On the Threshold of Opportunity or the Precipice of Destruction?
By Frances Anderson, Senior Lawyer, Moores Legal

The Federal Government’s proposed changes to workplace relations.

Most, if not all, members of the Australian population will be aware that we are sitting on the brink of fundamental change to the workplace relations system in Australia. Extensive advertising campaigns have been run by both Government and unions alike in an endeavor to advance the argument for and against the proposed changes. The Government’s much awaited WorkChoices Bill was introduced into Parliament on 2 November 2005 and was passed by the House of Representatives on 10 November 2005. The Bill goes before the Senate on 28 November 2005 and is expected to pass before Christmas. As the Bill is some 687 pages in length, we have chosen for the purposes of this article to highlight some of its main features with particular reference to its impact on smaller employers. We also comment on some lesser-utilised areas of workplace relations law that may offer new windows of opportunity for aggrieved employees under the new regime.

Summary of some of the key proposals
Move towards a unitary system - Australia currently has 6 state workplace relations systems in addition to the Federal system. The Federal Government proposes to “move” towards a single system and will rely on the corporations head of power in the Constitution to do this. However, this will only cover employees of corporations. Certain employees, e.g. employees of partnerships, sole traders and state authorities, will not be covered. As Victoria is already covered by the Federal regime (having handed over its industrial relations powers to the Federal Government in 1996), this is of particular relevance to states other than Victoria. There have been varying amounts of opposition to the proposal for a unitary system from certain state governments who have threatened to challenge the removal of their industrial relations power by taking the matter to the High Court of Australia.

Simplification of the agreement making system - certified agreements will no longer be certified by the Australian Industrial Relations Commission (AIRC) but will be lodged with the Office of the Employment Advocate as is currently the case with AWAs. Both these agreements will be effective from date of lodgement (as opposed to date of certification or approval as is currently the case) and can operate for up to five years (as opposed to the current maximum of three years).

Unfair dismissal - employers of up to and including 100 employees will be exempt from all unfair dismissal laws (including dismissals for operational reasons referred to below). The figure of 100 includes part time employees and casual employees who have been engaged on a regular and systematic basis for a period or a sequence of periods of at least 12 months.

For businesses with more than 100 employees, an employee will have to have been employed for 6 months before being able to claim unfair dismissal. Additionally, claims will not be able to be brought against these businesses where employment has been terminated for operational reasons.

Unlawful termination - protection against unlawful termination will remain (e.g. where employment has been terminated for reasons to do with a temporary absence from work because of illness or injury, trade union membership, race or another ground of discrimination etc). However the amount of compensation that can be awarded by the Commission in these cases has been substantially reduced¹. The Government will provide $4,000 worth of legal advice to eligible employees who believe they have been unlawfully terminated.

Establishment of the Australian Fair Pay Commission - the Commission will set minimum and award classification wages, thereby replacing the AIRC’s Safety Net review function. The first decision of the Commission is expected to be no later than Spring 2006. The chairman of the Commission has already been appointed, Professor Ian Harper, an academic economist².

A set of minimum conditions covering annual leave, personal/carer’s leave (including sick leave), parental leave (including maternity leave) and maximum ordinary hours of work (38 hours) will be enshrined in law. In regard to the maximum ordinary hours of work, the Bill states that an employee must not be required by an employer to work more than:

• an average of 38 hours per week over the employee’s applicable averaging period (which in most cases will be 12 months); and
• reasonable additional hours³.

Australian Fair Pay and Conditions Standard - the minimum conditions referred to above together with the minimum and award wages set by the Fair Pay Commission will make up the Australian Fair Pay and Conditions Standard. All new agreements will be required to meet this Standard throughout the life of the agreement.

Simplification of awards - Federal awards will be simplified and long service leave, superannuation, jury service and notice of termination will not be included in new awards because they are covered by existing legislation. These provisions in current awards, however, will continue to apply to existing and new employees covered by those awards.

Industrial action - there will be a number of changes regarding industrial action, for example, secret ballots will be required before protected action can be taken.

Some other changes - the Bill also provides:

• An employer may require an employee to provide a medical certificate for any absence on paid sick leave⁴ (i.e. not only for absences in excess of 2 days as is often the case);
• In litigation before the Commission concerning relief for termination of employment, costs orders can be made against representatives as well as against litigants⁵;
• Rights of entry to the workplace are far more limited and more regulated than before⁶.

Opportunity or destruction?
Concern has been expressed that these changes will amount to the “gutting of the Australian industrial relations system”, “conservative ideology gone mad” and the emasculation and ultimate destruction “of the independent conciliation and arbitration tribunal and the organised trade union movement - which … have done more than any other to embed the concept of the “fair go” into the law, the practices and the every fabric of Australian life.”⁷

The Government nonetheless appears confident that its WorkChoices workplace relations system is the right path for Australia to take.

New windows of opportunity
As some doors close, others may open. While some of the areas referred to below are not “new” but less utilised avenues for legal redress, others may indeed offer new opportunities. Employers, particularly those who are now excluded from the unfair dismissal jurisdiction, should be aware of these possibilities and take appropriate steps to safeguard against them.

Discrimination law
We may see greater use being made of federal and state anti-discrimination legislation as a means to contest dismissals. Anti-discrimination litigation is relatively easy and inexpensive to commence. The dispute resolution process usually entails conciliation/mediation at which the parties are required to try to settle the matter and if the matter is not settled, the matter can progress to a hearing. Obtaining a costs order against an unsuccessful litigant is usually unlikely and as a result, employers sometimes settle these claims (even those that are spurious and without foundation) rather than fight and incur the legal costs of doing so.

Many share the view that employers may find themselves being embroiled in more of these disputes than ever before.

Trade Practices Act 1974
There may be greater use of the Trade Practices Act - section 52 of the Act stipulates that a corporation shall not, in trade or commerce, engage in misleading or deceptive conduct. Section 53B states that a corporation shall not in offering employment engage in misleading conduct. Disaffected employees have used these provisions in litigation to good effect and employers have even been held liable for representations made to a prospective employee by an over-zealous recruiter⁸. This is more costly litigation to mount but can also be costly for the employer to oppose with the attendant risk of an adverse costs order if the matter is lost.

Common law - breach of duty of trust and confidence
This is not a well-established ground for relief in Australia as yet but there are many who believe that there is considerable scope and potential for this duty to develop. For example, it could be used by an employee to allege, that by conducting itself in a particular manner, the employer has breached trust and confidence implied in the employment contract. As a result, the employee could sue for breach of contract and claim damages in the civil courts. Many commentators are suggesting that this area of the law will see considerable development.

Conclusion
The WorkChoices Bill offers some welcome changes for smaller employers, however, employers (both large and small) would be well advised to be aware of the other avenues that can be utilised by a disaffected employee. We will explore some of these “windows of opportunity” in a subsequent COCA newsletter and will offer suggestions of ways employers can protect themselves against these risks.

Frances Anderson is a Senior Lawyer with Moores Legal and has practised extensively in workplace relations. She can be contacted on (03) 9843 2122 or fanderson@mooreslegal.com.au

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References

1. Section 170CR(2) of the Bill
2. Media Release, Minister Kevin Andrews, 13 October 2005
3. Section 91C of the Bill
4. Section 93N of the Bill
5. Section 170CJ(3) of the Bill
6. Part IX of the Bill
7. The Hon Bob Hawke, Lionel Murphy Memorial Lecture, 26 October 2005
8. O’Neill v Medical Benefits Fund of Australia [2002] FCAFC 188