Industrial Relations Society of the ACT Inc Conference

Canberra, 31 March 2004

Justice Giudice, President

Australian Industrial Relations Commission

[1] Thank you for inviting me to the ACT Industrial Relations Society Convention. It is a pleasure to be here and to have the opportunity to speak to you.

[2] I greatly admire the dedication of the voluntary committee members of the Industrial Relations societies around Australia who put a great deal of their personal time and effort into running programs of this kind. While the various state branches have their ups and downs in membership it is good to see that in recent years the societies seem to be very well supported and that all states have a core of loyal and active members as well as a healthy infusion of new blood. This level of interest was also reflected in the very large attendance at the national conference in Adelaide last year. The role of the Industrial Relations Societies in bringing together the various interest groups involved in industrial relations is a very important one. There is great potential for minimising disagreements in industrial relations through dialogue. By providing an opportunity for dialogue the societies play a very significant part in promoting tolerance of opposing points of view and contribute to harmony in industrial relationships. Conferences such as this one provide an opportunity for representatives of various interest groups to express views about industrial relations issues and, almost as important, to hear each others' views. It is to be hoped that the societies continue to thrive and that people from all of the various groups show their support through continued membership.

[3] There are four matters which I should like to deal rather briefly with in the next 25 minutes or so. The first is the legislative concept of the award safety net. The second is the way in which the Commission carries out its role in relation to the safety net. The third relates to the Commission's recent decision in the Redundancy Case. The last matter is our systems of workplace laws.

[4] The modern concept of an award safety net of minimum conditions is a relatively new one in the federal sphere, being barely 10 years old. The idea of confining the exercise of arbitral powers to the fixation of minimum conditions was introduced in 1994 and consolidated in 1996. The Workplace Relations Act 1996 limited the Commission's general or normal award making powers to the making of minimum rates awards in relation to the specified allowable award matters. The allowable award matters are set out in s.89A of the Act and cover most of the standard areas of award regulation such as wages, hours, leave and so on.

[5] Digressing for a moment, the 1996 Act also provided for the simplification of the existing awards by removing provisions which were not allowable award matters or not incidental to allowable award matters and necessary for the effective operation of the award concerned. Partly as a result of subsequent Full Bench decisions, awards which did not contain properly fixed minimum rates were subjected to a minimum rates conversion process. The award simplification process has been a long one. It commenced in earnest in July 1998. While there are still some awards to be finalised, less than 100, largely as a result of the simplification around 1700 awards have ceased to operate, over 1200 awards have been substantially amended and the total number of awards has reduced from around 3,200 to about 2,200.

[6] All new awards, apart from being confined to minimum rates and the allowable award matters, are required to conform to standard requirements. Some of these requirements are that the award neither contain matters of detail or process, more appropriately dealt with at the workplace or enterprise level, nor prescribe work practices or procedures that restrict or hinder the efficient performance of work nor contain provisions that have the effect of restricting or hindering productivity having regard to fairness to employees.1

[7] It is important to be aware of the statutory criteria which guide the Commission in carrying out its arbitral role in relation to minimum rates awards.

[8] This will necessarily be a summary of the provisions most relevant to minimum rates awards, although by no means all of the relevant provisions are mentioned. By the objects of the relevant part of the Act, Part VI, the Commission is enjoined among other things to ensure:2

[9] It can be seen that the award system is not only to serve the purpose of protecting wages and conditions but that there is also a maintenance aspect. This maintenance idea is also picked up by the additional statutory requirement that in performing its functions the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained having regard to three things in particular:3

[10] It is potentially dangerous to summarise statutory provisions because it might be said that something important has been left out or that an error has been made in emphasis. Recognising that danger, but pressing on regardless, it is clear that the maintenance of a safety net of fair minimum wages and conditions involves a consideration of living standards generally prevailing, economic factors and the needs of the low paid. The language of the statute makes such consideration obligatory.

[11] That brings me conveniently to the second area, the practical application of the Commission's role in relation to the safety net. Within the guidance provided by the statute the Commission is obliged to consider from time to time whether the safety net should be improved or otherwise altered. The most public examination of the safety net is the review of minimum rates which in recent years has occurred annually. But there are numerous other cases, some of which have greater general significance than others. In the latter category are the Working Hours Case4 and the recent Redundancy Case.5 In those cases the exercise of the Commission's not inconsiderable discretion is bounded by the statutory framework I have just described. We do not act at large to give effect to whatever seems to us in a general sense to be a good thing. This is sometimes not understood by parties who feel they are on the wrong end of Commission decisions.

[12] And because of our legal and constitutional history, the cases are conducted in the traditional adversarial fashion with the evidence and other material of each party being subject to criticism and examination by the opposing parties. It hardly needs to be said that in reaching its decisions the Commission applies conventional decision-making processes - it examines the evidence and the submissions in the context of the statutory requirements. In that environment it is the arguments and the evidence which speak loudest, not the identity of the parties. To criticise Commission decisions on the basis that such and such a party lost, or that only one party argued for the eventual outcome while all of the others opposed, it is to completely misunderstand or to ignore, the Commission's role and functions under the statute.

[13] Criticism of Commission decisions is to be expected and although not exactly welcome, it is certainly not objected to. It should also be pointed out that there are systemic checks, in the appeal system and the supervision of the superior courts, which are designed to deal with any errors which might occur. Errors do occur in every judicial and quasi-judicial system. But criticism which is not based on a balanced reading of our decisions, or sometimes on any reading at all, is an invitation to abandon principled decision-making, an invitation we do not take up, whatever the circumstances. The most powerful party can be unsuccessful if their case is weak, and the humblest party can succeed if their case warrants success, subject always to the exercise of the Commission's discretion within the framework provided by the statute. I would now like to say a few words about the Commission's most recent decision concerning the award safety net - last week's decision in the Redundancy Case.

[14] The decision in the Redundancy Case was based on a large amount of formal evidence and a great deal of other evidentiary material. Much material was filed in advance. There were many witnesses who gave oral evidence and were cross-examined. The witnesses included academics, professionals, employers and employees. There were some 15 days of hearing and extensive written submissions. The decision, which is one of the lengthier ones, about 100 pages, was delivered 5 months after the last day of hearing.

[15] There were two areas in which significant changes were made which I want to refer to. Both concerned the amount of severance pay.

[16] The first concerned employers with 15 or more employees. For those employers the severance pay liability was increased in relation to employees whose employment is terminated for redundancy but only in relation to employees with 5 or more years of service at the time of termination. The severance pay scale was extended from a maximum of 8 weeks pay after 4 years service to 16 weeks pay after 9 years service and 12 weeks pay after 10 years service.

[17] The second area concerned employers who employ fewer than 15 employees. Those employers have until now been exempt from the severance pay requirements in the Commission's awards and their employees have had no award severance pay entitlement. The Commission decided to partially remove the exemption. By the decision the severance pay scale which previously applied to employers of 15 or more employees was applied to employers of fewer than 15 employees. Employers of fewer than 15 employees, covered by the awards, will be required to pay up to a maximum of 8 weeks severance pay to employees who lose their employment through redundancy,

[18] Both of these matters were decided in the context of a number of findings on the evidence and submissions.

[19] In relation to the increase in the severance pay scale for employers of 15 or more employees, the findings, and here I am paraphrasing the decision, included the following:

[20] The findings in relation to employers of fewer than 15 employees, and once again I am paraphrasing the words of the decision, were:

[21] These findings followed a consideration of the evidence, which is set out in the decision, and they are supported in some cases by supplementary findings on which the main finding is based.

[22] I have devoted some time to this decision for a number of reasons. This is an important case and one of which people should be aware. The manner in which the Commission decided the case requires some elaboration if people are to truly understand the Commission's reasons. Hopefully thus stimulated you will hurry off to read the whole decision. Before leaving the Case I should say that the Commission, generally speaking, only gives its reasons for decision once and if you detect any divergence between my paraphrasing and the actual decision, you should immediately expunge the former from your consciousness and rely only on the latter.

[23] The last area which, with some trepidation, I want to briefly enter is the question of the so-called unitary system of industrial regulation. This is the focus as I understand it of the day's discussions. At the outset I want to sharply delineate two matters. The first is the nature and operation of laws affecting relations between employers and employees. The second is the discussion of directions for reform. On the latter I readily and gratefully defer to the policy makers and the members of the several parliaments involved. Although I have on several occasions pointed to the thicket of regulation emanating from different legislative bases and administered by a variety of courts and tribunals, it is not my role nor would it be appropriate for me to suggest how laws might be altered. But there should be an examination of that question.

[24] There are federal awards and state awards establishing terms and conditions of employment, there are laws providing for the protection of employees against unlawful discrimination which are administered by a number of different courts and tribunals at federal and state level, there are laws governing unfair and unlawful termination of employment which can be invoked before federal and state tribunals and courts. For employers operating in more than one state the number of different laws and procedures and the potential liabilities are great indeed.

[25] In this the age of the litigant in person, every court and tribunal is under increasing pressure to deal with claims, many of which do not have a great deal of merit, to enforce any one of a large number of statutory rights. Litigants who appear personally, that is without representation of any kind, are not to be discouraged, since often they do not have the ability to obtain representation and they should not for that reason be disqualified from taking advantage of statutory protections enacted for their benefit. It must be said, however, that in many cases the time and expenditure of resources arising from claims by such claimants constitutes a serious problem. The number of different laws, courts and tribunals makes access for all employees, including those who represent themselves, more difficult.

[26] The current mix of arrangements holds disadvantages for employers and employees alike. Furthermore they advantage the party with the greater resources, who is able to exploit the situation, to the disadvantage of those less able to discover and take advantage of the statutory and other rights which might be available to them.

[27] The rationalization and simplification of our industrial laws, which many have advocated, is not an easy task. Whilst there have been some notable achievements much remains to be done. I would congratulate those responsible for what has been achieved so far and encourage further attention being given to these issues. For that reason the theme of today's conference is a very important. I wish you all well in your discussions and trust that they will bear fruit.

1 Section 143(1B). See also s.143(1C).

2 Sections 88A, 88B(1).

3 Section 88B(2).

4 PR072002.

5 PR032004.