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Fair Work Australia – the New AwardWhere are we now?

CCF National Conference Gold Coast

19 – 22 October 2011

Ian Dixon – partner

gadens lawyers

gadens.com.au

Fair Work Australia – the New Award

• The ABCC – “Going, going…”

• The Modern Award – “Back to the future”

• Unions – “Present, patterned and protected”

• The Fair Work Ombudsman – “I’m from the government

and…”

• Independent Contractors – “Shame on sham”

• National OH&S – “1901 repeats”

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The ABCC – “ Going, Going….”

History:

• 2009 Wilcox QC Terms of Reference/2009 legislation

• May 2010 Epping markets – total $560,000

• July 2010 Westgate bridge – $1million

• July 2011Perth – $250,000

• August 2011 Woodside – $2 million plus $85K

• Last financial year $2.5 m fines on Vic CFMEU

• Mid 2010 Leigh Johns for John Lloyd

• Expanded services : underpayment and shams

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The ABCC – “ Going, Going….” (cont’d)

• The most recent ABCC report shows the top four contraventions are right of entry, unlawful action, coercion and independent contractor

• At June 2010 ABCC identified 689 projects subject to the National Code. In 2009 – 2010 the ABCC conducted:

– 1616 site visits– 79 inspections– 43 audits– 37 examinations– conducted 58 civil penalty proceedings– commenced 31 new ones (within 18 months of complaint)– made submissions in 19 FWA cases

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The ABCC – The Changes

• The Office of the Fair Work Building Industry

Inspectorate – Specialist Division of FWA

• “Complete autonomy” despite S11 Direction

• An Advisory Board of the Director, the FWO plus 5 part

timers, at least one union, one employer

• Directorate will investigate breaches of alleged safety

net contractual entitlements (see Modern Award, NES

or Agreements) with all powers

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THE ABCC – The Changes (cont’d)

• Retains compulsory examination power but now fine or imprisonment, and “industry” civil penalties for coercion & unlawful industrial action removed

• New Projects (after February 2012) can have examination powers “switched off” by the Independent Assessor if not contrary to the public interest & taking into account the Act’s objects

• Powers can be “switched on” if industrial unlawfulness• Presidential Member of the AAT must be satisfied about

the person, the purpose, the urgency, the personal effect and the alternative before issuing an examination notice

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THE ABCC – The Changes (cont’d)

• Individual can have lawyers and can refuse to disclose

information on certain grounds, legal privilege and

public interest immunity

• Reasonable, including legal, expenses will be paid

• Examinations will be videotaped & reviewed by the new

Director

• The Commonwealth Ombudsman will monitor, review &

report to Parliament on all examinations

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THE ABCC – The Changes (cont’d)

• Interim Ministerial direction to the ABCC regarding

examinations:

– Lawyers are in

– Any objection given time to be tested in Court

– Model litigant policy to be followed

– AAT member must be convinced

– AAT Member must give written advice

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The Modern Award

• Born out of two irreconcilable aims• Grace period of 6mths, then 5years “phasing in” of

adjustments• Provides all the traditional provisions which if not met or

covered by an Enterprise Agreement can cause difficulties

• Can be absorbed into “over Award”• Note the “ take home” “pay order”• Could be reviewed by industry but exceptional – note

apprentices• Will be major review next year

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Unions – “Present, patterned and protected”

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Unions – Present

• The inherent environment of the Fair Work Act

– Can only have certified Collective Agreements

– Unions are the Default Bargaining Representative

– “Matters pertaining to the employment relationship” now

specifically includes unions S172(1)(b)

– Must bargain with (them) in good faith

– Limitations on individual flexibility agreements

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Unions – Patterned

• FWA decisions that “common” aims, ambitions or

terms were not a pattern

• Started with common expiry dates so ETU, CFMEU &

AMWU Agreement expiry dates

• Add traditional tactic of importing favourable clauses

from other Agreements eg. the desalination plant

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Unions – Protected

• Immunity from legal action such as S.45D TPA,

interference with contract, intimidation etc.

• Slow start due to uncertainty and process – technical

defects meant unsuccessful applications & unions

exposed (the paperwork, the ballot, the wording, the

action etc.)

• Now streamlined - in 05/06 33 applications, in 08/09 328

and utilised - Qantas to Victoria police

• Switch of culture/philosophy

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Unions – Protected – Limits

• Employer does not pay employees• FWA can suspend/terminate the action if it is:

1. Causing significant (protracted) economic harm to both parties (S423)

2. a) Endangering the life, personal safety or health or welfare of the population of part; or

b) Significant damage to the Australian economy or an

important part of it (S424)

• Suspend for a cooling off if beneficial taking into account all matters

• Suspend if causing significant harm to a 3rd party

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Unions – Protected – Limits (cont’d)

• Nyrstar Port Pirie V CFMEU – SDP O’Callaghan Nov 2009

• NFEU v Uni of SA – Full Bench April 2010

• Woodside v CFMEU – DP McCarthy July 2010

Appealed CFMEU v Woodside – Full Bench August 2010

• Prysmian Power Cables v NUW & ETU – CMR Cargill Dec

2010

• BHP Coal v CFMEU, CEPU & AMWU – CMR Bacon April

2001

• Toyota v AMWU & CEPU – CMR Roe September 2011

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Unions – Protected – Limits (cont’d)

• Guidance from cases – Woodside August 2010– With a suspension only (3rd party) the harm must be

“significant” “with exceptional circumstances” with really serious impacts over and above the usual consequences of industrial action

– Woodside’s costs of $3.5 million a day and loss of revenue stream of millions per day were not enough in the context of the project unless action was protracted

– There was reasonable prospect of a quick resolution if the action continued, extensions of time might prevent loss and Woodside could fund the “trivial” claim

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Unions – Protected – Limits (cont’d)

• Guidance from cases – Toyota September 2011 – Potential losses to market and suppliers and risk to

Toyota’s future were not enough harm to the Australian economy. Evidence and length of bans were not good enough

– The harm to Toyota and suppliers and their employees could be millions of dollars but would not threaten the viability of Toyota or it’s suppliers or the automotive industry sector

– Note the application of two decisions in the coal industry refusing orders (despite in one case a million dollars per day loss of revenue) based on an assessment of the economics and operations of the coal industry as a whole

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Unions – Protected – Limits (cont’d)• Federal Court or Federal Magistrates Court injunction

against Pattern Bargaining• Ministerial direction terminating action if endangering life,

personal safety or health, or the welfare or the population of part of it; ORCausing significant harm to Australian economy or an important part (Qantas)

• Perfect storm for building & construction – Ongoing/surviving economic activity– Skilled & unskilled labour shortages– Financially vulnerable employers– Favoured bargaining tactics permitted– Protected action permitted– NOTE: enterprises, interest rates and economic conditions

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The Fair Work Ombudsman – “I’m from the government and…”

• Ensures compliance with Modern Awards, NES, the Fair Work Act and Enterprise Agreements

• Educational audit and then Compliance audit in geographic areas or industries (fast food, retail, hospitality, security and drivers)

• At both stages the FWO recovers under payments and back payments for failure to pay the minimum rate, overtime and minimum hours, proper leave entitlements, travel allowances, etc.

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The Fair Work Ombudsman – “I’m from the government and…” (cont’d)

• In 2009 - 2010 fines from 53 FWO legal actions totalled just over $2 million. Since March 2006 $6.8 million in fines and around $117 million recovered for 86,000 workers. Prosecutions will depend on reasons for the default, cooperation, attitude and the significance of the amount or nature of the breach

• Companies and directors can be fined up to $33,000 and $6,600 respectively per breach. For example construction company ($123,000) and Director ($24,000) for underpaying 5 immigrant workers more than $242,000

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Independent Contractors – “Shame on sham”

• Independent Contractor ACT 2006

• Fair Work ACT 2009

• No ‘shams’ – no misrepresenting employment as

independent contracting arrangements (S357)

• Unless employer did not know and was not reckless to the

difference between employment and contracting CFMEU v

NUBRICK (7 October 2009)

• But watch S358 – Company must not dismiss an employee

in order to re-engage that individual as an independent

contractor

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Independent Contractors – “Shame on sham” (cont’d)

• Sham arrangements are widespread in the ACT

• A saving of wages, worker’s compensation, PAYG,

superannuation, annual leave, sick leave

• Focus of Fair Work Ombudsman & ABCC

• Prosecutions can include the Director; eg Contracting Plus,

Centennial and Rapid Formwork cases

• Difference? Look at all factors – own Company, own shirt &

business card, own equipment, paid on result, by invoice, work for

several people, own vehicle

• Legal tests – control, “Four Corners”, “Totality”, “Entrepreneur”

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National OH&S – “1901 repeats”

• NSW initially wanted unions to retain the right to

prosecute and the “reverse onus of proof”

• Federal Government pressure and inducements

• All agreed then Western Australia went “feral” (read “

Liberal”), Northern Territory and Tasmania have held

back, Victoria and South Australia wish to take a “long

look”, Queensland and New South Wales ready to go

• A work in progress – Codes of Practice are being

released