Labor's new IR system - how it will work

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Labor's new IR system - how it will work

Following the decisions to abolish AWAs, Labor's IR spokesman Stephen Smith has issued briefing papers on what the ALP's industrial relations system will look like if it wins the next federal election, due towards the end of 2007.

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Following the decisions to abolish AWAs, Labor's IR spokesman Stephen Smith has issued briefing papers on what the ALP's industrial relations system will look like if it wins the next federal election, due towards the end of 2007.

Four features

The briefing papers say there are four features of Labor's flexibility on industrial relations:

  1. Labor's system will ensure that employers and employees have the capacity to enter into common law employment agreements. Common law employment agreements already cover around 30 per cent of all employment agreements currently in place in Australian workplaces.
    Under Labor, common law agreements - underpinned by Labor's new minimum standards - will provide flexibility upwards, to the overall advantage of both the employer and the employee, and our nation.
  2. Under Labor's system, employers and employees will be free to make provisions in collective agreements and awards allowing for individual variations to their arrangements.
    That means that if employers want the flexibility to meet operational needs or to reward individual effort through performance-based pay, they can. And if employees want the flexibility to change their working hours to make other personal changes in their work arrangements, they can.
  3. Labor will also ensure that the parties to common law agreements have access to appropriate advice and representational services, and can resolve any disputes quickly, efficiently and with a minimum of fuss and formality.
  4. Labor will have sensible transitional provisions for existing AWAs. That means that if both the employer and the employee genuinely want an AWA to continue for its agreed term, then it can. And at the end of that term, the parties will transition to alternative agreements or instruments, again underpinned by Labor's new minimum standards.

Individual Agreements

As an example on how these could work, the briefing papers refer to the Worsley Alumina General Award which allows the employer and employees to enter into individual agreements to enable the workplace to operate more efficiently depending on the needs of the business.

The provision:

  • requires any individual agreement not be less favourable than the award, when the terms and conditions of both are compared as a whole.
  • if the agreement is more favourable on the whole then the individual agreement will prevail over the award.
  • allows employees to seek independent advice, and provides for monitoring by the industrial relations commission.
  • requires the agreement be written, and the parties enter into it freely and willingly.

Private enterprise collective agreements for private enterprise also contain similar clauses.

Facilitative provisions

The briefing papers say that, similarly, more general facilitative provisions exist in awards and collective agreements. These clauses list those clauses in the award or agreement which can be negotiated directly between employer and an individual employee or group of employees.

The papers say that these facilitative provisions provide flexibility and fairness because:

  • the list of facilitative provisions on which negotiation is possible can be negotiated between the parties to the collective agreement, so they can be different for every workplace - as extensive or restricted as employers and employees are comfortable with.
  • those provisions will also be vetted by the independent umpire.
  • they usually contain a range of employer-focused and employee-focused issues, so that individual agreement can be reached on balancing an employee's personal and working life, or enabling a business to progress change which better responds to changing circumstances in the workplace.
  • the individual agreements cannot be used as a device to avoid the parties' obligations under the instrument. Any individual arrangement cannot, overall, disadvantage an individual compared to the provisions contained in the agreement.
  • require agreements be voluntary, in writing, and the parties to have representation if they require.

The Federal Metals Award contains this type of provision.

Automatic or Optional provisions

Some agreements also provide that when employees' salaries reach a certain level, they will or may enter into a particular arrangement with their employer containing their terms and conditions of employment

This addresses the fact that some things, for example hours of work and rostering, may not be relevant to more highly paid employees.

However those employees also have the protection of a global comparison between their new contract and their old agreement, which acts as the new comparator for their negotiations with their employer about pay, bonuses etc.

The briefing papers say fairness is built in to these arrangements because the clauses which allow parties to take this next step are part of a collective agreement negotiated and agreed between the employer and employees, and vetted by the independent umpire.

These provisions are found in some Federal Certified Agreements.

Smith said Labor wants a genuinely fairer and flexible industrial relations system and will be consulting widely with all interested parties.

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