The Fair Work bill is the end of arbitration as we know it, and I argue this should not be.
Fair Work Australia is the name of the industrial umpire into 2010 and sees the demise of the arbitration system.
Much has been written in the labour law and industrial relations literature on arbitration. Isaac J and Macintyre S (2004) The New Province for Law and Order 100 Years of Australian Industrial Conciliation and Arbitration (Cambridge University Press, Melbourne.) Hancock K 2004 ‘Reflections on a Century of Arbitration’ ‘One Hundred Years of the Higgins Legacy: Treasured Inheritance or Debilitating Folly?’ http://www.hrnicholls.com.au/nicholls/nichvo25/hancock2004.pdf ‘
At the end of the day: The challenges facing those engaged in shaping the future tribunal system,’ speech by Sydney University Dean of Law, Professor Ron McCallum to the Centenary Convention: the Conciliation and Arbitration Journey, Melbourne.
Some recent references are Graham Smith partner Clayton Utz ‘Reviving the Commission bring back the Umpire’ 2008 NT Industrial Relations Society.
Jolene Riley ‘The case for the umpire’ AIER The debate 2008:
‘If the US considers compulsory arbitration for disputes, Australia should not abandon its industrial umpire.’ The Australian Institute for Employment Rights. I add that China has a new arbitration system from 1/6/2008.
FWA can only review the ‘modern’ awards once every four years in very limited circumstances, not when required on merit.
So any improved job security measures would not be able to be assessed until 2014, well into the GFC.
Despite the press reports, the capacity for the FWA to impose itself and arbitrate an outcome in place of an agreement is very limited.
∑ By agreement: if both parties agree to submit the remaining matters for determination by the FWA through arbitration then that is permitted.
∑ Where industrial action is or is threatening to endanger life, personal safety, health or welfare, to the population or part of it or causing significant damage to the economy (this exists now).
∑ Where a party is in persistent breach of good faith bargaining orders made by FWA.
∑ Where protracted industrial action is causing significant economic harm to the bargaining participants or such harm is imminent and where there is no prospect of the parties reaching agreement. This is new and designed to deal with a Boeing dispute. It does not mean that it favours employees, as arbitration sees a return to work but later with no gains for the employees.
The lack of access to arbitration presents problems to unions in the public sector in the Federal system. Governments have money and resources to resist claims and to engage in union busting campaigns.
In these circumstances unions need access to arbitration as the knowledge assists the employer to settle the dispute because the employer wants to avoid a situation where the outcome is put into the hands of the arbitrator.
It recognises the reality of the virtually unlimited resources of the various States in industrial bargaining and disputes. The same applies with the most powerful global corporations.
FWA will not have a capacity to arbitrate issues in relation to the NES or modern awards but will be limited to making recommendations and conciliating.
Any contest as to entitlements will have to be carried out in the courts – juridification.
Every agreement must also contain a Dispute Settlement Procedure (DSP) that involves FWA or some other dispute settlement provider and must provide for representation of employees. One objection is the wording should be that suiting the parties and not by legislative decree.
But it will not be compulsory for the DSP to end in arbitration without the parties’ consent. This is a serious flaw. Provision for parties to go to court where there is a breach of an agreement will not effectively address many workplace conflicts that arise. Unions will have to rely on bargaining to ensure access to arbitration as the ultimate step, but this is not easy.
Employers in the past have shown unwillingness to accept recommendations made by the AIRC in dispute resolution proceedings.
In enterprise bargaining unions can press the employer to include in the DSP clause that all parties will accept and implement any FWA recommendation as a result of arbitration.
Some will agree to this, as they will see it as tying the unions’ hands as much as their own. But some will not, as they want to retain the option of refusing to accept recommendations they do not like.
Employers are able to deny a dispute being dealt with on its merits by arguing that the steps required were still being followed. It is important, therefore, to make sure those DSP procedures are not too elaborate and that they can be taken to FWA when required.
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