Monthly Archives: August 2011

A member of the AIER Executive Committee since the Institute’s inception in 2005, The Honourable Paul Munro has dedicated his life’s work to the advancement of decent and fair workplace rights and conditions within the Australian and global arena.

From 1986 to 2004, he served as Justice Munro, a Senior Presidential Member of the Australian Industrial Relations Commission and its predecessors.  He previously had stints as a legal practitioner in Papua New Guinea, Melbourne and Sydney, was National Secretary of the Council of Australian Government Employee Organisations (1969 to 1977), was a national public sector union official and has held various senior roles in government and other organisations.  Paul Munro has been a member of the ACTU executive, of the Executive of Public Service International and related committees, and of the 1974-1976 Coombs Royal Commission on Australian Government Administration and later the Administrative Review Council.  He is currently Patron of the Industrial Relations Society of New South Wales and a member of the Management Committee of the Papua New Guinea Association of Australia.

Place of birth? Condobolin, NSW.

Education summary. Early schooling until I was eight years old was by correspondence school via mail from my home in Walgett NSW, followed byfour years boarding school at the All Hallows Dominican Convent in Bathurst NSW.  From 1952 to 1956, I boarded at the Christian Brothers College Waverley in Sydney.  In 1960, I completed by Bachelor of Laws (LLB) at the Sydney University Law School.

First job?  I was an articled clerk for short periods, and a Legal Officer at the Crown Solicitor’s Office in Sydney.  My first real job was as a Legal Officer at the Public Solicitor’s Office in Port Moresby, Papua New Guinea from July 1961.

Career highlight? Working for two years with Dr H C Coombs and the Royal Commission on Australian Government Administration from 1974 to 1976.  Although I suppose my eighteen years as a Presidential Member of the CCACand the AIRC would probably be more commonly seen by others as the highlight.

Career lowlight? Being made an offer I couldn’t accept to share the Industrial Advocate’s position at ACTU after Ralph Willis was elected to Federal Parliament for the seat of Gellibrand. It became rapidly apparent to me that the very economically literate and splendidly articulate Rob Jolly was a much better selection as sole occupant of the position than I would have been alone or in tandem with him.

What inspired you to work in the area of workplace relations/workplace law? The attraction of a worthwhile case to litigate.  I was recruited to the PNG Public Service Associationin 1966to present a case for an increase to the wages of PNG public servants, one of whom, JuiPipiri, had worked with me in Rabaul trying to support his family of four on $6 per week.  I persuaded myself there could be no better object of my talents for the time being than to try to get that rate substantially increased. I later found I would be lead in the case by a person I had never heard of, Bob Hawke.  He inspired me in due course to believe that I should persevere with working in the industrial relations arena.

If you hadn’t worked in workplace relations/ industrial law what else would you have done? I would have returned to Sydney and commenced practice at the NSW Bar to which I had been admitted in 1961.

Why did you join the Australian Institute of Employment Rights? After 2004, the WorkChoices regime demolished elements of Australian industrial relations values and entitlements that had been integral to our polity and bipartisanly shared under virtually all administrations since at least the 1920s.  A broad spectrum of informed practitioners and academics were concerned to find a basis of common ground upon which the values and entitlements associated with industrial fairness as we had understood it might be maintained, if not on a bipartisan basis, at least on a tripartite basis of employer, employee and public or governmental interest.  I had done some work toward that objective for John Menadue and a policy group at New Matilda as it then was, when Mordy Bromberg asked me to join with him and others in the foundation of AIER.  I readily acceded.

What do you see as the role of AIER?  Above all,to provide an enduring institutional basis of accord about what reasonable employers and employees should expect of and deliver to each other in a modern economy in Australia, and a firm foundation or mooring by reference to which a fair system of rights and duties at work can be tested or measured.  Ancillary to that main role,AIER should do what it can to promote and extend understanding of that balance of rights and duties and foster community and workplace acceptance of them.

As one of the initial architects of the Australian Charter for Employment Rights, what role did you see it playing in the workplace rights arena?  Essentially, we were trying to work out a non-partisan common denominator for establishing what would constitute a fair system of workplace rights and duties, drawing upon Australian values and experience informed by internationally binding standards.

If you were advising the Minister for Workplace Relations, what’s the one initiative you would suggest as a priority for action? Within the entire system being administered by the Minister, unequivocally make appointments to regulatory institutions upon a tripartite rotational basis of individuals whose credentials and qualifications best match the prescribed conditions for appointment.  Advance this measure as intended to lessen the political incentives to substitute direct political legislative intervention and machinery of government changes for evolutionary change through a stable regulatory system overseen by an experienced tripartitely based regulatory authority.

Name a person that has inspired you. Had my commitment not been spurred by Bob Hawke, I would not have understood the importance of the challenges in industrial relations and workplace rights enough to devote my career to trying to meet them.

Tell us something that people don’t generally know about you. The person who pushed me to accept the position as Industrial Advocate to the PNG Public Service Association (PSA) in 1966 was Ian McPhee, a colleague who had occupied the position and was about to go overseas to the University of Hawaii (and who would later go on to the NSW Chamber of Manufacturers, be a Member for Balaclava,and Minister in the Fraser and Howard Governments).  He assured me that my total ignorance of industrial arbitration would not be fatal because the PSA case would be augmented and polished by an industrially experienced fellow from Queensland who had a law degree but had never been admitted to the Bar.  This turned out to be Bob Hawke.

In this article Sean Reidy, a workplace law barrister and member of AIER’s Executive Committee, argues that the recent move by the NSW Government to cap wages of public sector employees by policy strips employees of their rights to bargain collectively and in good faith, as outlined by the Australian Charter of Employment Rights.

State governments in South Australia, Tasmania, Victoria, Queensland and New South Wales have policies to cap public sector wage increases at 2.5%. In June, the New South Wales Government legislated to require that the NSW Industrial Relations Commission give effect to the capping policy in decisions to approve enterprise agreements. The notion of capping wages of public sector employees by policy does not comply with the Australian Charter of Employment Rights.

Governments are in a unique position of power in the bargaining relationship. As a bargaining party they have, among other advantages, the superior advantage of significant resources and of being able to legislate their bargaining position. Other employers do not have this advantage.

Developed in 2005 by the Australian Institute of Employment Rights (AIER), The Australian Charter of Employment Rights is a simply expressed document that unravels the complexity of the regulation of workplace relations by defining and clearly articulating the rights of employers and workers in modern workplaces.  The collaborative effort of seventeen of Australia’s leading industrial relations practitioners, lawyers and economists, the Charter draws upon international as well as uniquely Australian sources to identify the ten fundamental principles on which fair and balanced workplace laws and workplace relationships should be based, and to create a set of rights and obligations which all workplaces are encouraged to adopt and observe.

The Charter obliges parties to perform their obligations in good faith (Charter Right 1). The Charter also obliges parties to conduct bargaining in good faith (Charter Right 9). These rights are founded on the idea of a ’fair go all around‘. Governments should set out to be model bargaining parties. A ’fair go all round‘ requires that governments do not tilt the negotiating balance in their favour.

The use of the superior advantage to achieve a policy position risks not only being unfair to the employees on the other side of the bargaining table, but also unfair to private sector employers who do not enjoy the same advantages. The policy of capping and its corollary, the ‘one size fits all‘ approach, is inconsistent with the Charter obligation to bargain in good faith.  It means in practice that no matter what merit the other bargaining party can demonstrate, this will not be properly recognised. If this is accompanied by fettering the ability of the independent tribunal to determine an outcome through conciliation or arbitration, the right to access effective dispute resolution procedures (Charter Right 10) is also restricted.

There has been a tendency to announce these policies in budget papers and statements. Finding the content of the policy is made difficult. New South Wales has been the exception. Its policy is set out in a policy document.  Governments should be open about these policies, articulate the terms clearly and provide the other bargaining parties with all information relevant to the policy and its terms. Anything less is a failure to bargain in good faith according to the Charter standard.

Even though not often clearly stated, there is generally provision under the policy to “increase employee related costs by more than 2.5%… only if sufficient employee related costs savings have been achieved to fully offset the employee related costs”, to adopt the language of the New South Wales policy.

This type of approach has been applied in the negotiation of the Health Practitioners’ (Queensland Health) Certified Agreement (No. 2) 2011 that is currently under ballot. The government offered a further .5% on a “cost neutral”basis plus a “one-off contingent payment of $500” payable at the end of the agreement provided that certain productivity savings are achieved. The .5% is “cost neutral” because the agreement will give the government savings that are “at least equal” to the .5%.

This sort of limited proviso does not ameliorate the problems of capping. The proviso is itself a form of capping. It restricts the agenda items to those determined by the government party. There is no room left to engage in the dialogue of enterprise bargaining, such as a dialogue about a CPI increase of 3.6% in the year to June 2011 or interest rate rises of 0.75% since March 2010 (as at 3 May 2011, according to RBA figures).

The Full Bench of the Queensland Industrial Relations Commission’s observations in Queensland Police Service v. Queensland Police Union of Employees and Queensland Police Commissioned Officers’ Union of Employees CA/2010/12, 11 August 2011, align with the Charter’s approach to collective bargaining. The Full Bench expressed concern about the ’one size fits all‘ government offer to public sector employees. The Full Bench said at [221] – [224]:

“We are curious as to how a fixed offer can be made by the Government to its workforce without any apparent and obvious consideration being given to the type of industry under consideration… We are unsure of what consideration has been given to the fact that, within the public sector, employees often engage in a range of diverse activities. Further, in offering a fixed wage offer, there appears to be little consideration given to the fact that each bargaining party may have, and usually do have, a different set of claims to be considered … It is up to the parties negotiating with the State Government as to whether they agree to accept a fixed wages offer. However, if an enterprise bargaining negotiation has not been resolved between parties and a s.149 application is made, the requirement is that the Commission adhere to the requirements of the Act and particularly the statutory direction to act with equity, good conscience and the substantial merits of the case.”

This passage neatly summarises why a government-capped wages policy is contrary to the Charter. The language of equity and good conscience is the language of a ‘fair go all round’. The right to bargain collectively must be an effective right. The Charter sets out a scheme that seeks to make that right effective.

The right to bargain collectively cannot be effective when one party bargains by reference to a policy. It negates the opportunity for a “meeting of the minds” or “mutual enlightenment” that is central to the process of true bargaining (see Howe, J 2009, Australian Standard of Employment Rights, Hardie Grant Books, Melbourne p. 102 and Isaac, JE 1958, ‘The Prospects for Collective Bargaining in Australia‘, The Economic Record, vol. 34 (69)).

When the scheme envisaged by the Charter is altered, the balance that the Charter Right seeks to achieve is detrimentally impacted and the right loses its utility.

Charter Right 9 provides that the parties will have access to an independent conciliation and arbitration system to resolve roadblocks in reaching agreement. Charter Right 10 re-inforces the importance of the independent tribunal in the resolution of disputes in the industrial sphere. The recourse to an independent system to assist the parties to arrive at an outcome, or arbitrate a result if all else fails, makes the right effective for both parties to the negotiation. Legislating to fetter the ability of the independent system except according to applying one side’s policy reduces the efficacy of these Charter Rights.

As the full bench notes, employees and employers (the bargaining parties) negotiate in a particular environment on each occasion, seeking to advance the relevant claims of each against the background of a diversity of occupations and business activities. Restricting the capacity of one party or the other to effectively operate in that environment restricts the right to bargain collectively. Assessed against the Charter, capped wage increase policies are inconsistent with being a model bargaining party.

Sean Reidy

Sean Reidy is a barrister in private practice and a member of the AIER Executive Committee. He appeared for the Queensland Police Commissioned Officers’ Union of Employees in the Queensland Police Service case. The views expressed are those of the author and have not been endorsed by AIER.