5 October 2006

Work Choices national system, state systems and the Victorian public sector

Dr Graham Smith

By Dr Graham Smith.

Key Points:
Work Choices particularly impacts upon Victoria, because Victoria is the only State to have referred most of its industrial relations powers to the Commonwealth.

The new Work Choices legislation, relying on the corporations power in the Constitution, applies to:

• Employees engaged by constitutional corporations;
• All employees located in Victoria, ACT and the Northern Territory;
• Commonwealth public sector employees; and
• Flight crew officers, maritime employees, and waterside workers.

Importantly, the new system operates, to the extent possible, to the exclusion of the State or Territory industrial regimes. It follows that if an employee is bound by the new federal laws, State employment laws largely no longer apply.

The legislation specifically provides that State industrial relations acts, such as the Industrial Relations Act 1996 in NSW, no longer apply. It also excludes from operation most other State or Territory statutes which apply to employment, and whose main purpose is to regulate workplace relations. The legislation also expressly excludes the operation of State unfair contracts laws.

Commonwealth public sector

Work Choices applies to all Commonwealth public servants. This means that all public sector employees of the Commonwealth are covered by the amended federal industrial relations system.

applies to all Commonwealth public servants. This means that all public sector employees of the Commonwealth are covered by the amended federal industrial relations system.

Victorian public sector

Work Choices particularly impacts upon Victoria, because Victoria is the only State to have referred most of its industrial relations powers to the Commonwealth.

particularly impacts upon Victoria, because Victoria is the only State to have referred most of its industrial relations powers to the Commonwealth.

The referral of Victorian legislative powers means that Work Choices will apply to most Victorian public sector employees. Part 21 of Work Choice explicitly states that, in Victoria, the legislation applies to: "a person employing an employee, including the Crown and a public body".

Other states' public sector

State public servants in most other states are beyond the legislative authority of the Commonwealth Government.

Legislation to protect Victorian employees

As part of its response to Work Choices, the Victorian government has introduced four pieces of legislation to protect employees and public sector employees.

1.  Workplace Rights Advocate Act 2005

This establishes the Office of the Workplace Rights Advocate, an independent statutory body whose main role will be to provide information, advice and support for employees negotiating workplace agreements.

2.  Long Service Leave (Preservation of Entitlements) Act 2006

This Act will operate retrospectively to protect and preserve specified long service leave entitlements and award conditions which may otherwise have been lost as a result of Work Choices ;

3.  Public Sector Employment (Award Entitlements) Act 2006 ("PSEAE Act");

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This Act essentially seeks to maintain existing public sector award conditions as the minimum conditions of employment that will continue to apply in the Victorian public sector.

4.  Public Sector Acts (Further Workplace Protection and Other Matters) Bill 2006

The Bill proposes to grant additional rights to public sector employees in addition to restoring some rights that were recently removed by the Commonwealth Work Choices legislation.

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The last two pieces of legislation are explicitly directed at protecting Victorian public servants from the effect of Work Choices and are outlined more fully below.

Public Sector Employment (Award Entitlements) Act 2006

The second reading speech indicates that the Act's intention is to preserve the status quo as it existed prior to Work Choices for public sector employees who rely on awards for the terms and conditions of their employment

Key concepts in the PSEAE Act

• The PSEAE Act imposes various obligations on "Public Sector Employers", defined to mean those entities employing persons in a "public sector body" (under the Public Administration Act 2004) or a "Department" (under the Parliamentary Administration Act 2005), the Chief Commissioner of Police or other entities which may be prescribed as public sector employers.
• a "Preserved Award" is an award in force immediately before the Work Choices amendments commence, but will be deemed to include any increases in minimum pay rates by either the Australian Fair Pay Commission or the Australian Industrial Relations Commission (section 5).
• "Relevant Award" is a Preserved Award binding on a particular employer and to which employees' employment is subject (section 6).
• employees' "Preserved Entitlements" are those employees' award entitlements that are not excluded or modified by a Commonwealth 'industrial instrument' (being only pre-Work Choices industrial instruments).
• a "Designated Preserved Award" is a Preserved Award which has been determined by the Workplace Rights Advocate (the "Advocate") as being such (section s 3 and 12). This will only arise when it is proposed to make a workplace agreement but there is no "Relevant Award" in relation to some or all of the employees to whom the proposed agreement will apply.

The "Fairness Test"

A proposed workplace agreement under Work Choices will not pass the Fairness Test if it "disadvantages" employees in relation to their terms and conditions of employment, ie. its operation would result on balance in a reduction in the overall terms and conditions of employment under:

• Relevant Awards or Designated Preserved Awards;
• the standards set in the Family Provisions Test Case (if not already included in the award/s); and
• any relevant State or Commonwealth law (the Explanatory Memorandum cites the Public Holidays Act and the Long Service Leave Act as examples).

The Explanatory Memorandum indicates that the Fairness Test is intended to operate in essentially the same manner as the no-disadvantage test under the Federal Act prior to Work Choices .

Public Sector Acts (Further Workplace Protection and Other Matters) Bill 2006

This Bill, introduced into Victorian Parliament on 22 August 2006, will:

• restore unfair dismissal rights to public sector employees in workplaces with fewer than 100 employees;
• alter the right of return to non-executive positions for Victorian public servants; and
• change the Public Sector Employment (Award Entitlements) Act 2006 to further protect Victorian public sector employee terms and conditions by prohibiting public sector employers from offering to enter, or entering into, a statutory industrial agreement containing any conditions materially different from those already contained in the employee's collective agreement.

Unfair Dismissal Rights for Victorian Public Sector Employees

The Bill will allow specified Victorian public sector employees to apply to the Victorian Public Sector Standards Commissioner for relief from unfair dismissal.

The Victorian Public Sector Standards Commissioner ("PSCC") will be able to conciliate and, if necessary, arbitrate in similar fashion to the Australian Industrial Relations Commission ("AIRC").

Only Victorian public sector employees who are excluded from making an unfair dismissal application to the AIRC because of the "100 employee cap", will be able to apply to the PSCC. Currently, there are over 100 Victorian "public entities", such as the Victorian electoral commission, rural hospitals and medical registration boards, which engage fewer than 100 employees.

In his second reading speech, Mr Cameron, Victorian Minister for Agriculture, explained that:

"The Victorian government believes that all public sector employees should have a right of redress if they have been unfairly dismissed, regardless of the size of their employer."

Apart from the removal of the 100 employee exemption, the bill "mirrors the rights, exclusions, remedies and limits on compensation of the federal unfair dismissal jurisdiction as provided in the Workplace Relations Act 1996" (second reading speech).

This means that employees will cannot claim unfair dismissal if they: are serving a probationary period; are engaged for a specified period; earn more than a specified limit, or; are dismissed for "operational reasons" or reasons that include operational reasons.

Victorian Government Public Sector Policies

The Victorian Government has also introduced a series of public sector policies that affect the operation of Work Choices in respect of public servants. Particularly important is the Industrial Relations Policy Statements 2006 ("Policy Statement") published by Industrial Relations Victoria which commits the Victorian Government to a number of industrial relations principles, and, in accordance with these, the Policy Statement:

• prohibits the use of Australian Workplace Agreements within the public sector
• requires all non-executive employees to be covered by an award or agreement (executive employees are generally defined as senior employees earning $110,000 or more per annum)
• gives primacy to bargaining collectively with non-executive employees and their union representatives
• requires all agencies which do not receive budget funding for salaries, to have their agreements reviewed by Industrial Relations Victoria (as well as the Treasury Department and the Department of Premier and Cabinet) to ensure they do not undermine existing award conditions; and
• introduces a new ethical purchasing policy that will require employers in designated industries (initially security services, catering, cleaning, textiles clothing and footwear) who provide goods and services to the Victorian Government to maintain pre-reform award wages and conditions.

Effect of new certified agreement in public sector

On 14 March 2006, the Victorian Government and the Community and Public Sector Union entered a new Federal Certified Agreement, replacing their 2004 Agreement. It is scheduled to operate until 1 March 2009.

Pre-reform Certified Agreements will operate until replaced by a collective agreement or AWA made under Work Choices. Consequently, and especially given the Victorian policy prohibiting the offering of AWAs, the new Agreement means that Victorian public servants, whose employment is covered, will remain largely outside the Work Choices system until at least March 2009.

In conclusion

The responses to Work Choices continue. Questions remain as to the interaction of the new Victorian laws with Work Choices, and, of course, uncertainty remains pending the High Court decision in the challenge to the constitutional validity of Work Choices .

 

Thanks to Marilyn Pittard for her help in writing this article.

For further information, please contact Dr Graham Smith.