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Individualism and Collectivism in Agreement-Making Under Australian Labour Law University of Wollongong Research Online Faculty of Law - Papers (Archive) Faculty of Business and Law January 2003 Individualism and Collectivism in Agreement-Making under Australian Labour Law Andrew D. Frazer University of Wollongong, [email protected] Follow this and additional works at: https://ro.uow.edu.au/lawpapers Part of the Law Commons Recommended Citation Frazer, Andrew D.: Individualism and Collectivism in Agreement-Making under Australian Labour Law 2003. https://ro.uow.edu.au/lawpapers/7 Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: [email protected] Individualism and Collectivism in Agreement-Making under Australian Labour Law Abstract Australia, in common with many other industrialised countries in the 1990s, has experienced a shift towards individualism in labour law and labour market regulation. This has been part of a wider change as governments have opened up domestic markets to international competition, while rethinking the protections provided by the welfare state. Business has demanded deregulation of all kinds but particularly in the labour market, with the aim of achieving greater flexibility and efficiency in the utilisation of labour. The debate over the reform of industrial relations institutions and processes in Australia has been conducted in terms of ‘enterprise bargaining’, a diffuse term which means (depending on the position of the speaker) either collective bargaining involving national unions but with outcomes tailored to specific workplaces, or firm-specific bargaining by internal enterprise-based parties with minimal involvement from ‘external’ bodies such as unions. During the last decade the debate has moved from an assumption of collective bargaining with union involvement, to the view that agreements should be primarily individual in nature. Legislation has mirrored this debate, with increasing emphasis being given to individual agreements. Hence the legal relationship between collective and individual agreements is of major importance in contemporary Australian labour law. Keywords collective bargaining, enterprise bargaining, labour law, trade unions, Workplace Relations Act Disciplines Law Publication Details This book chapter was originally published as Frazer, AD, Individualism and Collectivism in Agreement- Making under Australian Labour Law, in Severynski, M (ed), Collective Agreements and Individual Contracts of Employment, The Hague, Kluwer Law International, 2003, 49-82. This book chapter is available at Research Online: https://ro.uow.edu.au/lawpapers/7 Australia Individualism and Collectivism in Agreement -Making under Australian Labour Law Andrew Frazer University of Wollongong Biography Dr Andrew Frazer is a Senior Lecturer in the Faculty of Law at the University of Wollongong, Australia , where he teaches in the fields of employment and labour relations law. He has published widely on the history of Australian compulsory arbitration systems, trade union law, and recent developments in labour law. Email: [email protected] 56810 -text.native.1159239189 25/9/06 2 3 Individuali sm and Collectivism in Agreement -Making under Australian Labour Law Andrew Frazer Introduction: compulsory arbitration, collective agreements and individual contracts Australia, in common with many other industrialised countries in the 1990s, has experi enced a shift towards individualism in labour law and labour market regulation. This has been part of a wider change as governments have opened up domestic markets to international competition, while rethinking the protections provided by the welfare state . Business has demanded deregulation of all kinds but particularly in the labour market, with the aim of achieving greater flexibility and efficiency in the utilisation of labour. The debate over the reform of industrial relations institutions and process es in Australia has been conducted in terms of ‘enterprise bargaining’, a diffuse term which means (depending on the position of the speaker) either collective bargaining involving national unions but with outcomes tailored to specific workplaces, or firm -specific bargaining by internal enterprise -based parties with minimal involvement from ‘external’ bodies such as unions. During the last decade the debate has moved from an assumption of collective bargaining with union involvement, to the view that agreem ents should be primarily individual in nature. Legislation has mirrored this debate, with increasing emphasis being given to individual agreements. Hence the legal relationship between collective and individual agreements is of major importance in contempo rary Australian labour law. In order to understand any labour law system in a comparative context, it has been said that one must adopt a functional and historical approach, paying regard 4 to the values, history and culture of the country being explained. 1 In the Australian context, discussion of industrial relations is necessarily framed by the long history of compulsory conciliation and arbitration systems. The shift towards enterprise bargaining and individual agreements involves a fundamental change in t he traditional approach to industrial regulation under the Australian Federal and State industrial relations systems. Compulsory arbitration was developed in response to a series of ‘Great Strikes’ during the early 1890s. In these disputes employers respo nded to the growth of trade union power by refusing to recognise unions or bargain with them. The employers’ stance was supported by the common law which made collective industrial action by employees a criminal offence or at the least a compensable civil wrong. State -sponsored compulsory conciliation and arbitration was introduced a century ago with the aim of preventing or settling such disputes. Its primary aim was the encouragement of collective bargaining, either by making agreements or by reaching con ciliated (mediated) settlements. The original aims of the Federal arbitration legislation were to prevent strikes and lockouts, to provide for conciliation ‘with a view to amicable agreement between the parties’ or, in default of that, to settle disputes by an ‘equitable award’ after compulsory arbitration. 2 The original framers of compulsory arbitration believed that collective groups of employers and employees would naturally tend to settle their differences by conciliation and agreement, and most likely on an industry - wide basis. The very existence of formal and compulsory mechanisms for conciliation and arbitration would induce parties ‘to make as between themselves agreements in regard to the conduct of the particular trade or business in which they ar e engaged. Then this Act will bind them.’ 3 The adoption of this system meant that unions did not need to gain recognition from employers. Under compulsory arbitration, unions were recognised by the state. As long as they were registered under the arbitrati on system they could notify a dispute with an employer (or employer association) and thereby invoke the compulsory processes of conciliation and arbitration. Ultimately a union could seek to have the tribunal impose an award on the employer which gave the union and its members both substantive and procedural rights. Registered unions were also able to make enforceable collective agreements with employers. 1 Johannes Schregle, ‘Explaining Labour Law and Labour Relations to Foreigners: Some Reflections about International Comparison’ in J.R. Bellace and M.G. Rood, eds, Labour Law at the Crossroads: Changing Employment Relationships , The Hague, Kluwer, 1997, pp. 161, 163. 2 Commonwealth Conciliation and Arbitration Act 1904 , s. 2. 3 A. Deakin, Second Reading Speech, Conciliation and Arbitra tion Bill, Commonwealth Parliamentary Debates , vol. 15, 30 July 1903, p. 2861. 5 The method chosen for making agreements legally enforceable was different from that used in many other systems. Rather than treating collective agreements as contracts, the arbitration system gave unions a special though limited legal status, enabling them to enter into particular kinds of agreements regulated by statute and supervised by tribunals separate from the ordinary courts. 4 Thus awards and agreements were not fully integrated into the legal system as occurred in many European countries. 5 Breach of an industrial agreement was not a breach of contract entitling the innocent party to compensatory dama ges but, like breach of an award, a contravention of a statutory obligation resulting in a penalty similar in nature to a fine. In practice, though, it has also been common for parties to obtain an injunctive order compelling the other party to observe the award or agreement. The upshot of the particular historical circumstances in which the compulsory arbitration system was developed, which determined the particular legal form for bargaining and regulation, is that individual and collective labour agreemen ts have been quite different in their juridical nature and form. The contract of employment, a creature of the common law, has remained notionally part of the private law of contract (though resort to the civil courts in employment disputes has been rare u ntil recently). Collective agreements registered under the arbitration system are part of the public law since they are regulated by statute and (especially in recent times) their contents subject to approval by a tribunal with responsibility to act in the public interest. Those collective
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