Observation (CEACR) - adopted 2004, published 93rd ILC session (2005)

Right to Organise and Collective Bargaining Convention, 1949 (No. 98) - Australia (Ratification: 1973)

The Committee takes note of the Government’s reports as well as the comments of the Australian Council of Trade Unions (ACTU) and the Australian Chamber of Commerce and Industry (ACCI) as well as the Government’s observations thereon.

Federal jurisdiction. The Committee recalls that its previous comments concerned the conformity of several provisions of the Workplace Relations Act, 1996 (WR Act) with the Articles of the Convention. Noting that the WR Act applies also to the State of Victoria, the Northern Territory and the Australian Capital Territory the Committee’s comments on the WR Act, as set out below, are also relevant with respect to these jurisdictions.

Articles 1 and 4 of the Convention. Protection against anti-union discrimination in the framework of collective bargaining. 1. Protection against anti-union discrimination in case of refusal to negotiate an Australian Workplace Agreement (AWA). As to the particular notion of "Australian Workplace Agreement" (AWA), the Committee refers to the clarifications provided in its 1997 observation on the application of the Convention by Australia. The Committee notes that its previous comments concerned the issue of protection against anti-union discrimination under the WR Act. The Committee takes note of the Government’s statement that full protection against all acts of anti-union discrimination and for all categories of workers is provided under the combined provisions of: (1) section 170CK of the WR Act, which applies in case of anti-union dismissals; (2) Part XA of the WR Act, in particular sections 298K and 298L which provide protection to all workers and in relation to a broader range of conduct, including not only conduct resulting in the termination of employment, but also threatened conduct; and (3) section 170WG(1) of the WR Act which prohibits the application of duress against an employee in connection with an AWA. The Committee takes note in this respect of several court rulings communicated by the Government. The Committee also notes, however, that the abovementioned sections do not seem to provide adequate protection against anti-union discrimination (at the time of recruitment, during employment or, for certain wide categories of workers, at the time of dismissal) to workers who refuse to negotiate an AWA and insist on having their terms and conditions of employment governed by collective agreements, contrary to Articles 1 and 4 of the Convention.

Firstly, with regard to discrimination at the time of recruitment, the Committee notes that section 298L of the WR Act does not include a refusal to negotiate an AWA among the prohibited grounds of anti-union discrimination at the time of hiring. According to both the ACTU and the Government, the courts found that an employer offering new employees a job conditional on signing an AWA did not apply duress, as, in that case, there was no pre-existing relationship between the parties (Maritime Union of Australia v. Burnie Port Corporation Pty. Ltd. (2000) 101 IR 435), while the Employment Advocate has repeatedly held that where an employee is offered a position with a new employer conditional upon entering into an AWA this will not, without more, amount to duress under section 170WG(1) of the WR Act. The Committee recalls that the protection provided for in the Convention covers both the time of recruitment and the period of employment, including the time of work termination (see General Survey of 1994 on freedom of association and collective bargaining, paragraph 210). The Committee considers that sections 170WG(1) and 298L of the WR Act and the relevant national practice do not appear to afford adequate guarantees against anti-union discrimination at the time of recruitment and cannot be considered as measures to promote collective bargaining.

Secondly, the Committee notes with regard to discrimination during employment, that according to both the ACTU and the Government, the courts found no anti-union discrimination in a case in which employees had been required to sign AWAs in order to receive a wage increase, thereby giving up their right to collective bargaining; as a result, those who chose to remain on the collective agreement received inferior conditions (Australian Workers’ Union v. BHP Iron-Ore Pty. Ltd. (2001) FCA 3). The Committee notes that according to the Government, the Court found that in this case, there was no evidence of pressure by the employer, who had made offers of individual agreements to all employees, as it was clear that the existing collective instruments would continue to operate for those employees who did not accept the offer of individual agreements. The Committee understands from the above that the finding that there was no discrimination, was based on the fact that there would be no dismissals; however, the issue of anti-union discrimination in the course of employment was not addressed. The Committee recalls that Article 1(2)(b) of the Convention covers, in addition to dismissal, acts which "otherwise" prejudice a worker by reason of union membership or because of participation in union activities (see General Survey, op. cit., paragraph 212). It considers that situations in which workers who refuse to give up the right to collective bargaining are denied a wage rise amount to anti-union discrimination contrary to Article 1 and constitute an obstacle to collective bargaining contrary to Article 4 of the Convention.

Furthermore, the Committee notes with concern from the Government’s report that in another case the Australian Industrial Relations Commission (AIRC) held that an employer would not be in breach of either section 170CK or section 298K by relying on an undertaking given by an employee to "not involve himself in union activities forever" and that such an undertaking could be enforced by the employer (Container Terminals Australia Limited v. Toby, 24 July 2000). The Committee considers that enforcing an undertaking not to be involved in union activities forever amounts to a clear act of anti-union discrimination, contrary to Article 1 of the Convention and certainly does not constitute a measure to encourage and promote collective bargaining.

Thirdly, with regard to discrimination at the time of termination of employment, the Committee notes that whereas refusal to negotiate in connection with an AWA is provided as a prohibited ground for dismissal in section 170CK(2)(g), such refusal is not a prohibited ground for dismissal under section 298L. As a result, the wide categories of workers who are excluded from the scope of section 170CK by virtue of section 170CC (employees on contracts of employment for a specified period of time or a specified task, employees on probation or engaged on a casual basis, those "in relation to whom the operation of the provisions causes or would cause substantial problems because of: (i) their particular conditions of employment; or (ii) the size or nature of the undertakings in which they are employed", and those whose remuneration falls below a certain threshold), do not seem to be protected against anti-union dismissals if they refuse to negotiate an AWA (thereby insisting on having their conditions and terms of employment governed by collective agreements). The Committee considers that these provisions are contrary to Article 1 of the Convention and constitute an obstacle to collective bargaining contrary to Article 4.

The Committee therefore requests the Government to indicate in its next report all measures, taken or envisaged, to revise sections 170CC, 170WG and 298L of the WR Act so that sufficient legal protection is provided against all acts of anti-union discrimination (committed at the time of recruitment, during employment, and for the wide categories of workers excluded from the scope of section 170CK, at the time of dismissal) against workers who refuse to negotiate an AWA and insist on having their terms and conditions of employment governed by collective agreements.

2. Protection against anti-union discrimination in case of negotiation of multiple business agreements. The Committee recalls that in its previous comments it had expressed concern at the exclusion from the scope of section  170ML, by section 170LC(6) of the WR Act, of industrial action taken with regard to the negotiation of multiple business agreements which was therefore not considered as "protected action" and was not covered by legal immunity. The Committee notes that this exclusion means that workers negotiating a multiple business agreement are not protected from anti-union dismissals under section 170MU and that, if they undertake industrial action, this might be regarded as coercion under section 170NC and would not appear to afford them the protection provided for lawful trade union activities under sections 298K and 298L(1)(n). The Committee takes note of the Government’s statement that, although the provisions of the Act are directed towards facilitating agreement at the enterprise or workplace level, the parties are free to negotiate and make multiple employer agreements outside the formal system if they so choose, and the Act expressly contemplates such bargaining. The Committee notes, however, that according to ACTU such agreements outside the formal system would be difficult to enforce and could not be adequately negotiated because any industrial action taken would be unlawful in common law. The Committee therefore observes that, by not affording adequate protection against anti-union discrimination during the negotiation of multi-employer agreements, the WR Act introduces obstacles to such negotiation. The Committee recalls in this respect that in its previous comments it had emphasized that the choice of the bargaining level should normally be made by the partners themselves and that the parties "are in the best position to decide the most appropriate bargaining level" (see General Survey, op. cit., paragraph 249). The Committee once again requests the Government to indicate in its next report any measures taken or contemplated to amend sections 170LC(6) of the WR Act so as to ensure that workers are adequately protected against discrimination for negotiating a collective agreement at whatever level the parties deem appropriate and that employers’ and workers’ organizations have a free choice as to the level at which they wish to negotiate collectively.

Articles 2 and 4. Protection against acts of interference in the framework of collective bargaining. The Committee notes that section 170LJ(1)(a) enables an employer to make an agreement "with one or more organisations of employees" where each organization has "at least one member" employed in the single business and is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement. It appears to the Committee that the effect of this provision read together with the non-discrimination provision in section 170NB(1) (which requires that in negotiating an agreement, an employer must not discriminate between employees who are members of an organization and those who are not members, or between those who are members of a particular organization and others who are members of a different one) is that collective bargaining in the name of all workers may take place regardless of the representativeness of a trade union in the particular undertaking and of the wishes of the employees. The Committee notes in this respect that, according to the ACTU, these provisions allow employers to "shop around" amongst unions to see whether they can gain an advantage by dealing with one union over another. The Committee notes that the provisions of section 170LJ(1)(a) in conjunction with those of section 170NB might enable an employer to unduly influence the choice of workers as to the trade union that should represent them in negotiations thereby enabling the employer to interfere in the functioning of trade unions, contrary to Article 2 of the Convention. It also recalls that the determination of representative trade unions should be based on objective and pre-established criteria so as to avoid any possibility of partiality and abuse (see General Survey, op. cit., paragraph 97). The Committee therefore requests the Government to indicate in its next report any measures taken or contemplated to amend section 170LJ(1)(a) of the WR Act so as to establish appropriate guarantees against employer interference in the context of the selection of a bargaining partner. In particular, the Committee would suggest the establishment of a mechanism for the rapid and impartial examination of allegations of acts of interference in the context of the selection of a bargaining partner, and the adoption of safeguards like objective and pre-established representativeness requirements.

Article 4. Measures to promote free and voluntary collective bargaining. 1.  Relationship between AWAs and collective agreements. The Committee recalls that in its previous comments it had noted that under section 170VQ(6)(c) of the WR Act, once an AWA is in place, it operates to the exclusion of a certified collective agreement (unless the latter was already in operation and until its expiry, according to section 170VQ(6)(a)(i) and (ii) or if the certified collective agreement expressly allows a subsequent AWA to operate to its exclusion, according to section 170VQ(6)(a)(iii)). It further notes that according to the Government, if an AWA has not passed its nominal expiry date, it excludes the application of a certified collective agreement which has taken effect in the meantime, even where the collective agreement contains more favourable terms and conditions of employment (section  170VQ(6)(b) of the WR Act). The Committee is of the view that the fact that a collective agreement which is subsequent to an AWA may prevail over it only after the expiration of the duration of the AWA, constitutes discrimination with regard to workers who may wish to join a union during their employment, since such workers will not be able to profit from any favourable provisions of the collective agreement despite their affiliation. It also notes that a special issue exists in this respect with regard to newly recruited workers because the WR Act enables employers to offer an "AWA-or-nothing" at the time of recruitment without this being considered as duress (see above); such workers will be unable to benefit from the provisions of a collective agreement until the expiry of their AWA. Thus, the Committee considers that section 170VQ(6) of the WR Act contains disincentives to trade union affiliation by unduly restricting the field of application of collective agreements. The Committee requests the Government to indicate in its next report any measures taken or contemplated to amend section 170VQ(6) of the WR Act so as to eliminate these disincentives and restrictions. The Committee also requests the Government to provide information on the evolution of affiliation levels since the adoption of the WR Act.

2. Collective agreements with non-unionized workers. The Committee observes that whereas section 170LJ is entitled "Agreement with organisations of employees", section 170LK is entitled "Agreement with employees" without any reference to workers’ organizations. Section 170LK(1) provides that "[t]the employer may make [an] agreement with a valid majority of the persons employed at the time whose employment will be subject to the agreement". Section 170LH requires the AIRC to certify agreements made by corporations either with trade unions or directly with employees. It appears to the Committee that (as also noted by ACTU), these provisions allow for collective negotiations over individual agreements to take place directly with employees, even where unions exist in an enterprise. The Committee notes that, according to the Government, section 170LK is in conformity with the Convention because individual workers are entitled under section 170LK(4) to request that they be represented by a trade union of which they are members in "meeting and conferring" with the employer. The Committee notes that the outcome of such request for trade union representation appears to be uncertain as section 170LK(6)(b) provides that the right of workers to be represented by trade unions will cease if any of the conditions stipulated in section 170LK(4) cease to be met. Thus, as noted by ACTU, even where workers are initially entitled to be represented by trade unions in negotiations, the employer may subsequently avoid any union involvement by unilaterally changing the scope and content of the negotiations (so that section 170LK(4)(b) no longer applies) or by simply declaring that it does not any longer wish to pursue an agreement under section 170LK. The Committee considers that if there is a possibility in the law that a request for trade union representation may lead to the partial or total abandonment of negotiations, then the law establishes a disincentive to request such representation. Recalling that Article 4 requires measures to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers’ organizations and workers’ organizations, the Committee requests the Government to indicate in its next report any measures taken or contemplated to amend section 170LK(6)(b) so as to ensure that the right to trade union representation is effectively guaranteed and that negotiations with non-unionized workers can take place only where there is no representative trade union in the enterprise.

3. Collective bargaining level. The Committee takes note of a long list of multiple business agreements certified by the AIRC, which is provided by the Government in its report. However, the Committee also notes from the Government’s report that during the reporting period the AIRC refused two applications to certify a multiple-business agreement on public interest grounds because the agreement applied to a number of employees whose operations were substantial and the matters would be more appropriately dealt with by single business agreements. The Committee recalls that section 170LC(4) of the WR Act provides that the AIRC must not certify a multiple-business agreement unless it is satisfied that it is in the public interest to do so, having regard to: (a) whether the matters dealt with therein could be more appropriately dealt with by agreement other than a multiple-business agreement; and (b) any other matter that the AIRC considers relevant. The Committee considers that approval should be refused only if the collective agreement has a procedural flaw or does not conform to the minimum standards laid down by general labour legislation; if legislation allows the authorities full discretion to deny approval (as seems to be the case under section 170LC(4)(b) of the WR Act) or stipulates that approval must be based on criteria such as compatibility with general or economic policy (in this case, the public interest), it in fact makes the entry into force of the collective agreement subject to prior approval, which is a violation of the principle of autonomy of the parties (see General Survey, op. cit., paragraph 251). The Committee therefore requests the Government to indicate in its next report any measures taken or contemplated to amend section 170LC(4) so as to eliminate the requirement of prior approval of multiple business agreements by the AIRC.

4. Negotiations over strike pay. The Committee further recalls that in its previous comments it had raised the issue of strike pay as a matter for negotiation noting that although the mere fact that there are deductions for days on strike is not contrary to the Convention, it is incompatible with the Convention to impose such deductions in all cases (as under section 187AA) as, in a system of voluntary collective bargaining, the parties should be able to raise this matter in negotiations. The Committee notes that, according to the Government, it is reasonable to prevent improper demands for payment for periods where employees or unions that come within the norms of the system have taken industrial action. The Committee once again recalls that in a system of voluntary collective bargaining, the parties should be able to raise the matter of strike pay in negotiations and that by preventing them from doing so, the law unduly constrains the permissible scope of collective bargaining. The Committee therefore once again requests the Government to indicate in its next report any measures taken or contemplated to amend section 187AA in accordance with the above.

5. Greenfields agreements. The Committee recalls that in its previous comments it had referred to the pre-selection by an employer of a bargaining partner before workers are employed according to section 170LL of the WR Act ("greenfields agreements") and had noted that this is permissible only for a first agreement and that since the Act permits the duration of any agreement to be up to three years (section 170LT(10)) section 170LL potentially prejudices the workers’ choice of bargaining agent for a considerable period. The Government states in its report that the Committee’s view that three years is a considerable period is a substantive judgement and expresses the view that it would take three years for a new business to get established, and that it is a reasonable amount of time to provide for "greenfields agreements". The Committee notes that its view that restrictions on collective bargaining for three years are too long is shared by other supervisory bodies like the Committee on Freedom of Association (see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, paragraph 887). It also notes that this view is implicitly shared by the Government itself as section 170LT(10) prohibits a duration of more than three years for (freely negotiated) certified collective agreements. The Committee considers that being an exceptional situation, "greenfields agreements" should not have the same duration as freely negotiated certified agreements. The Committee therefore once again requests the Government to indicate in its next report any steps taken or contemplated to amend section 170LL of the WR Act so that the choice of bargaining agent can be made by the workers themselves, including in the case of a new business.

Western Australia

In its previous comments the Committee had taken note of the Western Australia Government’s intention to repeal the 1993 Workplace Agreements Act, give preference to collective bargaining, repeal restrictions on unions’ access to workplaces, introduce a good-faith bargaining principle and strengthen the role of the Western Australian Industrial Relations Commission. The Committee notes with interest from the Government’s report that the Workplace Agreements Act will be repealed in stages by the Labour Reforms Act, which now formally recognizes the primacy of collective over individual agreements and contains new provisions relating to good faith bargaining, entry of authorized union representatives to working places (with due respect for the rights of property and management) and reinstatement as the primary remedy in cases of unfair dismissal. The Committee also notes, however, with regard to its previous comments concerning the absence of provisions prohibiting acts of discrimination for trade union activities in the Industrial Relations Act, 1979, that the Government does not indicate any new provision protecting workers against anti-union discrimination on the basis of trade union activities. The Committee requests the Government to indicate in its next report whether the concept of unfair dismissal encompasses anti-union dismissals and to indicate any further measures taken or contemplated so as to afford full protection against anti-union discrimination at the time of recruitment, during employment and at the time of dismissal, and provide for specific remedies and penalties where there has been anti-union discrimination.

A request on certain other points, including comments made by ACTU and those of ACCI, is being addressed directly to the Government.