17 February 2012
The Fair Work Act Review Panel
Dear Panel Members
Submission to the Fair Work Act Review Panel
by the
Australian Sugar Milling Council Pty Limited
The Australian Sugar Milling Council (ASMC) is a voluntary organisation established in
1987 to represent the interests of the owners of Australia’s sugar mills. As a peak
policy forum, the council facilitates the commercial development of the sugar
industry in Australia by working with its Members, other industry organisations and
government to develop and promote policies that enhance the industry’s
development. Membership represents 23 sugar mills - some 99% of raw sugar
produced in Australia.
ASMC exists to drive a profitable and sustainable sugarcane industry.
Overview
Access to a protected action ballot is achievable with no scrutiny of the applicant’s
objectives in their proposed agreement against the objects of the Fair Work Act
2009 (the Act).
Scrutiny of an application places emphasis on process and not on the objectives of
the bargaining party making the application.
The sugar Milling Council urges that in scrutiny of an application for a protected
action ballot, there is a clear link demonstrated between and the objects of the Act
(s.3) and importantly, objects of Part 2-4, Enterprise agreements and the
applicant’s proposed agreement contents.
Objects of the Act - Productivity
Productivity is a recurring theme of the Act, from the s.3 Objects of this Act to
s.682 Functions of the Fair Work Ombudsman. It appears in at least 11 places1
throughout the Act.
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s.3
s.134
s.171
s. 241
s.262
s.275
s.284
s.318
s.319
s.320
s.682
Objects of this Act
The modern awards objective
Objects of this (enterprise agreements) Part
Objects of this (low-paid bargaining) Division
When FWA must make a special low-paid workplace determination – general requirements
Factors FWA must take into account in deciding terms of a workplace determination
The minimum wages objective
Orders relating to instruments covering new employer and transferring employees
Orders relating to instruments covering new employer and non-transferring employees
Variation of transferable instruments and
Functions of the Fair Work Ombudsman
The ASMC has a real concern that productivity, while an important object of the
Act, is not encouraged (in this case) in enterprise bargaining.
This submission addresses ss3 and 171.
S.3(a) stipulates inter alia that the object of the Act “is to provide a balanced
framework for cooperative and productive workplace relations that promote
national economic prosperity and social inclusion for all Australians by:
(a) providing workplace relations laws that are fair to working Australians, are
flexible for business, promote productivity and economic growth…..and (f)
achieving productivity and fairness through an emphasis on enterprise-level
collective bargaining underpinned by simple good faith bargaining obligations and
clear rules governing industrial action.”
The emphasis is added to highlight that productivity appears three times in the
general Objects of the Act.
s.171 deals with the objects of Part 2-4 of the Act (enterprise agreements).
S.171 states:
“Objects of this Part
The objects of this Part are:
(a)
To provide a simple flexible and fair framework that enables
collective bargaining in good faith, particularly at the enterprise level, for
enterprise agreements that deliver productivity benefits; and
(b) To enable FW to facilitate good faith bargaining and the making
of enterprise agreements, including through
(i) making bargaining orders; and
(ii) dealing with disputes where the bargaining
representatives request assistance; and
(iii) ensuring that applications to FWA for approval of
enterprise agreements are dealt with without delay.”
Again, the emphasis is added.
The objects in s.171(a) deal with process to achieve agreements that deliver
productivity benefits and at s.171(b) they again deal with process related to
bargaining and related protected action and getting agreements approved in FWA.
The only object relating to agreement content is at s.171(a) where it addresses a
bargaining framework for agreements that deliver productivity benefits.
The ASMC submission is that this single outcome object of enterprise bargaining
must be the test applied in any scrutiny of an application for a protected action
ballot. For the application to succeed, the applicant must demonstrate that their
agreement proposals include claims balanced by (or commensurate with) the
proposed agreement’s productivity benefits.
In this scenario, if the applicant has proposed no productivity improvements
commensurate with their claims then they will not be able to access protected
action to support their claims; an agreement may nevertheless still be made.
However, if they are bargaining a set of claims that include productivity proposals
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then establishment that the productivity proposals are commensurate with the
related claims will be the test that applies in scrutiny of a protected action ballot in
addition to the present scrutiny of the bargaining process.
If there are genuine productivity proposals being bargained then there is a
significantly increased probability that an agreement might be made without any
resort to protected industrial action. The process of bringing the negotiations to a
conclusion from this point might then be chaired or assisted by a Commissioner of
Fair Work Australia if the any of the parties seek that.
The Sugar Milling Industry Experience
In the 2010 crushing season, some Queensland sugar mills suffered damaging
industrial disputes. Through that protected industrial action, coupled with the early
onset of the wet season, the opportunity was lost to harvest and process more than
500,000 tonnes of cane. There was a resultant $30 million revenue opportunity lost
for regional Queensland. Taking into account a regional multiplier the loss was in
excess of an estimated $100,000,000 as well as the loss of Government tax
revenues.
The criticism of the Fair Work legislation is that the test for access to that
protected industrial action is less than onerous considering the resulting power and
risk to business granted to one side of the bargaining parties. It is not available to
the employer to initiate protected industrial action. In this example, mills were
adversely affected by stoppages at various times and ten days production time was
lost – six in one company.
The ASMC submission is that had there been the opportunity for a more strenuous
scrutiny of the parties’ agreement content compared to the objects of the Act, in
considering the application for a protected action ballot protected action might not
have been available and the losses not incurred. History in the industry
demonstrates the agreements would still have been made.
Fair Work Bill 2008 Explanatory Memorandum
The Fair Work Bill 2008 Explanatory Memorandum states: r.168. The good faith bargaining requirements over which FWA can make
bargaining orders relate to procedural matters only and not the content of
the agreement. These requirements will be defined through an exhaustive
list which will require attending and participating in meetings at reasonable
times; disclosing relevant information (other than confidential or
commercially sensitive information) in a timely manner; responding to
proposals made by other bargaining representatives in a timely manner;
giving genuine consideration to the proposals of other bargaining
representatives and providing reasons for responses to those proposals; and
refraining from capricious or unfair conduct that undermines freedom of
association or collective bargaining.
The ASMC submits that this emphasis on process does nothing to reinforce other
significant objects of the Act, especially those relating to productivity.
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Conclusion
While the ASMC submission advocates a departure from the Explanatory
Memorandum, the proposal would importantly place emphasis on the productivity
objects of the Act generally and Enterprise bargaining that otherwise gets no
emphasis.
The significant positive aspect of the proposal is that productivity would be
encouraged as an important component of enterprise agreements. There would be
no detriment to the bargaining parties, agreements with no productivity
components would still be made but would be unable to be bargained with the
support of protected industrial action.
The ASMC appreciates the panel Members’ Consideration of this submission.
Yours sincerely
Dominic Nolan
Chief Executive Officer
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