What is the Commission's Role in an Environment of Individual and Collective Bargaining

Senior Deputy President O'Callaghan

19 October 2001

Any consideration of the role of the Australian Industrial Relations Commission should, in my view, commence from the premise that the Commission is not fundamentally a policy initiator. The Commission responds to initiatives, agendas and issues that arise in workplaces.

This address endeavours to identify a few issues which I suggest may well arise in the future. The extent to which they become relevant will depend entirely on how employers and employees variously manage their futures.

I have considered individuals and their interaction with the Commission.

I have considered changes occurring in relation to employment issues and types. I conclude that the combination of these two factors will result in disputes of increasing complexity that are inherently more difficult to resolve.

In my view there are some obvious environmental pressures that will impact on industrial relations in the near future:

In terms of the role of the Commission, let me first consider the individual. There is absolutely no doubt that individual employment arrangements are a current feature of our system. It would be inappropriate for me to comment on that intensely political issue of how these arrangements are best regulated. It would be equally inappropriate for me to comment on the role of the Union movement in relation to individual arrangements. What I have attempted in this paper, is to guess at the Commission's role in a rapidly changing environment profoundly influenced by individual employment matters.

Firstly, I need to make some comments on the interaction between the individual and the Commission. The determination of an individual's dispute is as hard or often harder from the Commission's perspective than is the determination of a collective dispute. The individual, often does not have the benefit of union or professional representation. The individual has little knowledge of the system, or its complex rule base and quasi legal processes, often unreal expectations, and a capacity to get his or herself into some extraordinarily complex situations.

The Commission sees unrepresented applicants in Unfair dismissal cases, disciplinary disputes and through the dispute resolution processes contained in Workplace Agreements.

The resolution of disputes involving individuals requires a variety of responses from the Commission. Increasingly there is the expectation that the Commission will take on the role of mediator. Such a role is clearly separate from the Commission's conciliation and arbitration functions. It generally requires different skills, resources and attitudes.

Additionally, the resolution of disputes involving individuals requires that the Commission provides substantial assistance to the individual to ensure the principle of `a fair go all round' can be preserved.

The provision of information in the form of easily used brochures and the Commission's web site reflects, at least in part, the need to tailor services such that individuals can easily access them.

Ultimately, legislation may allow the Commission or other functions to offer alternative dispute resolution processes that might allow for more informal and less "court" like dispute resolution.

However current legislation is inherently restricted in this respect-despite the changes to the Workplace Relations Act the majority of it is still designed around employer groups and unions rather than individual employees and employers.

The magnitude of the movement to individual workplace arrangements needs to be put in a context.

Simply considering Western Australia, there is the very topical consideration of the individual agreements registered in either the Federal or State system, representing (depending on various sources) 7% of the total workforce. Clearly, the future of some of these arrangements is a matter that will be considered in the context of the Western Australian Government's new legislative proposals.

However, individual workplace arrangements extend way beyond these statistics. I want to consider the individual in a range of rapidly changing workplace situations so that a comment on the role of the Commission can be founded on these situations.

Consider our hospitals and the estimates of: 1

5 ½ % of total nurses are casual staff

5 ½ % of total nurses are Agency staff.

Consider the dramatic growth of the labour hire companies, now operating in almost every industry with various individual corporate growth estimates of 15% per annum. Not only are the Labour Hire Companies now providing specific specialist services to many Companies, but they are also now undertaking various total employment services.

Consider the substantial growth of contractors: individuals working under contracts are commonly engaged in the security, cleaning, catering and transport industries. Self employed contractors now constitute 10% of the workforce and continue to increase in numbers and proportions. 2

These people often present real challenges for unions in terms of membership, issues and services. Additionally, they are clearly not employees in the traditional sense.

Research indicates that these people are more likely to be displaced employees and hence have more rigid views on certain employment issues.3

They very commonly now, simply come into a place to work. They do not necessarily identify with that business in terms of their future. Their preparedness to engage in planning, and business or corporate development programs is inherently limited. Depending on the contract under which they work, their duties may be rigidly defined or they may be infinitely flexible so they will do whatever it is they are asked to do. Managers however, cannot assume that these staff will operate naturally as traditional employees.

My suggestion is, that the concept of the employee has undergone a significant shift and potential enlargement.

Looking at it from the perspective of a spectrum. At one end (the traditional end) of the spectrum the weekly hire employee remains, although, in the current environment, with a decreasing level of confidence that the business they work for is properly managed and will not become insolvent overnight.

Moving across the spectrum is the concept of the casual employee which continues to under go significant growth. ABS statistics show nationally, the proportion of the working population were casuals has increased from 19% in 1988 to 27% in 1998 4.

Whilst casual employees can, and often do, act in a collective fashion, there is an increased likelihood that they will act as individuals, thereby reflecting the inherent nature of their employment arrangements.

Progressing across the spectrum there are the labour hire employees who tend to have some allegiance and identification with the labour hire firm that generally pays them, and a variable identification with the host employer who directs them.

Then, at the other end of the spectrum, is the individual contractor, who in years gone past, might well have been described in many cases as employees. These people increasingly include franchise operators and people who combine the traditional function of the employee with characteristics that are better associated with a small business operator. The extent of their employment status is often entwined with complex and poorly understood contractual arrangements.

This evolving spectrum clearly presents enormous scope for political, social and workplace relations debate. The issues up for discussion will relate to what sort of regulartory framework should apply to the unregulated, non-collectivised workforce.

Other issues for debate must inevitably emerge. These will be healthy debates, as they reflect what is driving the spread of this spectrum: namely the quest for arrangements that best suit both individuals and businesses. It is simply a fact that this quest is often occurring without a great deal of thought as to what consequences these new arrangements may engender and often without a great deal of thought to issues relating to lifestyle. Additionally there is often not a great deal of timely thought given to the progressive changes in bargaining influence bought about by skills and the demand for them.

My brief is not to guess at where these debates are likely to go and how they will conclude. It is a brief instead, to consider what the Commission's role might be in such a volatile and changeable environment.

Clearly, such a role will be defined by the legislation in a broad context. Given the structure of our various systems, it seems certain the debates will remain complex. Equally, it is clear that the legislation is going to continue to be profoundly influenced by the extreme examples - the examples of obvious inequity or the examples of obvious inflexibility that will be aired in the various Parliaments.

However, I suggest that it is possible to take a guess at some changes that will impact on the Commission. I have put these into three broad categories.

Changes to function.

There will be continuing debates over the Commission's role. These debates will include consideration of whether it is necessary and how best to monitor employment contract arrangements and assist in dispute resolution relating to them.

It is important that I stress that I am not advocating changes to the Commission's role-I am simply recognising that the environment in which we operate is such that these debates over changing roles will inevitably occur as it has done so many years.

Changes to methodology.

The Commission is recognising that the greater individual focus of our system, together with changes to the types of issues that are now collectively argued, and the resource's available to the traditional parties, are such that there will need to be continuing changes to our methodologies.

This is not restricted to employees-increasingly we now have individual businesses who seek to represent their own positions and views on issues such as award conditions that were traditionally the domain of employer and employee organisations.

The recent changes to the Workplace Relations Act underline this recognition of the reality of variable access to workplace relations knowledge and expertise.

My view is that the changes to employment traditions in a world of rapidly changing and developing communication options will inevitably increase pressure on groups such as the Australian Industrial Relations Commission to provide improved "self-help" options. I have already talked about improved Web based information services which have now been implemented and are being continually improved.

I believe that in the future, individuals, untrained in industrial relations mythology, will be able to enter a web page, identify the situations confronting them and access advice based on Commission precedents and established principles. Speaking entirely for myself, it would be wonderful if some of the advocates who currently appear before the Commission could do this immediately!

Further, I suggest that the paper-based Award as we know it, is a product of its time. In the future Web based Awards may allow employees and employers to access:

The arguments and issues brought to the Commission.

Look back over the last 10 years. The policy issues most commonly brought to the Commission can be broadly summarised:

Look forward in the context of the spectrum of employment arrangements which I have outlined and I suggest that we can predict a dispute agenda that might look a little like this.

The extent to which these predictions come true will depend, in my view, very heavily on business leaders in Australia. It will depend on the extent to which we have an environment where the way in which business engages staff is defined, not by the immediate lowest cost option, but rather, by the extent to which managers want people to be an integral part of the organisation rather than the supplier of strictly defined services in much the same way as the photocopier maintenance person now operates.

Australian businesses now have this broadening set of personnel options open to them. My view is that these changing work options, and in particular, the extent to which individual arrangements are now an established component of Australian industry, will have a substantial impact on the form and type of collective approaches in the future.

We are already seeing the union movement and employer associations becoming far more aware that they are funded by the minority of employees and employers but have traditional roles that extend across all of industry.

We are only now starting to see the potential impact of labour hire firms on industrial arrangements and of employees of these labour hire firms on the positions to be taken by trade unions.

These emerging groups of employees I have identified, predominantly select hours and working arrangements to suit themselves. There is an increased likelihood that their employment interests may not always be compatible with those of traditional employees, and that the potential for differences between employee groups based on the nature of the employment contract will be heightened.

We are clearly seeing a heightened level of community consciousness of the vulnerability of business and the potential impact of business failure and contractual arrangements on employees.

What we are not seeing clearly or commonly, are business organisations or leaders that are articulating philosophies and approaches that take into account this spreading spectrum of employment opportunities and define basic principles relating to business and employment conduct in a fashion which is capable of ready understanding by the franchisee operators, the contractors, the labour hire employees and the casual employees, who are now such a significant component of the Australian workforce.

Unless we can start to see the emergence of such an approach to these people in organizations, my view is that a significant portion of Australian businesses, and workers and employees will continue the Australian tradition of looking to bodies such as the Industrial Relations Commission to clarify the ground rules under which they should operate.

Consequently, in the environment I have described, where individuals will have greater choices, there will be debates about the role and function of the Australian Industrial Relations Commission.

There will also be some likely changes to the type of issue bought before the Commission, where employment arrangements come unstuck.

Disputes for the future are likely to more commonly involve interactions between different groups of employees - with different views and interests on specific issues.

Take, for example:

My message is that these different employment arrangements will mean that the Commission will not only have to deal with employees who have fundamentally different views on the matters in dispute, but they will often be represented in quite different and diverse ways.

The Commission will need to have regard to this increasing degree of diversity of interests and representation. The objects of the current Act already make this clear. However we also need to acknowledge the increased potential for the Commission to be operating alongside Civil jurisdictions who have referred to them, closely integrated contractual disputes.

If we take as a given, that the Commission generally only sees the disputes that represent that small proportion of employment arrangements that have come unstuck, then I suggest that where different groups of employees have different views, it will become inherently more difficult to resolve many issues, and the ultimate resolution will need to be more precisely tailored to suit a given situation.

The Commission will have a role in the future, profoundly influenced by what employers and employees do not properly consider in advance. It is, in my opinion, fortunate that by that time we will have simplified the Safety Net Awards because the complexities of enterprise employment arrangements will keep us occupied.

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1 Health Department of Western Australia - based on cost estimates.

2 Self Employed Contractors in Australia : Incidence and Characteristics - Productivity Commission Staff Research Paper. September 2001.

3 `The Changing Workplace : Challenges for Public Policy', Gordon Betcherman and Richard Chaykowski : Sept 1996 - Applied Research Branch, Strategic Policy, Human Resources Department, Canada.

4 ABS Australian Population Trends.