Future Directions: Enhancing the public value of the Fair Work Commission

Delivering public value in a tribunal setting

Mark Moore, a public management and leadership academic at Harvard University, has been at the forefront of this issue. He defines the aim of managers in the public sector in terms of creating public value at a broad level. Program evaluation and cost effectiveness analysis can help identify public value in terms of collectively defined objectives (Moore, 1995). In addition, there should be a focus on attracting continuing support from the broader institutions of government, stakeholders and the public (Colebatch, 2010: 67). These broad concepts are increasingly being applied across the public sector (Kelly et al., 2002; West and Davis, 2011).

Public value concepts can be used to gauge the performance of policies and public institutions. The application of the concept of public value to courts and tribunals is not without difficulty. Timeliness measures, caseloads and the backlog of pending cases are important metrics, but they do not completely capture the public value of judicial or arbitral dispute resolution. The public resolution of a dispute creates a precedent which informs decisions about whether to litigate at all. Predictability of outcomes promotes the resolution of disputes without litigation. The public value of such a system is difficult to measure.

For tribunals, the Tribunal Excellence Framework provides a means of assessing and improving public value. The Tribunal Excellence Framework draws on the work of the International Consortium that developed the International Framework for Court Excellence. The Council of Australasian Tribunals has substantially modified the Court Excellence Framework to better meet the needs of tribunals (see Ross, 2012).

Michael Gething (2008), Principal Registrar of the Supreme Court of Western Australia, has identified the following dimensions for court excellence:

Excellence in the context of a court has three dimensions. The first focuses on individual decisions … This will be referred to as ‘substantive justice’. The second dimension starts at the level of an individual decision, but then taps into community perceptions that will inevitably be drawn from a mosaic of individual decisions … This dimension of excellence will be referred to as ‘open justice’. The third level focuses on decisions of a court in aggregate and the work of the court as an institution … this involves four further dimensions: (i) timeliness; (ii) access, in particular cost; (iii) efficiency; and (iv) community confidence (p. 23).

Gething’s three dimensions of excellence are also apposite in the context of a tribunal such as the Commission. The first of these dimensions – substantive justice delivered through predictable and just decisions – provides an apt illustration of a qualitative measure of public value in an adjudicative context. Different Commission Members faced with the same facts should, broadly speaking, reach a similar outcome. Of course, Commission decisions often involve the exercise of a discretion and on the same facts different Commission Members may legitimately reach different conclusions. But such discretions must be exercised judicially and within acceptable parameters. A just decision is one based solely on the application of the relevant law to the facts of the case.

Delivering justice is not just about the outcome. The parties who appear before tribunals, and the community generally, have a legitimate interest in procedural justice. Procedural justice includes the legal concept of procedural fairness. But it also embraces a judgement about whether a tribunal process is fair in a more abstract sense. In a review of the literature about the factors driving public and participant satisfaction with courts and tribunals, Moorhead, Sefton and Scanlan, researchers from Cardiff Law School, concluded:

The weight of the evidence suggests that it is participant judgments about the fairness of the process not the outcomes that participants receive which are most important in influencing the levels of their satisfaction … the suggestion that satisfaction is simply dependent upon outcome, driven solely by the self interest of each participant, and somehow an anathema to justice, is challenged by the evidence. Even losing parties may gain some satisfaction from a process which is palpably just (Moorhead et al., 2008: i–ii).

This conclusion is supported by an Australian study of the Queensland guardianship jurisdiction. It found that fairness, procedural fairness and natural justice are central to satisfaction with court and tribunal processes and that parties can distinguish between the decision made and satisfaction with the process (Ashman and Joachim, 2010: 28). Similarly, in examining the drivers of public confidence in courts in the United States, Benesh (2006) found that experience with the courts and perceptions of procedural fairness affect people’s confidence in the courts.

Measures of public and participant satisfaction are a close proxy for the value of procedural justice. Participant and public perceptions about the fairness of the process that is about procedural justice depend on a complex mix of factors. Moorhead, Sefton and Scanlan found that five process-oriented factors contributed to the perception of fairness, and hence satisfaction:

the expectations of, and information provided to, participants;

Satisfaction with the process of justice is an important metric for a tribunal, and more generally. Satisfaction with the judicial process has been found to have a measurable effect on society as a whole and contributes to the perceived legitimacy of the justice system. There is also some evidence that it affects the behaviour of citizens, increasing their respect for the law (Cascardi et al., 2000; Tyler, 2006; Tyler and Huo, 2002).

Excellent tribunals resolve disputes and decide cases in a fair, accessible and efficient manner. They interpret the law consistently, impartially and independently. Excellence in this context can be seen as having three broad dimensions: predictable, just decisions; procedural justice; and the delivery of a fair and efficient dispute resolution service.

The service provided by the Commission should be fair in that it should provide access to a fair hearing, and be efficient in the sense that it is affordable and resolves disputes in an appropriate and timely way. The costs incurred by the parties and the Commission resources allocated to a proceeding must be reasonable and proportionate to the complexity and importance of the issues that are the subject of the case. By improving its service to the community in terms of these measures, the Commission is able to improve its public value.

The changing nature of the Commission’s work

In recent years the Commission has seen a significant shift in the composition of its work and an increase in the number of applications lodged. The nature of the Commission’s work has fundamentally changed – from collective to individual dispute resolution. Corresponding with this shift, the number of applications lodged overall has increased, with 34,152 applications lodged in 2014–2015 (Fair Work Commission, 2015: 8). Twenty years ago, about two-thirds of the applications lodged with the Commission were collective in nature. The remaining one-third were comprised of applications lodged by individuals. Figure 1 shows that by 2014–2015 this situation had largely been inverted, with 67% of applications lodged by individuals and 33% lodged in relation to collective matters. OPEN IN VIEWER

The increase in the proportion of individual dispute matters is a function of legislative change and changing patterns of industrial disputation. The most significant legislative change has been the expansion of unfair dismissal rights introduced by the Fair Work Act 2009 (Cth). The level of industrial disputation has fallen over time and now, generally speaking, it is associated with bargaining following the expiry of the term of a collective agreement.

Figure 2 shows the total number of working days lost per 1000 employees between 1988 and 2014. The total number of working days lost has fallen from around 265 per 1000 employees in 1988 to 6.8 in 2014. The average number of working days lost has steadily declined over successive industrial relations regimes. OPEN IN VIEWER

The average working days lost per 1000 employees under the Fair Work Act is slightly higher than the average during the period of the Workplace Relations Amendment (Work Choices) Act 2005 (16.5 compared to 13.5). However, the difference is not large, with the increases in 2011 and 2012 attributable to agreement renegotiations, some of which would relate to agreements outside of the national system (Australian Government, 2012: 76). Measured as working days lost the level of industrial disputation under the Fair Work Act is one-tenth of the level of disputation experienced in the late 1980s. ¹

Collective dispute resolution will always be a core Commission function, because of the impact that such disputes may have on the parties and the community generally. But, we also recognise that individual dispute resolution is now a substantial part of our work and collective dispute resolution is declining in relative terms.

Two things flow from the shift in the nature of our work. The first concerns the nature of the parties. The parties to collective disputes – unions, employers and employer organisations – are what Galanter (1974) described as ‘repeat players’. They are familiar with the legislative environment and the Commission’s procedures. The parties to individual disputes are quite different and are generally ‘one shotters’. They are unfamiliar with the Commission’s procedures and the relevant legislative provisions and are often self-represented. We have an obligation to explain these matters to self-represented parties.

The shift in the nature of our work also has implications for our stakeholder base. The parties appearing before the Commission are no longer predominantly registered organisations – they are individual employees and employers, many of whom are self-represented.

The shift in the nature of the Commission’s work brings significant challenges. Historically, the organisation has focused on collective dispute resolution. This focus is reflected in the Commission’s processes, its publications and its engagement with parties.

Responding to the changing nature of the Commission’s work and delivering public value

At its heart, the Commission’s public value lies in the provision of an efficient dispute resolution service – a service which resolves disputes in a way that is timely, fair and appropriate to the nature of the parties before it, and minimises the costs incurred by the parties. Since 2013 the Commission’s public value also lies in the promotion of cooperative and productive workplaces and in the prevention of disputes. ²

The Commission has sought to address these challenges through a transformational change program called Future Directions. First launched in October 2012, the Commission has already implemented the 25 initiatives outlined in the now completed first stage of Future Directions. These initiatives are directed at improving our service delivery and reducing transaction costs for parties, with a view to enhancing public value. The second stage of the Future Directions initiatives was launched on 8 May 2014. These 30 new initiatives build upon the successes of the first stage and are aimed at improving the performance and quality of the services provided by the Commission.

The successes and further initiatives under the transformational change program are discussed later. An important element of providing public value is not only the implementation of initiatives, but reporting on their progress as well. The Commission’s implementation of the Future Directions program recognises that, like any justice institution, it is accountable to the community it serves. Accordingly, the Commission has issued regular reports on its progress in implementing Future Directions. The Future Directions initiatives are grouped under four themes:

promoting fairness and improving access;

Promoting fairness and improving access

The provision of a fair hearing is at the very heart of the Commission’s obligations to the parties who appear before it. A fair hearing involves the opportunity to put forward your case – the right to be heard – and to have that case determined impartially and according to law. Members of the Commission are bound to act ‘judicially’ in the sense that they are obliged to provide procedural fairness and to determine matters impartially. ³ The Fair Work Act sets out some of the Commission’s obligations regarding the conduct of hearings. If the Commission holds a hearing in relation to a matter, the hearing must be held in public, except in the limited circumstances provided in s.593(3) of the Fair Work Act. Further, the Commission must perform its functions and exercise its powers in a manner that: is fair and just; is quick, informal and avoids unnecessary technicalities; and is open and transparent. ⁴

Commission Members are responsible for ensuring that proceedings are fair and that parties are treated with courtesy and respect. The information and assistance provided by the Commission to parties, particularly self-represented parties, is an important part of providing access to justice. This issue has become increasingly important as the mix of matters dealt with by the Commission has changed over time and individual dispute resolution (unfair dismissals and general protections matters) is now a substantial part of the Commission’s work. As previously mentioned, in 2014–2015 67% of applications lodged were in relation to individual matters. For many of these parties, their case will be the first time they have had any contact with the Commission. For those unfamiliar with the Commission’s processes and how a hearing is conducted, the experience can be daunting. The information and assistance provided can be of significant benefit to such parties.

The first stage of Future Directions implemented a number of initiatives directed at promoting fairness and improving access to justice, including:

setting out the obligations of Members, parties and their representatives in a new ‘Fair Hearing’ practice note;

The publication of benchbooks illustrates how the Commission is promoting fairness and improving access. A benchbook is a resource that is generally used by Tribunal members as a central collection of decisions that have been made around key areas within a particular jurisdiction. The unfair dismissal benchbook contains plain English summaries of the key principles of unfair dismissal case law. It also contains case summaries that illustrate how the principles have been applied in decisions of the Commission. It is intended to assist with making and responding to applications and with preparing materials in accordance with the directions of the Commission. The availability of this benchbook and other interactive tools on the Commission’s website improves access to justice at the Commission by increasing the accessibility of relevant case law. Benchbooks have also been produced in relation to anti-bullying, enterprise agreements and general protections matters.

In successfully implementing the first stage of the Future Directions initiatives, the Commission consulted widely with the community it serves. One of the initiatives directed at promoting fairness and improving access was the creation of a virtual tour on the Commission’s website. This initiative is intended to assist first-time users of the Commission’s services. The virtual tour on our website provides an accessible overview of what people can expect when they come to the Commission, what the environment is going to look like and how their matter is going to be determined. The tour provides information on the simple things such as where to park, or the nearest public transport, as well as who is who in a hearing room and how to make or respond to an application. Coupled with the virtual tour were improvements to the Commission’s website to provide greater access to information to first-time users and self-represented users. The site was designed to reflect external user feedback and to be accessible on all devices.

The Commission is further promoting fairness and improving access in its second set of Future Directions initiatives. These initiatives include:

developing further benchbooks and providing online access to audio recordings of proceedings;

The second stage of Future Directions is underway and the Commission has successfully implemented a number of these measures. A key second stage initiative to promote fairness and improve access is to improve services for small businesses. One measure has been to develop a plain language agreement-making guide and checklist, which was made on the Commission’s website in December 2015.

The Commission has also been consulting with small business owners in relation to citizen co-design research (Sweeney Research, 2014). This research involved the undertaking of focus groups and in-depth interviews with 47 small business owners across Victoria and New South Wales in the context of the four-yearly review of modern awards. This exercise elicited practical insights from small businesses and helped the Commission gain a greater understanding of the attitudes of the small business community in relation to their use and perceptions of modern award documents. These practical measures are the ways in which the Commission is engaging with the wider community and its stakeholders to promote fairness, improve access to its services and deliver public value.

Efficiency and innovation

An efficient dispute resolution service resolves disputes in a timely and appropriate way that minimises the costs incurred by the parties. Delays in dispute resolution undermine fairness – in many cases, justice delayed is justice denied. The Commission has a proven track record of dealing with applications relating to industrial action in a timely way, having consistently met its key performance indicator of dealing with 50% of these applications within three days of lodgement (Fair Work Commission, 2015: 92).

But there are other areas of the Commission’s work where there has been scope for improvement. On 1 July 2012, the Commission introduced timeliness benchmarks for the delivery of reserved decisions and in relation to the time taken to determine applications for the approval of agreements. The reserved decisions benchmark provides that 90% of all reserved decisions are to be handed down within eight weeks of the last hearing day (or receipt of the last written submission). All reserved decisions are to be handed down within 12 weeks.

The Commission’s work is allocated through a panel system. There are four industry panels as well as specialist panels dealing with anti-bullying, termination of employment, organisations and major resources/infrastructure projects. Panel heads are responsible for the timeliness performance of the Members in their panel. The introduction of the timeliness benchmarks has seen a significant improvement in the Commission’s performance in these key areas.

Since instituting the timeliness benchmarks, the Commission’s performance in issuing decisions has improved. In the period 1 January to June 2015, 82.8% of all reserved decisions were handed down within eight weeks, as against the performance benchmark of 90%. This can be compared with the 12 months ending 30 June 2012, before the institution of the timeliness benchmarks, when only 72.2% of reserved decisions were handed down within the eight-week benchmark. In 2011–2012, some 14% of reserved decisions were handed down more than 12 weeks after the final day of hearing or the last day of written submissions. By 30 June 2015 this had dropped to 7%. The Commission’s performance against these benchmarks is regularly published on our website and updated monthly.

The timeliness benchmarks are intended to be challenging, to that extent they are aspirational. We expect that there will be individual instances where the Commission does not meet its own high standards, for a variety of reasons. But the setting of performance benchmarks and then publicly reporting the Commission’s performance are important accountability measures. A separate set of timeliness benchmarks apply to the approval of enterprise agreements. There are three key benchmarks:

50% of all applications are to be finalised within three weeks;

The Commission has now introduced an agreements approval triage process designed to improve the time taken to deal with applications for the approval of agreements. This followed an agreements approval pilot, under the second stage of Future Directions, which ran from 6 October 2014 to 30 June 2015. The pilot involved Commission staff, under the supervision of a Deputy President, triaging applications for all Western Australian, Tasmanian and Australian Capital Territory (ACT) agreements and some Victorian agreements in the building, metal and civil construction industry prior to a Member’s consideration of the agreement.

We commissioned an external review of the agreements pilot to evaluate its progress. The report, which is available on the Commission’s website, concluded that the median time between lodgement and approval was significantly shorter for those agreements processed in the pilot than for non-pilot agreements. In addition, it was noted that the centralised triage approach provided for ‘a simpler, more consistent process for assessing agreements' and has effectively and efficiently assessed enterprise agreements in accordance with the Fair Work Act and to the satisfaction of Commission Members (Inca Consulting, 2015a). Following the pilot and the evaluation report, the new triage process is being progressively implemented, and by early 2016 about 80% of agreements will be dealt with under this process. By August 2015, 50% of matters were being finalised through the triage process in eight days and 90% of matters finalised in 17 days, on both measures an improvement on the results achieved prior to implementation of the process.

Innovation means not only finding creative ways to improve our efficiency, but also making the best use of available technologies in order to deliver a fair and efficient dispute resolution service. Parties can now file all applications electronically via our eFiling system, which helps to keep transactional costs down. Our new Online Lodgement System was launched in December 2015 and includes ‘smart forms’ in those areas where we receive the highest volume of applications as well as a secure payment facility where a filing fee is payable. At launch, the Online Lodgement System will be capable of handling 40% of the organisation’s lodgements, with this figure growing as additional forms are added. The ‘smart forms’ allow applicants to type directly into the form rather than scanning hard copies of the completed forms and emailing our registry. ‘Smart forms’ will assist in streamlining the process for lodging applications in unfair dismissal cases, general protections matters and applications to approve agreements. These three areas account for about two-thirds of all Commission applications.

New technology can be used to improve work processes, service delivery and access. We have taken a number of initiatives in this area including:

the redevelopment of our website, so that interested parties can access and search listings information by smartphone;

In 2015, the Commission commenced trialling the use of an information kiosk at the Sydney Registry. By allowing people to complete and lodge forms and to access relevant information online, the kiosk assists people who do not have ready access to the internet or who have attended one of the Commission’s offices in person. The Commission will consider expanding the kiosk facilities to other registries once our online lodgement service is fully implemented.

Transaction costs for unfair dismissal and general protection applications have also been reduced by the use of telephone conciliations. The Commission has been using telephone conferences in unfair dismissal applications since 2009. A review by TNS Social Research in 2010 reported high levels of satisfaction with the new conciliation process (TNS Social Research, 2010). As part of the second stage of Future Directions we have extended the use of staff conciliators to general protections matters. Traditionally, conferences about general protection applications had exclusively been conducted by Commission Members, often on a face-to-face basis.

The staff conciliators, who are highly skilled in conciliation and mediation, conducted 444 conferences during the pilot, which ran from 30 September 2014 to 30 June 2015. One of the key objectives of the pilot was to have applications listed for a first conference shortly after lodgement, in line with the Commission’s aim to resolve disputes in a manner that is ‘just, quick and affordable’. By this measure, an external review concluded that the pilot was a success as it significantly reduced the time between lodgement and conference – 90% of matters in the pilot program were the subject of a conference within 43 days of lodgement, compared with 59 days for matters that were not part of the pilot. This significant improvement can be attributed to centralised processes for listing and coordinating workloads (Inca Consulting, 2015b).

The review also found that centralised case management and the use of staff conciliators is a more effective arrangement than the traditional model and that the approach provides for a timelier and more efficient process, as well as improved settlement rates. Following the review, the general protections program roll out has been completed and all such applications are now referred to staff conciliators. The examples provided illustrate the creative and technology-driven ways in which the Commission is improving its efficiency and innovating within its legislative remit to deliver public value.

Increasing accountability

Public trust and confidence are central to the Commission’s effectiveness. Commission Members are subject to a range of accountability measures:

hearings are generally held in public;

Future Directions contains a number of initiatives directed at increasing the accountability of the Commission. Each of these initiatives has been implemented:

Member Conduct Guide published on the website;

The Member Conduct Guide does not purport to lay down a prescriptive set of rules to govern Member behaviour. The primary responsibility for deciding whether or not a particular activity or course of conduct is appropriate rests with the individual Member. The Guide sets out three main objectives:

to uphold public confidence in the Commission and in the administration of justice;

Any course of conduct that has the potential to put these objectives at risk must be carefully considered and, as far as possible, avoided.

As part of the second stage of Future Directions, the Commission will also evaluate its performance against the International Framework for Tribunal Excellence and will continue to release relevant and timely information on its performance within a transparent and easy to understand performance indicator framework.

The initiatives outlined support the provision of a more efficient dispute resolution service, which is at the core of the Commission's public value proposition. Measuring the Commission’s performance against clear and understandable benchmarks and reporting regularly on our performance are the ways we are increasing our accountability and communicating to stakeholders that the Commission is delivering public value and meeting their expectations.

Productivity and engaging with industry

One of the key workplace relations issues facing Australian workplaces is declining productivity growth. Australia’s productivity performance, however measured, has declined substantially since the late 1990s. One thing that economists agree on is that productivity growth is a good thing. Our productivity performance as a nation underpins our standard of living. Martin Parkinson, Secretary of the Department of the Prime Minister and Cabinet and former Secretary of the Treasury, has observed:

… in the long run productivity growth – producing more from the same inputs – is the only sustainable way for future generations to enjoy higher living standards. (Parkinson, 2011)

The legal framework underpinning the workplace relations system determines the rights and responsibilities of employees, employers and their representatives. While public policy settings and institutional support can facilitate productivity growth – as they affect the environment within which firms work – the key to improving productivity lies at the workplace level. Legislative change alone is unlikely to provide a solution to declining productivity growth or cooperative workplace relations at an enterprise level.

Since 2013, the Commission has had additional functions to promote cooperative workplaces and to prevent workplace disputes (see s.576(2)(aa)). For a more detailed discussion of this legislative function, see Stewart et al. (2014).

As part of the Future Directions initiatives, and in line with its new legislated functions, the Commission has developed a broad engagement strategy to encourage more productive workplaces, and prevent disputes, by promoting harmonious and cooperative workplace relations.

The engagement strategy, called New Approaches, relies on a different model of intervention that is aimed at permanently improving relationships between employers, employees and their representatives at the workplace level to reduce disputation and improve productivity. A goal of this project is to assist employees and employers to communicate and solve problems together to prevent disputes that may lead to working days or productivity being lost, including before and during enterprise bargaining.

Relying on the principles of interest-based negotiation, two of the larger interventions involving workplaces with protracted histories of disputation have been the subject of case studies prepared by the University of Newcastle. In both case studies, the employee and employer representatives reported significant and lasting improvements to their workplace relations. ⁶

In August 2015, Commission Members participated in workshops on interest-based bargaining. Employer and employee representatives, have been proactive in requesting the Commission’s assistance. The Commission will pilot the New Approaches model of implementation throughout 2015 and 2016 to assess its impact on cooperation and productivity, and will evaluate the success of the project before deciding whether to roll it out as an ongoing initiative.

Many factors impact on productivity and competitiveness, including the skills of our workforce, infrastructure, taxation, the general regulatory framework, workforce participation and the capacity for enterprises to successfully innovate. Our engagement strategy can assist employees, employers and their representatives to find common ground in at least some of these areas.

More broadly, the Commission continues to engage with the workplace relations community by consulting with peak employer, small business and employee organisations about how it can best meet their members’ needs, and the needs of the broader community. The Commission, through its national engagement strategy, also provides briefing and information sessions to school groups, unions, employer organisations, businesses, law firms, community legal centres and other community groups. The Commission actively fosters dialogue with its stakeholders through public lectures, panel discussions and participation in conferences and workshops.

While these initiatives are not a panacea for the challenges facing us as a nation, each national institution must play its part. It is vital that we meet these challenges if future generations are to enjoy higher living standards. The Commission is actively responding to the challenges of increasing productivity and engaging with industry in its continuing commitment to deliver public value.

Conclusion

The initiatives outlined in this article represent only a portion of the Commission’s transformational change strategy. Each is directed at answering the challenge of delivering and communicating public value. All of the 25 initiatives set out in the first stage of the Future Directions program have been implemented. Of the further 30 initiatives that form the second stage of the Future Directions program, 16 have been implemented to date. The implementation of Future Directions has significantly improved the service and public value we provide to the community. There is, of course, always more that can be done to continue to meet the changing needs and expectations of the parties that appear before us and the community more generally. The Commission’s change program has improved and will continue to improve the level of service we provide to the community, and enhances the Commission’s standing as one of our key national institutions.