FWD: Thinking 30 Jan 2017 Industrial relations developments

Registered Organisations Commission

The Fair Work (Registered Organisations) Amendment Act 2016 received royal assent on 24 November 2016. This Act will establish the Registered Organisations Commission, which will oversee the operation of registered organisations such as unions and employer associations, taking over principal responsibility in this area from the FWC. 

The ROC will have broader powers than those previously possessed by the FWC, including enhanced investigation and information gathering powers. In addition, the legislation will increase civil penalties and introduce criminal offences for serious breaches of officers’ duties. These provisions will take effect on a date that is still to be proclaimed, probably in the first quarter of 2017. You can read more about the ROC legislation here.  

In order to secure passage of the ROC legislation through Parliament, the Federal Government gave a commitment to strengthen whistle-blower protections in the public and private sectors. A Parliamentary Committee will consider whistle-blower protections in the first half of the year.

Australian Building and Construction Commission

The re-established Australian Building and Construction Commission has replaced Fair Work Building and Construction as the Commonwealth regulator for the construction sector. In comparison with the FWBC, the ABCC has an expanded jurisdiction (due to a broader concept of “building work”), along with enhanced investigative powers.  

The Minister for Employment, Senator the Hon Michaelia Cash, also issued a new building code on 2 December 2016. The Code for the Tendering and Performance of Building Work 2016 applies to companies that wish to undertake Commonwealth-funded building work. The new Code contains more prescriptive requirements for the content of enterprise agreements. Those requirements have immediate application to agreements made by Code-covered entities after 2 December 2016. Code-covered entities that are subject to an enterprise agreement made before that time are not required to comply with the enterprise agreement content provisions of the new Code until 29 November 2018. You can read more about the return of the ABCC and the new Code here.

Scrutiny over enterprise bargaining requirements

The Uniline decision handed down in August 2016 reinforced the strictness with which the FWC is interpreting FW Act provisions concerning Notices of Employee Representational Rights.  

The decision underscores for employers that it is essential that the NERR be correctly issued the first time around and within 14 days from the start of bargaining – failing to do so may prevent an enterprise agreement from being approved. Our Employment Alert about the Uniline decision can be accessed here.

Another FWC decision from 2016 emphasised the importance of compliance with procedural provisions of the FW Act concerning bargaining. In Falcon Mining Pty Ltd [2016] FWC 5315, the FWC refused an application for approval of an enterprise agreement, partly as a result of a failure by the employer to take all reasonable steps to (i) give a NERR to each employee; and (ii) ensure that the terms of the proposed agreement, and the effect of those terms, were explained to employees in an appropriate manner.

The Falcon Mining decision indicates that the potential for procedural failings to undermine an application for approval of an enterprise agreement is by no means confined to deficiencies with NERRs. 

Although there have been calls for legislative reform, in the meantime, employers must continue to be assiduous in complying with the FW Act’s bargaining provisions as there is little, if any, margin for error.

The past year was also notable for the highly-publicised decision in Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887, in which a Full Bench of the FWC declined to approve a proposed enterprise agreement that would have covered approximately 77,000 employees, on the basis that it did not pass the better off overall test. In addition, there was considerable media scrutiny of the enterprise agreements of several other major Australian employers. It would seem likely that the increased publicity being given to such matters will continue in 2017 and may lead the FWC to take an increasingly cautious stance on the BOOT. 

The decision by a Full Bench of the FWC in Construction, Forestry, Mining and Energy Union v Ron Southon Pty Ltd [2016] FWCFB 8413 highlighted yet again the technical challenges associated with compliance in this area. In that decision, the Full Bench upheld an appeal by the CFMEU against the approval of an enterprise agreement on the grounds that the agreement’s terms contravened the National Employment Standards because the agreement provided for an average of 40 ordinary hours per week. Whilst the Full Bench noted that “an average of ordinary hours above 38 per week does not ipso facto mean that it cannot be approved” and that any inconsistency with the NES could probably be resolved through an appropriate undertaking, it quashed the decision below which had approved the agreement, and remitted the approval application to a single Commissioner. 

Employers will need to be especially conscientious in performing their own BOOT assessments, including by considering the operation of the proposed enterprise agreement from the perspective of each class of employee to be covered by the agreement.  

Proposed union mergers 

The CFMEU has entered into two memoranda of understanding with the Maritime Union of Australia and the Textile Clothing & Footwear Union of Australia, respectively. The unions’ members will reportedly vote on the proposed mergers early this year.  

Separate reports of another possible tripartite merger emerged at the end of last year, with the National Union of Workers understood to have held informal talks with the Australian Manufacturing Workers’ Union and United Voice regarding an amalgamation.  

Prior to the Federal election in July 2016, the Coalition announced that it would seek to introduce legislation providing for proposed union mergers to be subject to a public interest test. This test would include consideration of the merging unions’ history of compliance with workplace laws. Since the election, Minister Cash has reaffirmed the Government’s commitment to this policy and described the proposed CFMEU-MUA merger as “extremely concerning”. However, no legislation was introduced into Parliament before it rose at the end of 2016. So, it is uncertain whether the slated mergers will be impacted by the Federal Government’s policy.

Heydon Trade Union Royal Commission 

The Federal Government is expected to introduce legislation in 2017 in response to the recommendations of the Heydon Trade Union Royal Commission. During the election, the Government indicated that it would implement the vast majority of the recommendations made by the Royal Commission, and Minister Cash repeated this in late October 2016.   

Secondary boycotts

In response to the recommendations of the Harper Review, the Federal Government has developed exposure draft legislation for consultation that includes increased penalties for the contravention of secondary boycott provisions from $750,000 to $10 million. Legislation arising out of the recommendations from the Harper Review is currently before the Federal Parliament, with the Bill that includes the reforms to the secondary boycott penalties yet to be introduced. This is likely to be introduced in 2017.  

Queensland IR changes

In late 2016, the Queensland Parliament passed the Industrial Relations Act 2016 (Qld). It is due to commence operation on 1 March 2017. The Queensland Act repeals the previous Industrial Relations Act 1999 (Qld) and amends a host of other Queensland legislation. The Queensland Government’s stated purpose is to provide a more streamlined, fair and balanced industrial relations framework that supports the delivery of high quality services, economic prosperity and social justice. The changes align the Queensland industrial relations framework in many respects with the existing Commonwealth framework under the FW Act.

The Queensland Act primarily applies only to those employers in the Queensland industrial relations system, being Queensland Government departments and agencies and the Queensland local government sector. The key exceptions to this are that the Queensland Act also:

• contains the relevant long service leave provisions for the State; and
• includes provisions relating to emergency service leave and jury service leave which apply to all Queensland employers.  For example, the jury service leave provisions obligate Queensland employers to pay an employee absent on jury leave for the entirety of the employee’s absence and based on the employee’s ordinary rate of pay less any attendance monies they have received. This entitlement exceeds the jury service leave provisions contained in the FW Act.

New legal avenues for public sector employees

The Queensland Act introduces a general protections and anti-bullying jurisdiction similar to the FW Act:

• The general protections jurisdiction prohibits employers from taking adverse action against an employee for a prohibited reason. Employees may make general protection claims regarding adverse action taken during their employment or in relation to the termination of their employment. Employers should be aware of the reverse onus of proof in general protections claims. Once the employee establishes that adverse action was taken, the employer is required to establish on the balance of probabilities that the relevant decision-maker’s approach had not been tainted by a prohibited reason. Such matters are to be dealt with by the QIRC.
• The QIRC also now has an anti-bullying jurisdiction that mirrors the Commonwealth jurisdiction in the FWC. Various orders are available to employees who successfully establish that a worker or group of workers repeatedly behaved unreasonably, creating a risk to health and safety, but which does not constitute reasonable management action carried out in a reasonable manner. This establishes a streamlined process and the intention is that each anti-bullying application will be dealt with quickly by the QIRC.

It will be prudent for Queensland public sector employers to review their policies and procedures. For example, they should ensure decisions taken which adversely impacts an employee are not affected by any prohibited reasons under the general protections framework. The existing case law regarding the Commonwealth framework should assist Queensland public sector employers to understand better how these provisions will operate and be interpreted by the QIRC.

New entitlements for public sector employees

Queensland public sector employees have also been provided with the following entitlements:

• Employees may access ten days of domestic and family violence leave if they experience domestic and family violence, making Queensland the first state to extend the scope of leave to this category;
• Employees have the right to request flexible working arrangements and such requests may not be refused unreasonably; and
• New employees must be provided with an information statement when commencing employment that details employee entitlements, similar to the Fair Work Information Statement.

Changes to bargaining framework

The new Queensland legislation also introduces changes to the bargaining process which include:

• Bargaining may commence earlier, six months before the nominal expiry date of the existing certified agreement rather than 60 days before; and
• The introduction of good faith bargaining obligations and scope orders.

Duty of mutual trust and confidence?

The Queensland Act also includes as one of its purposes the recognition of mutual obligations of trust and confidence in employment relationships. In 2014, the High Court unanimously held in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 that there is no implied term of trust and confidence in Australian employment contracts. Our Employment Alert on the Barker decision can be accessed here.

During the consultation process before enactment of the Queensland Act, the Office of Industrial Relations clarified that the inclusion of this obligation merely supports, rather than expands, existing protections for employees. Nevertheless, there is potentially scope for argument that the inclusion of the obligation in fact provides a further basis for claims about how the provisions of the Queensland Act should be interpreted and applied. 

Work related discrimination claims

Under the changes introduced, work related discrimination claims made under the Queensland Anti-Discrimination Act 1991 will now be determined by the QIRC rather than by the Queensland Civil & Administrative Tribunal.