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1. Allowable MattersIntroduction1.2 Paragraph 89A(2)(a) – Skills Based Classification Structures 1.3 Paragraph 89A(2)(i) – Public Holidays 1.4 Paragraph 89A(2)(j) - Allowances 1.5 Paragraph 89A(2)(m) - Redundancy 1.6 Paragraph 89A(2)(n) – Notice of Termination 1.7 Paragraph 89A(2)(q) – Jury Service 1.8 Subsection 89A(3) 1.9 Subsection 89A(3A) – Other Restrictions 1.10 Accident Pay 1.11 Superannuation IntroductionUnder the proposed legislation put forward
by Minister Reith the Commonwealth Government is seeking to further restrict the
contents of awards that can be made by the Australian Industrial Relations
Commission, through amendments to s.89A of the Workplace Relations Act 1996
(the Act). This is part of the Commonwealth Governments' continued attacks
on the working conditions of Australian workers through what they term "award
simplification", but which is more readily identified as "award
stripping".
It could be argued that the "2nd
Wave" legislation is somewhat premature given that the award simplification
process under the Act is incomplete. This is the situation in the building and
construction industry where the major parent award, the National Building and
Construction Industry Award 1990 is still, after 18 months of hearings and
conferences involving the Commission, not finalised. There are a number of
factors leading to this situation not the least being the uninvited involvement
of the Commonwealth Government, whose representatives have shown a complete
ignorance of the industry with which they are dealing. Having to explain to
these people how the industry actually operates has been a time consuming
process.
Accordingly, it is difficult to comment on
the effect of the 1996 legislation on the awards that cover the building and
construction industry as the final result is not yet known. It is clear however
from the proposed legislation that the Minister is not happy with the potential
outcome, hence the number of proposed amendments targeted towards the building
and construction industry.
The following comments are directed to how
the proposed amendments will affect the building and construction industry
awards. However in a number of situations, the comments will have universal
application to all awards.
1.2 Paragraph 89A(2)(a) – Skills Based Classification StructuresThe proposed deletion of “skill-based
career paths” (s.89A(2)(a)) as an allowable award matter is an
extraordinarily regressive measure.
The intent of this amendment is unclear as
no specific mention can be found in either the Coalition's More Jobs better
Pay policy of September 1998, nor the Ministers' May 1999 Implementation
Discussion Paper. The only indirect reference can be found in paragraph 37
of the Implementation Discussion Paper where it mentions that "the
legislation will make it explicit that maintenance of internal relativities
between classification rates of pay is not a relevant consideration unless the
Commission considers it would be against the public interest not to do
so."
The introduction of a skills-based
classification structure into the construction industry occurred over almost a
decade of discussions and arbitration by the Commission. Industry parties have
poured enormous resources into the development of the present arrangements which
were finally confirmed by the Commission in 1995 (Print L8499).
The main advantage of the present award
structure for employees are:
The main advantages to employers
are:
The effect of this amendment would lead to
a situation where awards would contain a classification structure but no detail
on how employees can progress through the structure by reference to training
requirements and acquisition of skills. Such a proposal would be detrimental to
building workers who do not have the luxury of years of continuous employment
with the one employer, due to the boom/bust cyclical nature of the industry and
itinerant employment. Also, as building workers are employed mainly by small
business with the overwhelming majority employed by companies with less than 5
employees, the award skill-based career paths are important in providing
incentives for employees to pick up additional skills that are nationally
recognised to enhance their employment prospects in the
industry.
At a time where the Commonwealth, with the
assistance of the States, is pursuing a national training framework with
nationally recognised skills and qualifications, it is unbelievable that the
same Government would seek to remove skill-based career paths from national
awards that compliment the system.
The proposed amendment should be
rejected.
1.3 Paragraph 89A(2)(i) – Public HolidaysThis amendment seeks to change the public
holidays allowable matter provision by limiting it to days declared by a State
or Territory Government. It is also tied in with the proposed new s.89A(3A)(e)
which seeks to remove union picnic days as an allowable matter. The Commonwealth
seems to be under the misguided belief that these matters are best dealt with at
the workplace or left up to State or Territory Governments.
Unfortunately they do not appear to be
historians, as it is only six years ago that a decision of the Victorian
Government to remove a number of substitute days led to protracted industrial
action in that State. Ultimately it led to a number of proceedings before the
Commission which resulted in a Full Bench decision more commonly known as the
Public Holidays Test Case (Print L4534). In that decision the Full Bench said
:
"We also accept that the declaration of
public holidays, by whatever legal instrument, is the prerogative of the various
Governments. There is a need, therefore, to reconcile, if possible, the
Commission's "safety net" function with the authority of the Governments. There
are certain days which do not require any action by the States to permit
their identification in the Commission's awards. No State law is necessary to
define Christmas Day as 25 December, Boxing Day as 26 December or New Year's Day
as 1 January. Good Friday and the Monday thereafter also stand in their own
right.........
Although the leave which employees
enjoy under the broad characterisation of "public holidays" is a significant
benefit and, as such, ought not to be excluded from the "safety net" concept,
the safety net standard goes more, we think, to the quantum of leave than the
specification of days.......
Though there are some variations
between States, we think that a prescription of ten days (excluding Easter
Saturday) gives reasonable effect to the criterion of minimum change."
(p19-20)
The Full Bench then went on to decide that
awards should normally provide;
"that holidays (or payment in lieu) be
observed in respect of New Year's Day, Good Friday, the Monday thereafter, Anzac
Day, Christmas Day and Boxing Day;
that holidays (or payment in lieu) be
observed also in respect of the days specified in the relevant States and
Territories as Australia day, the Queen's Birthday and Labour
Day;
for an additional holiday (or payment
in lieu) which may be a day identified by a governmental prescription (for
example, Melbourne Cup Day) or a day otherwise specified (for example, for a
union picnic); and
that when a prescribed holiday, other
than Anzac Day, falls on a Saturday or Sunday, a substitute day is provided."
(p.20)
Since that decision, most awards have been
varied to reflect the standard set by the Full Bench. This amendment however
seeks to turn the clock back but for no justifiable reason.
As for union picnic day, this is included
in the 10 day minimum. Where it exists in awards the award normally provides
that where the employer arranges another day as a picnic day for their employees
then that day can be substituted for the union picnic day. So what is the
rationale for removing it as an allowable matter? The only conclusion we can
reach is that it is tied in with the Coalition's distaste of any reference to
unions.
1.4 Paragraph 89A(2)(j) - AllowancesThis amendment seeks to change the
"allowances" allowable matter to restrict it to monetary allowances
for:
The intent of this amendment appears to be
to overturn the approach taken by the Full Bench in the Commonwealth Bank of
Australia Officers Award Case (CBOA) case that
"The list of allowable award matters is
comprised of particular kinds of award benefits and conditions of employment.
The construction of Section 89A(2) demands that each concept be given a meaning
consistent with the use of the concepts in industrial relations practice in
Australia. In its context, section 89A is not a provision for which there is a
need for either a restrictive or a generous construction. The terms in it are to
be given their ordinary meaning in regard to industrial relations usage. Most of
the allowable award matters listed are industrial concepts formulated around
entitlements and conditions of employment ubiquitously the subject of award
provisions in State and Federal industrial jurisdictions. Even within the
standard award concepts, the formulation of an award provision covering
employment entitlements and conditions has long allowed room for craft and
drafting skills. Conceivably, some conditions of employment could be formulated
in sufficiently various ways to bring the conditions within one, another, or
more than one of the allowable award matters. The categories of allowable award
matters are not mutually exclusive. However it is generally the case that
established award provisions are of a sufficiently standard content and form to
be identifiable as coming within one or occasionally more of the allowable award
categories, or as not coming within the category at all." - [(1997) 74 IR
446 at 458-9]
In a number of decisions of the Commission
"allowances" have been taken to include (as well as monetary allowances) such
thing as:
1.5 Paragraph 89A(2)(m) - RedundancyThe Government proposes to repeal
s89A(2)(m), which specifies “redundancy pay” as an allowable
award matter, and to replace it with –
“(m) payments in relation to
termination that is:
This would effectively impose upon all
industries the narrow definition of “redundancy” contained in the
Termination, Change and Redundancy Decision 1984 (“the 1984 TCR
decision”). [Ref: 8 IR 34 at 55-56].
Such a narrow definition would cause the
building and construction industry to revert to the situation wherein employees
received no award redundancy pay entitlements.
It was universally acknowledged that the
1984 TCR provisions could have no application in the building and construction
industry because of the nature of employment in the industry. [Ref: Print
K4831 - p.7].
However, this was recognized as being an
inequitable situation, and in 1989 a Full Bench of National Wage Case stature
(comprising the President, two Deputy Presidents and two Commissioners) decided
to introduce a redundancy payments scheme “designed to meet the
needs of” the building and construction industry. The Full
Bench stated –
“Many employees work in the building and construction industry for extended periods and are employed by many employers in the normal course of employment. The Full Bench decision was followed by
extensive hearings in the Commission to determine the detailed provisions of the
redundancy pay clause to be inserted into the awards. The current clause was
inserted in 1990. [Ref: Print J4870].
This special clause is now contained in
twelve major federal awards covering the various sectors of the building and
construction industry. The provisions are replicated in numerous state awards
covering employers who are not respondent to a federal award.
In 1992 these provisions were confirmed in
two Full Bench appeals, where the Commission rejected arguments that the concept
underlying the redundancy provisions in the industry represents a
“distortion” of the concept of redundancy. [Ref: Prints K2799 and
K4831].
In 1998 a Full Bench of the Commission
unanimously decided to insert the provisions into the Building and Construction
Industry (NT) Award. The Full Bench stated –
“Those provisions ... reflect the outcome of a relatively tortuous process of arbitration and negotiation. That process resulted in the development of what was described by several Full Benches as “one general statement of benefits to apply to redundancy in the building and construction industry.” “We are satisfied that it is appropriate, and consistent with the merits of the case, that the award should be varied to reflect what we accept to be effectively a national minimum award or safety net standard condition applicable to the building and construction industry.” [Ref: Print Q1599, pps.1 & 2]. By seeking to revert to the earlier narrow
definition of redundancy, the Government’s proposal is clearly directed at
the redundancy provisions contained in building and construction industry
awards.
Reference to the proposed amendment is made
in the Minister’s Implementation Discussion Paper, where it is said that
award simplification would be advanced by tightening the definitions and
specifications of various allowable award matters –
“...by reference to the basic elements of the relevant entitlement that is within the award making jurisdiction (eg redundancy pay to only relate to genuine redundancy, and not to cover custom and practice that arises in certain industries ...)”. [Ref: The Continuing Reform of Workplace Relations: Implementation of More Jobs, Better Pay – May 1999 – p.12, para. 39(c)] The Implementation Discussion Paper is
plainly wrong in suggesting that the building and construction industry
provisions reflect “custom and practice” (i.e., that they
existed either actually or presumptively from time immemorial).
Redundancy pay in this industry was virtually unheard of prior to the Full
Bench proceedings in 1988-89.
To reimpose the 1984 TCR definition of
“redundancy” upon all industries would effectively remove the
redundancy pay entitlements of many thousands of federal award employees in the
building and construction industry.
The formulation of a suitable definition of
“redundancy” to meet the special circumstances of a particular
industry is best left to the Commission. The proposed definition would
effectively strip a basic award entitlement from thousands of construction
workers. The Government clearly abandoned it’s “No Worker Will be
Worse Off” promise some time ago. This change highlights just how hollow
that promise was. No alteration to s89A(2)(m) should be made.
1.6 Paragraph 89A(2)(n) – Notice of TerminationThis amendment seeks to remove notice of
termination as an allowable matter. Whilst most employees would be covered by
s.170CM of the WR Act 1996, Regulation 30BA specifically excludes daily hire
employees in the building and construction industry. This would result in all
daily hire employees having no right to any notice provisions on termination.
This would be an untenable situation and therefore the amendment must be
rejected.
1.7 Paragraph 89A(2)(q) – Jury ServiceThis amendment seeks to delete jury service
as an allowable matter. The effect of this amendment would be to remove from
awards those clauses that require employers to make up the difference between an
employees normal wage and the amount received from the courts (the jury fee).
Normally the jury fees are set by he relevant States Sheriff's Office. In NSW
the fees are as follows:
$33.50 for less than 4 hours attendance on
the first day,
$67.00 for the first to the fifth
day,
$58.00 for the sixth to tenth day,
and
$91.00 for the eleventh day and each day
thereafter.
From these figures an employee attending
for jury duty for five days would receive $335 plus travelling expenses,
compared to the federal minimum wage of $385.40. Therefore every adult employee
would be disadvantaged if there were no jury service clause in the award.
As stated by the The Office of The NSW
Sheriff, "Jury duty is one of the most important responsibilities of every
citizen of New South Wales. It is an opportunity to participate in the work of
the courts and legal system, and to make sure that the legal system reflects the
general will of the people of NSW." (Website - Lawlink NSW: Jury Duty in New
South Wales)
One must wonder what type of Government
would seek to put in place disincentives for ordinary working Australians to
accept their civic responsibilities as outlined above. Introducing such
disincentives could have serious ramifications for the legal system in Australia
and the right to be judged by ones fellow citizens. If workers are losing pay by
fulfilling their civil duties the likely outcomes will be attempts to avoid jury
duty or even more frightening attempts by jurors to finish cases as soon as
possible with little regard to the outcome and the merits of the case.
1.8 Subsection 89A(3)This amendment seeks to include a provision
restricting awards to basic minimum entitlements. The intent of this is not
clear however our suspicion is that it seeks to reduce awards to the lowest
common denominator. This could lead to a situation where for example the
National Building and Construction Industry Award 1990 provides for 10 days sick
leave whilst other awards provide 8 days sick leave, and the Commission is
required to reduce the NBCIA to 8 days. Other potential areas affected include
shift penalties, travel allowances, meal allowances, casual provisions, etc.
This would quite clearly lead to a reduction in award conditions and workers
being worse off, It should be rejected.
1.9 Subsection 89A(3A) – Other RestrictionsThis amendment seeks to insert a new
subsection (89A(3A)) which further restricts what can be included in allowable
matters. Under the amendment the following are not to be covered by
s.89A(2):
It is quite clear from the above that these
are even more sinister attempts to reduce what can be covered by an award and
will reduce conditions. They should be rejected.
1.10 Accident PayThe Government proposes to remove accident
make up pay from federal awards.
This is to be done by limiting the type of
allowances covered by s89A(2)(j), and by expressly excluding accident make up
pay from the list of allowable matters [see proposed new
s89A(3A)(d)].
The Government’s policy rationale is
to –
“tighten the allowable matters provisions to clarify the original intent of the legislation and maintain their statutory rigour, and also to remove elements which duplicate other legislative entitlements ...” [Ref: The Continuing Reform of Workplace Relations: Implementation of More Jobs, Better Pay – May 1999 – para. 39(b)]. It is noteworthy that in 1996 the
Parliamentary Secretary responsible for the carriage of the Bill that became the
WROLA Act stated that -
“The Government has included accident make-up pay within proposed new paragraph 89(2)(j) which covers allowances.” [Ref: Senate Official Hansard 5 July 1996 at 5100]. Therefore, it can hardly be said that the
proposed change is necessary to clarify the original intent of the
legislation.
Nor can it be said that accident pay
duplicates other legislative entitlements. As a Full Bench of the Commission
has stated –
“Award prescription in this sphere does not supplant, nor is it intended as a substitute for, State legislation. It is awarded as a benefit which is supplemental to the rights and obligations existing under State legislation.” [Re Carpenters and Joiners Award (1973) 149 CAR 39 at 50]. Award accident pay had its origins in a
series of decisions of the NSW Industrial Commission in the early 1970s. In
other words, the State Industrial Commission determined that it was fair
and just that State workers’ compensation legislation be
supplemented by an award of accident make up pay.
[e.g., in Re Building Trades Dispute Award
(1971) 1 AR 619 at 628-632].
Accident pay was introduced into building
industry awards in 1971 by a decision of Sheehy J, who stated that
-
“...building workers are more prone to work accidents than employees in industry generally. In my opinion the disability complained of should be minimised so far as possible whether by legislation or award provision or perhaps both. In some cases at present a workers’ compensation payment would be little more than half the award wage and this is difficult to countenance when one considers that the injury causing the man’s absence from work must have related to his employment.” [Ref: 1971 AILR 325]. The Construction Industry is recognised as
one of Australia’s most dangerous industries. This is reflected in the
high rate of lost time accidents and the high rate of workplace deaths in the
industry -
The accident pay clause in the National
Building and Construction Industry Award 1990 is a typical minimum award safety
net standard. It entitles the employee to the difference between the weekly
amount of compensation paid to the employee pursuant to the relevant
Workers’ Compensation Legislation and the employee’s appropriate 38
hour award rate. The entitlement in respect of any one injury is for a maximum
of 26 weeks. [Ref: N0122 - clause
27].
That is not an extravagant benefit, bearing
in mind that regular overtime and over-award payments are excluded. More
important, it is not a benefit that duplicates a legislative
entitlement.
The Government’s proposal would
effectively deny employees working in dangerous industries such as construction
the benefits of a uniform award based supplement to the State based workers
compensation schemes (which vary from State to State).
As accident make up pay has been held by a
Full Bench of the Commission to be an allowance, and thus an allowable award
matter [Ref: Print
P1297], the Government’s proposal to amend
s89A(2)(j) should be rejected, along with the proposal to expressly exclude
accident pay from the list of allowable award matters pursuant to the proposed
new s89A(3A).
1.11 SuperannuationAlthough superannuation is not specifically
mentioned in the proposed legislation the Commonwealth Government is still
seeking to remove it as an allowable matter (by the Workplace Relations and
Other Legislation Amendment (Superannuation) Bill 1998). The reasons behind
the Governments attempt is so that it can pander to its "friends" in the banking
and insurance industries by allowing them greater access to workers
superannuation money. Whist it is recognised that there are a number of Acts
dealing with superannuation there are a number of flaws with the system which
award provisions attempt to counter.
Firstly there is the issue of choice of
fund. Most awards nominate the funds into which contributions can be made to
ensure that the funds are complying funds which the industry approves of. It
should be noted that of the 180,000 (approx.) funds in existence, in the
financial year 1997/98, the Australian Prudential Regulation Authority only
reviewed 1,100 funds to ensure compliance with the legislation. Of these, 35%
had shortcomings requiring rectification. Allowing open slather on choice of
funds will lead to a number of workers losing some or all of their
superannuation entitlements.
Another issue is when payments are to be
made. Under awards the employer is required to make monthly payments or in
accordance with the trust deed of the fund. Failure to comply can be pursued at
any time as a breach of the award. Under the Superannuation Gurantee
legislation, if an employer does not make the payments they are only required to
make up the shortfall if the Australian Taxation office finds out, and this is
normally only assessed once a year. In the building and construction industry
with workers being employed by more than one employer in a year, and a
significant number of the employers going out of business each year, workers
will be disadvantaged if they have to wait for the ATO to chase up their
employer (who in many cases will no longer exist!).
Another condition not covered by the
superannuation legislation, but covered by awards, include what payments are
required when employees are absent from work on paid leave or on workers
compensation. Removing superannuation as an allowable matter will disadvantage
workers in these situations.
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