Until the Reform Act was introduced workers employed under federal awards had practically no rights to seek re-instatement or compensation for the unlawful termination of their employment. ACTU Assistant Secretary, Tim Pallas.

It is easy to be confused about the Industrial Relations Reform Act (Reform Act) and its effect, particularly given all the caterwauling from employer organisations and conservative politicians. However, if you tune out all their babble and absorb the facts, you would be inclined to throw a boot at their malcontented mischief.

The unlawful termination jurisdiction is an illustration of the Reform Acts operation where certain employer organisations have not let the facts get in the way of a good whinge.

Until the federal government introduced the Reform Act workers employed under federal awards had practically no rights to seek re-instatement or compensation for the unlawful termination of their employment.

There could be no more telling an indictment on our dualistic system of state and federal regulation of employment conditions than for such an irrational distinction to be perpetuated. The consequences of this duality of regulation were both quite ridiculous and unjustifiable. The 50% of award based workers covered by state awards had access to a system of re-instatement whilst employed under federal awards did not have the same rights and entitlements.

Do not be misled by the protestations of the professional sooks from the employer ranks – their agenda is to destroy the federal unlawful termination jurisdiction so they can repeat the behaviour that they turned into an art form before the legislation was introduced; namely chasing individual workers all the way up to the High Court of Australia in an effort to avoid being answerable for their actions and to send a message of litigious impoverishment for any who would dare question their authority.

The Australian Industrial Relations Court which was established to oversee amongst other things the unlawful termination jurisdiction, it has to be admitted, started out on a rather shaky basis effectively transposing the practices and procedures of a higher court of record.

Nobody was more critical of the Court’s initial functioning than myself. However credit should be given where it is due and the Court has profoundly improved its practices to be increasingly user (and not exclusively lawyer) friendly.

We are seeing the transformation of the Court, particularly at judicial registrar level, into an increasingly effective and prompt tribunal for the settlement of termination grievances. This in not to say there isn’t room for improvement.

As at 10 March 1995 there have been 7,294 applications for unlawful terminations filed in the Industrial Relations Court. This figure is likely to be around 7,700 for the first full year of the Acts operation. Such a figure is consistent with the level of notifications for unlawful terminations in all state jurisdictions which totalled 8,000 in 1991/92.

The Reform Acts unlawful termination provisions has achieved one very valuable result. Specifically, we have seen the progressive harmonisation of state and federal unlawful termination laws. This means that instead of having seven (six state and one federal) jurisdictions, all espousing variations on a theme, the law is moving towards a single legislative framework.

Consequently a nationally integrated system is being created without seven variations upon a theme that only lawyers can understand.

Unlawful termination claims dealt with under the Reform Act have a high level of pre-trial settlement. 38% of all cases are settled or discontinued between the time the claim is filed and when it is referred to conciliation. In total, almost 90% of all claims are settled or discontinued before trial.

Employers argue that the Court has determined a disproportionate number of unlawful termination cases in favour of the employee. Nothing could be further from the truth. Of the 148 decisions of the Court to date 77 have been in favour of the employees and 71 decisions have rejected the employees case[1]. This is despite the fact that these are litigated cases where the employee would be expected to have a particularly strong case.

In total to date 21 employees have been reinstated as a consequence of the legislations operations.

The remaining successful employee litigants have been awarded an average compensation payment of $8,158 for the unlawful removal of their employment.

This average compensation figure constitutes less than one quarter of the average annual wage (less than 12 weeks pay) for full-time adults according to ABS figures. This is despite the fact that the median period of unemployment is 19 weeks.

In this context it can be seen that the average compensation payments awarded by the Court to workers who have been unlawfully terminated does not even meet the average cost of the resultant average period of unemployment.

Many employers argue that the Act is weighted too heavily in favour of employees. It is an indictment on their position that they have no substantive evidence to support their case, indeed what evidence there is directly contradicts such nonsense.

The Act actually requires that the onus of proof be shared between an employee asserting they have been unlawfully terminated and their employer. Those who criticise this aspect of the Reform Acts operation seem to have an extremely unique idea of fairness, namely to place the responsibility entirely on employees.

The Industrial Relations Court is increasingly being transformed into a non-technical results driven institution.

For example, a recent survey[1] of Court users in Melbourne found that 43% of all applicants represented themselves, 38% were represented by solicitors and 19% were represented by their union.

The average hearing time for a dismissal case is between 1½ to 2 days. This jurisdiction would have to be one of the most efficient and accessible Courts in the country. It seems a quick, low cost forum is not what some of the Acts critics really want. Perhaps they like the idea of a costly, inaccessible or preferably non-existent opportunity for workers to seek just restitution for an unlawful termination. Maybe their ideal view is that access to your day in court should be the sole preserve of the wealthy.

Some employer groups have gone to the extreme of suggesting that the lodgement of an unlawful termination claim forces employers to settle rather than incurring legal costs. What are we to make of such a proposition? That we should remove a right because it is being exercised. How credible can a suggestion be that employers can not bear the cost of litigation and are impelled to settle however their sacked former employees are in some curious manner capable of incurring comparable costs.

At the time the Reform Act became law on 31 March 1994 the public was told by conservative politicians that it would seriously impede employment growth by acting as a disincentive for employers to take on new workers. In the ensuing 12 month period the number of jobs generated by the economy has grown by 342,000.

These figures represent the sixth largest increase in jobs growth recorded and also the largest February to February figures ever compiled.

Employers argue that these figures could have been even better, but it is hard to imagine how. The acid test on jobs growth can be seen from the reaction the Accord Mark VII agreement received in March 1993 where over a three year period the Agreement aimed at a job growth target of 500,000. With 12 months of the Agreement still to run, and 560,000 jobs created, perhaps the cynical guffaws from the knockers have subsided and the “credit where credit” is due principle should be applied.

As far as good legislation is concerned this a hard Act to follow. The Act was labelled as a potential impediment to economic growth, however economic growth has now reached 6.1%, inflation remains static at 2%, the rate of employment growth has reached 4.4% and average wage settlements are running at 4.1% before productivity offsets.

A comparison of Australian wages growth with the outcomes arising from New Zealand’s individual contract system is quite telling. In New Zealand there has been a average real wage decline of 1.6% over the last year, despite the fact that both economies are in comparable growth modes.

It is hard to believe that many perennial pessimists said only 12 months ago that enterprise bargaining would be stifled by the Reform Act. At the end of February 1995 there were approximately 4,000 enterprise agreements covering 56% of federal award employees. Almost 40% (1,345) of these agreements have been registered since the Act came into effect last year.

Last year’s enterprise agreement registration levels represent a 70% increase in the making of agreements over the same period in the preceding year. So the argument put forward by the Act’s critics that there is not enough bargaining going on has been drowned by the sheer weight of numbers.

Plan B for the critics is that the bargaining is not good enough nor yielding comprehensive agreements.

The obvious observation to make upon this criticism is that it is patronising in the extreme to suggest to parties who have made agreements that those agreements are not good enough. The whole concept of enterprise bargaining is predicated on employers, unions and employees collectively taking responsibility for the outcome of their own agreements.

What the enterprise bargaining process does not need is puerile ideologues espousing the benefits of more comprehensive agreements overriding awards despite the fact that the awards terms may operate entirely satisfactorily to all concerned.

Concentration on real issues and dispensing with ideological baggage is the key to successful bargaining. Avoid the urge to fix that which is not broken is a rule dramatically embraced by real life industrial relations practitioners, they are results driven and do not spend a lot of time in the dubious pursuit of comparing the width of their respective agreements.

The quality or quantity of agreements are really just convenient vehicles of criticism for some. What they really want to do is undermine the ground rules of negotiation. They want to do away with award minimums and impoverish and isolate the worker to ensure they are much more amenable to their employers view of the world. That is not bargaining, it is exploitation and quite simply un-Australian.

The Reform Act does not allow that to occur. It will not consign workers to the abyss of bargaining without a guarantee against exploitation.

True protection in bargaining can only occur with the maintenance of a real and effective safety-net and when bargaining is a right and not an economic necessity.

The real choice in industrial relations, one which the Reform Act brings into glaring contrast with the conservatives “Jobsback” policy, is whether as a society we want collective bargaining as a right or alternatively individual contracts borne out of the exercise of brute economic bargaining power.

The Australian Trade Union Movement for its part has played a positive role in the first year of operation of the Act. Despite the fact that for the first time in this country’s history workers have a legislative right to strike, this right has not been abused. Days lost through industrial disputation are at a 35 year low.

The critics of the Act insisted that such a right was a recipe for industrial anarchy. Well they have not ruined their perfect record – they were wrong on that too.

The Industrial Relations Reform Act is a s the name suggests, all about reform. Those critics whose comfortable notions of industrial relations are locked into the class warfare mentality of bygone days will never recognise the true value of this legislation.

The rest of us will get on with doing that which need to be done by taking advantage of the opportunities that the Reform Act provides and most importantly, dispensing with the ideological dross.

Article by ACTU Assistant Secretary Tim Pallas 28 March 1995

[1] Speech JW Trew QC 10 March 1995 – Reinstatement & Dismissals Update : Source Baker & MCKenzie Page 39 – AFR 24 March 1995