WorkChoices: seminar addresses questions from HR professionals

Analysis

WorkChoices: seminar addresses questions from HR professionals

A panel comprising two representatives from employer associations, one from a large public sector employer and a university industrial relations law academic faced questions on the WorkChoices legislation from HR practitioners at a seminar conducted by the Australian Human Resources Institute (AHRI) in Sydney on 16 November 2005.

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A panel comprising two representatives from employer associations, one from a large public sector employer and a university industrial relations law academic faced questions on the WorkChoices legislation from HR practitioners at a seminar conducted by the Australian Human Resources Institute (AHRI) in Sydney on 16 November 2005.

The following is a summary of the panel’s comments and answers.

What is the likely impact of the WorkChoices legislation on a large State Government employer?

Roger Pucill, Employee Relations Consultant for Energy Australia (a corporation, and therefore covered by the legislation), noted that Energy Australia has a heavily union employee dominated workforce, although it operates under both New South Wales awards and Australian Workplace Agreements. He commented that ignoring the unions was 'not an issue' and that Energy Australia would continue to deal with them.

He added that many issues required regulations to be gazetted before the meaning of various provisions became clear (particularly in the areas of 'prohibited content' of agreements, 'non-allowable' matters and contractor/labour hire issues), and that his company could not proceed until this occurred.

Energy Australia would proceed cautiously and be a 'follower' in most respects. Pucill commented that the legislation would certainly not reduce the need for lawyers and the importance of good industrial relations leadership would become even greater.

Who will be the 'early adopters' among employers?

The panel’s consensus that employers subject to federal awards, the construction and mining industries, and later the retail and hospitality sectors would be among the first areas to implement changes. Heavily unionised sectors would be among the slowest to make changes.

What are the implications of some of the 'prohibited content' provisions?

Apart from provisions in the Bill itself, the Government will be able to gazette regulations that proscribe certain subjects as 'prohibited content' of workplace agreements. Jo-Ellen Riley from the University of Sydney Law Faculty, argued that this is an ad hoc approach that means that employers and employees cannot necessarily see what their obligations are when they are in the process of negotiating agreements.

She added that 'unfair dismissal' provisions are classified as 'prohibited content' in agreements involving employers with less than 100 employees – the Bill already provides for this -- and that could disadvantage such employers because good employees might be inclined to prefer employment with larger employers because job security was preserved by legislation.

Riley raised the scenario where, as an employer she might issue a work tender that required prospective workers to work under communal or profit-sharing arrangements. She claimed that to do so would breach the Bill’s freedom of association provisions and thus deny her the exercise of a 'choice'.

Single system - Riley also commented that while the Bill may have some good intentions, such as the potential advantages of simplicity offered by a single federal system, it might end up as an opportunity lost because of antagonisms and attempting to win old arguments. Whereas an organisation that represents employers will be treated as a 'primary party' under the legislation, one that represents employees will be a 'third party', as will the Federal and State Industrial Relations Commissions.

Will it be feasible for employers to escape coverage by 'unfair dismissal' provisions by splitting themselves into units of less than 100 employees each?

The two employer association representatives replied that the Government had indicated to their associations that it 'does not regard this as an issue' and 'will legislate further if it becomes an issue'. Apart from taxation and corporations law issues, the consent of each employee to a change of employer is currently required.

Other participants commented that employers that attempted to do this would gain a bad reputation and might find it hard to attract employees in the first place.

What are the implications of the provisions relating to penalties for disclosing information about parties to Australian workplace agreements?

These are controversial provisions that have received quite a bit of publicity, but opinions appeared to differ regarding their scope. It would appear that providing employees or employers with 'market information' about the contents of Australian Workplace Agreements to help them to negotiate their own agreements will not be unlawful, provided that the information is not stolen from the Office of the Employment Advocate – in other words it would appear that the parties to an AWA themselves can disclose details to others, provided that they do not breach any term of the specific AWA by doing so. This point still needs some clarification by amendment or regulation.

AWA ambassadors and purpose of legislation - Some employers who use AWAs exclusively have been appointed as 'AWA ambassadors' by the Employment Advocate, and have permission to disclose that they are parties to AWAs for the purpose of promoting the spread of AWAs.

The discussion of this issue led to the observation that the reasons given for inserting a provision into legislation may not be what a court or tribunal later interprets as its actual legal meaning.

A further example of the latter is that the main purpose of many of the Bill’s 'contractor' provisions appears to be to prevent a union from insisting that an employer can only contract work out to people or organisations specified by the union. However, the actual meaning of the provisions may be broader than this.

How does the across-the-board six months probation period interact with current 'standard industry practice' of three-month probation periods?

The difference has internal (employer) significance only. In a dispute, the statutory provision of six months would take precedence.

Are there any changes to the 'unlawful termination' provisions and will they be more widely used?

There are no significant changes to the grounds, remedies or procedures. Riley noted, however, that only about 200 decisions in almost nine years of their existence have resulted in reinstatement of the employee.

Employees who became ineligible or unable to make other types of dismissal claims may attempt to use the provisions to a greater extent, but overall it has not been an attractive option to use at present.

What will be the impact on 'unfair contract' claims under NSW and Queensland legislation, and common law claims?

State 'unfair contract' claims were described as 'gone' for employees employed by corporations, as the federal system will negate them. However, there may be legal loopholes that would be explored by lawyers seeking to keep this jurisdiction alive.

Franchisees and sole traders may still be able to use the unfair contract provisions, but not employees, at least as currently litigated.

Common law claims - Common law claims will remain possible, for breach of the employment contract, but in most cases will be unattractive because they will remain very costly to make and compensation will generally be limited to payout of a period of reasonable notice.

Private arbitration - The employer association representatives warned against agreeing to requests from unions to insert private arbitration provisions into contracts and agreements, because they could prove to be open-ended in terms of time limits, amounts, etc – it was essential to seek detailed legal advice before negotiating such provisions.

What is the time frame envisaged for the transitional arrangements to run their course?

In general, up to three years for parties to a State system to transfer to the federal system, and up to five years for parties in the federal system to implement new arrangements.

Another federal election will be held before those periods expire. The comment was made that any ALP Government would probably be unable to repeal the legislation as it would most likely lack a Senate majority.

Many of the transitional arrangements will require Regulations to implement them, so one cannot make many definitive statements before then. The general thrust of the transitional provisions, however, is that 'anything current is preserved until it expires'.

Further information

Further information about this seminar is available from AHRI.

Related

Federal IR changes 2005   

 

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