a proportion judged by
the employer to be appropriate to the reduction in work done because of the partial work
ban. Under s.417(4), the employer also has the ability to issue a “notice of non-payment”.
That is, the employer refuses to accept any work from the employee for the period of the
partial work ban. After the employer gives this notice of non-payment, this refusal extends
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AMWU Submission to Fair Work Act Post-Implementation Review
from the start of the day on which the partial ban was to occur to the end of the last day
upon which the partial work ban occurs.
4.13. In addition, whilst a dispute over an employer notifying a partial deduction of pay could be
the subject of determination by FWA under s.472, a complete “notice of non-payment”
cannot be subject to an order made under s.472.
4.14. The implication of this for the “two hour paperwork ban” was that the minor ban was
escalated to a complete cessation of work for each entire day on which the paperwork ban
was to occur. This compares with the institution of a total ban on work for two hours which,
under s.470, would only lead to a cessation, and non-payment for the notified two hours.
Indeed, unprotected industrial action taken for two hours would only lead to a four hour
deduction in pay.45
4.15. The entirety of Division 9 of Part 3-3 appears confused. In the least, the AMWU recommends
that the ability of an employer to give a “notice of non-payment” under s.471(4) be revoked.
The ability to give a notice proportional deduction under s.471(1) is sufficient, and is subject
to the supervisory jurisdiction of FWA under s.472.
45 s.474(1)(a)
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5. Enabling representation at work
5.1. The AMWU supports the submissions of the ACTU with respect to the rights of delegates.
We support the need for the Act to provide for a clear statement of positive rights of
workplace delegates – access to the workforce, email, time to do their job of representation,
the opportunity to consult with their union and training to do that job more effectively. We
note the freedom from discrimination which is currently being challenged by employers in
the High Court in Bendigo TAFE v Barclay.46 We support the AEU in that matter – if there is
no general protection from the real reason of adverse action taken against a workplace
delegate, then that real reason can be too easily shielded behind ostensible but false
reasons. Victimisation of delegates is real, and the Act must be held to protect delegates in
their role.
5.2. It is also crucial that workers have access to their representatives. The Act has come along
way in providing for arbitration of disputes about the exercise of right of entry by union
representatives. However, decisions by FWA have supported the antagonistic position of
many employers to union representatives attempts to have discussion with employees and
investigating suspected contraventions of industrial laws and instruments.
5.3. Entry to have discussions with employees eligible to be a member of a Union is limited at
s.490 of the Act to discussions during “mealtimes or other breaks”. This restriction limits
discussion at most AMWU workplaces to the 30 minutes meal break during a shift during
which employees must attend to their personal needs, prepare their meals and eat.
5.4. it is crucial, therefore, that Union officials be accessible to eligible employees during that
meal break. Logically, it is in the main meal or break room of most premises that union
officials need to be available.
Case study - Somerville
5.5. In AMIEU v Somerville47, a dispute had arisen over whether right of entry meetings could be
conducted in a lunchroom, or in a training room which the employer preferred. Access to
the training room was only available to employees after informing their supervisor that they
wished to attend the union meeting, and a supervisor accompanied each employee through
46 Case M128/2011, Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Anor, to be heard on 29 March 2012, appealing [2011] FCAFC 14.47 The Australasian Meat Industry Employees Union, v Somerville Retail Services [2010] FWA 6737.
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a secure door into an administration area in which the training room was located. As Roe C
noted in his decision:
“[38] There is no evidence of inconvenience to the employer in this situation particularly
given the history of professional conduct by the AMIEU organiser over a number of years and
the fact that the use of neither of the two alternative locations is regarded by the employer
as causing inconvenience to the business. So in this case the reasonableness should be judged
against the extent to which it enables the first two objectives in Section 480 of the Act
concerning the rights of the AMIEU and the rights of employees to have representation. For
these reasons and for the reasons set out below, in the circumstances of this case, I am
satisfied that the AMIEU has established that the request to use the training room is not a
reasonable request in that it has the effect of discouraging eligible employees and making it
unnecessarily difficult for eligible employees who wish to participate in those discussions and
that in the circumstances of this case that is contrary to the objectives of Part 3-4 of the Act
as set out in Section 480.
[39] In reaching this conclusion I have considered the requirement of Section 484(c). That
provision makes it clear that the rights under Section 484 can only be exercised for the
purposes of holding discussions with those who wish to participate in those discussions. As
raised earlier the Employer argued that this meant that the meal room was unsuitable
because it was possible that, as a result of the actions of the AMIEU organiser, employees
who did not wish to participate in discussions may not be able to enjoy their meal
undisturbed and may not have a real choice as to whether or not to participate in
discussions. The Employer argued that the training room was reasonable because it
overcame this problem for those employees who did not wish to participate in discussions.
[40] An apprehension by the Employer that some employees may be inconvenienced if the
discussions take place in a particular location is unlikely to be a relevant consideration unless
it caused undue inconvenience to the capacity of the employer to go about its business.
Further the fact that some employees who did not wish to take place in discussions were
present in the location that the discussions were taking place would not of itself make that
location inappropriate unless it could be shown that the objective of the permit holder was
not to hold discussions with those who wish to participate in those discussions.
[41] The right of entry for the purpose of discussions with those who wish to participate is a
right of the AMIEU permit holder. It cannot be reduced to a right of employees to be able to
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request to hold discussions with the permit holder. An organiser approaching an employee to
participate in discussions is not contrary to the legislative scheme unless that organiser
unreasonably persists after that employee has made it clear that they don’t wish to
participate in discussions. Such persistence it could be argued might bring into question the
purpose of holding the discussions and might in some circumstances lead to disruption to the
business.
5.6. However, on appeal, the reasoning of Roe C was rejected by the majority of a Full Bench:48
“[32] In our view, the scheme of the Act is that occupiers of premises have the right to
request permit holders to conduct interviews or hold discussions with employees in a
particular room or area of the premises provided the request is reasonable. When a dispute
arises as to the reasonableness of the request, all of the circumstances must be considered.
An applicant can only succeed if it establishes that the employer request is objectively
unreasonable. The mere preference of permit holders for a different room is insufficient.”
…
[41] The Commissioner’s conclusion that Somerville’s request was otherwise unreasonable is
based on his finding that the effect of the its request hampers the AMIEU’s ability to exercise
its rights and achieve the objects of Part 3—4 of the Act and the ability of employees who
wish to have discussions to effectively do so. The reasoning for this conclusion is contained in
paragraphs [32]-[42].
[42] In our view, that reasoning is flawed in several respects.”
5.7. In AMIEU v Dardanup,49 McCarthy DP similarly held:
“[32] Much of the evidence of the AMIEU seemed to be directed at endeavouring to establish
that the lunch room is more convenient and more suitable. They seemed to be arguing that a
more reasonable decision would be to allocate the lunch room at the location for interviews
of employees. However that is not the test the FW Act requires me to apply . The test in the
FW Act is one of reasonableness on the part of the occupier and deemed unreasonableness if
certain intention of the occupier is established.” (emphasis added)
48 Somerville Retail Services Pty Ltd v The Australasian Meat Industry Employees Union [2011] FWAFB 120, per Watson VP, Sams DP; Deegan C dissenting.49 The Australasian Meat Industry Employees' Union v Dardanup Butchering Unit Trust T/A Dardanup Butchery Company [2010] FWA 9197.
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This was upheld on appeal.50
5.8. Commissioner Lewin has remarked on the lack of utility of provisions in which an union
application for a dispute, about the “reasonableness of the request” by an employer that
union officials use a particular room, must attempt to prove the subjective intention of the
employer, without the benefit of the reverse onus of proof which is included in other parts
of the legislation in which an applicant must prove the subjective intention of others:
“[23] In various employment law contexts both statutory and jurisprudential where an
employer’s subjective intention forms a critical nexus for the purpose of constituting the pre
condition to a legal consequence it has been considered appropriate to impose specific
procedural or presumptive provisions in relation to the onus in a proceeding.
[24] This is because it will always be difficult for a party claiming the existence of a subjective
motivation or intention on the part of another to affirmatively establish the alleged intention
or motivation. Such an intention may be indicated by facts and circumstances, however,
short of some extraordinary telepathic talent, knowledge of what was on an employer’s mind
when acting in a particular manner, in this case making the disputed request, will essentially
be within the employer’s domain.
[25] However, the provisions of Part 3-4 provide no basis upon which the type of presumption
provided for in s.361 of the Act, for example, can be made in a proceeding for an order in
relation to a disputed request the subject of s.492 of the Act. Nor, in my view, has the
Tribunal given specific consideration to the issues of procedural and substantive onus raised
above in cases where such intentions have been alleged.
[26] While I consider an approach which imposes an appropriate procedural onus to reflect
the considerations I have identified has compelling logic, which may be applied where a
permit holder’s organisation alleges an intention of the kind contemplated by s.492(2), I
intend to deal with the application on the basis that the procedural and substantive onus to
establish an intention proscribed by s.492(2) rests with the AWU. I do so primarily because of
the absence of an indication of any presumption in the statutory provisions and any clear Full
Bench authority for a different procedure.
[27] As an observation, however, I would go so far as to say that without presumptive
provisions or an appropriate modulation of procedural onus in relation to the operation of
50 The Australasian Meat Industry Employees’ Union, v Dardanup Butchering Company Pty Ltd [2011] FWAFB 3847
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the provisions of s.492(2)(b) it would be difficult to judge the practical vitality of the statutory
provisions highly.”51
5.9. With respect, we must agree. If the Full Bench in Somerville is correct, the provisions of the
Act do not provide for the most appropriate room to be available for employees to consult
with their union officials or officials of unions of which they are eligible to be members. The
objects of the Act include at s.3(e):
“(e) enabling fairness and representation at work and the prevention of discrimination by
recognising the right to freedom of association and the right to be represented, protecting
against unfair treatment and discrimination, providing accessible and effective procedures to
resolve grievances and disputes and providing effective compliance mechanisms.
Not only does the relatively unfettered ability of employers to determine which rooms are
reasonable undermine freedom of association of workers, and their right to be represented,
the legislative framework available to resolve grievances and disputes is, in the words of
Lewin C, is not of high “practical vitality” – in reality it is useless.
Case studies – Right of Entry
5.10. Our concerns about reasonable access to employees whilst exercising right of entry are real
and continuing:
.At Rio Tinto in the Northern Territory, an AMWU organiser is allowed access to one
room across a site that is three kilometres long. That means that members and
those eligible to be members must walk up to three kilometres to meet with the
organiser during a twenty minute break. Rio Tinto previously allowed access to
multiple crib huts across the site, but this has subsequently been revoked.
Another employer in Queensland divides his office in two using a petition. On one
side of the petition he sits, on the other is the purported “reasonable room” for
meeting.
At Cochlear’s site at Lane Cove, referred to above, there are two lunch rooms, one of
which seats over a hundred employees, the other of which seats about thirty.
Cochlear does not permit access to either of these lunch rooms, instead providing a
meeting room, located in an administration area of the premises, that fits
approximately six employees;51 The Australian Workers' Union v Rio Tinto Aluminium (Bell Bay) Limited [2011]FWA 3878.
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Weir Minerals in Artarmon in Sydney has a workplace of over 250 employees. The
workplace is segmented over more than 6 different work areas with multiple shift
and meal break patterns operating in each. Most work areas have a separate lunch
area. Weir only allows AMWU officials to meet employees in a room called the
“Foundry Training Room”, which seats only 30 employees and is a five minute walk
from some parts of the workplace. An application for FWA to determine a dispute
about Weir’s determination that the AMWU use this room has not been made
because of FWA’s limited capacity to determine the best room for a meeting during
the exercise of a right of entry under the Act.
5.11. Another example demonstrates that the exercise of right of entry continues to be frustrated
in its practical application at workplaces across Australia. In January 2012, At Rio Tinto’s
Cape Lambert site in the Pilbara region in WA, AMWU and AWU officials conducted a joint
meeting in a meeting room to which they were escorted. This room was a different location
to the room where previous meetings had taken place.
5.12. In February 2012, AMWU, CEPU and AWU officials provided corresponding right of entry
notifications to Rio Tinto in respect of their Dampier, 7Mile and Cape Lambert sites. On
arriving at the Dampier site, and attempting to exercise right of entry, human resources
managers informed the three union officials that the company would be splitting up the
intended joint meeting so that each union official could only speak with those employees
who were eligible to be members of that officials’ union.
5.13. Setting aside issues in respect of joint coverage of many employees by the relevant unions,
such bureaucratic obstruction delayed and prevented the employees at the site easily and
simply having discussions with union officials representing workers at that site. The unions
are not hopeful about curtailing the employers conduct in relation to the other two Rio Tinto
sites.
5.14. Continuing debates and disputes about access to particular rooms are intended to be
resolvable by FWA under s.505. Indeed, the Explanatory Memorandum provides:
“FWA is able to make orders that a specific room be used for a meeting as this may be the
only means of effectively resolving the dispute.”52
In practice, however, through its interpretation of s.492, FWA has made it impossible to
practically show the unreasonableness of an occupier’s request that a union use a particular 52 Explanatory Memorandum at paragraph 2104.
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room. Because of this, in reality FWA is never actually empowered to make any orders that a
specific room be used for a meeting.
5.15. For these reasons, the AMWU proposes that the provisions at s.492 of the Act be amended
to provide that:
A. The main room in which relevant employees spend the mealtime or other break
referred to at s.490 will be provided as a meeting room for the purposes of s.492,
unless an employer or occupier can show that the room is unreasonable;
B. Any dispute over access to premises and relevant employees during the exercise of
right of entry under s.492 may be dealt with under s.505;
C. In determining a dispute under s.505, in respect of the location of a meeting
pursuant to the exercise of right of entry under s.492, FWA must to be satisfied as to
the most reasonable and practical location for eligible employees to meet with the
union official exercising right of entry, and may determine the location of that room
and the circumstances of its use.
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6. Ensuring and enforcing a guaranteed safety net
Constraints on the exercise of FWA functions – making modern awards
6.1. The object of the Act at s.3(b) provides:
“ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and
conditions through the National Employment Standards, modern awards and national
minimum wage orders;”.
It is integral to any safety net provision, whether directly legislated, or made or approved by
FWA in awards or enterprise agreements, that the provisions are enforceable and that gaps
do not open up in the net. Unfortunately, the approach to certain safety net provisions has
meant that, in our view, the intent in the Act to provide a safety net is undermined.
6.2. In its approach to Award Modernisation, FWA adopted a position of not providing for
matters in awards that were already dealt with in the National Employment Standards
(“NES”). This treatment of the NES as a code providing the only regulation of matters dealt
with by the NES is directly contrary to the Act. Certainly, a modern award cannot exclude
any provision of the NES,53 however at s.55(4) the Act provides that :
“A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.” (emphasis added)
6.3. Nonetheless, in many cases during Award Modernisation proceedings, FWA (and the AIRC
before it) held that a modern award should not provide for a matter because that subject
matter was already dealt with in the NES. To the dismay of many employees covered by such
awards, this entailed a reduction in a term or condition of employment from that which
applied under a previously-applicable award or instrument.
53 s.55(1).
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6.4. For example, in the case of parental leave, multiple “old awards” provided for concurrent
parental leave for parents extendable for up to eight weeks.54 The NES provides at s.72(5)
that concurrent leave may only extend up to six weeks. Following Commission decisions,
several modern awards now provide for the lesser period of leave in accordance with the
NES.55 The curious disinclination of the AIRC Full Bench to adhere to the supplementation
permitted by s.55(4) is displayed In their decision in relation to “priority awards” in 2008:
“Parental leave
[94] We received some submissions which urged us to supplement the entitlement to
concurrent parental leave which is provided for in the NES. We have decided not to do so.
This appears to be an area in which it would be necessary to supplement the NES in all
awards and the result would therefore be the creation of a new minimum standard rather
than mere supplementation.”56
In our view, there is no cause for the Full Bench to curtail the ability to supplement the NES
under s.55(4) through the limiting factor of “not creating a new minimum standard”.
6.5. Similarly, in dealing with “community service leave” and “jury service leave”, the Full Bench
found:
“Community service leave
[103] We have given further consideration to whether modern awards should supplement
the NES in relation to the amount of jury service leave to which an employee is entitled. The
NES provides that jury service leave should be limited to 10 days. So far as we know jury
54 cl.27.6A.1(a) Confectioners Award 2002 [AP818086CRV]; cl.20A(3) Confectioners (State) Award (NSW) [AN120156]; cl.7.3.4(a)(i) Country Publishing and Printing Award 2002 [AP819465CAV]; cl.7.4.4(a)(i) Draughting, Production Planners and Technical Workers Award 1998; cl.29.6A.1(a) Food Preservers Award 2000 [AP781106]; cl.23(3)(a)(i) Food Preservers (State) Award (NSW) [AN120212]; cl.7.3.4(a)(i) Graphic Arts – General - Award 2000 [AP782505CR]; cl.20A(3) Ice Cream Makers (State) Award (NSW)[AN120257]; Part I cl.7.4.4(a)(i) Metal, Engineering and Associated Industries Award 1998 [AP789529CRV]; cl.35.3.1(a) Metal Trades (Australian Capital Territory) Award 2000 [AP787983CRA]; cl.7.6(3) Metal, Engineering and Associated Industries (State) Award (NSW) [AN120334]; cl.7.4.4(a)(i) Metal Industry (Northern Territory) Award 2003 [AP82513CRN]; Part VI cl.4(k) Metal and Engineering Industry Award (Tasmania) [AN170120]; cl.23(3)(a)(i) Printing Industries (State) Award (NSW) [AN120432]; cl.19(k) Printers Award (Tasmania) [AN170081]; cl.7.5.4(a)(i) Regional Daily Newspapers (Printing) Award 2001 [AP811502CRV].
55 Manufacturing and Associated Industries and Occupations Award 2010 [MA000010]; Building and Construction General On-site Award 2010 [MA000020]; Graphic Arts, Printing and Publishing Award 2010 [MA000026]; Food, Beverage and Tobacco Manufacturing Award 2010 [MA000073].
56 [2008] AIRCFB 1000.
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service leave provisions in awards and NAPSAs are not subject to any cap at all. If we were to
maintain an unlimited entitlement it would be necessary to supplement the NES in every
modern award. Such a course would be inconsistent with the NES and tend to undermine it.
[104] A similar consideration arises in relation to the rate of pay while on jury service leave.
For similar reasons we shall not make general provision for a rate of pay other than the base
rate as defined in the NES. It follows that the standard community service leave clause will
simply refer to the NES.
Several modern awards have now adopted the NES cap of 10 days for jury service,57 despite
predecessor awards having no such cap.58
6.6. It is the firm view of the AMWU that given the approach of the AIRC and FWA to s.55(4) that
this provision must be amended to provide absolute clarity. For example, the content of
legislative note 1 beneath s.136(1) could be usefully included at s.136(1)(c) where the
interaction between awards and the NES is described, so that the ability for awards to
include terms supplementary to the NES is made explicit. Further, we propose that the
modern awards objective at s.134(1) be amended to include a new paragraph:
“(i) the need for modern awards to supplement National Employment Standards
as appropriate for Australian industries and occupations.”
It appears that such an explicit provision is necessary to provide clarity for FWA in respect of
the application of s.55(4) and s.136(1) to the exercise of its functions under Part 2-3 of the
Act. This is necessary in respect of both the objective of the Act at s.3(b) and the modern
awards objective to provide “a fair and relevant minimum safety net standard.”
57 For example Manufacturing and Associated Industries and Occupations Award 2010 [MA000010]; Building and Construction General On-site Award 2010 [MA000020]; Graphic Arts, Printing and Publishing Award 2010 [MA000026]; Food, Beverage and Tobacco Manufacturing Award 2010 [MA000073]..58 Compare cl.29 Confectioners Award 2002 [AP818086CRV]; cl.22 Confectioners (State) Award (NSW) [AN120156]; cl.7.3 Draughting, Production Planners and Technical Workers Award 1998; cl.30 Food Preservers Award 2000 [AP781106]; cl.7.4 Graphic Arts – General - Award 2000 [AP782505CR]; cl.35 Food Preservers (State) Award (NSW) [AN120212]; cl.22 Ice Cream Makers (State) Award (NSW)[AN120257]; cl.33 National Metal and Engineering On-site Construction Industry Award 2002 [AP816828CRV]; cl.7.3 Metal, Engineering and Associated Industries Award 1998 [AP789529CRV]; cl.7.5 Metal, Engineering and Associated Industries (State) Award (NSW) [AN120334]; cl.7.5 Metal Industry (Northern Territory) Award 2003 [AP82513CRN]; cl.25 Printing Industries (State) Award (NSW) [AN120432]; cl.27 Printing Award (WA) [AN160261].
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FWA constraints on the guarantee of a safety net – cashing out annual leave
6.7. At s.87, the Act provides quite clearly that an employee is entitled to four weeks of paid
annual leave for each year of service, or five weeks in the case of certain shiftworkers.
Section 93 of the Act then provides for a narrow range of circumstances in which a modern
award or an enterprise agreement may provide that such annual leave may be “cashed out”
under the relevant instrument. There is a prohibition on cashing out if it would leave the
employee an annual leave entitlement of less than four weeks, a requirement that each
cashing out instance must be by a separate written agreement between employer and
employee (ie there cannot be some sort of “standing agreement to cash out”), and a
requirement that the employee must be paid in full the amount that the employee would
have received had the employee taken the leave.
6.8. The Explanatory Memorandum provides that these safeguards are “in recognition of the
importance of employees taking leave for the purposes of rest and recreation”, and that the
“effect of cashing out paid annual leave is that the payment the employee receives for
cashing out paid annual leave is in addition to the payment that the employee would be
entitled to receive for working during the period covered by the cash out.”59
6.9. Quite surprisingly then, the majority of a Full Bench of FWA in Re Mr Irving Hull; Hull-Moody
Finishes; Mr Romano Sidotti60 found that an all-up wage rate provided in an enterprise
agreement, incorporating “payment in advance for annual, long service and personal leave”
was not contrary to the provisions of s.93 and did not attempt to exclude the NES. The
agreement then provided that annual leave would be taken, but it would be unpaid at the
time of taking the leave. Workers were obliged to take two weeks annual leave a year, but
could take up to four weeks at the time provided in the NES.
6.10. Such a finding is particularly insidious in its impact upon the public and personal benefits
which taking paid annual leave provides. If there was ever a disincentive to taking annual
leave, the fact that it is unpaid at the time of taking the leave would be it. As noted by
Cambridge C in his dissenting judgement:
“[52] The words in Division 6 need to be approached having cognisance of the context in
which they appear. The terms form part of national legislative minimum entitlements which
provide basic benefits to employees. The statutory interpretation exercise therefore involves
59 Explanatory Memorandum at paragraphs 378-379.60 [2011] FWAFB 6709, per Watson VP and Hamberger SDP; Cambridge C dissenting.
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provisions which operate as a safety net. Inherently there are issues involving the
preservation and protection of minimum employment conditions. In this particular analysis
the protected benefit is of four weeks paid annual leave and the impact on that benefit by
arrangements described as cashing out.
[53] In my view the approach adopted by the majority has not, with respect, had sufficient
regard for the beneficial, protective context of the provisions under examination. In
particular there has not been proper appreciation and weight given to the indisputable fact
that “... the matters in s.93 (2) are in the nature of protections for employees and could be
described as safeguards.”
[54] When properly considered as underlying safeguards, the words of subsection 93(2) (a) of
the Act should be construed in the context of the purpose for which the Standards prescribed
by Division 6 of Part 2-2 are made. Division 6 establishes various minimum terms for paid
annual leave such that subsection 93(2) is a safeguard which intends that no terms in a
modern award or enterprise agreement which deal with payments made in connection with
annual leave, however described or configured, are to create an arrangement whereby it
“...would result in the employee’s remaining accrued entitlement to paid annual leave being
less than 4 weeks.” [emphasis added]
[55] The fundamental notion of paid annual leave is defeated if at around the
commencement of or during the period of actual leave, there is no payment provided in
respect of the period of absence from work. The redirection of the payment into an hourly
rate creates such disconnection with the period of absence from work so as to effectively
make the period of absence a period of unpaid leave. The obvious practical outcome is to
establish financial disincentive for the taking of the period of leave. Thus the rationale for the
establishment of paid annual leave involving annual rest and recuperation away from work is
impugned and the protected benefits and safeguards intended by Division 6 are violated.”
(emphasis added).
6.11. For these reasons, the AMWU overwhelmingly recommends that the legislative prohibition
against cashing out leave be strengthened so that the connection between taking leave and
being paid for leave is made clear. It is this connection which provides comfort to allow
employees to take leave without financial detriment being incurred by the actual taking of
the leave. One legislative amendment to achieve this might be to insert clarification at s.90:
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AMWU Submission to Fair Work Act Post-Implementation Review
“(1) If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period at, during or immediately prior to the time of taking the leave.”
Legislative constraints on the exercise of FWA functions – arbitration and awards
6.12. A modern award is able to include “procedures for consultation, representation and dispute
settlement”,61 and in particular a modern award must include a term that provides for the
settling of disputes about any matters arising under the award or in relation to the National
Employment Standards.62
6.13. In that context, modern awards typically provide that:
10.2 If a dispute about a matter arising under this award or a dispute in relation to the NES is unable to be resolved at the workplace, and all appropriate steps under clause 10.1 have been taken, a party to the dispute may refer the dispute to Fair Work Australia.
10.3 The parties may agree on the process to be utilised by Fair Work Australia including mediation, conciliation and consent arbitration.
10.4 Where the matter in dispute remains unresolved, Fair Work Australia may exercise any method of dispute resolution permitted by the Act that it considers appropriate to ensure the settlement of the dispute.63
6.14. Notwithstanding the ability to exercise any method of dispute resolution that FWA considers
appropriate, the Act provides a limitation on the method of arbitration being adopted, even
where it may overwhelmingly be the only option that would resolve a dispute between
parties. Section 739(4) provides:
“(4) If, in accordance with the term, the parties have agreed that FWA may arbitrate (however described) the dispute, FWA may do so.
Note: FWA may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
6.15. So, it is only by agreement with the parties to a dispute that FWA is empowered to
determine a dispute by arbitration. Where there is an intractable dispute, such agreement is
61 s.139(1)(j)62 s.146.63
From MA000010, Manufacturing and Associated Industries and Occupations Award 2010.
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unlikely to be forthcoming. This is shown in the example of disputes in relation to the
application of casual conversion clauses in awards.
Case Study – Christie Tea
6.16. At Christie Tea, a South Australian tea packing company which has been in operation for
approximately 20 years workers wished to use their right, which exists at clause 13.4 of the
Food, Beverage and Tobacco Manufacturing Award 2010 [MA000073] to convert from casual
employment to permanent full-time or part-time employment after six months. These
workers blend and mix tea for ALDI, IGA and other supermarket brands and are mainly
migrant , female and Filipino. There are 24 workers, 17 of whom are engaged as casuals. One
worker has been engaged as a casual for 20 years, one person for 13 years with the majority
of casuals having 5-6 years of casual service. Most workers are paid at the minimum award
rate.
6.17. During 2011 four employees informed the AMWU that they wished to convert to permanent
employment. These four 4 employees had 4, 4.5, 7.5 and 8 years’ service as casuals
respectively. Despite there only being a six month qualifying requirement to request
conversion under the Act, the employer refused to meet the request on the grounds that
they had always employed casuals and that “the other casuals would not like it” if the four
became permanent.
6.18. The matter has been before FWA twice for conciliation under the dispute settlement
procedure of the Award. On the first occasion64 Commissioner Hampton recommended that
the “parties consider their positions in the light of the above observations”. The
Commissioner observed that “it is the policy of modern award to encourage and facilitate
the conversion of eligible casuals to full and part-time positions”65 and :
“[15] I would observe that given the relative size of the business, the fact that the employees
concerned have several years of regular and systematic employment, and the fact that the
nature of the supply contracts is not in itself unusual, Christie would need to demonstrate
something well beyond inconvenience and the need to introduce some additional
administrative structure in order to justify its position.”66
64 [2010]FWA 1012165 Ibid, paragraph 1066 Ibid, paragraph 15
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6.19. On the second occasion67 Commissioner Hampton recommended that the parties:
1. Resolve the matter by the employees accepting Christie’s refusal to allow the conversion.
2. Resolve the matter by Christie accepting the requested conversions to full/part-time
employment as sought by the employees.
3. Undertake further discussions and exchange of information (concerning hours of work and
production schedules etc) designed to reach an agreed outcome.
4. Submit the matter, by agreement, to Fair Work Australia for arbitration.
5. One or both parties to submit the matter to a Court of competent jurisdiction to determine
whether the refusal to convert complies with the modern award requirements.”
6.20. In the face of Christie Tea’s continued refusal to accept the employee’s conversion request ,
and in the absence of a capacity to arbitrate the dispute, these award-dependent workers
have been forced to accept that their entitlement to convert from casual to permanent in
their award is simply meaningless. Without arbitration, there exists no mechanism to test
the “reasonableness” or otherwise of Christie Tea’s refusal outside of expensive, time
consuming Federal Court proceedings which can be particularly intimidating for employees
who are already in insecure employment. The employer determines their own
reasonableness, without arbitration.
Case study - Cerebos
6.21. This pattern was repeated at Cerebos. The site in question has a preserved state
agreement68 underpinned by both the modern Food, Beverage and Tobacco Manufacturing
Award 2010, including the casual conversion clause at 13.4 and the Manufacturing and
Associated Industries and Occupations Award 2010, including the casual conversion
provisions at Clause 14.
6.22. This matter involved an employee directly engaged by Cerebos as a casual in the occupation
of fitter/fabricator. He had been engaged as a casual for more than 3 years when he
requested permanent employment in November 2011. He had worked an average of at least
42 hours a week for the last 3 years, at a site which works a 36 hour week. Permanency had
recently become more important to this employee when he was refused a home loan on the
basis of his insecure employment.
67 [2011] FWA 90568 AG870053 PR984069
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6.23. Whilst they had not implemented the casual conversion provisions in the Modern
Manufacturing Award, Cerebos did concede that casual conversion provisions applied at the
site. Nonetheless, this particular employee was said by Cerebos to be excluded because he
had been employed on a “special project” and the project was now finished.
6.24. The employee requested conversion to permanent employment in November 2011. In early
December, Cerebos advised him that his hours were being reduced. An application was
made under the general protections provisions for FWA conciliation proceedings under
s.372. Cerebos has refused the Union’s request that the matters at issue be arbitrated, and
has ignored requests made by the AMWU that seven further production employees on
“temporary contracts” be permitted to convert their employment.
6.25. It is the view of the AMWU that Cerebos is in breach of the casual conversion provisions in
the relevant awards. However, the Union’s and the affected employees’ only option is to
begin several expensive and time-consuming proceedings in the Federal Court or Federal
Magistrates Court. Without a requirement to arbitrate, any recommendation of FWA has no
effect on an award entitlement.
Case study - Foxteq
6.26. In 2010, Foxteq employed around 120 casuals through a labour hire agency. Employees were
paid on the award rate with a 25% casual loading. Employees at Foxteq had an average of
more than 4 years’ service. Employees, for the entire time they worked at Foxteq would not
know until the afternoon before the next day’s shift whether they would be required the
next day. Employees would receive a text message, usually around 4pm or 5pm, although
sometimes as late as 8pm, stating they were required to attend work the next day at
6.30am.
6.27. Employees were never informed of how many hours they were required - sometimes they
worked the minimum daily hours and were then sent home, sometimes a full shift and
sometimes they were required to work overtime. If employees could not attend their shift
for whatever reason including illness or caring responsibilities they were dropped from the
pool of Foxteq casuals. Due to the nature of their employment, some employees had
worked at the Foxteq site for up to 8 years without a holiday. Award-dependent employees
deserve at least as much right to arbitration as those covered by enterprise agreements.
6.28. After 20 years of enterprise bargaining in Australia, 55% of AMWU members are still covered
by an award, rather than an agreement. 55% of AMWU members, and countless other
employees throughout Australia are employed under terms and conditions in which disputes
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over those award and NES terms and conditions can never be arbitrated in FWA. As in the
case of casual conversion, noted above, the only option for these workers – often the
lowest paid workers, is to take costly and time consuming court action to remedy a breach
of their conditions of employment.
6.29. It is the strong recommendation of the AMWU that s.146 of the Act be varied to provide:
“Without limiting paragraph 139(1)(j), a modern award must include a term that provides a procedure for settling disputes by mediation, conciliation and arbitration :
(a) about any matters arising under the award; and
(b) in relation to the National Employment Standards.”
6.30. Further, we strongly recommend that s.739(4) be amended correspondingly to read:
“If, in accordance with the term, FWA may arbitrate (howsoever described) or the parties
have agreed that FWA may arbitrate (howsoever described) the dispute, FWA may do so.”
Legislative inadequacy – arbitration and agreements
6.31. For similar reasons to those discussed in the context of awards which are legislatively denied
dispute resolution by arbitration, enterprise agreements do not require arbitration to be
included. This was confirmed by a Full Bench of FWA in 2010.69
6.32. Nonetheless, the Commonwealth’s Fair Work Principles, which apply to suppliers covered by
the Commonwealth Government’s procurement policy, must include a “genuine dispute
resolution process”. This is defined in the Fair Work Principles User Guide 70to be:
“5.2.5 For a procedure to be considered a “genuine dispute resolution procedure” it must
include as a minimum:
• the ability for employees to appoint a representative in relation to the dispute;
• in the first instance procedures to resolve the dispute at the workplace level;
69 Woolworths Ltd t/as Produce and Recycling Distribution Centre [2010] FWAFB 1464.70 Fair Work Principles User Guide January 2010, Revised November 2011, available at http://www.deewr.gov.au/WorkplaceRelations/Policies/FairWorkPrinciples/Documents/FWPUserGuide.pdf
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• if a dispute is not resolved at the workplace level, the capacity for a party to the
dispute to refer the matter to an independent third party for mediation or
conciliation; and
• if the dispute is still not resolved, the capacity for an independent third party to
settle the dispute via a decision binding on the parties.” (emphasis added).
6.33. The Commonwealth also provides reasons why dispute resolution procedures under the
Principles require the capacity for a third party, such as FWA, to make a binding decision,
irrespective of the “consent” of a party to the arbitration:
“5.2.1 The Fair Work Act fosters effective dispute resolution which can help employers to
maintain good relationships with their employees by dealing with workplace issues at an
early stage. Employees are likely be more cooperative and productive if they know that their
grievances will be taken seriously by the employer and there is the opportunity for an
independent party to assist in resolving the dispute if it cannot be resolved at the workplace.
5.2.2 A good dispute resolution process with a focus on effective resolution at the workplace
level may also help to avoid the costs of resolving a claim externally; for instance, via Courts
or Tribunals.”
6.34. These are the reasons why we argue that arbitration must be available for award-covered
workers, and why are of the view that dispute resolution terms in agreements must also
provide for arbitration. If there is a dispute as to the term of an agreement, parties are
either left with their dispute unresolved, promoting resentment and disharmony, or facing
the costly and time consuming path of seeking judicial determination of rights. For most
employees, and most unions, the latter is rarely an option.
6.35. For these reasons, the AMWU recommends that the requirements at s.186(6) of the Act be
amended to provide:
“(6) FWA must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows FWA, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes by mediation, conciliation and arbitration:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
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(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
6.36. Without simple and straight-forward procedures to resolve disputes about agreement
entitlements, such entitlements are simply words on a page. The ability of an employer to
ignore a dispute over an entitlement, absent expensive and time consuming judicial
enforcement, allows the abuse of agreement entitlements, particularly for workforces
without the industrial organisation and resources to pursue them.
Legislative and procedural constraints on the exercise of FWA functions – unfair dismissal
6.37. Further legislative constraints are placed upon the recovery by employees, of their safety
net and agreement entitlements under the unfair dismissal framework established in the
Act. To be sure, the AMWU supports the significant reforms of the Act from the battered
husk that the unfair dismissal regime had become under WorkChoices. We also note the
submission of the ACTU recognises that although the Act tripled the size of the unfair
dismissal jurisdiction compared with WorkChoices, unfair dismissal claims have not even
doubled from WorkChoices levels since the Act commenced.
6.38. Despite our general support, there are elements of the Act which deny the ability of
employees to achieve their enforcement of the right to protection from unfair dismissal, and
we would urge vigilance against this undermining of the safety net of Australian workers.
Case Study – Workers unfairly dismissed prior to redundancy
6.39. In a recent example of an unfairly dismissed worker, whose claim of unfairness would almost
certainly have been upheld by the Tribunal, reinstatement was strenuously opposed by the
employer, meaning that compensation may well have been the only option at the arbitration
of the claim. This compensation is capped at 26 week’s pay for an applicant at s.392.
6.40. In this particular case, at a food manufacturer in Victoria, four long-serving employees were
terminated for misdemeanours that were relatively minor, and did not warrant dismissal as
FWA indicated during conciliation. Shortly after the workers were terminated, the
maintenance work which these workers had been undertaking before their dismissal was
outsourced to the employees of a subcontractor. In the ordinary course, had the four
workers been still employed, they would either have been transferred to the subcontractor
under their current terms and conditions, or they would have been made redundant. One
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particular worker was a very long standing employee who had accrued 80 weeks of
redundancy, amounting to $200,000.
6.41. In conciliation, the employer was strenuous in its submission that trust and confidence had
broken down, so that reinstatement of the workers would not be an option. The employer’s
representative was also very quick to offer 24 weeks’ pay by way of settlement of the unfair
dismissal application – a most extraordinary offer, particularly at a conciliation stage. Of
course, the offer is not extraordinary when the saving of 56 weeks’ redundancy pay is
considered – the employer removed effectively redundant employees very cheaply indeed.
6.42. As it stands, the 26 week cap for compensation for unfairly dismissed employees prevents
the unfair dismissal regime bearing any coercive influence on unfair practices by employers
dismissing long-standing employees. For this reason, the AMWU recommends that the 26
week cap at s.392 of the Act be amended to account for accrued entitlements beyond the 26
week cap. Otherwise, unfair dismissal can be nothing but a cheap option for long-standing
employees, undermining the termination of employment and redundancy pay provisions of
the Act, and of instruments made under the Act.
6.43. The procedures that have been adopted by FWA in respect of unfair dismissal applications
also risk employees being unable to properly pursue the enforcement of their unfair
dismissal protections under the Act. In FWA in all States, AMWU officers repeatedly
experience an inflexibility in the arrangement and programming of unfair dismissal
proceedings. Notwithstanding that unions have limited staff – most often one or two
industrial officers per State, and often despite consent arrangements being made by both
parties to an application, FWA will not tolerate any deviation from a pre-determined
timetable for hearing that may bear no relationship to the availability of applicants,
respondents or their representatives. This is a common complaint, and one that undermines
the integrity of the unfair dismissal framework of the Act. The merits of a matter become
irrelevant if a party cannot prosecute that case with their given resources.
6.44. For these reasons we recommend that the requirement in the Act at s.398(4) be
strengthened. This provision currently states:
“(4) FWA must take into account the wishes of the parties to the matter as to the way in which FWA:
(a) considers the application; and
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(b) informs itself in relation to the application.”
To this end, we would recommend that s.397 of the Act be amended to add a new paragraph (2):
“397 Matters involving contested facts
(1) FWA must conduct a conference or hold a hearing in relation to a matter arising under this Part if, and to the extent that, the matter involves facts the existence of which is in dispute.
(2) FWA must take into account the wishes of the parties to the matter as to the way in which FWA determines the procedures to be adopted under subsection 397(1) and the conduct of a matter arising under this Part . ”
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AMWU Submission to Fair Work Act Post-Implementation Review
7. Conclusions and recommendations
7.1. The AMWU makes a series of recommendations to the Review Panel in this submission, and
each is made in order that the Act better achieve the objects which it sets out to achieve,
and which it proclaims at s.3. We do not resile from our support for the Act, or its role in
improving the fairness and respect with which workers in Australia are now treated,
compared with the insidious and dehumanising race to the bottom which was the
motivation and momentum of Australian industrial legislation during the time of
WorkChoices.
7.2. At the same time, we do recognise that the Act could do better. It could do better in
promoting productivity, providing for fairness, providing for better representation and a
more secure safety net. If the Act is to maintain its integrity, and move closer to the
achievement of those objects at s.3, then we strongly commend the following proposed
amendments to the review Panel.
7.3. We thank the Panel for the opportunity to make our submission, and look forward to further
consultation as the Review progresses.
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AMWU Submission to Fair Work Act Post-Implementation Review
Subject matter Recommendation Paragraph
Reference
Productivity That the limitations on the subject matter of agreements at s.172 be removed;
2.32
Productivity That multi-employer agreements may be negotiated under the same good faith bargaining and protected action principles and negotiations for enterprise agreement;
2.32
Productivity That appropriate industry-wide agreements may be made and enforced;
2.32
Productivity That prohibitions on “pattern bargaining” are removed 2.32
Good faith bargaining Removing the “ninety day” requirement at s.229(3) so that
good faith bargaining principles are enforceable throughout
bargaining
3.13
Protected Industrial Action
Amending s.483(1) so that industrial action is available
throughout bargaining
3.19
Good faith bargaining Amending s.187(2) so that good faith bargaining is
considered by FWA at the time any application for approval
of an agreement is made
3.24
Good faith bargaining Deleting s.228(2) so that bargaining representatives are
required to reach an agreement
3.29
Good faith bargaining That bargaining representatives being required to be
“genuinely trying to reach agreement” and/or have a duty
to conclude an enterprise agreement unless there is a
genuine agreement not to on reasonable grounds.
3.30, 3.78,
3.79
Good faith bargaining That the definition of “group of employees” be amended
under s.186 to be “more than one employee who is to be
covered by the proposed agreement.
3.37
Good faith bargaining Provide that the definition of objectionable term at s.12
include a term that allows one or more employees to “opt
out” of an agreement
3.50
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Good faith bargaining That communications which are proposals about or
variations to terms and conditions of employment of
employees to be covered by the proposed enterprise
agreement must be made through the bargaining
representative of any such employee.
3.84
Good faith bargaining That good faith bargaining requirements provide for
equality of communication for bargaining representatives
3.85
Good faith bargaining That majority support arbitration be introduced. 3.96
Good faith bargaining That a model code of good faith bargaining be made as a
Regulation.
3.100
Protected Industrial Action
That s.417 be amended and s.459(3) be amended to
prohibit only engaging in industrial action.
4.4
Protected Industrial Action
Amend the definition of “payment” for the purposes of
Division 9 of Part 3-3 to exclude “accommodation-related
payments”.
4.8
Protected Industrial Action
That s.471(4) be revoked so that a notice for complete non-
payment cannot be made in the case of a partial work ban.
4.15
Right of Entry That s.492 be amended so that employees main meal break
area is the default meeting place for the purposes of s.492,
and that disputes over such rooms be determined by FWA
on the basis of the most reasonable and practical location
for employees to meet with an official exercising right of
entry.
5.15
Guaranteed safety net That s.134(1) be amended to provide that modern awards
should supplement the NES as appropriate for Australian
industries and occupations.
6.6
Guaranteed safety net That s.90 be clarified so that payment for annual leave is
made at, during or immediately prior to the taking of the
annual leave.
6.11
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Guaranteed safety net That s.146 and s.739(4) be varied to provide that modern
awards must include a procedure for settling disputes by
mediation, conciliation and arbitration.
6.29, 6.30
Guaranteed safety net That s.186(6) be amended to provide that enterprise
agreements must include a procedure for settling disputes
by mediation, conciliation and arbitration.
6.35
Guaranteed safety net That the 26 week cap at s.392 be amended to allow for an
award reflecting accrued entitlements beyond that cap.
6.42
Guaranteed safety net That s.397 be amended so that the wished of the parties
are taken into account in the programming and conduct of
matter under Part 3-2.
6.44
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