Arbitration, AWAs extended in new IR system: Gillard


Arbitration, AWAs extended in new IR system: Gillard

The Federal Government’s new IR laws will allow for arbitration where disputes are protracted and damaging, and will also allow AWAs to continue indefinitely where both sides are happy with them.


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The Federal Government’s new IR laws will allow for arbitration where disputes are protracted and damaging, and will also allow AWAs to continue indefinitely where both sides are happy with them.
As well, arbitration will be available for the first collective agreements negotiated with multiple employers for low-paid workers, such as cleaners.
IR Minister Julia Gillard revealed the details in a speech to the Australian Labour Law Association in Melbourne on Friday afternoon.
Arbitration if negative or dangerous impact
She said Fair Work Australia (FWA) will be able to refer a bargaining dispute for arbitration where industrial action taken during bargaining has a particularly negative or dangerous impact.
A new ground for arbitration will be where protracted industrial action causes, or is threatening to cause, significant economic harm to the bargaining participants. FWA will have regard to the views of all bargaining participants in making this decision.
‘We have seen a small number of disputes in Australia where industrial action continues for many months; where the employees and the employer suffer greatly and yet the parties are so stubborn and entrenched in their positions that they cannot achieve a breakthrough,’ Gillard said. ‘In these very unusual circumstances, this intervention is warranted.’
'Significant harm' test
She said the ‘significant harm’ test for employee industrial action will require FWA to be satisfied that economic harm is being suffered by both the employer and the employees.
'Where the employer has locked out its employees, meaning the employees have no income at all, then the significant economic harm need only be caused to the employees to be covered by the agreement,’ Gillard said.
She stressed that this ground for a workplace determination will have a 'high threshold’, and its use is likely to be very unusual.
Economic pressure permitted
‘It is accepted that when the time for re-bargaining comes around every few years, the parties are permitted to put economic pressure on each other to make an agreement,’ Gillard said. ‘But in the public interest, there do need to be some limits.’
Gillard said that on very rare occasions, there will be industrial parties— either employers or unions— who are prepared to ignore orders and flout the law during good-faith bargaining.
In such cases, arbitration will be possible in this circumstance.
Arbitration threshold trigger
The threshold to trigger arbitration in this case will be that FWA will have to be satisfied that:
  • abargaining representative has breached good faith orders (whether or not any penalty has been imposed); and
  • the breaches are sufficiently serious and sustained as to significantly undermine the bargaining; and
  • all other reasonable alternatives (including attempting to enforce the good-faith order or orders and alternative dispute resolution) for reaching agreement have been exhausted; and
  • there is no prospect that the dispute will be resolved within the foreseeable future.
Regarding the continuation of AWAs, Gillard said an initial proposal was that all such agreements would sun-set after five years (the ‘drop dead date’), with the aim of tidying up the system and encouraging parties to make a new agreement.
AWAs ‘to stay’
She said the feedback she received, particularly from Australian Mines and Metals Association, was that this proposal would ‘disturb long-standing and satisfactory arrangements and create an unnecessary requirement to alter those arrangements’.
Gillard has now decided that old Act agreements, such as old 1993 IR Act agreements, AWAs, ITEAs, s170LK and LJ agreements, will continue to apply until such time as a new agreement is made.
After the nominal expiry date of such agreements, parties can bargain in the new system.
To balance this, Gillard said that the National Employment Standards (NES) will come into effect on 1 January 2010 for all employees and will override any inferior conditions.
‘This will ensure that employees on sub-standard AWAs made under WorkChoices will receive the full benefit of the NES,’ she said.
Other details
Other details of how the new system will work that were contained in the speech include:
  • judicial functions of FWA will be exercised by Fair Work Divisions of the Federal Court and the Federal Magistrates Court
  • modern awards and minimum wages will be set and adjusted by FWA with the participation of unions, employers and those with an interest. They will be reviewed every four years, and test cases as existed in the old award system will continue
  • the Good Faith Bargaining obligations will be set out in the legislation, and FWA will be able to make good-faith bargaining orders that can, for example, direct parties to meet, to disclose relevant information, to consider proposals and respond to them, and refrain from unfair or capricious conduct.
  • parties will not be required to make concessions or sign agreements they do not support
  • where there are disputes under awards, enterprise agreements or regarding the NES, FWA will be able to exercise a ‘full suite’ of alternative dispute resolution powers such as calling compulsory conferences of the parties, conciliating, mediating, expressing opinions, informing itself about the circumstances of the dispute and making recommendations
  • anew small claims jurisdiction will be provided for claims up to $20,000. The Court will not be bound by the rules of evidence and may act in an informal manner, without regard to legal forms and technicalities. The Courts will now be able to make ‘any order they consider appropriate’ to remedy a breach, and to issue injunctions to prevent breaches
  • to encourage parties to meaningfully conciliate their disputes, the Courts can take into account whether a party participated in Fair Work Australia conciliation in deciding whether to award costs
  • there will continue to a dispute-settling clause in agreements, which must involve either FWA or another person or body independent of the parties, and provide for the representation of employees in the process.
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