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ILCCR: Examination of individual case concerning Convention No. 98, Right to Organise and Collective Bargaining, 1949 Australia (ratification: 1973) Published: 2007Description:(ILCCR Individual Observation) Convention:C098 Country:(Australia) Session of the Conference:96 Document:22 Subject classification: Freedom of Association Subject classification: Collective Bargaining and Agreements Subject: Freedom of Association, Collective Bargaining, and Industrial Relations Display the document in: French Spanish Document No. (ilolex): 132007AUS098 The Government representative expressed his Government's deep concern that it had been called before the Committee because there had been serious and fundamental flaws in the processes culminating in that situation. He would not address the observation of the Committee of Experts because it had been the result of a flawed process. While the Committee of Experts' observations were the basis of the Conference Committee's work, the observation on Australia in that case did not take into account the Government's submissions, which was extremely disappointing and completely inappropriate. As the observation was unbalanced and contained factual errors, it was a totally inappropriate and unacceptable starting point for consideration by the Committee. At its 2006 session, the Committee had asked the Government to report to the Committee of Experts on the provisions of Australia's workplace relations reform legislation and its impact in law and in practice on its obligations under Conventions Nos 87 and 98. Responding to that request had been a mammoth task, given the magnitude of the legislative reforms in question, some of the largest in Australian history. The Government had made every effort to meet the very short timetable set by the Committee and kept the ILO fully informed of progress regarding the development of the report and the possibility of a delay in submitting it. On three occasions, between August and November 2006, the Government had written to the Office, and Government officials had met senior ILO officials in November 2006, again emphasizing the possibility of a slight delay in reporting. Remarkably, a detailed report had been provided in December 2006. However, it was regrettable that the Committee of Experts' observation did not take the information provided by the Government into account. His Government did not believe that it had been necessary or appropriate for the Committee of Experts to make observations on Australia's laws. The Committee of Experts had been prepared to defer the consideration of cases where relevant documents or reports had been received late and could not be examined with necessary care, due to lack of time. The Government could not understand why the Committee of Experts had not taken the same approach in its case. The Government representative stated that the Committee of Experts' observation that the Government had not replied to the comments made by the National Tertiary Education Union (NTEU) was factually wrong. The Government's response to those comments had been provided to the ILO in mid-November 2006, and the Office had acknowledged that it failed to forward it to the Committee of Experts. Thus, a procedural failure had led to an error in the Committee of Experts' observation. The Government representative stated that, in view of those failures of process, it would be inappropriate for the Conference Committee to engage in a substantive discussion on an observation which was critical of Australia without having considered the information provided by the Government. Having been in the public domain for more than four months, the observation gave the false impression that Australia had simply failed to provide information. That flaw could only be rectified by way of a new observation by the Committee of Experts, which would take the submission of the Australian Government into account. Australia remained willing and keen to explain its workplace relations laws to the Conference Committee and to discuss the ways in which those laws complied with international obligations. An appropriate course of action for the Committee would be to note that the Committee of Experts' observation was based on incomplete information and to refer the matter to the Committee of Experts for consideration at its 2007 session, at which time the Government's submission should be considered. Australia would be happy to appear before the Conference Committee in 2008, if necessary. The Government representative rejected the view that, despite procedural flaws, the case was sufficiently important to warrant immediate consideration by the Committee. Australia was a country with high labour standards that had undergone 15 years of sustained economic growth. It was ironic that the Government had been criticized for implementing reforms that were central to the delivery of significant economic benefits, particularly to workers and employers. In that regard, the Government representative stated that Australia had the second highest minimum wage in relation to median earnings in the Organisation for Economic Co-operation and Development (OECD). Since the workplace relations reforms in March 2006, 358,700 new jobs had been created in Australia, of which 94.8 per cent had been full-time jobs. In May 2007, the unemployment rate stood at 4.2 per cent, its lowest level since November 1974. Wages had increased by 4.7 per cent in the 12 months after the reforms had come into effect. In conclusion, the Government representative stated that the failure of fair and proper process weakened the credibility of international labour standards, the supervisory procedures, and the ILO. The Worker members pointed out that the Government was not justified in criticizing the report of the Committee of Experts. The Government had neither communicated the requested information within the prescribed deadlines so as to allow it to be analyzed; nor had the Government provided details as to the errors that it attributed to the Committee of Experts. The labour legislation of Australia, be it the initial act of 1996 (Workplace Relations Act) or the Workplace Relations Amendment (Work Choices Act), 2005, remained in blatant violation of Convention No. 98 in at least three respects: (i) it favoured individual rather than collective bargaining, just as it favoured bargaining at enterprise level rather than other forms of bargaining; (ii) it allowed employers to select their bargaining partners themselves; and (iii) it considerably restricted the number of matters open for negotiation. Since 1996, the legislation provided for two types of agreements: collective agreements and individual agreements between a worker and an employer - known as "AWA" (Australian Workplace Agreements). The AWAs prevailed over collective agreements. Moreover, workers preferring to be covered by a collective agreement rather than by an AWA were exposed to discrimination at the hiring stage or in the course of employment. The situation constituted a flagrant violation of Articles 1 and 4 of Convention No. 98. The Amendment Act of 2005 had only aggravated the situation: an AWA could henceforth replace a collective agreement in force, which meant that the employer was completely free to impose the AWA on the workers; and the substitution of a collective agreement by an AWA was irrevocable, thus marginalizing the workers' organizations. Under the Act of 1996, the multi-employer agreements, i.e. sectoral collective agreements, were subjected to previous approval by a public quasi-judicial body, which favoured agreements with a single employer and refused authorization to negotiate multi-employer agreements unless it could be demonstrated that this was in the public interest. The Workplace Relations Act provided for two types of "Greenfield agreements", those made with a union, and those made unilaterally by an employer. Such agreements can last for 12 months. The Act of 1996 prohibited negotiating the payment of wages in respect of strike days. Yet, the Committee of Experts had always stated that, while the deduction of strike days from wages was not in itself contrary to the Convention, making such deduction compulsory infringed the principle of free bargaining. The Act of 2005 even expanded the number of matters that were henceforth excluded from bargaining; such as deduction of union fees at source; payment of wages for time spent in union meetings or union training; access of trade unions to workplaces; union intervention in case of conflict; remedy in case of abusive dismissal and subcontracting. The Employer members recalled that the Committee of Experts had examined Australia's application of the Convention at its 2006 session because the Conference Committee had requested it to do so. Because the Government's report was received late, the Committee of Experts could not analyse the new legislation. It was therefore difficult to reach substantive conclusions in this case beyond those of June 2006, while keeping in mind that at the current session, Australia was discussed in relation to Convention No. 98. The Government had explained why it had not been able to comply with the conclusions of the Conference Committee and given that Australia had a long tradition of cooperation with the Committee, those explanations should be taken in good faith. The Committee should await the analysis of the Committee of Experts. The Employer members further noted the Government's willingness to appear before the Committee in 2008. The Worker member of Australia recalled that the Committee was dealing with Australia for the third consecutive time. In the light of the fact that new laws had come into force in March 2006, the Committee had requested the Government, at its previous session, to prepare a detailed report to the Committee of Experts for examination at its November-December 2006 session. Regrettably, the Government's report had been submitted after the Committee of Experts had concluded its work. While time did not permit a comprehensive explanation of the substance and impact of the industrial relations laws, he argued that the Workplace Relations Act, as amended, continued to breach the Convention because it relegated collective agreements to an inferior status as compared to individual statutory contracts, the Australian Workplace Agreements (AWAs). The Act unduly restricted bargaining by limiting the subject matter of bargaining. The Minister responsible for workplace relations could declare the matter a prohibited bargaining matter. Once prohibited, parties faced fines of AUS$33,000 for bargaining on such matters. Prohibited content included, among others, unfair dismissal remedies, attendance at paid meetings of union members, leave to attend training conducted by a union, restrictions on the use of independent contractors or involving a delegate in a grievance process. The Minister could declare prohibited content retrospectively. If a clause in an agreement became illegal, there was no recourse. Clearly, the legislation did not provide the broad scope for bargaining envisaged under the Convention. Further, the new laws imposed new restrictions on multi-employer bargaining, and removed the requirement that authorization of a multi-employer agreement, in the limited circumstances in which it was permitted, or refusal of an application for authorization, be conducted in an open and transparent forum. Where a party pursued a common claim across two or more agreements, industrial action could not be authorized and any such action would not be protected. Strike pay was illegal and subject to sanctions. Moreover, employers were required to dock four hours' pay, even if employees only stopped work for ten minutes. Employers may insist on the signing of an AWA as a condition of employment or promotion, or accessing a wage increase. Those laws breached the Convention. The argument that Australia was not required to promote collective bargaining because such bargaining was already prevalent should be rejected. The extent of the coverage of different industrial instruments was irrelevant in terms of assessing the way laws functioned and their consistency with the Convention. A quarter of the workforce fell outside the minimum conditions available as a safety net. Thousands of workers had already lost the arbitration award conditions that originally had been intended to underpin AWAs. In any case, the rights and obligations under the Convention were not alleviated by the quality of labour standards and the favourable economic situation, as suggested by the Government representative, which was not relevant to the issue of compliance with the Convention. In conclusion, there was no right to bargain collectively, as the choice rested with the employer. The laws in question were not consistent with the promotion of collective bargaining as required by the Convention. The Employer member of Australia stated that the Committee of Experts' observation was incomplete, meaning that the Conference Committee could not engage in a substantive discussion. It was even difficult to maintain the previous year's conclusions. In cases that involved complex questions of law, such as the current case, the Committee should base itself on full and correct facts in order to maintain its credibility. The Employer members were greatly interested in having an assessment by the Committee of Experts, taking into account any additional information the Government may wish to provide. The Worker member of the United Kingdom said that the Committee of Experts' report gave a long list of matters explicitly excluded from collective bargaining and noted that these were traditionally issues which would be included in collective bargaining between employers and unions. These restrictions could only be seen as closely paired to the introduction of Australian Workplace Agreements (AWAs), which bribed workers to give up their union membership and rights in return for short-term benefits in increased pay or better conditions. These had emerged some years ago in the United Kingdom until they were banned by the European Court of Human Rights and outlawed as anti-union agreements in breach of Article 11 of the European Convention on Human Rights, which had similar protections to those in Convention No. 98. In introducing AWAs, the Government first encouraged employers to move towards individually bargained contracts in order to exclude the influence of trade unions. The Government had now taken the next step and brought in measures to restrict even those employers who understood the benefits of collective bargaining. An employer who wished to develop strong and meaningful bargaining mechanisms would henceforth be restricted from doing so. The Government had included even more areas which could not be bargained on in future, many of which were related to trade union membership. For example, agreements which supported workers joining a trade union or those which facilitated payroll deduction of union dues or provided leave to join a trade union meeting were all outlawed. In particular, it was not possible for employers and unions to reach a collective agreement that restricted introduction of AWAs, either directly or indirectly. The pursuit of collective bargaining was fundamental to the purposes of trade unions and a government which restricted collective bargaining was undermining the ability of the trade unions to represent members on workplace issues. This was a clear attack on collective bargaining and an attack on trade unionism in Australia. The interests of trade unions could not be divorced from the interests of their members, and the purpose of collective bargaining was to establish fair, equal and transparent collective terms across the workplace. By limiting the scope of bargaining, the Government was limiting the extent to which Australian workers could benefit from improvements to the most basic statutory provisions which applied. It also hindered those employers who sought to promote strong collective relationships. She concluded by saying that the provisions struck at the heart of the right to organize and bargain collectively, and requested the Committee to call upon the Government to amend the laws immediately. The Worker member of the United States focused on the Committee of Experts' observation that giving primacy to AWAs over collective agreements was contrary to Article 4 of the Convention. In fact, she said, AWAs were coercive and experience in the United States had shown that employers' attempts to deal directly with employees and bypass the union were common and in some instances unlawful; yet this was one of the many devices that US employers used to defeat collective bargaining. The National Labor Relations Board had found the conduct of one particular company to violate the National Labor Relations Act, which forbade interference in the right of employees to bargain collectively. However, this employer's conduct would be perfectly legal in Australia. The Work Choices Act allowed not only to offer individual contracts but also to require such contracts as a condition for recruitment, even if the contracts offered inferior wages. This completely undermined the integrity of any collective bargaining process and contravened the Convention. It was extremely troubling that workers in Australia had fewer protections than those in the United States. She therefore asked the Government to amend the law to bring it into compliance with the Convention. The Worker member of Japan stated that the Committee of Experts' report had observed that the Work Choices Act breached Convention No. 98 in many aspects and she claimed that legislative amendments made in 2005 seemed to target union busting. She was concerned by the primacy granted to individual contracts over collective bargaining and that there was no obligation on an employer to negotiate a collective agreement with employees even if 100 per cent of the workforce were union members and sought a collective agreement. Employers were using this legislation to undermine collective bargaining and promote individual contracts. More and more workers were being pushed into individual contracts and their working conditions were changed without appropriate compensation. According to the Government's own report, individual contracts were cutting pay and conditions; for example, 52 per cent of AWAs cut shift work loadings, 64 per cent cut annual leave loadings and 46 per cent cut incentive-based payments and bonuses. Furthermore, companies dismissed workers because they refused to sign the individual contract that would have cut their wages by over 25 per cent. Referring to the refusal to bargain collectively, she said that an aircraft-related company had consistently refused to negotiate a collective agreement which led to a lengthy strike. But the Australian Industrial Relations Commission could only acknowledge that it had no power to assist employees if their employer refused to bargain collectively. The Worker member of India observed with great concern that the Government had chosen to introduce retrograde legislation and blamed the spread of globalization as it affected the world's workers. The Convention had been reduced to a piece of paper: the legislation gave preference to individual contracts over collective bargaining and could even supersede the terms of collective agreements. Not only was this contrary to the Convention but was aimed at depriving the working class of a fundamental right to organize trade unions. The new legislation encouraged employers to impose AWAs and make collective bargaining almost impossible. Jobs could be conditional on AWAs which could be thrust upon workers. The result was more work and less pay. The Australian Confederation of Trade Unions (ACTU) was convinced that job security in the country would be reduced. Many workers had already lost protection from being dismissed unfairly since the new legislation came into effect in 2006; he was apprehensive that private sector employers with 99 or fewer employees were exempted from all unfair dismissal laws. The Government had failed to comply with the recommendations of the Committee of Experts. He requested the Committee to take such steps as necessary to protect and strengthen the right of Australian workers to organize and bargain collectively. The Worker member of New Zealand said that it was clear that despite the previous advice of the Committee of Experts, the Government had seriously compounded its breaches of the Convention by passing the further Work Choices amendments to its Workplace Relations Act. This was a travesty of ILO fundamental principles. The primacy of individual employment agreements (AWAs) over collective agreements was contrary to Article 4 of the Convention, as the Committee of Experts had noted. Section 48 of the Workplace Relations Act specifically provided that a collective agreement had no effect while an AWA operated in relation to an employee; that there would no longer be a "no disadvantage test" thereby increasing the incentive to employers to use AWAs to reduce wages and conditions of employment; that award conditions could be displaced by specific provision in an AWA; and that an AWA could be required as a condition of employment. The ACTU had observed that it "makes the purported ability of unions to bargain collectively on behalf of their members nugatory in any practical sense". But the Government argued that the Act did not promote one form of agreement over another. He recalled that the Convention required governments to promote collective bargaining and collective agreements over individual agreements, but the Australian Government was doing the exact opposite through section 348. He said that when similar legislation had been adopted in New Zealand in the 1990s, collective bargaining had been reduced by almost half and the extension of collective bargaining on an industry basis had come to an end. Enterprise collective bargaining and individual employment contracts had become almost universal, and union density had fallen from 56 per cent of the labour force to 21 per cent by 1999. A major contributing factor had been the primacy in law and practice of individual bargaining and employment contracts, and the restrictions and impediments imposed on unions seeking to engage in collective bargaining. The result had gone beyond the negative impact on wages and conditions of work; legal protection had been weakened and there had been a negative effect on productivity and occupational safety and health. A similar effect was being seen in Australia where a Government survey showed that in a single three-month period, more than 1,000 workers a day were being transferred from collective agreements to AWAs. He found it ironic that, at a time when governments, including Australia, were reaffirming commitment to ILO principles as reflected in the Decent Work Agenda, the Government had moved legislation to compound serious breaches of the Convention. He said that the Government was displaying an almost contemptuous disregard for the Committee of Experts and that for it to claim that the Committee of Experts had got its jurisprudence wrong was not an adequate response. In all, the Government had demonstrated at the very least an indifference to the decisions of the Committee, and he called for strong conclusions. The Government representative said that his Government should not be expected to make a response to a process that he considered flawed. The Worker members requested the Office to provide clarifications on the exact status of the reports supplied by the Government, before they made their final statement. The representative of the Secretary-General informed the Committee that there had been a long exchange of correspondence between the Office and the Government of Australia, beginning with a letter of 7 August 2006 sent by the Office in the framework of the follow-up to the conclusions of the Conference Committee of 2006, up until a letter by the Government dated 11 May 2007. The Government had informed the Office in a communication dated 29 November 2006 that it was unable to submit a report. This communication had been brought to the attention of the Committee of Experts and was reflected in the second paragraph of its report. A substantive reply containing the Government's report was finally received on 10 January 2007. The Worker members were astonished that the Government had invoked the report's complexity to justify non-respect of the deadline set and considered this as a pretext to avoid dialogue with the Committee of Experts. The Government maintained that Australian legislation was neutral vis-à-vis collective bargaining while the Convention foresaw that collective bargaining should be promoted and encouraged. According to the Government, neither this Committee nor the Committee of Experts had understood the real sense of the Convention with respect to Australia, despite the fact that the Committee of Experts itself had certain Australian expertise. And yet it was clear that there was discrimination against trade unions, obstacles to collective bargaining and a disquieting primacy granted to individual contracts over collective agreements. In addition, an explicit prohibition existed for negotiations on a multitude of issues, which were heavily sanctioned if the parties negotiated them. Indeed, this case was of particular importance to the fundamental principles defended by the ILO and trade unions all over the world, which made it imperative to support the Committee of Experts' requests for modification of legislation that was out of line with the Convention. The Worker members deeply regretted that despite the requests made at last year's Conference the Government had not presented its report on time. Such a trick should not be used to postpone the discussion of a case by the Conference. A detailed report should be communicated by the Government before September this year, if not, the Worker members would ask for the establishment of a fact-finding mission to examine all legal aspects of the case, as well as the real impact of the new legislation on workers and on social dialogue in Australia. The Employer members noted that the discussion had not been satisfactory as there was a need for an analysis by the Committee of Experts of the information provided by the Government. The Committee now had this information at its disposal. With the exception of any information on intervening legislation and information on the impact of the legislation, which concerned the implementation of the Convention in practice, the Committee of Experts would be in a position to make a more complete assessment of the situation. Thus, this Committee's conclusions should mirror the conclusions of the previous year with an additional request that the Government make sure to bring to the attention of the Committee of Experts all information on the current legislative situation in Australia, so that the latter could appreciate the full situation with regard to the application of the Convention. The Worker member of France considered that the conclusions of this case should reflect the unacceptable and outrageous manner in which the Australian Government had treated the Committee of Experts, which was a far cry from the customary diplomatic manners in international organizations.
ConclusionsThe Committee noted the statement made by the Government representative and the debate that followed. The Committee recalled that the Committee of Experts had been making comments for several years on certain provisions of the Workplace Relations Act (now as amended by the Work Choices Act), in particular those relating to the exclusion from protection against anti-union discrimination, the relationship between Australian Workplace Agreements (AWAs) and collective agreements. The Committee of Experts had also noted discrepancies between the Building and Construction Industry Improvement Act 2005 and the provisions of the Convention. The Committee noted the Government's statement which did not address the substantive issues of the case, but rather referred to what it esteemed to be procedural errors in the examination carried out by the Committee of Experts, particularly in respect of its analysis of the application of the Convention without the benefit of the Government's report. Noting that the Workplace Relations Act had been amended by the Workplace Relations Amendment (Work Choices Act), 2005, and that the Government's report on the latest amendments had unfortunately not been received in time for examination by the Committee of Experts, the Committee trusted that all relevant information relating to the application of the Convention, in both law and practice, would be transmitted to the Committee of Experts in time for it to examine the Government's report - received at the end of December 2006 - and any additional information. The Committee once again requested the Government to pursue full and frank consultations with the representative employers' and workers' organizations regarding the impact of the Workplace Relations Act, as amended by the Work Choices Act, on the rights afforded by the Convention, in particular regarding the promotion of the effective recognition of the right to collective bargaining. It requested the Government to report to the Committee of Experts in this regard so that it could undertake a full appreciation of the application of the Convention in law and practice in its 2007 report. |
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