A series of changes in the modern economy are making it necessary for labour lawyers to master a broader range of expertise, said Bruce Moore, a partner in Mallesons Stephen Jaques, in an address today to the First Australian Labour Law Association Conference.
The changes that have impacted on labour law include globalisation, the efficiency and speed of modern telecommunications, and privatisation of utilities such as gas and electricity.
This means that labour lawyers, who might be assisting unions, employers, or governments, have needed to become familiar with legislation in an array of areas of law which are increasingly relevant to employment issues - such as corporations, taxation, superannuation, freedom of information, migration, privacy, anti-discrimination, and contracts – including the impact of this legislation at both federal and state level.
Two issues which confront labour lawyers are the continuing evolution of the law concerning “transmission of business” (questions as to whether an industrial award is binding on a company that has acquired or taken over a business) and the voluntary assumption of obligations by corporations flowing from the Global Compact initiated by the United Nations July 2000 (which includes labour standards drawn from the International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work).
Transmission of business issues
The passage of the Workplace Relations Act 1996 has placed much more emphasis on employment terms at the workplace level, and this has had some unexpected consequences. With the continuing development of varying conditions of employment at the local level, displacing industry-level standards, a consequence has increasingly been that the new employees acquired with a business purchase might have terms and conditions which are materially different from those of existing employees.
Some recent judgments show how complex this area of law has become. In PP Consultants Pty Ltd v Finance Sector Union (2001) employees were transferred from St George Bank to a pharmacy, to set up a banking agency inside the pharmacy. Because of the characterisation of the commercial activities carried on by the pharmacy, the High Court ruled that their employer was not engaged in the business of banking. This meant that the award previously applicable to their employment no longer applied.
Another case, decided in September 2002, concerned the termination of outsourced services. A school appointed a company to manage certain grounds and maintenance. The company entered into a certified agreement with the AWU. Later, however, the maintenance contract ended and the employees of the company were offered permanent employment with the school. When an issue arose concerning income protection that had existed under the certified agreement, the Commission ruled that the business carried out by the maintenance contractor had now become part of the business of the school, and that they would be covered by the conditions of service for non-teaching staff.
Mr Moore said that experience to date showed that “not all of the issues with the evolving application of the transmission of business provisions can be regarded as finally settled”.
The federal government has said it will seek to provide the Australian Industrial Relations Commission with power to decide on whether or not to bind new employers to certified agreements, in the same way as the Commission may do for awards. It introduced the Workplace Relations Amendment (Transmission of Business) Bill 2001, but this lapsed with the end of Parliament. A similar bill is currently before Parliament – this allows the Commission to order that a new employer is not bound by an existing certified agreement, or that the employer is bound only to a certain extent or for a certain time.
Global impacts
Mr Moore said the United Nations’ Global Compact for corporations operating in a range of countries included nine key principles. Four of these concern employment matters and, of these, Principle 3 is the most likely to affect employers based in Australia if they choose to participate in the Compact. It covers “Freedom of association and the effective recognition of the right to collective bargaining”. It has been argued that the promotion of workplace agreements and its emphasis on direct employee-employer relations in the Workplace Relations Act may be inconsistent with ILO Conventions; this may give rise to questions of compliance with the principles of the Compact (to the extent they are based on ILO Conventions) if a corporation is proposing to align itself to the Compact.
Although the Global Compact is voluntary, its principles are still likely to bring pressures to bear on the operations of Australian companies both locally and overseas. Mr Moore said: “Labour law practitioners need to be conscious of the evolving external global environment and its potential to affect employers and employees.”