ACTU Submission to the Senate

Workplace Relations Amendment (Secret Ballots For Protected Action) Bill 2002

Background

The Secret Ballots 2002 Bill contains a number of changes from its 2000 predecessor of the same name. However, the ACTU submits that the changes do not, in practice, make the proposed requirements materially less cumbersome or restrictive.
The process for obtaining and implementing an order for a secret ballot set out in the Bill adds additional time-consuming complexity to the taking of protected industrial action, reflected in the approximately 35 pages which would be added to the Act if the Bill was to be passed. The ACTU submits that the process would be of such complexity that it would nullify any practical right to take protected action.
Following the failure of the 2000 Bill to receive sufficient support to ensure passage through the Senate, the Government submitted an outline of new proposals, largely reflected in the 2002 Bill, to the ILO’s Freedom of Association Branch. In a letter to the Department dated 9 October 2000, the Chief of the Branch wrote:

“As requested, I am able to confirm that the ‘elements underpinning possible Australian legislation on pre-industrial action secret ballots’, which you submitted to us on 29 September 2000, do not, standing alone, appear to contravene existing ILO principles and standards on freedom of association. The supervisory bodies have accepted secret ballots as a pre-requisite to taking strike action, on the condition that the procedures, the quorum and the majority required are not such that in practice the exercise of the right to strike becomes very difficult.

“As we discussed during your visit, any legislation that is finally adopted on compulsory strike ballots will need to be considered in the context of the industrial relations legislation as a whole, in particular all the legislative requirements in order to call a lawful strike, to ensure that the cumulative effect of such legislation, by virtue of its complexity and extent, is not such as to make it very difficult from a practical point of view to declare a legal strike, or to declare a strike in a timely manner. Our opinion concerning the pre-strike ballots must also be viewed in the light of the comments of the Committee of Experts concerning the legislation regulating strikes in Australia, in particular the concerns expressed regarding the restrictions on the subject-manner of strikes, the prohibition of sympathy action, and the restrictions extending beyond essential services.”

If the Government were to claim ILO endorsement of its scheme it would be a level of hypocrisy which would be unbelievable if it was not consistent with its general pattern of behaviour. The Government will not ask the ILO to examine the 2002 Secret Ballots Bill “in the context of the industrial relations legislation as a whole”, while it continues to ignore its previous findings and observations on the right to strike. Showing complete contempt for these findings, the Government has introduced the Genuine Bargaining Bill, which further restricts the right to strike.

The Rationale For Secret Ballots

The ACTU supports the right of union members to vote on whether or not to take industrial action, and believes such votes are generally taken. It should be noted that a number of unions routinely use secret ballots prior to taking industrial action. No evidence has been adduced showing that unionists are being forced or required to take industrial action against their will, or without their consent. The fact that in many disputes not all union members participate, is evidence of the lack of coercion, which would, in any event, be unlawful.
The ACTU notes that secret pre-strike ballots are available when requested by employees under section 136 of the Act.
It is also possible under section 135 for the Commission to order that a secret ballot be conducted if it considers that this would be helpful in resolving a dispute, if industrial action is pending, or to ascertain whether an agreement has been genuinely made.
Although there is no specific provision for an application for a secret ballot to be made by an employer party to the dispute, another affected party or the Minister, there is no bar on any of these persons making submissions to the Commission that a ballot should be ordered.
In the Ministerial Discussion Paper Pre-industrial action secret ballots published in August 1998, the authors found that very few secret ballots had been ordered by the Commission, and that where these had occurred they had generally been to ascertain employees’ attitudes to particular issues, rather than their views in relation to industrial action. The report concludes:

“The Commission appears to be using ballots strategically to progress dispute resolution, particularly where the parties have reached a stand-off in negotiations.” (p3)

There is no evidence in the Discussion Paper of the Commission refusing applications by employers, or anybody else, for ballots to be conducted in relation to the question of taking industrial action.

Western Australia has legislation for compulsory secret pre-strike ballots, although its repeal is currently before the WA Parliament. There had not been one application for a ballot from 1 January 1998, when the legislation came into effect. This is in spite of applications being able to be made by an employer or employer organisation, as well as by a union or union member. The Minister also has the power to issue a certificate that a ballot would be in the public interest, whereupon the Commission was required to order it to be held. The Ministerial Discussion Paper notes, in relation to WA:

“There have already been a number of apparent breaches of the Act.” (p15)

The ACTU submits that existing provisions are generally unutilised, not because they are difficult to access, but because in the face of an actual dispute, parties and other affected persons have not taken the view that a ballot would be effective in preventing industrial action or resolving the dispute.

It is interesting to note that the Bill proposes to remove the Commission’s discretion under section 135(2B) to order a secret ballot in the case of unprotected action; this is part of a general thrust by the Government to create a legislative framework in which legal action is the only possible response by employers to unprotected industrial action, rather than encouraging the use of Commission processes to resolve the dispute which has given rise to the industrial action.

In this context, the Government’s proposals for a system of compulsory secret ballots cannot be seen as anything other than an attempt to further restrict the ability of Australian unionists to take protected industrial action, bearing in mind that this right is already more restricted than in most other developed countries. The incidence of industrial action in falling in Australia, demonstrating that there is no industrial crisis that requires action.
The Government’s refusal to consider secret ballot requirements to call off a strike is conclusive evidence that this proposal has nothing to do with democratic functioning, and everything to do with restricting the right to strike. Further evidence is provided by the lack of any support for proposals such as compulsory secret postal shareholder votes on issues such as takeovers, or whether or not a company should lock-out its employees.

The 2002 Changes

While the 2002 Bill contains some improvements over its predecessors, these are relatively minor, and do not change the essentially restrictive and intrusive nature of the scheme.

Ballot applications

Proposed subsection 170NBB(1A) provides that an application for a ballot may be made up to 30 days before the expiry of an existing agreement. Under the 2000 Bill the only requirement was that an application be made during a bargaining period.
This change, if anything, imposes an additional restriction, as the 2000 Bill allowed applications to be made at any time after a bargaining period had commenced. It reflects the new provision in proposed subsection 170NBDD that industrial action authorised by a ballot must commence within 30 days of the declaration of the ballot results.

Applications to be dealt with quickly

Proposed section 170NBCA provides that the Commission must act as quickly as is practicable and must, as far as is reasonably practicable, deal with a ballot application in two days. This has been changed from four days in the 2000 Bill.
The ACTU submits that as the provision is merely aspirational, the reduction in time is of no material significance. The Commission’s ability to deal with applications quickly can be quite outside its control.
Employers and others wishing to delay the action will be able to argue a number of issues before the Commission, such as the validity of the bargaining period and whether or not the union has genuinely tried to reach agreement. In addition, procedural issues, such as who should conduct the ballot, the roll and the timetable are all issues for debate which can be used for delay.
The new proposal allowing the Commission to decline to consider a submission if satisfied that it is vexatious, frivolous, misconceived or lacking in substance [s170NBCB(2)] is unlikely to prevent delays, given that the Commission is bound by the rules of natural justice, and would need to listen to a submission before being able to make the relevant determination.
Similarly, the proposed privative clause [s170NBGBA], while limiting appeals against ballot orders, will not affect the length of the initial proceedings.

The Commission is also limited by its own resources and by the need to deal with competing priorities created by applications under other provisions of the Act which are seen by parties as requiring urgent attention.
To an uncertain period for the hearing and determination of an application for a ballot order must be added a period of around three weeks for the Electoral Commission or private ballot agent (which may include the union) to conduct a postal ballot, which is the favoured method in the Bill. This is followed by three days notice to the employer before the action can take place, with the Commission able to extend the period to a maximum of seven days if there are “exceptional circumstances”. [s170NBCI(5)]
It should be noted that the UK pre-strike ballot provisions do not require an application to a tribunal for approval of the proposed ballot. In the UK, if a union believes that a ballot is appropriate, it simply organises one in accordance with a Department of Trade and Industry Code of Practice.

The ballot question

Proposed subsection 170NBDA requires the question or questions to be put to the relevant employees to include the nature of the proposed industrial action. Under the 2000 Bill the ballot question was required to include the precise nature and form of the proposed action, the day or days on which it is proposed to take place and its duration.
“The nature of the intended action” is the term used in subsection 170MO(5) of the Act in relation to notifying the employer of the intended taking of protected action. It is a principle of statutory interpretation that words and phrases used on more than one occasion in a statutory instrument have the same meaning.
In considering the meaning of the notification requirement in subsection 170MO(5), a Full Court of the Federal Court has held that a certain degree of specificity is required.

“Parliament did not indicate what degree of specificity it intended by the term "nature of the intended action". To interpret this term, on the one extreme, as requiring no more than an indication of industrial action, as argued by NUW, would be significantly to devalue s170MO(5); the notice would provide little information. To interpret it, on the other extreme, as requiring precise details of every future act or omission would be to impose on the giver of a notice an obligation almost impossible to fulfil. Industrial disputes are dynamic affairs. Decisions as to future steps often need to be made at short notice, sometimes in response to actions of the opposing party or other people, including governments, and changing circumstances. It would be a major, and unrealistic, constraint on industrial action to require a party to specify, three clear working days in advance, exactly what steps it would take. An unduly demanding interpretation of s170MO(5) would seriously compromise the scheme of Division 8 of Part VIB of the Act; it would be difficult for a party to an industrial dispute to obtain the protection contemplated by the Division........

“We think s170MO(5) was designed to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be damaged if precipitately shut down. If warned in advance of a ban that might affect the continued operation of that plant, the employer might choose a controlled shut down during the period of the notice. More commonly, perhaps, an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the consequences for them of the notified industrial action. Very often, the recipient of the notice will respond in a way that has a legal dimension. For example, a union might react to a notice by an employer of intent to lockout some employees by giving notice that all employees will strike indefinitely as from the commencement of the lockout. Similarly, an employer might respond to an employees' notice of bans by giving notice of a lockout of some or all employees.

“It will be apparent we think it necessary, and sufficient, for parties to describe the intended action in ordinary industrial English; for example, ‘an indefinite strike of all employees’, ‘a lockout of all employees employed in the AB fabrication plant’, ‘a ban on overtime’, ‘a ban on the use of the MN equipment’, ‘rolling stoppages throughout the mine’, ‘a ban on the servicing of delivery vehicles’.” Davids Distribution Pty Ltd v National Union of Workers [1999] FCA 1108 paras 84, 87-88

In light of this, the ACTU believes that a new ballot would be required should the union and its members wish to change the type of action being taken.
The proposed requirement that the ballot question specify the nature of the action should be contrasted with the equivalent provisions of UK law, to which the Minister referred approvingly in his Second Reading Speech.
The requirements of the system are set out in a Code of Practice Industrial Action Ballots and Notice to Employers issued by the Secretary of State for Trade and Industry pursuant to section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992, with the authority of Parliament. Under the UK system of pre-strike ballots, the ballot paper must include one of these two questions:

Are you prepared to take part in a strike?

Are you prepared to take part in industrial action short of a strike?

Both questions can be asked and, if both are carried, this allows for a later decision to be made about the form of action to be taken.

It should be noted that there is no requirement for the ballot question to provide any more detail about the type of action. The ballot operates as a general authority to one or more persons, who may be union officials or workplace delegates, to make a call for industrial action at some time after the ballot. The first call for industrial action must be made not less than four weeks from the date of the ballot, and this can be increased to eight weeks with the consent of the employer.
Once a ballot agreeing to industrial action has been carried, the union may decide to authorise or endorse industrial action, which may be continuous or discontinuous. Employers must be given seven days notice of the date or dates on which action is intended to commence.
While the UK system is unacceptably complex and technical (and is not, incidentally, supported by UK unions, as alleged by the Minister) and does lead to a great deal of litigation, it is not as rigid or restrictive as that proposed in the Bill.
In particular, unions are not tied to a type of action specified in the ballot paper, but are able to make decisions about action subsequent to a ballot, on an ongoing basis, so long as notice is given to the employer.

Quorum

Proposed section 170NBDD sets the quorum for the vote as 40 per cent of voters on the roll, although this can be reduced further by the Commission in “exceptional circumstances”. [s170NBCI(4)] The quorum under the 2000 Bill was 50 per cent, with no ability for reduction.
The ACTU submits that it is inequitable to require a quorum, and asks the Committee to note that no quorum for voters is required under the UK legislation. (Pre-industrial action secret ballots Ministerial Discussion Paper, August 1998, p17)
The ILO Freedom of Association Committee has held that while:

“the obligation to observe a certain quorum.....may be acceptable...........The requirement of a decision by over half of all the workers involved in order to declare a strike is excessive and could excessively hinder the possibility of carrying out a strike, particularly in large enterprises”. [Freedom of Association Digest, 4^th (revised) edition, paras 507&510]

The June 1999 report of the non-Government members of the Public Administration Committee of the Western Australian Legislative Council into the Labour Relations Legislation Amendment Act 1997, which, until its expected repeal, provides for compulsory secret ballots, says in relation to quorum requirements in a voluntary system of voting:

“....each failure to exercise the capacity to vote has the effect of an arbitrary determination of that failure to vote as a ‘no’ vote.

“The right to abstain from a voluntary vote is a democratic right which is widely practiced in Australian society......

“The broad purpose of section 97C of the Act is to provide a mechanism to determine whether union members wish to engage in a form of industrial action or not. It is inevitable that in most cases some members will want to strike, others will not, and others will not want to make a decision either way. A ballot should be able to reflect that range of opinions, and our administrative processes should facilitate a fair expression of those views.” (p47)

Although the Western Australian legislation to which these comments are addressed required a higher quorum than the Bill, the principles are the same. There is simply no justification to require more than a simple majority of valid votes cast, the system which applies, not only in the UK system of pre-strike ballots, but in the election of UK politicians, and the President of the United States. If the quorum requirements in the Bill were to operate in the US, there would not have been a validly elected President.
Two examples should be considered, both involving workplaces of 100 employees. In the first, 39 employees in the ballot vote, all in favour of strike action. In the second, 40 employees vote, 21 of them in favour of strike action. In the first example, strike action would not be authorised, while in the second it would, even though it would appear that there was substantially greater active support for the strike in the first example.

Conduct of the ballot

The 2002 Bill provides for a union to be permitted to run the ballot if it has an “independent adviser”, subject to Commission approval and authorisation of the adviser. The Commission must not name a person as the authorised independent adviser for the ballot unless satisfied that the person is sufficiently independent of the union and is capable of giving the union advice and recommendations directed towards ensuring that the ballot will be fair and democratic. [s170NBEA(2)] Under the 2000 Bill, the ballot was required to be run by the Australian Electoral Commission or a person approved by the Registrar and entered on a register of ballot agents.
While this change is a minor improvement, it does not deal with the inevitable delays which will result from the process required under the proposed legislation.
The 2002 Bill allows the Commission to agree to an attendance vote rather than a postal ballot, if the former is more “efficient and expeditious”, although the presumption in favour of the latter is retained. [ss170NBCI(2)-(3)]
It is difficult to see how the aspiration expressed in subsection 170NBCC(3) for ballot results being available to the parties within 10 days after the ballot order is made could possibly be adhered to if a postal ballot is required by the Commission.

Cost of the ballot

The 2000 Bill provided for the Commonwealth to reimburse the union for 80 per cent of costs “reasonably and genuinely incurred” in the holding of the ballot. The 2002 Bill provides for the 80 per cent to be paid directly to the ballot agent by the Commonwealth.
The ACTU submits that this difference is not significant. The long-standing principle in Australia is that where the Government determines who shall run a ballot, it pays the costs, as is the case with union elections. It is completely unfair to impose requirements on private organisations to have ballots run by a government body, and then require the organisation to pay the costs. In this case, although the Commission may approve a ballot agent other than the Australian Electoral Commission, this is clearly the exception. Even if the AEC is not used, the alternative must be approved by the Commission pursuant to legislation.
The Western Australian regulations provide that costs associated with the ballot are reimbursed by the Registrar to the entity conducting the ballot.
The 2002 Bill, on the other hand, proposes that unions would be reimbursed only 80 per cent of costs, which the ACTU believes is totally unacceptable.

Conclusion

The ACTU submits that the 2002 Secret Ballots Bill is intended to, and will have the effect of restricting the right to take industrial action even further than is currently the case.
The ACTU urges the Committee to recommend that the Senate not pass the Bill.