Observation (CEACR) - adopted 2009, published 99th ILC session (2010)

The Committee notes the comments of the Australian Council of Trade Unions (ACTU) in a communication dated 31 August 2009, the International Trade Union Confederation (ITUC) in a communication dated 26 August 2009, the Australian Chamber of Commerce and Industry (ACCI) in a communication dated 14 October 2009 and the Australian Industry Group (AI) dated 14 October 2009 on the application of the Convention. The Committee also notes the passage of the Fair Work Act, 2009, and the creation of Fair Work Australia (FWA) to oversee the administration of the provisions of this Act. As a general consideration, the Committee notes with interest that the Fair Work Act was prepared in full consultation with the social partners and was aimed at resolving a number of issues that the Committee has been raising over recent years in relation to the application of the Convention.

The Committee notes with interest that the Government indicates that the development of the new system under the Fair Work Act benefited from a process of genuine and extensive consultation with the social partners and key stakeholders – the most comprehensive consultation process on workplace relations ever undertaken in Australia. According to the Government, this extensive consultation process ensured that all stakeholders had the opportunity for their concerns to be raised and addressed before the Bill was debated in Parliament and adopted in amended form as the Fair Work Act. The Government indicates that Australia’s new system represents a significant move away from the fundamental elements of the previous Government’s Work Choices regime and that the Fair Work Act has been designed to balance the needs of employees, unions and employers and to foster increased competitiveness and prosperity, at the same time as safeguarding workplace rights and guaranteeing minimum standards. The Government considers that the new legislation strikes the right balance between fairness and flexibility in the workplace to achieve the objectives of both social equity and economic modernization.

Article 3 of the Convention. The right of organizations freely to organize their activities and to formulate their programmes. The Committee recalls that it previously expressed the need to amend numerous provisions of the Workplace Relations Act, 1996, (WR Act) which lifted the protection of industrial action in support of: multiple business agreements (section 423(1)(b)(i)); “pattern bargaining” (section 439); secondary boycotts and general sympathy strikes (section 438); negotiations over “prohibited content” (sections 356 and 436 of the WR Act, in connection with the Workplace Relations Regulations, 2006); strike pay (section 508 of the WR Act); and provisions which prohibited industrial action in case of danger to the economy (sections 430, 433 and 498 of the WR Act), through the introduction of compulsory arbitration at the initiative of the Minister (sections 500(a) and 504(3) of the WR Act). The Committee also recalls that it previously raised the need to amend provisions of the WR Act which prohibited industrial action in instances when it risked harm to the national economy and empowered the Minister to order compulsory arbitration.

The Committee notes the concerns raised by the ACTU that most of the restrictions remain in place in the Fair Work Act. In particular, sections 408–411 protect industrial action only if it is undertaken in the process of bargaining for an agreement, which would appear to effectively prohibit sympathy strikes and general secondary boycotts. The Act maintains the removal of protection of industrial action in support of multiple enterprise agreements (section 413(2)). The Committee notes that the Government indicates in its report that, under the Fair Work Act, certain categories of multiple employers with a close connection to each other are able to bargain together as single-interest employers for a single enterprise agreement with their employees. In that instance, protected industrial action is available to employers and employees. The Fair Work Act also allows voluntary multi-employer bargaining. However, employers and employees do not have access to protected industrial actions in these circumstances. In addition, the pre-existing secondary boycott arrangements, regulated by the Trade Practices Act, 1974, remain in place. The Committee requests the Government to review the abovementioned provisions, in the light of its previous comments, in full consultation with the social partners concerned, with a view to bringing them into full conformity with the Convention.

Pattern bargaining remains unprotected, unless the parties are “genuinely trying to reach an agreement” (sections 409(4) and 412). Industrial action remains unprotected if it is in support of the inclusion of unlawful terms, including: to extend unfair dismissal benefits to workers not yet employed for the statutory period; to provide strike pay; to pay bargaining fees to a trade union; and to create a union right to entry for compliance purposes that are different or superior to those contained within the Act (section 409(3)). The Committee notes that the Government indicates that, under the Fair Work Act, industrial action in pursuit of an agreement that contains non-permitted matters is still protected, provided the bargaining representatives reasonably believed the claims were permitted. The Government further indicates that, under the Fair Work Act, it remains unlawful for an employer to pay, or an employee to demand or request strike pay, but that when protected industrial action is taken there will no longer be a minimum mandatory deduction of four hours’ pay. In addition, section 423 permits the suspension or termination of protected industrial action if it may cause significant economic harm. Section 424(1)(d) requires the suspension or termination of industrial action if it has threatened, is threatening or would threaten to cause significant damage to the Australian economy or an important part of it, while section 431 permits the Minister to terminate proposed industrial actions in the same circumstances. Industrial actions that are threatening to cause significant harm to a third party must also be suspended or terminated (section 426). The Government indicates that in order for the prohibition or suspension of industrial action to be ordered by the FWA, that agency must be satisfied that the action is threatening to cause significant and imminent economic harm. The Committee observes that these restrictions depend upon a complex review of conditions apparently set forth with the aim of balancing a number of concerns. With reference to its previous comments on these matters and recalling that the right to strike is an intrinsic corollary of the right of association protected by Convention No. 87 (see in particular the 1994 General Survey on freedom of association and collective bargaining, paragraphs 159, 160, 168 and 179), the Committee requests the Government to provide detailed information on the application of these provisions by the FWA and to continue to keep them under review with the social partners with the aim of ensuring the full application of the provisions of the Convention.

The Committee previously noted the need to amend section 30J of the Crimes Act, 1914, which prohibits industrial action threatening trade or commerce with other countries or among states. Section 30K of that Act prohibits boycotts resulting in the obstruction or hindrance of the performance of services by the Australian Government or the transport of goods or persons in international trade. The Committee notes that the ITUC states that there have been no amendments to the Crimes Act. In addition, section 419 of the Fair Work Act, 2009, requires the FWA to suspend or terminate industrial action in non-national enterprises or by non-national employees, if the event will or would be likely to have the effect of causing substantial loss or damage to the business of a constitutional corporation. The Committee once again requests the Government to review the abovementioned provisions, in the light of its previous comments, in full consultation with the social partners concerned, with a view to bringing them into full conformity with the Convention and, in the meantime, to provide detailed information on any use of these provisions in practice.

In addition, the Committee notes the concerns raised by the ACTU in relation to the potential obstacles to the effective exercise of industrial action that may be posed by the provisions concerning strike ballots. The Committee requests the Government to provide information on the application of those provisions in practice.

The Committee recalls that it previously raised the need to amend the restrictive conditions set for granting a permit allowing trade union representatives to have entry to the workplace in order to meet with workers. The Committee notes that, under the Fair Work Act, a union official must hold a permit provided by the FWA in order to have the right of entry under the Fair Work Act for a certain workplace. In determining whether to grant an entry permit, the FWA will consider any matter it considers relevant, including whether the applicant has ever been convicted of violating an industrial law or convicted of a crime involving fraud, entry onto premises, or intentional use of violence or destruction of property (section 513). The Committee notes that the Government indicates that the Fair Work Act permits union officials to hold discussions with employees who are members, or eligible to be members, of a union and to enter workplaces to investigate suspected breaches of the Act or an instrument made under the Act. The Committee requests the Government to provide information on the practical application of this provision, including statistics relating thereto.

Building industry. The Committee recalls from previous comments that: (i) the Building and Construction Industry Improvement (BCII) Act of 2005 renders virtually all forms of industrial action in the building and industrial sector unlawful; (ii) introduces severe financial penalties, injunctions and actions for uncapped damages in case of “unlawful” industrial action; (iii) gives the enforcement agency known as the Australian Building and Construction Commission (ABCC) wide-ranging coercive powers akin to an agency charged with investigating criminal matters; (iv) grants the capacity to the Minister for Workplace Relations to regulate industrial affairs in the building and construction industry by ministerial decree through a device referred to as a building code which is inconsistent with the Convention on several points and is implicitly “enforced” through an “accreditation scheme” for contractors who wish to enter into contracts with the Commonwealth. The Committee previously requested the Government to indicate whether the proposed bill would: (i) amend sections 36, 37 and 38 of the BCII Act, 2005, which refer to “unlawful industrial action” (implying not simply liability in tort vis-à-vis the employer, but a wider responsibility towards third parties and an outright prohibition of industrial action); (ii) amend sections 39, 40 and 48–50 of the BCII Act so as to eliminate any excessive impediments, penalties and sanctions against industrial action in the building and construction industry; (iii) introduce sufficient safeguards into the BCII Act so as to ensure that the functioning of the ABCC and inspectors does not lead to interference in the internal affairs of trade unions – especially provisions on the possibility of lodging an appeal before the courts against the ABCC’s notices prior to the handing over of documents (sections 52, 53, 55, 56 and 59 of the BCII Act); and (iv) amend section 52(6) of the BCII Act which enables the ABCC to impose a penalty of six months’ imprisonment for failure to comply with a notice to produce documents or give information so as to ensure that penalties are proportional to the gravity of any offence.

The Committee notes that the Government indicates that the Office of the ABCC will be retained until 31 January 2010 and that, after that date, subject to the passage of legislation, it will be replaced with a new agency, the Office of the Fair Work Building Industry Inspectorate. In addition, based on an independent report the Government commissioned and consultation with industry stakeholders, the Government developed and introduced the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill, 2009, into Parliament on 17 June 2009. According to the ACTU, that Bill maintains the coercive powers of the ABCC, while allowing trade unions to petition for the coercive powers to be switched off. This Bill: (i) repeals sections 36, 37 and 38 of the BCII Act; (ii) repeals sections 39 and 40 of the BCII Act and repeals and substitutes sections 48–50 with the effect that the provisions of the Fair Work Act apply to the building and construction industry in the same way as they do to all other industries; (iii) introduces numerous safeguards and limits the coercive powers to no longer allow investigation of matters relating to compliance with laws governing the registration of the internal affairs of unions; and (iv) maintains the current limitation on the ABCC’s power to impose any penalty under section 52(6) of the BCII Act, which requires the ABCC to refer the matter to the Office of the Commonwealth Director of Public Prosecutions who determines whether to prosecute. The Committee requests the Government to indicate any progress made concerning the adoption of the Transition to Fair Work Bill. The Committee also once again requests the Government to indicate any measures taken to instruct the ABCC to refrain from imposing penalties or commencing legal proceedings under the ABCC while the review is under way.