Five years on, Shaw's IR Act scores top marks


Five years on, Shaw's IR Act scores top marks

The 1996 NSW IR Act has delivered 'world class performance' to NSW enterprises, speeded up processing time for agreements almost threefold, delivered win-win outcomes to industrial parties and cut litigation, according to the review into the legislation tabled in Parliament yesterday.


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The 1996 NSW IR Act has delivered 'world class performance' to NSW enterprises, speeded up processing time for agreements almost threefold, delivered win-win outcomes to industrial parties and cut litigation, according to the review into the legislation tabled in Parliament yesterday.

None of the 27 submissions into the Act received by IR Minister John Della Bosca recommended abolishing or replacing it, with the only amendments likely to be technical.

Under s411 of the Act the legislation must be reviewed after five years to determine whether the policy objectives of the Act remain valid, and whether the Act's terms are still appropriate to meet those objectives. This report concludes that the Act 'is clearly meeting its policy objectives' and that 'on the whole' the terms remain effective for achieving those objectives.

The Act covers 1.2 million workers on NSW awards and enterprise agreements. Its focus was on collective rather than individual bargaining, greater interaction between IR and anti-discrimination jurisdictions, consultation and co-operation and a strong award system to act as a buffer against entrenched poverty.

Changes introduced through the Act included:

  • Enshrining judicial and arbitral functions with the NSW IRC;
  • Changes to appeals systems;
  • Enshrining the principle of equal remuneration for men and women doing work of equal or comparable value;
  • Changes to the resolution of industrial disputes;
  • Giving the IRC a pro-active role in determining and varying awards;
  • Simplifying the process of setting enterprise agreements.

The report on the review points out that the IR Act, developed under former IR Minister Jeff Shaw, was notable for being developed through an extensive consultation process, which has meant that all key stakeholders have largely been happy with the system under the Act.

As a result of that input by all parties, co-operation has been a key feature of IR in the state, the report says, giving the example of the consent award which covered employment of workers at the Sydney 2000 Olympic and Paralympic Games.

Protecting vulnerable workers

It points out that the Act has been amended as the IR environment has changed, and says the Act has been 'a flexible tool in the management of the state's economy'.

The report concludes that the Act continues to achieve its three main goals:

  • Protecting vulnerable workers and workers who would be exploited or unfairly treated under individual contracts;
  • Creating a bargaining system which allowed for flexible adjustments in NSW enterprises, thus facilitating productivity and international competitiveness;
  • Emphasising workplace reform and consultation to facilitate productivity gains to a degree which was 'simply not possible' under a system of individual contracts.

It says the common rule award system 'reaches far into industries with negligible union membership and low levels of enterprise bargaining' and as such was 'particularly effective' in protecting some of the community's most vulnerable workers.

The report concludes that the current Act 'provides the prerequisite conditions for the kind of trust and co-operation needed in successful industrial relations'.

'By fostering collective processes and giving employees a voice in decisions which affect their lives at work, the NSW system actively fosters a thinking, co-operative and productive workforce.

'Additionally, the strong emphasis in the Act on anti-discrimination and pay equity consolidates the rights and strengthens the voice of particular groups of employees who have been historically disadvantaged or silenced in the workplace, such as women.'

The release of the report comes only a month after NSW IRC President Justice Lance Wright told NSW industrial practitioners the Commission was now perfectly placed to expand its work protecting the wages and conditions of the low-paid and disadvantaged (see 134/2002).

Other achievements outlined in the report include:

  • The holding of the NSW Pay Equity Inquiry, which led to the implementation of the Equal Remuneration Principle and which earlier this year gave NSW librarians a 26% pay increase (see 8);
  • A test case establishing minimum conditions for workers covered by part-time work agreements;
  • Family friendly initiatives like parental leave for casual workers with more than 12 months' service, and the state personal/carer's leave test case which granted permanent award-covered employees two days;
  • The development of a Clothing Outwork Strategy;
  • Compliance measures which have recovered around $16 million in wages and entitlements for NSW workers.
  • Reducing or consolidating by 800 - or half - the number of previous awards, making it easier for employers and workers to determine what conditions apply. Processing times for enterprise agreements have also been cut, from 81 days to 28 days.

Legislative changes

The most significant amendment so far, the report says, has been unfair dismissal provisions which regulate the remuneration cap for non-award employees' access to the jurisdiction, and exclude certain classes of workers.

Meanwhile, the Industrial Relations Amendment (Unfair Contracts) Bill 2002 (see 9) passed through the Legislative Council this week and will now move to the Legislative Assembly.

Under the Bill:

  • Claims will be limited to those whose total remuneration package in the 12 months prior to the claim does not exceed $200,000.
  • Partners in partnerships will be excluded. This is the only such exclusion.
  • Claims must be made within 12 months of termination of the contract or arrangements.
  • Mitigation of loss is to be taken into account.

The Minister will now consult with industrial parties on any proposed technical changes to the Act arising from submissions to the review. The report is available on the DIR website.



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