Fair Work Act needs more work

Although it has delivered many benefits for workers, employers have found a major weakness in the Fair Work Act and, as Victorian ANF Industrial Officer Leigh Hubbard explains, are setting out to exploit it.

Certainly, the Fair Work Act introduced in 2009 is much better for protecting vulnerable individuals and for initiating and conducting the enterprise bargaining process.

Among other things the new Act:

  • reintroduced unfair dismissal in workplaces of less than 100 employees;
  • abolished individual contracts (Australian Workplace Agreements);
  • introduced a more stringent test for new agreements against existing Award and Agreement standards;
  • established new bargaining rules that require both sides to bargain in good faith and ensure that an employer can’t put dodgy agreements to a vote without time for proper consideration by employees.

But when it comes to intractable and large-scale disputes, the Fair Work Act is found wanting. The good faith bargaining provisions of the Act are welcome, but the intractable dispute they were designed to overcome – at the Cochlear bionic ear plant – remains unresolved. Unlike New Zealand, where once bargaining commences an agreement has to be reached, the legislation places no pressure on Australian employers to do more than sit politely at the table (surface bargaining).

Employers cry wolf

In situations where unions organise their members and hold a ballot to take protected industrial action, a key problem is within section 424 of the Act. In economically significant or health/community related industries, it is incredibly hard to avoid having protected industrial action either suspended or terminated by Fair Work Australia. This can occur when Fair Work Australia determines either that the action ‘has threatened, is threatening or would threaten’ to ‘cause significant damage’ to the Australian economy or part of it (as in the Qantas dispute) or it will ‘endanger the life, personal safety or health, or the welfare of the population or of a part of it’ (as with Victorian nurses).

Where protected industrial action is terminated there is a 21-day period of conciliation (that can be extended to 42 days if there is progress), after which time there must be arbitration (an industrial action related workplace determination under s266 of the FWA) as soon as practicable.

The Qantas hypocrisy

In the example of Qantas, the employer engineered the termination of protected action, and the move to arbitration, by grounding its fleet and locking out its workforce. Think of the irony. A company makes an application to take away workers rights to protected industrial action, by initiating its own industrial action, which it then claims is significantly harming the Australian economy! In the Qantas example, the legislation left the Fair Work Australia full bench with little choice but to terminate the industrial action. Remember, the only action Qantas pilots had taken was to wear red ties and make in-flight announcements. It is no wonder there are now calls for the legislation to be amended to stop such an abuse by employers.

In the case of the Victorian nurses, the second limb of section 424 came into play; that of endangering health and welfare. A cabinet document leaked in early November revealed that the Baillieu Government strategy was to have the ANF protected action terminated and then seek arbitration of the dispute. Just as in the case of Qantas, the government knew that, on matters of workplace flexibility and ‘managerial prerogative’, members of Fair Work Australia (FWA) have been historically reluctant to impose conditions or restraints. So, whether it is limits on contracting work overseas, in the case of Qantas, or skill mix clauses or nurse-patient ratios, as in the case of Victorian nurses, management knows it is highly unlikely that FWA will act decisively to limit management discretion in these areas.

An added barrier for Victorian nurses is that, due to constitutional law and the limits on the referral of Victoria’s state industrial relations powers to the federal system, in relation to public sector employees, it is possible that Fair Work Australia has no jurisdiction to arbitrate matters related to staffing or skill mix. At the very least, there could be six months arguing these jurisdictional issues in the High Court. The Victorian Government, with an agenda of removing nurse-patient ratios and introducing short and split shifts, has counted all along that Fair Work Australia would be either unwilling or unable to include such matters in arbitration.

Fair Work takes conservative position

Fair Work Australia takes a very conservative view when deciding whether to suspend or terminate protected industrial action under section 424. In the Victorian nurses case, the FWA full bench, when presented with very thin evidence of delays to elective surgery, or of a few people staying longer than normal in ED, opted for a safety-first approach. This was despite the ANF Victorian branch taking great care when closing beds and cancelling elective surgery (their advice to members was ‘if in doubt, open your reserved emergency beds’). FWA decided to suspend the protected industrial action for 90 days rather than terminate it. One suspects that the full bench, being acutely aware of the Cabinet strategy of engineering an arbitrated outcome, did not want to be seen as a pawn of the state government. This was a shock to management and has lead to the current stalemate.

So, the right to take protected industrial action is hollow for many groups of workers. But what happens next?

The ANF Victorian Branch took unprotected action for several days but quickly faced employer applications for an injunction to stop the industrial action in the Federal Court. Once an injunction is granted, any breach will lead to contempt of court proceedings and the risk of heavy fines. In addition, the Fair Work Ombudsman indicated that it was ready to prosecute the union for multiple breaches of the Fair Work Act. There was also a risk of common law damages actions; last year Qantas won damages of several million dollars against the Transport Workers’ Union, for unprotected industrial action that only lasted a few weeks.

The stakes are high and the options available to unions and their members are few. Victorian nurses are determined that they will not be forced into an arbitration that might deliver wage increases, but cannot protect staffing and professional standards. In more recent times the ANF Victorian Branch has turned to community campaigning and a discussion with members about the prospect of mass resignations – on the basis that such resignations are not ‘industrial action’. As The Lamp went to print, more than 90 workplace meetings were being held to determine the attitude of members to that proposal.