The Political History of The Queensland Industrial Relations Reform Program
of the 1980s and its Repeal
David Russell, QC
'Progress, far from consisting in change, depends on retentiveness
... Those who cannot remember the past are condemned to repeat it.'(1)
In April 1987, the then Premier of Queensland, opening the third Conference of this Society felt able to say of measures taken by his Government that they 'represent(ed) the most substantial program of legislative change in the industrial relations area implemented in Australia since the turn of the century' (2).
That reform process, and its consequences in the context of individual industrial disputes, has already resulted in a substantial contribution to the proceedings of this Society, including Papers on the 1985 electricity dispute (3), the development at State level of a body of law complementing sections 45D and 45E of the Trade Practices Act (4), the history of Australia's first enterprise union (5), and a series of Papers relating to the economic thinking behind the introduction of voluntary employment agreements (6), the evolution of their final form (7) and, in the context of a discussion of the New South Wales Government's Green Paper and first attempt at enactment of enterprise bargaining legislation, an analysis of how the New South Wales Enterprise Agreement Legislation was substantially modelled on the Queensland efforts (8).
Most (but not all) of the achievements of those years have now been swept away with the enactment of the Industrial Relations Act 1990 which is largely modelled on its Commonwealth counterpart. The next phase of industrial relations reform in Queensland accordingly will commence with no structure from the earlier phase in existence which sentiment or a desire not to be seen to be overturning one's own handiwork would require to be kept in place. The present is therefore a convenient time to reflect not only upon what was achieved and why it proved so transitory, but also to consider what was left undone and what a future model of industrial reform for Queensland---and indeed other States---should comprehend.
The industrial relations reforms of the 1980s occurred against a background of a political and industrial culture in many respects different to much of the rest of Australia. It is convenient at the outset to identify those elements of the uniquely Queensland political culture which played a significant part in the matters discussed below.
1. Queensland has a history of strong executive government dating back at least to the days of the Theodore administration (1919-1925). The abolition of the Legislative Council in 1922 removed the only significant parliamentary restraint upon the executive government.
2. Queensland is the only mainland state in which a majority of people does not live in its capital city. The attitudes of Queenslanders outside the south east corner towards governmental institutions within it readily approximate the attitudes usually attributed to all Queenslanders in relation to Federal and southern governments and people.
3. Whatever the deficiencies of the Queensland Industrial Commission, it was widely perceived as having a better record than its Commonwealth counterpart: in 1986, for example, over 60% of man days lost through strikes occurred in employment subject to Federal awards, although 64% of Queensland employees were subject to State awards and 24% subject to Federal awards. In addition, the State Industrial Commission had largely held the line against what were considered to be undesirable developments such as the thirty-eight hour week.
4. The Queensland Industrial Court, even though presided over by a Supreme Court Judge, and the Queensland Industrial Commission when established in 1961, have always been within the institutional preserve of the Department concerned with industrial relations, which has undergone many name changes and which for convenience I shall call the Department of Industrial Relations throughout this paper, rather than, as would have been appropriate in the case of the Court at least, the Department of Justice. As a result, the former Department always could be relied upon to support the interests of the Court and the Commission.
5. Historically, that Department has been headed by highly motivated and effective public servants, including the late Colin Clark. As a result, it was rare, particularly in the early years of the Coalition Government, that the Departmental policy did not progress automatically to become Ministerial and Government policy.
6. The Labor split of 1950s occurred in Queensland in 1957, two years later than in other States. The members who left the Labor Party at that time initially joined the Queensland Labor Party (which later affiliated with the Democratic Labor Party). Many people who might in other states have been expected to remain members of the DLP joined the Liberal and Country Parties in Queensland: in consequence since such persons were usually the only people appearing in policy making forums who had industrial relations experience, their view on subjects of interest to right wing unions and unionists either prevailed or were sufficiently influential to prevent the development of a consensus within either coalition party sufficiently strong to encourage them to confront either the organised union movement or the views of the Department.
7. Under the Coalition arrangements which continued until 1983, the industrial relations portfolio was held by members of the Liberal Party.
Whilst the period to 1983 discloses some differences between the former Coalition partners in the industrial relations area, these did not occur on any continuing basis and largely took the form of complaints by the then Premier that union militancy was not being satisfactorily suppressed by the State Industrial Commission. This came to a height with the dispute over the contents of the Essential Services Act 1979 which was ultimately introduced into the Parliament not by the Minister for Industrial Relations, but by the (National Party) Minister for Main Roads, allegedly because Cabinet of the day was dissatisfied with the results of efforts to have the Department of Industrial Relations draft the necessary legislation.
I would be inaccurate to suggest fundamental differences between the Parties at that point on industrial relations issues: the National Party's Industrial Relations Policy Committee of the time was headed by Vince Lester MLA, and a review of the documents which it produced over the period does not disclose any fundamental dissatisfaction with the operation of the industrial relations system, being more concerned with issues such as compulsory grievance settlement procedures and sanctions imposed by the Industrial Commission for unlawful conduct.
The National Party first attempted to come to grips with the failings of the industrial relations system, as opposed to expressing vague disquiet about particular aspects of it, at its 1984 State Conference. Resolutions are proposed to State Conference by the operating bodies in Federal Electoral Divisions and State Electoral Districts. The Landsborough State Electorate Council is distinguished in the Queensland National Party not only for producing two Premiers (Sir Francis Nicklin and Mike Ahern) but also for the quality of resolutions which it proposes to State Conference and the research in which it engages in preparing them. For many years its Chairman was a former Party president, Mr John Ahern (father of Michael). It proposed as its principal notion for the 1984 Conference the abolition of the Conciliation and Arbitration Commission.
That motion was moved by John Ahern. Neither its mover nor its seconder expected that it would be carried and indeed it was opposed quite strongly. But ultimately it was supported by approximately two-thirds of the delegates and became Party policy.
The new policy did not specifically address issues relating to the State Industrial Commission, although it was implicit in the argument put forward by both mover and seconder that the features which warranted abolition of the Commonwealth system applied equally in relation to the State system.
Later that year, the building unions sought to extend their superannuation scheme to Queensland. Building industry employers sought the assistance of the Government to resist this campaign: as a result, the Industrial (Commercial Practices) Act and the Superannuation Trust Funds (Protection of Employee Entitlements) Act were introduced. The former was passed by the Parliament on the afternoon that the Senate discussed the then proposed repeal of sections 45D and 45E of the Trade Practices Act by the Hawke Government.
Given that the former legislation in its original form did little more than apply those sections of the Trade Practices Act and that the latter had application only if it were proclaimed to operate in relation to a particular scheme, and that it was made clear at its time of introduction that it would be applied, if at all, only in relation to the building union scheme, and in fact has never been applied, it is interesting that both Acts were greeted with an almost hysterical reaction by both the Parliamentary Opposition and the media. Indeed, it was almost axiomatic that any industrial relations reform would be treated in this way by the media as, indeed was the legislation for voluntary employment agreements which, paradoxically, the same media subsequently argued should not be abolished. The fact that such a media campaign would be mounted became a fixed assumption in the minds of all whose political judgment played a part in deciding whether or not initiatives should go ahead: the real question ultimately on almost every occasion came down to a calculation of whether the advantage which would accrue to the Government from enacting the legislation would warrant going through another campaign of resistance to it, and whether there would be sufficient opportunity for the legislation to come into effect and be demonstrated not to justify the criticisms made of it so that it would not be an electoral embarrassment to the Government.
The next industrial relations development was the February 1985 electricity dispute. The possibility of the use of the ordinary courts to bring about an end to the dispute was raised at a meeting of National Party Management Committee members and Brisbane backbench Parliamentarians called by the Minister responsible for the electricity industry to brief them on the progress of the dispute thus far. At that meeting enquiry was made as to why proceedings under the Industrial (Commercial Practices) Act enacted the previous year had not been contemplated since the conduct in question seemed to fall squarely within the scope of its prohibitions. Interestingly, although by that stage the State had been suffering extreme dislocation for nine days, none of the then professional advisers to the Government had brought to its attention the possibility that that Act might be relied upon. This reflects the institutional biases of the Departments involved and, in particular, the Department which some four months beforehand had been responsible for drafting the legislation for the Minister for Industrial Relations. Ultimately, such proceedings were commenced and were largely responsible for the return to work (although not before the Courier-Mail had published an editorial saying that they would solve nothing).
The history of the electricity dispute has been told in Papers presented to this Society and elsewhere (9) and this is not the place for a detailed discussion on that subject. However one incident which occurred during it well illustrates the lack of depth of understanding of industrial issues then current.
The South East Queensland Electricity Board had by that stage dismissed approximately one thousand linesmen who had refused to return to work and was securing the services of contractors and new employees. The Government, correctly anticipating that the likely response to this would be an Order from the State Industrial Commission that the dismissed employees be reinstated, published an Order in Council pursuant to the State Transport Act depriving the Industrial Commission of jurisdiction to make such an Order. The Commission thereupon issued a recommendation to that effect. A great deal of time in one of the strategy reviews which were conducted on a daily basis in the Premier's Office was spent in a consideration of the attitude which the State Industrial Commission would adopt to particular aspects of the decisions the Government was then taking. It was pointed out that it was National Party policy to abolish organisations of that sort and that in the circumstances the Government should not be overly concerned with its views of Government conduct. The reaction ranged from shock and horror on the part of those members of the industrial relations club present to one of surprise and relief on the part of the Premier. Up until then, the idea that such bodies could easily be done without does not seem to have been regarded as within the range of realistically available political options.
The settlement of the electricity dispute, both in terms of establishment of a legislative and arbitral structure for the electricity industry and litigation of the various issues that arose out of it, including constitutional issues and secondary boycott proceedings, occupied the time of those advising the Government on industrial strategy for most of the first half of 1985. For present purposes, it is relevant to note that part of the legislative settlement involved the conferring upon elements of the electricity industry the power to enter into individual contracts of employment in terms approved by the Governor in Council.
Once that matter was attended to, the Government established within the Premier's Department a committee to advise the Government on possible further initiatives in the area of industrial relations reform. Those involved included a former President of the Queensland Confederation of Industry, three barristers who had been involved in assisting the Government during the power dispute, and various departmental advisers. Its task was never formally defined, but its general task was to review industrial developments in the course of the electricity dispute and advise any changes to the law which were thought necessary.
In practice, that involved a consideration of the Industrial (Commercial Practices) Act and particular aspects of the Industrial Conciliation and Arbitration Act with particular reference to strike ballot procedures, preference clauses, and employment agreements outside the award system.
The work of this committee came to partial fruition with the 1985 amendments to the Industrial (Commercial Practices) Act which recognised that the general exemption afforded to primary boycotts in the course of an industrial dispute (corresponding with the protection afforded by sub-section 45D(3) of the Trade Practices Act) should be not available in circumstances of specified industrial conduct (lightning strikes) and conduct directed towards unacceptable industrial objectives such as compulsory unionism and demarcation disputes (10).
It was in the proceedings of this committee that a debate first arose the resolution of which fundamentally affected the Voluntary Employment Agreement legislation.
The Electricity Industry legislation validated employment contracts entered into between the South East Queensland Electricity Board and individual linesmen, and made provision for further contracts, if approved by the Governor in Council to be entered into (11). There was no element of collective bargaining involved in the formation of such contracts. The predisposition of many was to simply permit individual contracts to be entered into in other circumstances notwithstanding awards.
The argument was put and ultimately accepted that the consequence of granting such powers would be that if such a general right were conferred, Queensland based unions would begin a move en masse to seek Federal awards in place of State awards so as to prevent this. If, it was argued, that occurred the Federal Commission would be generally sympathetic to such applications. The result would be that a far greater proportion of the Queensland workforce would be employed under Federal awards, given the ease with which the Commonwealth Commission and Appellate Courts would hold that an interstate industrial dispute had been created, for example, the proceedings before the Federal Commissioner in relation to the Queensland power dispute were held to be an 'interstate dispute' (12).
The increased involvement of the Federal Commission in Queensland industrial conditions ('Federal award intrusion') was argued to be undesirable for, inter alia, the following reasons:
1. the record of the Federal Commission settling disputes was less satisfactory;
2. whilst the State Industrial Commission had generally followed the Federal Commission general rulings, it had taken its time to do so and in some respects had not (e.g., the thirty-eight hour week);
3. the State industrial system was more apt to deal with breaches of awards and disputes than a remote Commission operating from Melbourne: e.g., breaches of awards can be prosecuted in Industrial Magistrates Courts spread across the State.
Paragraph 41(l)(d) of the Conciliation and Arbitration Act 1904 as then in force provided, inter alia, as follows:
'The Commission may, in relation to an industrial dispute...
(i) dismiss a matter or part of a matter or refrain from further hearing or from determining the dispute or part of the dispute if it appears...
(ii) that the dispute or part has been dealt with, is being dealt with or is proper to be dealt with by a State Industrial Authority; or
(iii) that further proceedings are not necessary or desirable in the public interest.'
Sub-paragraphs 111(l)(g)(ii) and (iii) of the Industrial Relations Act 1988 contains a like provision.
If, it was argued, some element of flexibility and private negotiation could be introduced into the system which would not result in wholesale Federal award intrusion, the progress towards a deregulated system would be greater because, although everything that was desirable might not be achieved, by providing for arrangements in respect of which the Federal Commission might be inclined to stay its hand, more would in fact be achieved in particular enterprises and the risk of a general movement towards Federal awards would not materialise. This view ultimately prevailed. The Committee's considerations, therefore, became those of trying to second guess what the Federal Commission's approach to paragraph 41(l)(d) would be.
Ultimately, the committee reached the view that the following elements would need to be part of the package if there were to be reasonable prospects of resistance to Federal award intrusion:
1. the contracts would need to be negotiated collectively rather than individually;
2. although the ideal means for negotiating such a contract on the part of employees would be enterprise unions, the facility for the establishment of such unions would provoke a mass attempt on the part of Queensland unions to obtain Federal awards;
3. it would be necessary for some residual jurisdiction to exist in the State Industrial Commission both in relation to the enforcement of contracts and their contents; and
4. certain minimum conditions should be fixed by the Act which could not be lowered by agreement.
These factors resulted in draft legislation being prepared which made no provision for the establishment of enterprise unions, required a 60% adhesion to contracts amongst affected employees, and provided that contracts should be examined by the State Industrial Commission to determine whether or not they were in the public interest before they might come into effect. Critics of the model at the time expressed the view that although contracts entered into within this structure might not fall foul of the Federal Commission, no one would bother entering into them.
Legislation embodying these principles, together with other amendments relating to the other subjects which the committee had to consider such as preference to unionists, was drafted and made available to the Government early in 1986. Despite the Premier's support for it, it did not proceed because the view was strongly held by other members of the National Party (including Minister Lester and State President Sir Robert Sparkes who convinced the State Management Committee of the wisdom of his view) that introduction of such legislation in the period shortly before a State election (which was due by the end of the year) would create political controversy which ought to be avoided, and encourage the trade union movement to increase its efforts to defeat the Government.
The National Party's platform, released in July 1986 and on which it contested the election, reflected the view that far-reaching change in this area was necessary. It stated the belief of the Party, inter alia,
1. That co-operative relationships voluntarily agreed between employers and employees should be the basis of employment conditions;
2. That all Australians are entitled to a work environment free from violence, intimidation, victimisation or coercion;
3. That loss or damage caused by industrial action should be subject to the same law as applies to other loss or damage deliberately caused, and subject to the jurisdiction of the same courts.
After the State election, in which the National Party increased its vote, the question of industrial relations reform came onto its agenda again. In the first place, if the Premier's then contemplated Federal political involvement was to continue, it would be unsatisfactory if any reforms of the Commonwealth industrial relations system which he proposed were met with enquiry as to why similar reforms had not been attempted in Queensland. Secondly, the Small Business Development Corporation proposed that the Government act under powers then conferred by the Industrial Conciliation and Arbitration Act to exempt small businesses from awards made under that Act, which could be done by order in Council.
The proposals drafted by the committee previously referred to and the proposals of the Small Business Development Corporation were then referred to a committee established by the Department of Industrial Relations. It included personnel from that Department, the Premier's Department, the Small Business Development Corporation, the Queensland Confederation of Industry, the Sugar Industry, and some of the Government's legal advisers. To those who had accepted the view of the earlier committee, the proposal by the Small Business Development Corporation was open to the dual objections that it would lead to Federal award intrusion and that it was inappropriate that the Government proceed, particularly by statutory instrument rather than legislation, to vary employment conditions and to do so in relation to part only of the economy.
On this committee, the personnel who represented the Queensland Confederation of Industry changed and the approach which it adopted to the proposal became far more sceptical, if not hostile. It was made clear that the Government could not expect the support of the Confederation for a proposal to substantially deregulate the labour market. The reason given officially was concern at Federal award intrusion, and it is perhaps unduly cynical to suggest that the real reason was associated with the institutional interests of the Confederation, buttressed by its practical monopoly of rights of appearance for employers before the State Industrial Commission (lawyers then, as now, are not permitted to act in such proceedings without the leave of the Commission which may only be given with the consent of all parties to the proceedings (13)). Of course, the Government knew that anything which it proposed would be unremittingly criticised by both the media and the trade unions.
The committee reached broadly similar conclusions to its predecessor and a Green Paper dealing with the reform was issued in early 1987.
An intention to conduct a general review of the provisions of the Industrial Conciliation and Arbitration Act 1961-1987 was also announced.
The Green Paper had differed from the conclusions of the earlier committee in proposing the establishment of enterprise unions and in its initial form the Bill proposed this. After 'consultation' the Bill was withdrawn and the legislation ultimately enacted did not adopt this proposal. In fairness to the Government members of Parliament at the time (one of whom described the fairly modest proposal as 'courageous' in the sense that the term is used by Sir Humphrey Appleby in 'Yes Minister'), by that stage controversy was a fairly frequent aspect of the affairs of Government, and its avoidance must have seemed a consummation devoutly to be wished. As a result more minimum conditions were included in the legislation.
Shortly after enactment of the legislation, Mike Ahern became Premier in place of Sir Joh Bjelke-Petersen. By inclination disposed to seek structural solutions to problems, and concerned that the State Government should develop an integrated development strategy, he was perhaps ideally placed to carry through a structured reform of the industrial relations system. Certainly from his conduct during the power dispute it was clear that he was prepared to face difficult issues of union power. However with the Committee of Inquiry into the Industrial Conciliation and Arbitration Act sitting, he no doubt felt it inappropriate for further industrial relations initiatives to be undertaken in the early days of his Premiership and prior to the handing down of its report.
The Committee of Inquiry was appointed pursuant to an Order in Council dated 25 July 1987. Its membership comprised Ian Hanger QC, a member of the first (but not second) committee which had advised the Government. He had also acted for the Government in a number of matters which arose in connection with the electricity dispute, and regularly appeared in the Commonwealth Industrial Commission. His father had been President of the Queensland Industrial Court. The Committee included one of the two members of the Industrial Commission whose joint recommendations had so discomforted the Government during the electricity dispute, Harry Peebles. The remaining members were Bruce Siebenhausen, a former General Manager of the Queensland Confederation of Industry and initially a member of the second committee which the Government established to advise it in relation to voluntary employment agreements, and Garath Jones.
In retrospect, it is easy to see that a Committee comprised of such persons would be predisposed to the view that the industrial relations club needed an interior designer with a slightly more modern approach rather than a receiver. But even with the benefit of hindsight, it is difficult to see who could have been appointed to such a body whose appointment would have commanded general respect amongst industrial relations practitioners who would not have had that view. Indeed, it is difficult to see how the Government could have proceeded differently once the decision to establish such a Committee of Inquiry had been taken. Constitution of an inquiry by persons competent to analyse the economic consequences of the present system as a whole would have led to the criticism that its findings were not consistent with 'industrial reality'. Constitution of the Committee by persons experienced in industrial relations realities but disapproving of the present system would have led to the suggestion that the process was hopelessly biased and (possibly) that the Government was favouring 'cronies' by appointing them to a paid position.
As the work of the Committee of Inquiry proceeded, the difficulties inherent in such a process became clearer. The Government, through the Department of Industrial Relations, made a formal submission to the Committee which dealt almost solely with technical aspects of the legislation. The National Party organisation, which by then had evolved a fairly comprehensive view of the role of State arbitral systems whilst the Commonwealth system remained, decided not to lodge a submission for the dual reasons that were it to do so, it might be criticised for attempting to apply unfair pressure on an independent Committee charged with the function of advising the Government and that, if it were to make submissions which were rejected, it would then be in a difficult position if it were nonetheless to persist in pressing the merits of its views with the Government after the Committee reported.
The result was that the submissions to the Inquiry were largely from users of the industrial relations system who not surprisingly given their vested interests in its continuation, did not argue for radical change.
The Committee of Inquiry reported in November 1988. Perhaps the comment that best describes its work is that of Eric Hobsbawn, commenting on the Report of the Fulton Committee into the British Civil Service in the 1960s:
'It will do no harm. It may even do some good. But it is a bad piece of work, and it is time that someone said so.'
Some idea of the overall flavour of the Report can be gained from its general discussion of the utility of the system:
'None of the major users of the system submitted that the present system should be dismantled, and indeed, a great degree of satisfaction about it was expressed by the parties. Most, however, felt that there was a need for substantial changes in the Act.
We are mindful of the fact that the State industrial system does not operate in a vacuum and must operate closely in conjunction with the Federal industrial system. Any changes that are to be made in the State field must be made with the full awareness that it is not difficult for organisations to shift their allegiance into the Federal arena, rather than remain in the State arena, should they so desire. Therefore, any radical changes that we might have thought necessary could only be made with the implied or tacit approval of the users of the present State system.
As it is, we are not faced with the dilemma of making decisions to dismantle the system. We think that radical change is not called for but that a great deal of fine tuning to the present system is required... (14)
and its observations on the role of unions:
'One thing that needs to be said at the outset, is that the present system is based on a system of unionism. Not to give trade unions or unions of employers a strong voice in the system would amount to dismantling it, and there is no justification for that. What we must seek to do is to maintain a healthy balance of power between the various interested parties...' (15)
The existing Voluntary Employment Agreement provisions had been excluded specifically from the terms of reference of the Inquiry. Whilst the industrial arrangements in relation to the electricity industry were not within its terms of reference, the Committee of Inquiry felt capable of making the gratuitous observation that the electricity industry should be returned to the jurisdiction of the State Industrial Commission (16), to recommend continuation of preference to unionists (17) and to recommend the repeal of a number of evidentiary aids which applied not only for the purposes of the Industrial Conciliation and Arbitration Act (which was within its terms of reference) but also the Industrial (Commercial Practices) Act (which was not) (18).
Unsurprisingly, both the Queensland Confederation of Industry, and the Queensland Trades and Labour Council announced that they were generally satisfied with the Report as a package and would support its implementation. This pleased both the Chairman of the Committee of Inquiry and Minister Lester. For many in the National Party, however, it represented a complete betrayal of everything which had been achieved prior to the change of Premiership. In particular, they were adamant that the National Party should not enact into law a comprehensive Industrial Relations Act which provided for preference in employment to unionists. That view was adopted unanimously at a meeting of the National Party's Central Council on 25 February 1989.
At the same time, the administrative arrangements in connection with voluntary employment agreements as originally enacted were being shown to be defective. In particular, the approach by the State Industrial Commission to the application of the public interest test in vetting agreement had made such agreements practically impossible to obtain, and in the absence of the opportunity to form enterprise unions was becoming particularly embarrassing, particularly in relation to the Queensland Power Workers' Association whose support had been invaluable to the Government during and after the electricity dispute. As a result, the Committee established by the Department of Industrial Relations was reconvened to consider the operation of the Voluntary Employment Agreement legislation, and it recommended that it be amended in four important respects:
1. the percentage approval amongst the workforce was increased from 60% to 65%;
2. that approval was required to be established through a secret ballot;
3. the jurisdiction of the Industrial Commission to approve an agreement before it came into effect was replaced by jurisdiction to avoid it on the application of a party thereto once in operation if it were shown to be contrary to the public interest; and
4. the formation of enterprise unions was provided for.
These proposals became law on 5 May 1989 (19). Action on legislation to implement the Committee of Inquiry's Report subject to the variations requested by the National Party Central Council was deferred.
That deferral did not, however, mean the end of the Report of the Committee of Inquiry. The Labor Party announced that its industrial relations policy for the election would be to implement that Report. In this way, the Government's principal electoral advantage - its industrial relations record---was taken from it, because the Labor Party said that its policy was simply to implement the Report of a Committee of Inquiry which the Government had itself set up. The political issues of the day became those associated with the corruption issue and in due course the Labor Party won the election.
Contrary to its undertaking, the Labor Party did not implement the Report of the Committee of Inquiry in its entirety, and enacted a number of provisions which it had not indicated it would enact. Its Industrial Relations Act 1990 repealed the Industrial (Commercial Practices) Act and the Essential Services Act, abolished Voluntary Employment Agreements, brought the electricity industry within the jurisdiction of the State Industrial Commission and outlawed the contracts which had been entered into by the electricity workers with their employer. It also provided 'superannuation' payments to the dismissed SEQEB workers, with the entitlements being calculated on an extraordinarily favourable basis, which included, amongst other things, an averaging process to determine final average salary which included in the period over which the average was taken two summers (when, because of seasonal conditions in Queensland, overtime levels are high) and one winter (20). In the meantime, the employees whose contracts were outlawed suffered a pay reduction of up to $70 per week. Other deviations from the Report included the abolition of political objects funds, which required that individual union members contribute to the Labor Party only if they wished to do so: a recommendation which, paradoxically, Marshall Cooke QC, Commissioner of the Inquiry into Union Corruption, recommended in his first Report should be enacted in a strengthened form the very day that legislation was enacted in the Parliament with some fifty minutes being allotted to the Opposition to move amendments. Interestingly enough, both the Courier Mail and the Sunday Mail, which had initially opposed Voluntary Employment Agreements, criticised the new Government for not including them in its legislation, but to no avail.
Not repealed were sections 23, 23A and 24 of the State Transport Act 1938-1981, which provided for a much harsher regime of essential services legislation than the Essential Services Act itself, suggesting, perhaps, that doubts expressed in previous proceedings of this Society (21) as to utility of such legislation are shared by the Queensland Government (although from a different perspective).
The Government has never released the figures, but it is estimated that up to 70 Voluntary Employment Agreements were finalised between labour and management and lodged for registration. About 40 were actually registered: one Consultancy lodged 35 of which only 12 were registered. The Industrial Registrar obligingly slowed down the processing before the State Election in December and after it contacted companies with agreements awaiting registration with a 'do you really want to proceed' type of enquiry 'in view of the imminent legislation to rescind the Voluntary Employment Act'.
The last word should go to the Honourable Neville Warburton MLA, ex Electrical Trades Union official and current Minister for Industrial Relations in Queensland. In a newspaper interview in relation to Voluntary Employment Agreements, he argued:
'... I and my Government believe they are against the public interest...
... What they have also done in some cases, particularly where there is a high labour content when companies are tendering ... they are now discovering that VEAs make the playing field very uneven.
... It's become unfair competition where one company has VEAs and one doesn't. It makes it possible for one company to tender lower because they have an unfair advantage in terms of labour costs'. (22)
Summary and Conclusions
In the light of this history, what conclusions are to be drawn from the Queensland experience?
In my view, they include the following:
(a) Given the existence of State and Federal systems, there is a very great need for the political parties which favour deregulation of the labour market to develop a comprehensive Commonwealth/State strategy which can be implemented as those parties progressively attain political office.
(b) The strategy at Commonwealth level should seek to prevent any enterprise bargaining arrangements it creates being capable of being overridden by the activities of State Arbitral Tribunals. There are a number of techniques by which it is legally possible to achieve this, although not all would find favour with those who prefer to limit Commonwealth powers. They include, inter alia,
(i) using the existing jurisprudence on the extent of the concept of 'interstate disputes' to provide that State Industrial Tribunals have no jurisdiction to make an award in connection with disputes which have an interstate character;
(ii) use of the corporations power, the international and interstate trade power and the territory power to provide that corporations, territory residents and persons engaged in international and interstate trade will not be subject to the awards of state industrial tribunals where they have entered into an agreement recognised under Commonwealth law;
(iii) use of the external affairs power and the recognition of the right of freedom of association in the International Covenant on Civil and Political Rights to make all union membership voluntary.
(c) Whilst the State systems have the weakness that their awards can be overridden by a Federal award, the Federal system has the weakness that its awards are respondency based. There is therefore far more scope for employers and employees who wish to be outside the scope of a Federal award to arrange matters so that they are outside it, than there is for employers and employees wishing to escape from a State award. The most simple method for escape from Federal awards is resignation from the appropriate employer organisation which, in the context of bodies such as the Confederation of Australian Industry and the Victorian Employers' Federation, might well be thought to be a welcome development. Certainly it would force those seeking to have the workforce unionised to work a little harder to achieve that result. Accordingly, except in quite extraordinary circumstances which probably do not even exist in Queensland any longer and are unlikely to exist in Victoria or New South Wales, the abolition of State industrial systems would have the consequence that the only applicable awards would be Federal awards which, as previously noted, are respondency based. Under normal conditions, such a proposal might be regarded as politically impossible. But at times of de facto government bankruptcy it would provide not only a desirable budgetary outcome (since the State industrial relations systems involve substantial expense to Governments and produce little in the way of revenue) but also increased economic activity arising from deregulation of the labour market. State governments should, however, facilitate the incorporation and operation of enterprise unions.
(d) The establishment of expert bodies as Committees of Inquiry in this area will not assist in the promotion of labour market reform: they will either reinforce the prevailing views of the industrial relations club in which case they will retard progress or, if they do not they will become discredited and controversial and therefore not provide a generally accepted objective basis for decision making.
(e) The enactment of a simple procedural code protecting the rights of persons and corporations to carry on business with recourse to the ordinary courts modelled on sections 45D and 45E of the Trade Practices Act and the Industrial (Commercial Practices) Act is desirable at State level.
(f) There is a far wider constituency for change in this area than professional politicians recognise. It is now the accepted wisdom in Queensland, as a result of the Voluntary Employment Agreement experience, ignored only by the present Government and the trade union movement, that enterprise bargaining arrangements are a necessary part of Australia's future economic development. Yet when introduced, they were widely regarded as yet another form of extremist union bashing. The Queensland legislation has been allowed through the New South Wales Upper House in virtually identical form by the New South Wales Labor Party Opposition. This would not have been conceivable had the Queensland experience not occurred, and making the general public comfortable with the concept of enterprise bargaining is an important part of securing necessary change.
(g) Tinkering at the edges of the system rather than thoroughgoing reform will encourage those who oppose its abolition to resist change and make it easier for them to reverse the gains which have been made. If, for example, the whole structure of the Department in Queensland had been dispensed with, it would not have been as easy a matter for the Labor Party to reinstate the system.
It was a privilege and a challenge to have the opportunity
to participate in the development of the Queensland
industrial relations reform program of the 1980s. I
wish others who follow in our path well. I can confidently
predict that those who seek to do so will find their
(1) Santayana, G: Life of Reason Vol I Ch XII
(2) Bjelke-Petersen, J: Proceedings of the H R Nicholls Society ('Proceedings') Vol III p. 10 (1987)
(3) Gilbert, W: Proceedings Vol I pp. 29 et seq.
(4) Clauson, P: Proceedings Vol III pp. 17 et seq.
(5) Carberry, C: Proceedings Vol III pp. 279 et seq.
(6) Brown, A: Proceedings Vol III pp. 25 et seq.
(7) Stenhouse, K and Haycroft, G: Enterprise Agreements---Myth v. Reality in Queensland (Paper for H R Nicholls Society Conference, Sydney 1990)
(8) Russell, D: Current Labour Market Reform in New South Wales (Paper for H R Nicholls Society Conference, Sydney 1990)
(9) Russell, D: Turning on the Power in Queensland Institute of Public Affairs, Sydney (1987)
(10) Industrial (Commercial Practices) Act Amendment Act 1985
(11) Electricity (Continuity of Supply) Act 1985 section 7, Electricity Authorities Industrial Clauses Act 1985 section 32
(12) R. v. Ludeke, Ex parte Queensland Electricity Commission and Others (1985) 159 C.L.R. 178
(13) Industrial Conciliation and Arbitration Act 1961-1989 section 125, Industrial Relations Act section 8.17
(14) Report of the Committee of Inquiry into the Industrial Conciliation and Arbitration Act p. 3
(16) ibid. pp. 446-447
(17) ibid. pp. 252-261
(18) ibid. pp. 107
(19) Industrial Conciliation and Arbitration Act Amendment Act 1989
(20) Electricity Superannuation Restoration Act 1990
(21) Russell, D: Proceedings Vol V 'Essential Services Legislation'
(22) Sunday Mail, 4.2.1990