News & Events

2012 Workplace Relations Review and looking ahead at 2013

By: Anthony Forsyth

Submitted by Firm:
Corrs Chambers Westgarth
Firm Contacts:
John Tuck
Article Type:
Legal Article
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This In Brief provides a summary of the major workplace relations developments in 2012, and an overview of the key issues that employers will need to consider in 2013. We begin by examining the year ahead, in which proposed changes to federal anti-discrimination laws and the federal election on 14 September loom large.

Bargaining in key sectors including road and rail transport, coal production and aviation may lead to industrial action, off the back of higher levels of disputation in the second half of last year.

 

2013: Workplace relations watch list and anticipated hot topics

1 January 2013 and ongoing

Paid parental leave and other family-friendly measures

The national Paid Parental Leave scheme implemented in 2011 provides financial support to eligible working parents who are the primary carers of newborn or recently adopted children. Under the scheme, the Government funds employers to provide parental leave pay to their eligible employees for 18 weeks at the minimum wage.

From 1 January 2013, the Government also funds ‘Dad and Partner Pay’, which is paid leave for 2 weeks at the minimum wage for fathers or other partners after the birth or adoption of a child.

The Government will later this week make some announcements about proposed legislative changes to assist families to balance work and caring responsibilities, including a stronger “right to request” flexible work arrangements; and new protections for workers in relation to roster changes that can make organising child care difficult.

Ongoing

Health and Safety harmonisation

On 1 January 2013, the model Work Health and Safety Act (Model WHS Act) commenced in South Australia and Tasmania. This means Victoria and Western Australia are now the only two jurisdictions with ‘non-harmonised’ WHS legislation.

The first round of transitional arrangements under the model Work Health and Safety Regulations came to an end on 1 January 2013. This means persons conducting a business or undertaking (PCBUs) have to comply with additional provisions of the Model WHS Act.

The Queensland Parliament will consider a number of changes to Queensland’s WHS Act and Regulations, following an industry roundtable discussion on the impact of the new laws, including the delay of the introduction of particular Regulations until 1 January 2014 .

1 February 2013

New National Building Code commences operation

The Building Code 2013 (Building Code) was made as a legislative instrument, replacing the procurement rules previously applicable to contractors and participants in the building and construction industry under the National Code of Practice for the Construction Industry. The Building Code is intended to provide construction industry stakeholders with greater certainty, and also appears aimed at addressing the emerging conflict between the federal procurement rules and those issued by some state governments. Contractors and building industry participants should note that the new rules in the Building Code apply to certain Commonwealth-funded projects for which tenders were submitted prior to 1 February 2013, as well as those submitted on or after that date.

See here.

Continuing through 2013

Proposed overhaul of anti-discrimination laws

2012 saw the release of an Exposure Draft of the Human Rights and Anti-Discrimination Bill 2012 (HRAD Bill), which would consolidate all five pieces of federal anti-discrimination legislation into one statute.

Changes proposed by the Bill include redefining the concept of discrimination, expanding the grounds of prohibited discrimination, and introducing a ‘shifting burden of proof’. If enacted, these changes would enable discrimination complaints to be more easily established than is the case presently. See here.

At the end of January 2013, the Attorney-General indicated that there would be a redrafting of some contentious provisions of the Exposure Draft relating to when a person is taken to discriminate against another person.

The HRAD Bill has been referred to the Senate Legal and Constitutional Affairs Committee for inquiry and report by 18 February 2013. Developments can be monitored here.

Continuing through 2013

Modern Awards Review

Under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), modern awards setting minimum wages and other employment conditions across industries are subject to a one-off review, two years after their commencement on 1 January 2010.

The review process started in 2012 before Fair Work Australia (FWA), and will continue in the Fair Work Commission (FWC) in 2013. This process is unlikely to result in any major changes to minimum employment standards (such as ‘penalty rates’ for overtime or weekend work, a major concern for small business employers in the retail and hospitality sectors). However, employers will need to keep track of any changes that are made to specific modern awards applicable to their workforce. Developments can be monitored here.

Continuing through 2013

Phase 2 of implementation of the Fair Work Act Review

We discuss the outcomes of the Fair Work Act Review in the below section: ‘Looking Back 2012’.

In addition to the changes made by the Fair Work Amendment Act 2012 (Cth) (FW Amendment Act), the Government is now consulting with stakeholders over a second piece of legislation to implement the remaining recommendations of the Fair Work Act Review Panel. These include:

  • extending the good faith bargaining obligations to the process of varying (as well as negotiating) an enterprise agreement;
  • making the process for reaching greenfields agreements one based on genuine negotiation between an employer and a union;
  • facilitating the easier use of individual flexibility agreements under awards and enterprise agreements;
  • preventing unions from instigating the process for taking protected industrial action until bargaining has commenced.

It is expected that reaching a consensus on the Review Panel’s remaining recommendations will be much harder to achieve than was the case with the changes reflected in the FW Amendment Act, discussed below. Further, it is unlikely that the Government will be able to obtain passage of a second piece of amending legislation through Parliament in the eight sitting weeks remaining before the next federal election (see below).

14 September 2013

Federal election

The Prime Minister has called an election for 14 September 2013, avoiding speculation throughout the year about the timing of the poll. While the major parties have yet to formally announce their workplace and industrial relations policies, it is expected that the Coalition (if elected) would implement some changes to the Fair Work Act 2009 (Cth) (FW Act).

The ALP’s workplace relations policy will probably be to maintain the system introduced by the FW Act, and to implement any remaining recommendations of the 2012 Review (see above). The Government also intends to make the issue of family-friendly workplace arrangements a key election issue.

LOOKING BACK AT THE MAJOR DEVELOPMENTS IN 2012

5 December 2012

Transfer of business changes

The Fair Work Amendment (Transfer of Business) Act 2012 (Cth) took effect, protecting the employment entitlements of state public sector employees where there is a transfer of business from a state government entity to a national system employer. This legislation is a response to increased privatisation and outsourcing activity by state governments, particularly in New South Wales and Queensland. It has important potential implications for private sector employers considering tendering for contracts from any state public sector employer. See here.

5 December 2012

Fair Entitlements Guarantee

The Fair Entitlements Guarantee Act 2012 (Cth) took effect, replacing the General Employee Entitlements and Redundancy Scheme with a Fair Entitlements Guarantee scheme. This government-funded scheme enables employees to recover unpaid employment entitlements in the event of their employer’s liquidation or bankruptcy; and increases the level of redundancy payments that are recoverable to a maximum of four weeks’ pay per year of service. See here.

28 November 2012

Fair Work Act changes passed by Parliament

Following a post-implementation review of the FW Act in the first half of 2012, the independent Review Panel’s Report was released by the Government in August. Overall, the Review Panel found that the FW Act was meeting its objectives and (therefore) there was no case for major changes of the kind wanted by major employer groups (eg restrictions on union-initiated bargaining in the resources sector, and limits on the content of enterprise agreements). See here.

However, the Review Panel’s Report included 53 recommended changes to the FW Act, mostly of an administrative or technical nature. This led to the passage of the FW Amendment Act in late November 2012, implementing around one-third of the Review Panel’s recommendations. These include some significant changes to the FW Act provisions dealing with unfair dismissal and general protections claims, certain aspects of agreement-making, and ballots for protected industrial action.

Changes were also made to the structure and operation of FWA, which from 1 January 2013 was renamed as the FWC. In addition, the FWC has been given new functions in relation to default superannuation funds in modern awards. See here.

22 November 2012

New gender equity reporting requirements

The Equal Opportunity for Women in the Workplace Amendment Act 2012 (Cth) was passed by Parliament, introducing more onerous reporting obligations on gender equity issues for private sector employers with more than 100 employees. Commencing with the reporting period 1 April 2013-31 March 2014, employers must provide information about their compliance with a number of ‘gender equality indicators’ (eg gender composition of the workforce and of the employer’s board or other governing body, equal remuneration practices and flexible working arrangements). See here.

7 September 2012

High Court overturns Barclay decision

The High Court of Australia handed down its much-anticipated decision in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32, which overturned a majority decision of the Full Court of the Federal Court. The case involved consideration of the test to be applied in determining a decision-maker’s reasons for acting, for purposes of establishing whether an employer has breached the ‘general protections’ (or ‘adverse action’) provisions in Part 3-1 of the FW Act.

The High Court rejected the ‘objective’ test articulated by the majority in the Full Court, with the practical result that greater weight can now be given to the subjective intention of employers in adverse action cases in circumstances where the evidence of the decision-maker is reliable. Despite this, given the continued overall growth in numbers of adverse action claims (see below), we anticipate that this will continue to be a high risk area for employers.

See here.

3 September 2012

Implied term of trust and confidence: Barker v Commonwealth Bank of Australia [2012] FCA 942

Justice Besanko of the Federal Court of Australia held that there exists in Australian law an implied term of mutual trust and confidence in a contract of employment. It was determined that a serious breach by an employer of its own redeployment policy amounted to a breach of the implied term, resulting in a substantial award of damages to a dismissed employee. This decision is now the subject of an appeal to the Full Court of the Federal Court. The state of Australian law regarding the implied term of mutual trust and confidence may be further clarified in the appeal proceedings. However, the case is an important reminder to employers of the importance of complying with their own policies. See here.

14 August 2012

Full Federal Court upholds contractor and union rights clauses in ADJ Contracting Case

In Australian Industry Group v Fair Work Australia [2012] FCAFC 108 (the ADJ Contracting Case), the Full Court of the Federal Court rejected an argument that a job security clause in an enterprise agreement (requiring parity of pay and conditions for contractors with existing employees) is an unlawful term because it requires or permits a contravention of the general protections provisions in Part 3-1 of the FW Act. The Full Court also upheld the validity of agreement clauses requiring the employer to promote union membership among its employees, and permitting union entry to the workplace for purposes of assisting employees in dispute resolution processes under the agreement. See here.

8 August 2012 & 17 January 2013

TWU v Qantas Airways Limited; Q Catering Limited [2012] FWAFB 6612
AIPA v Qantas Airways Limited [2013] FWCFB 317

The high-profile industrial dispute at Qantas, including months of work bans and stoppages by three unions seeking new enterprise agreements, resulted in the airline grounding its world-wide fleet in late 2011 ahead of a proposed lockout of employees. This led to the federal Government making a successful application to FWA to have all industrial action terminated. FWA was then required to arbitrate the terms of new agreements for three groups of employees involved. See here.

In early 2012, a Full Bench of FWA ratified an agreement settling the dispute between Qantas and the ALAEA representing licensed aircraft engineers (see ALAEA v Qantas Airways Limited [2012] FWAFB 236).

In a decision handed down on 8 August 2012, a Full Bench of FWA rejected key claims by the TWU (representing catering and ground staff), including limits on the amount of work that can be outsourced, the extension of agreement rates and conditions to contractors and labour hire staff, and the union’s 5% per annum wages claim (the Full Bench awarded a 3% per annum increase). In the decision, the Full Bench also confirmed the view that management has the right to manage its business (especially in a competitive operating environment such as the aviation industry); and demonstrated a reluctance to endorse union bargaining claims where these would negatively impact on efficiency and productivity.

The remaining dispute, between Qantas and the AIPA representing long-haul pilots, was also the subject of arbitration proceedings in 2012. In a decision handed down on 17 January 2013, an FWC Full Bench rejected the union’s job security and wages claims – while agreeing to back-date pay increases from 1 January 2012. This decision was also generally supportive of the airline’s need to ensure that its labour costs do not place it at a competitive disadvantage.

While arbitration of bargaining disputes under the FW Act remains relatively uncommon, these two decisions of FWA/FWC Full Benches mean that employers should consider seeking arbitration in difficult agreement negotiations with strong unions. Whether this is an advisable strategy will depend on the specific circumstances of the negotiations and parties involved. See also FWA v Schweppes Australia Pty Ltd; United Voice – Victorian Branch [2012] FWAFB 7858 and [2012] FWAFB 8599; and here.

19 July 2012

Endeavour Coal Pty Ltd v APESMA [2012] FCA 764

The Federal Court upheld a decision of a Full Bench of FWA that Endeavour Coal had engaged in surface bargaining in its negotiations with the union (APESMA). Justice Flick held that the good faith bargaining requirements in s 228(1) of the FW Act meant that an employer must do more than ‘adopt the role of a disinterested suitor’ in agreement negotiations; some effort must be made to enter into an agreement, such as the employer putting its own proposals.

Despite this, Justice Flick set aside three of the four bargaining orders made by the Full Bench of FWA , finding they were beyond the tribunal’s power. This included an order requiring the employer to inform the union of the matters that it would be prepared to include in an agreement. Justice Flick found that this order fell foul of the explicit provision stating that parties are not required to make concessions in bargaining (s 228(2)).

On balance, the decision means that employers should engage meaningfully in the process of negotiating an enterprise agreement under the FW Act – including providing the union(s)/other bargaining representatives with some indication of the terms that the employer may be prepared to agree to.

1 July 2012

New regulatory agency in the road transport industry

The Road Safety Remuneration Tribunal (RSRT) commenced operations. Established by the Road Safety Remuneration Act 2012 (Cth), the RSRT’s role includes the making of road safety remuneration orders setting minimum conditions for employee drivers and owner drivers; and resolving disputes between drivers, employers/hirers, and other participants in the transport industry supply chain. See here.

At present, the RSRT’s work is mainly focused on investigating the retail, livestock, bulk grain, interstate and intrastate sectors of the road transport industry (see: [2012] RSRTFB 3), which is considered likely to expose working arrangements in the supply chains of major Australian retailers to some scrutiny.

29 June 2012

Regulation of trade unions and employer organisations

Most provisions of the Fair Work (Registered Organisations) Amendment Act 2012 (Cth) commenced operation. This legislation amended the Fair Work (Registered Organisations) Act 2009 (Cth), increasing the level of regulation of registered trade unions and employer organisations (and their officials) in response to allegations of corruption and mismanagement within the Health Services Union.

1 June 2012

Changes to regulation of the building and construction Industry

The Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 (Cth) came into operation, replacing the Office of the Australian Building and Construction Commissioner with the Fair Work Building Industry Inspectorate (which operates under the name ‘Fair Work Building and Construction’).

The 2012 amendments also removed some of the regulator’s investigative powers, and reduced penalties applicable to certain breaches of workplace laws – both matters of concern to employers operating in the building and construction industry. See here and here.

1 February 2012

Equal remuneration ruling

A Full Bench of FWA handed down its decision in a test case seeking to increase minimum wage levels for social and community services workers, based on the equal remuneration provisions in Part 2-7 of the FW Act. In Equal Remuneration Case [2012] FWAFB 1000, a majority of the Full Bench decided to award substantial pay increases phased-in over an eight-year period. This outcome was based on an earlier decision which found that the relevant workers were paid less than other comparable employees due to their gender: Equal Remuneration Case [2011] FWAFB 2700.

2011-2012

FWA caseload statistics

FWA reported the following statistics for the financial year 2011-2012:

General protections/adverse action claims increased by 12.6% from the previous year, with 2303 claims lodged in 2011-12.

Unfair dismissal claims increased by 9.2% - 14,027 claims were lodged in 2011-12.

Protected action ballot applications increased from 759 in 2010-11, to 1011 in 2011-12. ABS data showed an increase in days lost to industrial disputes in the September quarter 2012.

Enterprise agreements: the number of agreements increased by 18.8%, with 8,565 agreements lodged for approval in 2011-12. However, recent ABS data shows that the overall level of collective bargaining coverage fell from 43.4% in May 2010 to 42% in May 2012