Industrial Relations Reform Act, equitable outcomes and fair treatment for all. ACTU Assistant Secretary, Tim Pallas.

If you have tired this summer of watching the Australian cricket team embarrassing their English opposition, or if like me you have come to the realisation that it may be a long time before an Australian wins the Australian Tennis Open, there is one sport I urge you not to turn to in desperation.


This sport has more padding and hype than American football and survives not on popular support but on commercial and media sponsorship. I am referring to the sport of knocking the federal system of industrial relations.


Some of the commentators on this new “sport” make Brian Westlake and Rex Hunt sound calm and considered by comparison. As is often the case with contrived and imported sports, most of the real action doesn’t take place on the field, the commentators have elevated themselves to the status of coaches, crowd and cheer squad.


Sometimes it must feel like employee representative teams are playing a perpetual “away” game. But like that Canberra Raiders and the West Coast Eagles (exponents of more legitimate codes) it takes a little more substance than rhetoric to beat a team that deserves a measure of respect on the field.


The Industrial Relations Reform Act 1993 (the Reform Act) passed through the Federal parliament in late December 1993. It became law on 31 March 1994 and is approaching its first anniversary of operation.


No piece of legislation before or since has ever been subjected to a more vehement and politicised campaign of public disinformation from its opponents. When the Reform Act was introduced into Parliament, the Minister Laurie Brereton began his speech in support of the proposed Act by quoting and relying upon the sentiments expressed by a conservative Prim Minister, Alfred Deakin, when the latter introduced the Conciliation and Arbitration ACT IN 1904. That legislation still forms the philosophical basis of our current system of industrial relations but you won’t hear too many conservative politicians laying claim to this political or ideological pedigree


Perhaps as the Minister suggested they have turned into the people that Alfred Deakin warned this country to be wary of over 90 years ago:


“This Bill starts with a confession that it is based on humanitarian interpretation of the principles and obligations which from the very basis of civilised society. It leaves to its opponents the creed whose God is greed, whose devil is need, and whose paradise lies in the cheapest market.”


Like the Conciliation and Arbitration Act before it, the Reform Act is unashamedly intended to protect employees.


For good reason nobody has ever accused conservative governments (state or federal) of introducing legislation that was unduly concerned with the welfare of working people. This is a criticism contrived by employers and their organisations and exclusively directed at Labor governments. It is a criticism that should be worn like a badge of honour.


In recent months the measure of employer and media rhetoric against the Act has lost all sense of proportion. We have heard variously that the Act should be burnt, torn up and thrown out. Fighting funds are to be established to lobby the government to presumably achieve some or all of the foregoing acts of vandalism.


To understand the legislation and the torrent of abuse it has received by those in the community who seek to reserve to themselves what they considered to be the rights to which only money, power and privilege are entitled, I have compiled a list of important worker protections the Act provides and the most common employer / media criticisms of the Act and why they are wrong.

Protections For Workers

1. The Maintenance of the Award System

Awards are the means by which most workers minimum conditions of employment are preserved. Every survey of the community has confirmed that the award system is highly regarded and also that the Labor approach to industrial relations management is better and fairer than the conservative alternative.


Ordinary Australians appreciate the certainty and security that the award system provides.


The alternative model for industrial relations advanced by conservative governments is either the immediate or eventual destruction of award protections. In their place will be a skeletal amount of minimum standards and individual contractual arrangements to fill the void, if you’re lucky and your boss is generous.

2. Enterprise Bargaining with a “No Disadvantage Test” and the Relevant Award as a Safety Net

A real bargaining process must necessarily start from the position that both parties have something to bargain with.


If employees cannot be assured that their existing award conditions as a total package cannot be undercut in the bargaining process the employer would be holding all the access. Workers could be left trying to hold onto what conditions they currently maintain or even worse be forced to make unfair concessions the net consequence of which would mean a drop in living standards. Under the Reform Act negative cost cutting and reduction below the award safety net is expressly prohibited.


The Australian Industrial Relations Commission is charged with the responsibility of ensuring fair dealings and bargaining that provides mutual benefits for both employees and employers. If the Commission is not satisfied that the legislative safeguards have been complied with they can reject such agreements.

3. A Limited Right to Pursue Industrial Action with Immunity from Civil Liability

It is hard to believe but prior to the introduction of the Reform Act workers and their unions had no right to pursue industrial action without facing the prospect of a civil damages claim for the loss suffered by the employer in the dispute.


The right of workers to withdraw their labour is an internationally accepted standard and the fact that it has taken so long to be provided in a country such as Australia which prides itself on its democratic tradition is nothing short of a scandal. Still, the right to pursue protected industrial action in the Reform Act is quite limited.


Nonetheless workers joining together collectively in defence of their working conditions can now do so without fear of litigation costing them and their families dearly for what should be an accepted right – that being the right to peacefully protest and withdraw labour.

4. The Right for Employees to Seek Restitution for Unlawful Termination

Until the Reform Act the rights of federal award employees to seek re-instatement were limited by technical barriers which meant that most employers could terminate their employees without any real prospect of ever having to answer for their actions.


The Act now provides all workers with a right to seek an independent review of the employers conduct and therefore seek to regain one of the most valuable assets they possess, their contract of employment, in circumstances where it has been unlawfully removed.


Predictably many employers object to any limitation on their right to hire and fire at will. By December 1994 there had been over 4,500 unlawful terminations lodged with the Industrial Relations Court. Over half of these applications were made by Victorian workers. More than 80% of all these claims have been settled by the agreement of the parties and less than 10% are likely ever to be the subject of litigation.

5. Various Protections Against Discrimination in Employment

The legislation provides a right for all workers to pursue equal pay for work of equal value. This will go some way to end discriminatory employment practices, particularly effecting women.


There are safeguards to ensure that the interests of women, young people and persons whose first language is not English are adequately taken care of in the development of enterprise agreements.


A process is established whereby discriminatory terms in awards are required to be rectified.

Common Employer Criticism Of The Act

1. The ACT Increases the Power and Role of the Unions

Individual employees rarely have sufficient clout to match the resources and power of most employers.


The wages employees receive, their working conditions, job security, occupational health and safety etc are all matters of great importance and require the collective authority, skills and experience of unions to ensure the entitlements of workers are maintained at a reasonable level.


In the major moves which accompanied the new Industrial Relations Act including those to have an important focus on enterprise rather than industry bargaining and the recognition of EFA’s there was a need to give a broader set of rights and roles to unions.


Without well resourced unions servicing the safety net awards for all employees award entitlements would in all likelihood diminish and therefore render the no disadvantage test in the enterprise bargaining process an increasingly irrelevant guarantee.

2. The Unlawful Termination Provisions are Impending Employment Growth

The Accord Mark VII Agreement committed the Australian Trade Union Movement to put employment growth at the forefront of our industrial agenda.


The Accord Agreement stipulates an employment target of 500,000 new jobs between 1993 and 1996. Less than 2/3rds of the way through the Accord’s period of operation this employment growth has all but met that goal. The Federal Treasury recently estimated employment growth in the same period as amounting to almost 470, 000 jobs. For one half of this period the Reform Act has been in operation.


There is no evidence to support a suggestion that the Act impedes employment growth.


A related argument is that there is a flood of applications which will cost the community considerable sums because of the litigation costs and the reluctance of employers to employ.


By December 1994 there were approximately 4,600 unlawful termination claims lodged. Less than 20% of these claims have been referred to the Court for determination. This means that over 80% of matters are settled amicably and without the need for litigation. In fact the figure of litigated cases is likely to drop to below 10% of all initiated proceedings.


This is a standard attrition rate in litigation matters. The reduction from the 20% referred from the Commission to the less than 10% estimated is a result of pre-trial settlements or discontinuances.


For whatever reason employers’ fears are imaginary. Under current arrangements liability is capped to 6 months pay or $30,000.00 whatever is the lesser. The ACTU and unions have never supported this compensatory restriction but it does demonstrate the minimal cost in the jurisdiction. Further there is ample opportunity for an agreed settlement.


In effect employers who object to the impact of the Act upon employment opportunities are in all probability the same employers who would deny all workers access to re-instatement rights no matter how repugnant the employers behaviour.

3. The Right to Strike Arrangements will lead to Industrial Chaos

Well that is what was said 12 months ago and we are still waiting. Union power or tis alleged abuse can often whip up an emotive headline, but like the “reds under the bed” line it is becoming dated and unsustainable.


The working days lost graph set out below demonstrates that working days lost through industrial action are, and have remained, at a very low level. Perhaps more so than ever in the 12 months since a restricted right to strike became a legislative entitlement.


The Industrial Relations Reform Act has dramatically altered the industrial relations landscape.


The emphasis remains however on equitable outcomes and fair treatment for all. An increasing enterprise or workplace focus and the facilitative role of the Commission in the bargaining process.


The Act itself is under attack, not so much for its content but rather the ideological chasm it represents between conservative and Labor policies.


Every worker and fair minded Australian should be concerned to preserve the focus of the Act and the protections that flow from it. The alternative is the impoverishment and exploitation of the weak. There’s no sport in that.


Presented by Tim Pallas at the Park Grand Sydney on 23rd February 1995