IR: A national system has a long way to go

Co-operation on a national IR regime is not going to be won any time soon – let alone implemented. By PETER VITALE.

By Peter Vitale

Co-operation on a national IR regime is not going to be won any time soon – let alone implemented.

In the lead up to last year’s federal election, the NSW Government swung in behind Kevin Rudd’s promise to explore, in consultation with the states, a national industrial relations system.

NSW Industrial Relations Minister John Della Bosca commissioned constitutional law academic Professor George Williams to make recommendations about what such a system might look like.

Williams released his report on Friday, but do his recommendations serve a workable model of co-operative federalism? Some groups already argue that his model does not go far enough.

In analysing the options available, Williams had to tackle the fundamental difficulty that the Commonwealth does not have sufficient power under Australia’s constitution to regulate all employers. This is demonstrated by the Howard government’s WorkChoices scheme, which does not regulate employers, such as partnerships or sole traders, that are not constitutional corporations.

He considered various models of national regulation relating to corporations law and consumer credit laws. He also considered the approach taken by the Victorian Government in 1996 to refer a large part of its legislative power over industrial relations matters to the Commonwealth.

The legal effect of Victoria’s move, which has been maintained by both sides of politics, was broadly that Victoria became subject to the Federal Workplace Relations Act and was an integrated part of the federal system. Further changes in 2004 extended the reach of federal law into Victoria to enable the Australian Industrial Relations Commission to make common rule awards covering all Victorian employers.

While the Victorian changes are able to be reversed by that state withdrawing the referral of its legislative power, the events surrounding the IR debate in 2004 showed that there is little stomach within the state to reconstitute the infrastructure of a whole system.

It is perhaps with an eye on the Victorian experience, and the stated reluctance of some states to give a similar blanket referral of power, that the NSW Government placed emphasis in its terms of reference to Williams on “co-operative federalism”.

The result is that the Williams report recommends a hybrid model that would deny the Federal Government complete control over workplace relations laws. Under the Williams model, states could either refer industrial relations powers to the Commonwealth or put in place “mirror” legislation. The national system would be overseen by a council of state and federal ministers, in a similar fashion to other co-operative legislative schemes.

The main question arising from the report is exactly how much it has really advanced the debate? Williams has quite properly consulted widely and his report is considered, given the restraints of the terms of reference. He also identifies major flaws in the current operation of the “WorkChoices” system, largely due to the absence of co-operation from the states. The proposed scheme however raises a number of concerns for those who favour a single national system.

Perhaps the most difficult of these is the potential for a system where enforcement of laws is undertaken by a mixture of state and federal bureaucracies and courts. A similar approach to national corporations regulation was replaced after only 20 years, largely because of concerns arising from the potential for differing interpretations of the same law by courts in different states.

The solution posited by Williams is to amend the Federal Constitution to enable the appropriate sharing of judicial and enforcement functions between state and federal courts.

A further difficulty is that the system would be implemented in a range of ways, with the states left to determine which laws would remain within their province and which would be referred. As with referral of legislative powers, states could opt out altogether. This will inevitably lead to a patchwork national system on issues such as occupational health and safety laws.

As Williams notes in relation to the issue of the national reform agenda: “Australia will not meet its challenges if reform occurs in an ad-hoc or piecemeal way.” Historically, but particularly in the wake of the WorkChoices legislation, there is a reluctance by state governments, perhaps understandably, to commit to a full and unhindered referral of industrial relations powers to the Commonwealth.

Williams has carefully acknowledged these concerns and endeavoured to devise a scheme that is as inoffensive as possible. The tone of the report suggests he has developed something of an interim model to make the states feel comfortable, over time, about the idea of a full referral of legislative power.

The concern remains as to whether it will result in a genuinely national system of industrial relations any time soon.

The lesson for employers:

Don’t hold your breath for a single set of national employment laws.

Peter Vitale is the principal of CCI Victoria Legal