Australia: Bargaining on the Future: Limitations for Industrial Action Under WorkChoices

The federal Government's workplace relations reform legislation, which passed through Parliament in December 2005, is likely to commence in March 2006. Under the new legislation, the role of unions in engaging in protected industrial action is set to diminish.

This article will focus on the restrictions imposed on parties to engage in industrial action under the new legislation, in particular, the limitations imposed during the bargaining and negotiating of agreements.

The Workplace Relations Amendment (WorkChoices) Act 2005 ("WorkChoices") amends the Workplace Relations Act 1996 ("the Act") and creates a unitary industrial relations system.

The Act relies on the Commonwealth's power to make laws in respect of corporations, in respect of the Territories (the Northern Territory and the Australian Capital Territory) and in respect of the Commonwealth, its authorities and employees.

WorkChoices will not govern State Government authorities. They will remain governed by their respective State system. It will however govern the Northern Territory and ACT Public Service by virtue of the Territories power.

Unincorporated sole traders and employees of unincorporated entities and partnerships will not be covered by the legislation and will remain bound by the State systems. Employers currently in the federal system who are not constitutional corporations will remain covered by WorkChoices for a transitional period of five years, after which time, they will revert to the relevant State systems if their business remains unincorporated. It is anticipated that independent contractors will also not be bound by WorkChoices, but instead will be covered by an Independent Contractors Act which the government has forecast will be introduced sometime this year.

The federal Government has estimated that in total, the legislation will apply to approximately 85% of all employees in Australia.

The NSW, Western Australia, South Australia and Queensland State Governments have lodged a challenge in the High Court to the constitutionality of the federal Government's reforms. It is expected that the case will be heard in May 2006.

Industrial action

The legislation prohibits industrial action being taken during the life of any agreement. Industrial action is defined to include, among other things:

• the performance of work by an employee which by its nature, restricts, limits or delays the performance of that work,
• the failure or refusal by an employee to attend work, or
• the failure or refusal to perform work or the locking out of employees from their employment.

Industrial action does not include action taken by employees which is authorised by the employer, or which is based on a reasonable concern by the employee about an imminent risk to his or her health and safety.

The prescriptive definition of what constitutes industrial action, raises questions concerning employees who take strike action or leave work to participate in a "union rally" and the extent to which such behaviour would constitute industrial action and therefore would be prohibited under the new legislation.

So when is industrial action protected?

WorkChoices provides that industrial action will be protected in certain limited circumstances during a bargaining period. This can only occur after the expiry of an agreement, after a secret ballot has been conducted and an order from the Industrial Relations Commission has been obtained.

A bargaining period is initiated when a party gives written notice to the other party and the Commission, stating that that party wishes to make a collective agreement and negotiate the terms and conditions of the agreement.

The Commission may suspend or terminate a bargaining period where it is satisfied that certain circumstances exist. These include:

• where the parties do not genuinely try to reach an agreement,
• where the industrial action is considered to endanger the life, personal safety or health, or the welfare of the population or part of it;
• where it is likely to cause significant damage to either the whole or part of the Australian economy; or
• following an application by a negotiating party or an application by the Minister or on its own initiative.

The Commission can also suspend a bargaining period for a "cooling off" period, if appropriate in light of the duration of industrial action and the context of public interest.

In the lead-up to Parliament passing WorkChoices, the Senate debated the reforms through a Senate inquiry. One of the concerns raised during the submissions was the possibility of an unscrupulous employer initiating a bargaining period in accordance with the legislation, only to seek to have the bargaining period terminated by relying on the circumstance that the parties did not genuinely try to reach an agreement before organising or taking industrial action.

While there is a possibility that this could occur, it would be extremely unlikely given the new powers granted to the Commission. In any event, where a bargaining period has been terminated in circumstances where there is a threat to personal safety or the welfare of an individual, or it is likely to cause significant economic damage, and the parties have not settled the matter, the Commission has the power to issue a workplace determination, settling the matter.

At present, most Commonwealth public sector employees are employed under collective agreements, the majority of which are negotiated with unions. Notwithstanding this, all Senior Executive Service appointments are made via Australian Workplace Agreements (AWAs) and increasingly, more non-executive positions are being offered under AWAs.

Bargaining in the Commonwealth public sector is conducted in accordance with "Policy Parameters" set by the Depart-ment of Employment and Workplace Relations, which allow third party involvement by unions. The Public Sector Union has been an active participant in negotiating certified agreements for its members.

However, given the Government's platform for workplace reform, in particular, decentralised bargaining and greater workplace flexibility, it is likely that AWAs will increasingly become the predominant mechanism for employ-ment of public sector employees.

The greater use of AWAs, in place of negotiated certified agreements, combined with changed arrangements for right of entry and the limitations on union led protected industrial action, is likely to lead to a lesser role for public sector unions in the future of government employment.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.