Australian Workers' Union Conference

19 APRIL 2002

Justice Giudice
Australian Industrial Relations Commission

[1] Let me make it clear at the outset that I have nothing whatever to say about the legislation currently before the Federal Parliament. Although there have been suggestions in some media and elsewhere to the contrary, I am not going to comment on particular legislative proposals at the Federal or for that matter the State level. Members of the Commission, as they are bound to do, faithfully carry out their duties according to the law as it stands. And we have quite enough to occupy our time without being concerned with daily political issues. Anyway it is beyond doubt that there are plenty of people ready to give the Honourable Senators advice and they don't need any from me. Having made clear what this speech is not about, may I turn to what it is about. What I intend to do is to address, in a necessarily brief way, some issues which arise from the structure of our labour laws. In particular it seems to me that there is a good deal of support amongst the parties to industrial relations and, dare I say it, at the political level as well, that there should be some rationalization of our industrial relations system, meaning by that the various acts of the State and Federal parliaments and the courts and tribunals which administer and enforce those laws.

[2] I would like to start with what I hope is the unexceptional observation that within our society we have an extensive array of legislation at Federal, State and local government level regulating a wide variety of legal relationships. The proliferation of laws is a feature of social and political development worldwide. Legislation is continually being developed adding to, creating and refining legal obligations. The number of laws continues to grow and to affect relations between government and citizens between corporations and their shareholders, customers, competitors and the public. Between credit providers and borrowers. And of course between citizens, as exemplified in road traffic and other laws and regulations including the criminal law. In Australia the relationship between employer and employee has shared in full measure in this proliferation. Laws exist at several levels dealing with terms and conditions of employment, freedom of association, occupational health and safety, discrimination, superannuation, taxation and so on. These laws build on and modify pre-existing common law. Where State laws are inconsistent with Federal law the Constitution provides that the Federal law should prevail. The regulation is aimed at the protection of employees from exploitation, injury and various forms of oppression such as discrimination. The law also operates to protect the freedom of employers to carry out their operations within the established legal framework.

[3] The topic for today's address invites a focus on one part of that legal framework - the laws relating to unfair termination of employment. In looking at that part of the law it is important to bear in mind that it cannot be seen in isolation from other laws governing the relationship between employers and employees. The enforcement of rights recognised by the common law or created by statute related to termination of employment is the province of courts and tribunals with jurisdictions extending well beyond that particular area. In examining the way in which unfair dismissal laws operate they cannot be seen in isolation from their institutional and legislative context.

[4] If one were to conduct a survey of the laws regulating termination of employment in this country the following features would emerge. Firstly, there are industrial tribunals in five of the six States with jurisdiction to deal with claims arising from termination of employment. The federal industrial tribunal, the Australian Industrial Relations Commission, operates in all 6 States and in the Northern Territory and the Australian Capital Territory. Its arbitral power only extends to the arbitration of claims that termination of employment was harsh, unjust or unreasonable. In addition termination of employment on particular grounds specified in the Workplace Relations Act 1996 is unlawful. An example in this category would be a termination because of union activities. In the Federal system actions in relation to unlawful termination are heard in the Federal Court, although the Commission is under an obligation to attempt settlement by conciliation first.

[5] Wrongful dismissal, a common law action based on breach of contract, might also be available to an employee whose employment has been terminated. Wrongful dismissal cases are heard in the civil courts of the States.

[6] When it is alleged by a dismissed employee that the termination was motivated by discrimination, on the grounds of sex or race for example, the employee may seek a remedy pursuant to the anti-discrimination legislation of any of the States or the Commonwealth. There are specialist tribunals dealing with discrimination in most States. At the federal level the Human Rights and Equal Opportunity Commission exercises jurisdiction in relation to complaints that termination of employment constitutes unlawful discrimination on the grounds of race, sex and disability. Where the complaint is unresolved binding orders may be made by the Federal Court or the Federal Magistrates Court.

[7] In a nutshell, there are a number of different tribunals and courts which may provide an avenue of redress in relation to a particular termination of employment. For the individual employee who loses his or her job, in most cases the choice in practical terms will be limited to one or two jurisdictions. For employers operating beyond the limits of any one State the number of jurisdictions in which they are liable to find themselves may expand significantly.

[8] The second thing which one would notice is that different rules apply to the proceedings depending upon the tribunal and the statutory provisions. The point needs little elaboration but I mention two areas by way of illustration: firstly, the requirements to invoke the jurisdiction of the court or tribunal and, secondly, the nature of the remedy. As between the Australian Commission and the state Industrial Relations Commissions, access to the jurisdiction may depend upon a number of conditions such as whether the applicant is a Federal award employee, a probationer, a casual, engaged on a contract of employment for a specified period of time, salary level and so on. In relation to the remedy available to successful applicants, some legislative provisions place a greater emphasis than others upon the remedy of reinstatement. There is not a uniform approach to the assessment of any amount to be ordered in lieu of reinstatement. In most of the industrial jurisdictions the limit on the amount which may be ordered in lieu of reinstatement is approximately the same. The precise nature of these differences in the rules applying to the various jurisdictions is not as important as the fact that the differences exist.

[9] It should be pointed out that most (if not all) of the relevant statutes have provisions designed to prohibit applicants from pursuing applications for relief in more than one forum concurrently. This may place an applicant in the position of having to speculate in relation to the relative chances of success in various jurisdictions. It is not always clear whether a particular jurisdiction is available and this means that there are cases in which unnecessary transaction costs arise because of jurisdictional uncertainties.

[10] It is obvious that the nature of our system of Government, in particular the fact that the Commonwealth is a federation of states, has affected the development of our institutions and laws in a large number of areas, not the least industrial law. It is important to recognise that our constitutional arrangements, in particular the terms of s.51(xxxv) of the Constitution, have in large part been responsible for the development and maintenance of separate Federal and State industrial systems. For that reason the rationalization of our industrial laws must be approached with care and respect for the past and for the nature of our system of government.

[11] It is of course a matter for others to decide - those most directly concerned with our industrial laws and whose economic fortunes rest on the efficacy of those laws - to decide whether the problems, seen in perspective, are of such a nature or magnitude that rationalization should be attempted. Some may conclude that the problems tend to work themselves out in practice and are overstated or that nothing can be done because the political implications of reform are insurmountable. With that reservation might I propose three reasons why the operation of our industrial laws, including laws relating to termination of employment, ought be further investigated.

[12] The first reason is a philosophical one, and I freely concede idealistic. Consistency of treatment under the law is an important aspect of any society and of fundamental importance where the rights of individuals, even the livelihood of the individuals, are at stake. This is an important consideration for unions who seek access to tribunals and for employees seeking a remedy. Obviously consideration should not be confined to employees. Employers must be familiar with their obligations under a range of Federal and State laws and, potentially, with the operations of the tribunals who administer the laws and the Courts who enforce them. The laws are not uniform, the processes differ and the interaction between jurisdictions can be confusing and frustrating. If the law is seen to operate in an inconsistent way depending upon the statutory regime governing the proceedings, that is not a good thing for either party nor is it in the public interest. Confidence in the tribunals, the courts and the law itself is diminished.

[13] The second reason is one of cost. Costs are frequently incurred which may be avoidable. In the Federal system alone there are hundreds of decisions each year dealing with preliminary jurisdictional issues. The jurisdictional issues which all too frequently arise can be extremely frustrating and potentially disastrous for those of modest means. Many employees and proprietors of small businesses can be counted in this category. There are additional costs for unions and employers in dealing with jurisdictional issues where interstate operations are involved. In relation to termination of employment specifically the number of courts and tribunals that could be involved is greater than in relation to industrial disputes generally. And of course there is the cost to the community of maintaining separate processes and institutions where operations are subject to a significant amount of overlap. Of course there will always be hard fought cases which last for a long time and be very expensive. But I am speaking only here of costs which arise from gaps or inconsistencies in the patchwork of industrial laws and which might be capable of being remedied.

[14] The third reason is about Australia's international relationships. The proposition may be stated in a simple form - can we afford to have a collection of labour laws which are complex and sometimes inconsistent? To that question, it seems, there can be only one answer. The less complex and the more consistent, the better. There are others far better qualified than me to assess the effect of our labour laws on trade issues. But I do not see why we should not apply similar kinds of efficiency criteria to the legislative scheme for labour law as we do to the legislative scheme for the regulation of corporations. Another consideration which might gain importance in the international arena is that we have the capacity to respond as a nation to international developments in labour law.

[15] Bearing the three reasons in mind, consistency of operation, cost and the international dimension, let me read something to you:

[16] That is the end of the quotation. Those are not my words but words written in 1985. They are the first 5 paragraphs of the Recommendations for Change of the Committee of Review of Australian Industrial Law and Systems. The members of that Committee were George Polites, Charlie Fitzgibbon and Professor Keith Hancock. The recommendations were made, as I said, in 1985. Much has been done to implement those recommendations. Some legislative change was made at the Commonwealth level in 1988. The relevant State and Federal Ministers have conferred fairly frequently on other matters and this has led to some greater legislative consistency. The Commonwealth has appointed many members of State industrial authorities to the Australian Commission and most States have reciprocated. In South Australia members of the State Industrial Relations Commission who are also members of the Australian Commission routinely exercise Federal jurisdiction. There has been significant harmonisation of registry services in nearly all States and the State and Federal Commissions are now located in the same building in most States. I believe that liaison between the heads of the industrial tribunals is effective and cordial.

[17] Nevertheless more can be done and an opportunity should be provided for the relevant legislative and institutional issues to be identified and debated. Perhaps some lessons might be learnt from the manner in which the national companies legislation evolved. In 1952 the Premiers of the States responded to concerns about the lack of uniformity in State company laws by agreeing jointly to a conference to examine how uniform company laws might be achieved. The drafting process commenced in 1959 when a committee of State and Federal Attorneys-General was formed and uniform companies' acts were passed in all States and Territories in 1961-62. The Commonwealth attempted unsuccessfully to introduce a new Federal scheme in 1974. A new scheme was eventually adopted by all States in 1978. The present corporations law implements a new cooperative scheme based largely on the 1978 scheme. The scheme operates under the direction of a Ministerial Council. Despite recent difficulties with cross-vesting legislation, and other difficulties, there is a high degree of uniformity in company laws across Australia, achieved for the most part on a cooperative basis. It seems to me that two things in particular are worth noting about the progress towards uniform company laws. The first is that it has been achieved by agreement. The States were able to put aside different positions and interests and develop a coordinated, uniform system in the national interest. But not all differences were removed immediately. Over the years the areas of difference have been gradually reduced. The second is that the process commenced with recognition at the highest level that something needed to be done and a conference was called to talk about it. May I echo, therefore, what was said by the Committee of Review of Australian Industrial Relations Law and Systems some 17 years ago and suggest that consideration be given to a conference to discuss the operation of our industrial laws, including those relating to termination of employment, with a view to identifying problems and developing solutions to those problems. Many approaches have been suggested. All deserve proper examination. No one approach may resolve all problems and a differentiated response may be appropriate involving some rationalization of jurisdictions, uniformity of laws, greater use of cooperative measures between tribunals and so on.

[18] In one way the time to look at these issues has never been more opportune. The spread of enterprise bargaining, the significant reduction in industrial disputation and the recent decade of non-inflationary economic growth mean that we are experiencing relatively quiet, and I stress relatively, benign industrial conditions. Looked at in purely historical terms the pressure on our industrial institutions and laws has lessened. One hopes that these conditions will continue indefinitely, no one more than me, but one doubts that they will. If we are to seriously attempt as a nation to address these issues, now would be a very good time.