Industrial Relations Society of Australia

Centenary Convention

Justice Giudice, President

Australian Industrial Relations Commission

Hotel Sofitel Melbourne

October 22, 2004

Your Honours, Honourable Ministers, members past and present of Federal and State industrial tribunals, other distinguished guests, ladies and gentlemen.

It is a privilege to add my words of welcome to this gathering of the leaders in industrial relations in Australia. Over the next two days you will hear a collection of speakers with combined knowledge and experience in industrial relations which, I suggest, surpasses that at any previous conference and which is unlikely to be surpassed at any conference in the future. You will be addressed in relation to the economic, social and political effects of decisions of the Commission and of its predecessors, contemporary issues in industrial and workplace relations, predictions about the Commission's role in years to come and on many other interesting issues.

I don't intend to deal directly with any of those issues. While the centenary of conciliation and arbitration is worthy of celebration, and I am very pleased to be part of that celebration, it would not be appropriate for me to comment on the merits and defects of the system, historic or contemporary, in any but the most general way. Instead I would like to speak about the Commission's work from a perspective which you may not hear a lot about from other speakers, the perspective of the members of the Commission.

Thousands of applications are required to be dealt with by the Commission every year. For the most part members do not have any say in which cases they will deal with, either sitting alone or on Full Benches. The most common applications are dispute notifications, including requests for assistance in negotiating agreements, award variations, applications for orders in relation to industrial action, requests to certify agreements, requests for the exercise of powers pursuant to dispute settlement provisions in agreements and applications in relation to termination of employment. The Workplace Relations Act 1996 emphasises that in dealing with these matters primacy is to be given to conciliation, and that arbitration, in cases where it is available, is to be used only as a last resort.

In relation to the award making function, despite the commonly expressed view to the contrary, the Commission is not at liberty to give effect to such wages and conditions as it thinks appropriate. It is obliged by the Workplace Relations Act to ensure that a safety net of fair minimum wages and conditions of employment is established and maintained having regard to a number of things. First, the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community; secondly, economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment and, thirdly, when adjusting the safety net, the needs of the low paid. Section 88B(2) of the Act mandates these considerations. There are a number of other matters to which the Commission must also have regard, for example those listed in s.88B(3), s.90 (the public interest, particularly the effects of any award on the national economy and the level of employment and inflation), s.93 (Commission to take account of anti-discrimination legislation), s.93A (Commission to take account of Family Responsibilities Convention) and s.97 (Safety, health and welfare legislation).

These are some of the criteria which must guide the Commission members in making awards. They also apply, naturally to the major cases which are conducted from time to time in relation to minimum wages and other conditions of employment. In recent years, in addition to regular minimum wage reviews, there have been test cases dealing with hours of work and severance pay. At the present time there are claims part heard before a Full Bench in relation to so-called work and family balance issues. All of these are very significant. They directly affect all of the employees engaged on award minima and indirectly affect many more employees engaged under enterprise agreements through the operation of the no-disadvantage test, referred to by one employer witness in recent proceedings, perhaps in a Freudian slip, as the no-advantage test.

We are regularly addressed in tests cases on the weight to be given to the various statutory criteria. Naturally enough parties emphasise the criteria which support their position. It might be thought that some of these case go for too long. Speaking in 1951, at a convention to mark the jubilee of arbitration in the federal sphere, Sir Richard Eggleston noted that the two most recent cases of that time, the Forty Hour Week Case (formally Standard Hours Inquiry 1947 59 CAR 581) and the Basic Wage Inquiry 1949 - 1950 had taken 15 and 18 months respectively to complete. In expressing reservations about the utility of cases of such length he made a remark with which many will find themselves in sympathy today: "In the arbitration jurisdiction everything is relevant but there is very little which is helpful." (25 ALJ 360 at 374). So it is that these days, after hearing a range of submissions about the conclusions to be drawn from the expert evidence, research material and economic data, the Commission makes what is in one sense a value judgment. This is not a precise science and one which requires that sometimes competing considerations be weighed and balanced in coming to a conclusion.

In carrying out all of their statutory functions members of the Commission are required to act according to equity, good conscience and the substantial merits of the case. Although as a community we would like to think we share a common notion of equity, in fact views differ as to the outcome that equity requires in particular circumstances. And so it is in collective industrial disputes and in disputes about termination of employment. Each party usually, but not always, believes that equity is on their side of the argument. The resolution may require at least one of the parties to change or depart from their view. And at least one of the parties may be disappointed to some degree by the decision.

The Commission, like a court, may be required to pass judgment on the parties' conduct, but, unlike a court, it may also establish rights which will regulate the parties' relationship for the future. In doing so the individual member of the Commission is obliged by the statute to give effect to his or her own concepts of equity, good conscience and the substantial merits of the case and, whether conciliating or arbitrating, to attempt to bring about a resolution which is consistent with those concepts. Each member strives to adopt a neutral role, as they are sworn to do, regardless of their occupation and experience prior to appointment. One can readily see that the ethos of an institution like the Commission will be enhanced if it is composed of members with experience across the spectrum of industrial relations and law.

In some cases the matter may be complicated by broader social issues and may be viewed as involving a clash of rights and privileges - the rights of workers on the one hand against the right of the employer to manage on the other. Which is to prevail? All dispute resolution potentially involves a compromise of the employer's absolute prerogative and the Commission is often called upon to draw the line. That is a responsibility which the Commission cannot and does not shirk.

There is also sometimes a political dimension. In our political system the forces of capital and labour are, to a large extent, aligned with the major political parties. Parties to bitter or public disputes tend to attract political support from quarters traditionally aligned with their interests.

So it is that value judgments made by the Commission may and often do generate controversy and attract public comment. Members of the Commission are often exposed to criticism in the press and other media. That is part of the job. The Commission cannot and should not carry out its functions free of public scrutiny. Our system of industrial relations is intended to resolve clashes of interest between employers and employees, be they economically, philosophically or politically based, in a tribunal which from its inception has been designed for that purpose.

For members of the Commission, of course, it is important, as it is for all judicial or quasi-judicial office-holders, to exercise one's statutory powers in accordance with the conditions on which they are granted. The Commission must observe the statutory objects which condition the exercise of its powers, ignoring the commentators, who almost always neglect the relevant statutory framework, and turning a deaf ear to the barrackers on the sidelines whose partiality is patent.

Much of the Commission's important work, however, is not carried out in the glare of publicity. Most of it is carried out in routine matters effecting relatively small numbers of people, local disputes, perhaps pursuant to dispute settlement provisions, or in termination of employment cases. Many of the problems which come to the Commission in this way are resolved by agreement in conciliation - the preferred method of dispute resolution.

In the great majority of cases conciliation is voluntary. If no agreement is reached the use of compulsory powers of arbitration in collective disputes is, these days, very limited. The introduction of protected industrial action, both strike and lockout, in 1993, coincided with a reduction in the Commission's compulsory arbitration role. Our industrial relations system now recognises the use of economic power as a legitimate measure in industrial dispute resolution. Whether that approach will be seen in future as promoting the economic prosperity and welfare of the people of Australia is hard to say (Workplace Relations Act 1996 s.3). Be that as it may, the Commission's primary tools for the resolution of most disputes coming before it are dispute resolution skills applied mainly in conference and often over an extended period - a process which has been an essential part of dispute settlement since the system commenced.

The pastoral award of 1907 was one of the first awards made by the Court ((1907) 1 CAR 62). All of its terms were settled by agreement except three. Interestingly enough the outstanding claims were rates of pay, preference to members of the AWU and right of entry to the grazier's property for AWU officials. These three claims still took 22 days to deal with and the length of the case was no doubt a reason why Justice O'Connor resigned not long after to resume full-time duties on the High Court.

There are other important skills besides conciliation, however, including in particular legal skills. It is a perhaps unfortunate fact that many applications and most Full Bench appeals involve questions of law - the interpretation of statutes, awards and agreements and arguments about the limits of the Commission's jurisdiction. Whether the legal framework in which the Commission operates could be streamlined to avoid some of the legal arguments is problematic but now, and for the foreseeable future, legal skills are an indispensable requirement for a properly functioning Commission.

Commission members receive a lot of unsolicited advice, some of it welcome, much of it uninformed. In the end the only course Commission members can take is that charted for them by the Workplace Relations Act which constitutes the Commission and governs the exercise of its powers and functions. In the resolution of the matters coming before it the Commission is committed to use the means the Act provides and no others. Appreciation of the fundamental elements of the industrial system is an essential foundation for discussion about it and I hope that these short remarks will set the scene for the thought-provoking and scholarly papers you will hear today and tomorrow.

I thank all of you for your attention and for your attendance at what I am sure will be a memorable Centenary Convention.