Industrial legislation in Australia in 2013

‘Family friendly’ measures

The Amendment Act contains a range of amendments to various aspects of the FW Act including parental leave, penalty rates, the right to request and consultation over roster changes which are designed to be ‘family friendly’. Some of the amendments came out of the recommendations of the review panel, while others iron out difficulties that have arisen in the operation of the FW Act over the first three years. These changes are also discussed by Charlesworth and McDonald (this edition), and will be briefly outlined here.

Perhaps one of the most significant changes within the ‘family friendly’ package is the expansion of the right to request flexible work arrangements in FW Act s 65. The provisions expand the number of employees entitled to a considered response to such a request. Section 65 now covers parents or carers of school-age children, all carers (within the meaning of the Carer Recognition Act 2010 (Cth)), employees who are 55 or over, employees who have a disability, and employees who are experiencing domestic violence, or who are caring for a member of their family or household requiring care or support because they are experiencing domestic violence.

An important aspect of the right to request in FW Act s 65 is that it is not a right to flexible work arrangements, but is a right to ask for such arrangements which may only be refused on ‘reasonable business grounds’ (FW Act, s 65(5)). While the basis of a refusal on reasonable business grounds may not be challenged, the employer is required to provide details of the reasons for the refusal (FW Act, s 65(6)). The Amendment Act inserts new s 65(5A) setting out a list of ‘reasonable business grounds’ to provide guidance on the operation of this requirement. The grounds are not exhaustive and include the cost of the proposed arrangements, lack of capacity to change working arrangements to accommodate the proposal, the impracticality of recruiting new employees or changing work arrangements of other employees, loss of efficiency or productivity or the likelihood of a significant negative impact on customer service.

Two other changes of a similar nature are an addition to the modern awards objective concerning remuneration of unsociable working hours, and a new modern award and enterprise agreement content requirement regarding consultation over changes to regular rosters. FW Act s 134(1)(da) now includes ‘the need to provide additional remuneration for employees working overtime, or unsocial, irregular or unpredictable hours, weekends or public holidays or shift work’ in the modern awards objective to guide the FWC in the exercise of its functions with respect to modern awards, and the setting of minimum wages (FW Act, s 134(2)). Under FW Act s 145A, a modern award must now contain a term requiring an employer to consult employees about a change to their regular roster or ordinary hours of work; and allowing for representation of those employees for the purposes of consultation. A similar term must also be included in enterprise agreements under FW Act s 205(1)(a).

These changes are designed to embed family friendly practices within the Fair Work system. They do not give employees a ‘right’ to family friendly work adjustments. The changes require employers to engage in proper workplace consultation over rostering changes which may adversely impact workers who have reduced capacity to adapt due to family obligations. They reinforce the understanding that unsociable hours are not ‘family friendly’ and should be appropriately remunerated. For the most part, these changes are about effecting cultural and attitudinal change without creating new rights to flexible work arrangements.

There were also important changes made to the unpaid parental leave provisions to resolve practical difficulties. The right of a pregnant employee to transfer to a safe job or take unpaid leave if there is no safe job available has been extended to employees who have not completed 12 months of service (FW Act, ss 81, 82A). The length of concurrent unpaid parental leave for employee couples has been extended from three to eight weeks, and may be taken in blocks of not less than two weeks (FW Act, s 72(5)). Finally, where a female employee takes a period of unpaid ‘special maternity leave’ due to being unfit to work as a result of a pregnancy-related illness, the period of leave is no longer deducted from any subsequent period of unpaid parental leave (FW Amendment Act, Sch 1, Pt 1).

Right of entry

An area of significant contention between trade unions and employers that emerged during the FW Act review was right of entry. Unions complained about the inappropriate nature of some rooms made available by employers for discussions with workers, and employers complained about the increased frequency of visits from unions exercising right of entry (Review, 2012: 189–197). The review panel made three recommendations to improve FWC dispute resolution over right of entry disputes, but the Amendment Act went further, implementing substantial new rights for unions with respect to access to lunch rooms and remote work sites.

Under FW Act s 492, a right of entry permit holder must conduct any interviews or discussions in a room or area of the premises ‘agreed with the occupier of the premises’. Where a permit holder and an occupier cannot agree on a suitable location, s 492(3) permits the permit holder to use the lunch room. This is a significant change from the previous wording of the section, which required a permit holder to ‘comply with any reasonable requests’ as to the location of the discussions or interviews, and appears to make lunch rooms available de facto to permit holders. However, the obligation to comply with any ‘reasonable request’ by an occupier as to the particular route that a permit holder must take to get to the relevant room has been retained (FW Act, s 492A). Access to dispute resolution over the location of discussions or interviews has been removed; however, permit holders remain subject to s 508, which provides for the restriction of entry rights in circumstances where rights are misused.

Division 7 of FW Act Part 3-4 now provides for accommodation and transport arrangements for right of entry permit holders accessing work sites in remote areas. Where either accommodation or transportation at, or to, a worksite is not reasonably available to a permit holder, an occupier and an organization may enter into an accommodation arrangement or a transportation arrangement to facilitate the permit holder’s access to the worksite (FW Act, ss 521A, 521B). If such an arrangement cannot be agreed between the parties, FW Act ss 521C and 521D oblige the occupier to enter into such an arrangement provided that this will not cause them undue inconvenience, and the request is made a ‘reasonable’ time before the accommodation or transportation is required. The occupier cannot charge the permit holder a fee for transport or accommodation that is more than that required to cover the cost of providing the transport or accommodation (FW Act, ss 521C(3), 521D(3)).

Dispute resolution, including access to arbitration, is extended by the Amendment Act to disputes arising over accommodation and transportation agreements for remote worksites (FW Act, s 505(1)). There is also a new provision for the FWC to deal with disputes over the frequency of entry to hold discussions. Under FW Act s 505A, the FWC may deal with such a dispute, including by arbitration, but may only make an order if it is satisfied that the frequency of entry by the permit holder(s) requires ‘an unreasonable diversion of the occupier’s critical resources’. The FWC may act on its own initiative or by application from a permit holder, a permit holder’s organization, an employer or an occupier of premises.

As noted earlier, the right of entry amendments commenced operation on 1 January 2014. However, they may prove to be short-lived in operation. Under the workplace relations policy that the Coalition took to the last election, proposed right of entry changes include the repeal of these amendments (except, unsurprisingly, the inclusion of dispute resolution over frequency of access), and reinstatement of the pre FW Act requirement for an organization to be covered by a workplace instrument applicable at a worksite before a permit holder can exercise right of entry (Coalition, 2013: 17–18).

‘Stop the bullying’ ¹

Workplace bullying poses many regulatory challenges. The consequences of workplace bullying behaviours can be significant in terms of economic and social impacts on both businesses and individuals. Businesses bear the brunt of lost productivity and the costs of repairing the damage to worker morale. Individuals may experience psycho-social and physical harms, loss of self-esteem and confidence, and loss of the capacity to participate in the labour market (House of Representatives, 2012: 1–8). However, regulating to eliminate workplace bullying involves complex challenges arising from different perceptions of the nature and effect of behaviours alleged to constitute bullying.

In Australia, workplace bullying falls under a patchwork of different laws including work health and safety, anti-discrimination and the criminal law. In 2012, the House of Representatives Standing Committee on Education and Employment concluded that there is no express prohibition of workplace bullying in any Australian laws, ‘nor any one law that can be used to both hold bullies accountable and provide resolution and remedies for the targets of bullying’ (House of Representatives, 2012: 29). The new anti-bullying provisions aim to fill this gap, providing bullied workers with access to a quick remedy to ‘stop the bullying’.

The Amendment Act inserted Part 6-4B into the FW Act, titled ‘Workers bullied at work’. Passed with the objective of providing for early intervention in bullying matters before harm is caused, Part 6-4B allows workers to make a complaint to the FWC about alleged workplace bullying and potentially obtain an order directed at preventing further bullying (House of Representatives, 2013: 9).

The provisions apply to ‘workers’, a term defined broadly by reference to the Work Health and Safety Act 2011 (Cth) (WHS Act) to include an individual who performs work in any capacity (including employees, contractors, sub-contractors, volunteers and students gaining experience, but not members of the Defence Force) (FW Act, s 789FC). However, while the coverage of the Act is broad, constitutional limitations mean that a significant number of workers, particularly those working for sole traders and state public servants, are excluded. ² To access the provisions, a worker must work in a constitutionally covered business: a business or undertaking (as defined under the WHS Act) which is a constitutional corporation, the Commonwealth or a Commonwealth authority, a body corporate incorporated in a Territory, or a business or undertaking conducted principally in a Territory or Commonwealth place (FW Act, s 789FD(3)).

Part 6-4B provides a remedy where a worker is ‘bullied at work’ which is defined as repeated unreasonable behaviour towards the worker (or a group of workers of whom the worker is a member) by a worker or group of workers, where that behaviour creates a risk to health and safety (FW Act, s 789FD(1)). Reasonable management action carried out in a ‘reasonable’ manner is expressly excluded from the definition (FW Act, s 789FD(2)).

Where a worker covered by the provisions ‘believes that he or she has been bullied at work’, they may apply to the FWC for an order to stop the behaviour (FW Act, s 789FC(1)). The FWC must commence action within 14 days, and if it is satisfied that bullying has occurred and there is a risk that it will continue to occur, it may make any order it considers appropriate, other than an order requiring the payment of money, to prevent further bullying (FW Act, s 789FF(1)). Contravention of an FWC order is an offence to which penalties attach (FW Act, s 789FG).

As the legislation had not yet taken effect at the time of writing, the success or otherwise of the provisions cannot be measured. It will take time before the terms ‘unreasonable behaviour’, ‘risk to health and safety’ and ‘reasonable management action’ develop a clear and consistent meaning. Cases in the unfair dismissal jurisdiction have demonstrated that a purported performance management process can easily be interpreted as bullying by an employee, and the line between the two can be difficult to draw. ³ However, provided that the system is well resourced, the capacity of the FWC to intervene in workplace bullying before irreparable harm is done may prove to be a timely preventative measure.

Expansion of consent arbitration

A final change to note is the expansion of grounds under which the FWC can conduct consent arbitrations. Under the FW Act, applicants alleging that their employment has been terminated in contravention of the general protections provisions or the unlawful termination provisions must make an application to the FWC for resolution of the dispute before they are able to commence court proceedings. Previously, the power of the FWC to deal with these applications has been limited to holding a conference. The amendments allow the FWC to undertake consent arbitration of general protections claims involving termination and unlawful termination claims where requested by the parties if the dispute has not been resolved and a certificate has been issued to that effect (FW Act, ss 368–371, 776–781). They also align the timeframe for making an application with respect to an alleged unlawful termination to the FWC with the 21-day timeframe for general protections dismissal and unfair dismissal applications (FW Act s 774(1)(a)).

New South Wales

In June 2013, the NSW Parliament passed the Government Sector Employment Act 2013 (NSW) (GSE Act) along with the consequential repeal of the Public Sector Employment and Management Act 2002 (NSW) and associated regulations. The GSE Act came into force on 24 February 2014. According to Premier Barry O’Farrell, the Act simplifies ‘decades of accreted complexity’ creating an Act with an easily understood structure (O’Farrell, 2013). In this process of ‘simplification’, the Act effects a change in public sector regulation in NSW further away from conciliation and arbitration of public sector industrial disputes, towards enhanced government control of public sector employment.

The primary regulatory focus of the GSE Act is the ‘public service’ which ‘consists of those persons who are employed under [the GSE Act, Part 4] by the Government of New South Wales in the service of the Crown’ (GSE Act, s 20). The Act covers statutory appointments (Secretaries of Departments, heads of other public service agencies) and employees who are broken into two categories – senior executive employees and public service employees. The Act regulates forms of engagement, work classifications and termination of employment across these categories.

Senior executive employees are to be engaged under a contract of employment as either ongoing or term employees (GSE Act ss 34(1), 39) and are employed essentially at will, subject to termination at any time without notice, with an entitlement only to the level of compensation for termination set out in the contract of employment (GSE Act s 41). There is no access to the NSW Industrial Relations Commission (NSWIRC) under the Industrial Relations Act 1996 (NSW) (IR Act) for any senior executive employee (GSE Act s 58(3),(4)). This is significant as this category will include some executive level employees who previously have been engaged under relatively generous award conditions (including benefits such as flex-time) (O’Farrell, 2013). Shifting workers within this category from award-based employment onto contract-based employment will inevitably require a redundancy process for existing staff who are unwilling to accept considerably reduced conditions and the removal of their job security, and may prove to be an expensive exercise for the NSW government.

Public service employees will continue to be award-based; however, by contrast to the now repealed Public Sector Employment and Management Act 2002 (NSW), there are relatively few express statutory provisions regulating their engagement. The GSE Act sets out how they may be engaged (ongoing, temporary or casual) (s 43), that their engagement may be subject to conditions (s 44), that they are to be employed in a ‘classification of work’ (s 45) and detailed provisions dealing with termination (s 47). Recourse to the NSWIRC under the IR Act is retained, but not with respect to disputes over promotion or over the engagement or failure to engage a worker as a non-executive employee (GSE Act s 58(6)).

The reduced detail in the GSE Act when compared to its predecessor is offset by the inclusion of a range of discretionary measures operating at regulatory level. Significant power is vested in the NSW Public Sector Commissioner through the Commissioner’s power to set ‘government sector employment rules’ (GSE Act s 12). These rules may deal with a range of matters for senior executive employees including work standards, methods of job evaluation, capabilities for roles, assignment of executives to roles and the terms of contracts of employment (GSE Act, s 36). For public service employees, they include recruitment, engagement, working conditions, work standards, methods of job evaluation, capabilities, assignment of employees, employees acting in other positions, termination of employment and excess employees (GSE Act, s 48).

The GSE Act also provides regulation for the broader ‘government sector’, defined to include the public service, the Teaching Service, the NSW Police Force, the NSW Health Service, the Transport Service of NSW and the service of any other person or body constituted by or under an Act or exercising public functions that is prescribed by the regulations (GSE Act, s 3(1) definition of ‘government sector’). The Act provides for additional regulation of the government sector through government sector employment rules in respect of workforce diversity (s 63), employee transfers and secondment between government sector agencies (ss 64–66), performance management systems (s 67), unsatisfactory work performance (s 68), misconduct (ss 69–70) and other matters.

The GSE Act represents a major change to the operation of the NSW public sector, and the full implications of the legislation are likely to remain unclear for some time, particularly with respect to the scope of the new government sector employment rules. Two other Acts passed by NSW Parliament in 2013 will also impact upon public sector workers. Staff members working for NSW Members of Parliament will be governed by the Members of Parliament Staff Act 2013 (NSW) (the date of commencement had not been proclaimed at the time of writing). The Act provides that staff of ‘political office holders’ (the Ministry and Leader of the Opposition) will be engaged directly by those office holders under terms and conditions determined by the Premier until they are terminated, resign, there is an election or the office holder loses office (Part 2). Staff engaged by other members of Parliament will also be employed directly by the Member of Parliament, under terms and conditions determined by the Presiding Officer (President or Speaker of the relevant house of parliament) and subject to termination at the will of the Member or when an election is held, the person resigns, the Member becomes a political office holder or ceases to be a Member of Parliament (Part 3). Finally, under the Statutory and Other Officers Remuneration Amendment (Judicial and Other Office Holders) Act 2013, the Statutory and Other Officers Remuneration Tribunal must now give effect to declared government policy on the remuneration of chief executive officers and office holders (including judicial officers) in making remuneration determinations under the Statutory and Other Officers Remuneration Act 1975 (NSW).

There have also been changes to the NSWIRC and Industrial Court. As discussed in last year’s review essay (see McCrystal and Orchiston, 2013), the jurisdiction of the NSWIRC and Industrial Court have been curtailed by the NSW referral of industrial relations powers and the transfer of the work health and safety jurisdiction to the NSW Local and District Court. Four NSWIRC judges will retire in early 2014 and will not be replaced (Workplace Express, 2013a). To accommodate this reduction in judicial members, the Industrial Relations Amendment (Industrial Court) Act 2013 (NSW) amended the IR Act to enable the NSWIRC to be constituted in court session by a single judge and enabling judges of the NSW Supreme Court to act as judicial members of the NSW Industrial Court.

Queensland

Legislation passed through the Queensland Parliament in 2013 revised the Industrial Relations Act 1999 (Qld) (QIR Act) with respect to work arrangements and conditions for state sector workers (Queensland public service and local council employees) and the regulation of state-registered organizations. The amendments implement an increased level of control over state sector working conditions and bargaining, including what can and cannot be contained within industrial instruments (awards and agreements), and has been described by some commentators as ‘worse than Work Choices’ (Workplace Express, 2013b).

The first major industrial relations change was the Industrial Relations (Fair Work Harmonisation No. 2) and Other Legislation Amendment Act 2013 (Qld). This legislation substantially amends the QIR Act with respect to employment terms and conditions. The amendments alter the structure of the QIR Act to mirror the FW Act, although there are significant differences in the content of the Acts.

With respect to minimum conditions, new Chapter 2A contains a set of legislated minimum standards, called the ‘Queensland Employment Standards’ (QES). The provisions largely replicate standards that already existed within the QIR Act, but improve the amount of sick leave available (increased from eight days to 10 days per year), allow sick leave to be taken as carers’ leave, and reduce minimum redundancy entitlements from three weeks' pay per year of service to a scheme which is capped at 16 weeks for employees with 12 or more years of service.

To operate in conjunction with the QES, the Queensland award system is to be ‘harmonised’ with the FW Act. Chapter 5, Part 2 of the QIR Act allows the Minister to direct the Queensland Industrial Relations Commission (QIRC) to carry out an award modernization process similar to that carried out by the Australian Industrial Relations Commission prior to the commencement of the FW Act.

The content of any new awards created by this process will be curtailed, as will the content of any agreements created under the agreement making provisions of the QIR Act. Awards and agreements must contain basic content similar to the FW Act, although the required ‘individual flexibility arrangement’ clause does not contain a better off overall test as it does in the FW Act (QIR Act, s 71MB). By contrast, awards and agreements must not contain clauses that: deal with contracting out or in of services (at all); job security or maximizing permanent employment; ‘encouragement’ of membership of an industrial association (e.g. the supply of facilities to organizations, payroll deductions for dues, allowing for attendance at training or meetings organized or facilitated by industrial associations during working time); require or permit a bargaining services fee; involve an entity in decision making regarding organizational change; adopt or incorporate any other instrument; require allocation of funding to something other than employee entitlements; deal with right of entry; are discriminatory; displace the QES; restrict forms of employee engagement (i.e. full-time, part-time, continuing, casual); restrict flexible rosters; deal with accident pay; or restrict the offering of high-income guarantee contracts (new ss 71O–71OJ). Furthermore, awards must not provide for training, workload management, delivery of services or workforce planning (s 71OK). Agreements must not require an employer to manage workloads in a particular way, restrict access to training arrangements, or restrict the efficient delivery of services (71OL). This last requirement is nebulous and is likely to be the subject of contestation, especially as many claims by unions to protect working conditions may be construed as restricting ‘efficiency’. This is the most extraordinary list of restrictions and controls. It represents an unprecedented level of legislative support for unfettered managerial prerogative in almost all aspects of the governance of the Queensland public service and local councils, and far exceeds the list of prohibited content in agreement making found in the Workplace Relations Act 1996 (Cth) after the WorkChoices amendments (see Forsyth and Sutherland, 2006).

There has also been curtailment of the right of Queensland public sector and local council employees to take industrial action under the QIR Act. New s 148 requires the QIRC to help parties to negotiations to make an agreement in certain circumstances. This assistance takes the form of conciliation, with compulsory arbitration where matters are not resolved by conciliation (s 149), which has the effect of removing access to industrial action. The circumstances which may lead to arbitration are broad (s 148). They include provisions similar to the essential services and harm to bargaining parties provisions in ss 423 and 424 of the FW Act, but also allow for arbitration in a much broader range of circumstances. These include where one of the parties declares a breakdown in negotiations and the QIRC considers that further negotiations are unlikely to result in an agreement being made within a reasonable time; or where one of the parties is organizing or engaging in industrial action which is protracted, or the cumulative effect of which has affected, or threatens to affect, directly or indirectly, access to, or delivery of, services to the community. The provisions are a considerable restriction on access to industrial action for Queensland public sector and local council workers. It effectively means that almost all public sector disputes involving industrial action of any severity may be shut down.

The second major industrial relations change in Queensland in 2013 was the Industrial Relations Amendment (Transparency and Accountability of Industrial Organisations) and Other Acts Amendment Act 2013 (Qld) which took effect on 1 July 2013. The Act made changes to the provisions of the QIR Act dealing with industrial organizations, aiming to increase their transparency and accountability. The amendments are similar to those implemented at the federal level in 2012 and discussed in last year’s review essay (McCrystal and Orchiston, 2013), implementing disclosure obligations, requiring the development and implementation of policies about expenditure and requiring training of officials over governance and accounting obligations. However, beyond these changes, the amendments also require employee organizations to make certain information publicly available online, including the organizations’ credit card statements and cab charge cards or vouchers (QIR Act, ss 557BA, 557D, 655A), and require a ballot of members to authorize any political expenditure over $10,000 (QIR Act, s 553D). Other notable changes are the repeal of QIR Act s 110, which had permitted the inclusion of terms in industrial instruments which ‘encouraged’ a person to join or maintain membership of an industrial association, along with a provision declaring any such terms in existing industrial instruments to be ‘of no effect’ (QIR Act, s 691C(1)). The amendments also inserted new notice provisions into the right of entry requirements in the QIR Act requiring authorized industrial officers seeking to exercise right of entry under the Act to give at least 24 hours' written notice before exercising those rights (s 372A).

One other Queensland Act impacting ‘public sector’ workers should be mentioned. The Queensland Independent Remuneration Tribunal Act 2013 (Qld) created the Queensland Independent Remuneration Tribunal to review and set the remuneration levels of Queensland Members of Parliament. Previously, Queensland MPs had been entitled to an annual salary that was $500 less than federal MPs under the Parliament of Queensland Act 2001 (Qld). The new legislation broke this nexus and the salaries of Queensland MPs will now be set independently.