INDUSTRIAL RELATIONS AMENDMENT (INDUSTRIAL COURT) BILL 2016

11 October 2016

2nd Reading Speech


The Hon. ADAM SEARLE ( 18:04 ): I lead for the Labor Opposition on the Industrial Relations Amendment (Industrial Court) Bill 2016. The Labor Opposition will be opposing the bill. The Opposition does not think it is a reasonable or necessary measure.

The Hon. Dr Peter Phelps: Knock me over.

The Hon. ADAM SEARLE: I know the member is shocked by this revelation. The bill before the House seeks to abolish the Industrial Court, also referred to in the bill as the Industrial Relations Commission in Court Session. Ancillary to the abolition of the court it will transfer the remaining judicial member, the current President of the Industrial Relations Commission and of the court, Justice Michael Walton, to the Supreme Court. That is a necessary outcome because the Industrial Court is a superior court of record and holding a judicial office of that kind the Government is required by the Constitution to appoint Justice Walton to an equivalent court. The Industrial Court is equivalent in status to the Supreme Court of New South Wales.

The bill makes a number of ancillary changes to the operation of the Industrial Relations Commission as a tribunal. The lesser position of chief commissioner is modelled on the West Australian approach and will replace the office of president. The holder of that office will be required to be an Australian legal practitioner but they will not be a judicial officer. The office of Vice President of the Industrial Relations Commission has been vacant since Justice Walton became President of the Industrial Relations Commission on 3 February 2014 and will be abolished. 

The functions of the Industrial Court will principally be transferred to the Supreme Court and in some limited cases to the District Court. Some minor functions will be retained by the Industrial Relations Commission. Members of the House may not appreciate that although the Industrial Court is equivalent in status to the Supreme Court it has tended to operate in a less formal and legalistic way when compared to a mainstream court. The parties that approach the Industrial Court are registered industrial organisations and individual applicants that are sometimes represented and sometimes not. 

The prospect of approaching the Supreme Court is much more daunting and will act as a disincentive to many people seeking redress. A substantial part of the remaining jurisdiction of the Industrial Court is breaches of industrial instruments and recovery of outstanding wages. In various iterations over the last 100-plus years the industrial commission and court has played a significant role protecting and supporting working people in a less formal and legalistic way. These changes will end that. It will expose litigants to the higher costs of the Supreme Court. The Industrial Court has the same costs jurisdiction as the Supreme Court but it has tended not to work in the same manner. 

For this reason, judges of the Industrial Court are also deputy presidents of the Industrial Relations Commission. They are able to switch between exercising judicial functions and non-judicial functions as needed, often in the same proceeding and in the same court room. For example, if a protracted matter has not been resolved before litigation commences, as the evidence is being taken by the court the attitude of the parties changes. There is nothing to stop parties from reaching an out-of-court settlement even in the middle of a trial, but sometimes parties cannot do that. They do not have the skills; they need a third party, an independent umpire. Sometimes, because of their nature, litigants need a circuit breaker to provide them with the opportunity to reassess their position. In an Industrial Court proceeding the judge can become an arbitrator or a conciliator at will, as the parties need. There is no need to delay or waste court time. The matter can occur straightaway. 

Under the model being proposed in this bill, if the parties wish to go to conciliation mid-trial they will need to ask the judge to stop. They will need to ask the judge to exercise, potentially, the functions in the bill under proposed section 109, which may not work. As I read that provision currently, it seems to provide for the Supreme Court to refer a matter to conciliation pre-litigation. It is unclear to me whether that provision would operate to enable a non-litigious outcome once litigation has been commenced. The current arrangement, which I am sure was not intended, will lock parties into high-cost litigation once the court processes have been invoked, unless they can resolve matters themselves.

On one view this bill is a small step, but on another it is a significant change. It is the latest attack in this Government’s war on working people and the institutions created to support and protect them. Since this Government took office a range of measures have attacked the independent umpire, the Industrial Relations Commission, narrowing its jurisdiction or limiting the space within which the tribunal can operate independently of government. The Government often invokes the reduction in the Industrial Relations Commission’s workload as a reason for the diminution of the tribunal.

One can see from successive annual reports that, although the jurisdiction has contracted—first, as a result of the Howard Government’s WorkChoices laws and then because of the way in which the Fair Work Act was constructed and the migration of private sector employment matters to the Federal system—and there has been a contraction in the State commission, nevertheless there has been a sustained high level of work. The retirement of commissioners, who were until recent years not replaced, led the tribunal to drown in work. I commend the efforts of the current president, Michael Walton, and the commissioners who have worked with him to do their level best to stay on top of the work of the tribunal.

Despite the change in the jurisdiction, a significant workload has still been imposed on the commission. That needs to be recognised; it is not addressed in this bill. The workload of the court has also diminished, not as a result of WorkChoices or the Fair Work Act but largely because of the actions taken by this Parliament to strip the Industrial Court of its jurisdiction to deal with work safety matters. In 2011 this Parliament, at the urging of the Government, made significant changes to work health and safety legislation that created three categories of offence. The most serious offences, category one, were to have jurisdiction conferred in the Supreme Court. The next most serious, category two, were to be given not to the Industrial Court, the traditional repository of this jurisdiction, but to the District Court, without specialist expertise or training in this field. When the workload was given to the District Court there was no additional training provided and no judicial appointments to enable it to stay on top of the work. That has added to the stress and workload of that important court in our legal system. Category three offences, the least serious, were left in the Industrial Court.

That created the anomaly of a superior court of record equivalent to the Supreme Court being left with a residual jurisdiction in this field. When one looks at the annual reports one can see that in 2011, of the 219 matters filed in the Industrial Court, 144 were work safety prosecutions. Of the 244 matters completed by that court, 160 were work health and safety matters. In 2012, after the work safety laws were passed, only six new prosecutions were commenced in the Industrial Court, and 107 of the 180 matters of disposed of by the Industrial Court were work safety prosecutions. In 2013 there were no work safety prosecutions filed in the Industrial Court and 70 of the 148 court matters were work safety matters. In the most recent annual report, 2014, one can see that no new prosecutions were filed in the Industrial Court and 16 of the 91 matters disposed of that year by the court were work safety matters. One can see that the diminishing workload of the court is attributable almost directly to the stripping of that court of its jurisdiction.

To place all this in some context, for more than 100 years there has been a commission, a tribunal and a court that has served working people, industrial parties and the wider community well on a more or less bipartisan basis until fairly recent times. In the 1990s we saw the creeping in of the ideological war in industrial relations. There was the Nile and Green paper, which proposed what were then fairly radical changes to the New South Wales industrial relations system. John Fahey, the then Minister, implemented in piecemeal fashion significant changes to the industrial relations system. One of the most fundamental changes was the extraction from the Industrial Relations Commission [IRC] of judicial functions. The Liberal-Nationals Government of 1988 to 1995 created a standalone Industrial Court as a superior court of record.

The Hon. Trevor Khan: That was a long time ago.

The Hon. ADAM SEARLE: It was, and it was done at the urging of the Liberal-Nationals Coalition. The Government kept a separate industrial tribunal, largely populated by the same people. The judges of the court were the judicial members of the tribunal. The Labor Government of 1995, in which I worked as a staffer for the Hon. Jeff Shaw, who was the Attorney General and the Minister responsible for the 1996 legislation—

The Hon. Trevor Khan: It was a long time ago.

The Hon. ADAM SEARLE: It was a long time ago. I disclose the interest. The fact is that the two functions were combined, so there was an integrated court and commission where a flexible approach was able to meet the needs of participants in a way that was not as formal or legalistic as traditional black letter law litigation. That is a model that we think has worked well and should continue to work well, notwithstanding the diminution or contraction. It must be recognised that the justification for the latest change is, “There is only one judge. There is not really enough work for a separate court.”

The fact is that the people who work in the commission and the registry will continue to do so, even after the judicial functions have been taken to the Supreme Court. The one judge will be a judge of the Supreme Court. In fact, this move will cost the taxpayers money because the Government will be appointing a new chief commissioner, presumably remunerated at a level higher than a traditional commissioner. That will be a net additional cost. It is not a big one, but there is no cost saving. There is no significant rationale for the move, other than a continued diminution of the specialist jurisdiction dedicated to working life and working people.

For those of us on this side of the House, that is contrary to the view we have historically taken, including since being in Opposition over the past five years. We have consistently opposed the many changes that have seen the role and scope of the industrial jurisdiction reduced in this State. At each opportunity, whether it is in debate on the work safety legislation or on the construction and jurisdiction of the NSW Civil and Administrative Tribunal [NCAT], we have continuously argued that there should be a single court and tribunal that deals with the world of work. We know that there is more than enough work under State laws, given to different courts and tribunals, that would keep a fully functioning court and commission completely engaged.

It is simply where governments and parliaments choose to allocate that work. We say—for reasons of specialism, expertise and providing a proper level of public service to the wider community—that all of this should be reposed in an enhanced Industrial Relations Commission and court. The Labor Party has argued for that not only in this place in adjournment speeches and debates on various bills and in other forums, but it also took a platform of this nature to the election in 2015. 

For Labor the world of work and its impact on individuals, the family and the wider community is essential to the way we see the world and it informs our actions in the Parliament. We believe we live in a society, not merely an economy. There are workplaces, but there is not a labour market. People are not merely units of production, but individuals with families and lives outside the workplace. That is why we continue to support fair shop trading laws, including existing protections for Good Friday, Easter Sunday, Christmas Day, Boxing Day and Anzac Day morning. That is why we resisted the changes made by this Parliament last year.

The evidence shows that removing these protections will not increase employment or economic wellbeing but will only reduce the quality of life for affected workers and small business operators who are forced or pressured to work on those days. We not only want a healthy economy to grow jobs but we also want those jobs to be of good quality and to provide meaningful work for those who need it. This is a key measure, we think, of social as well as economic inclusion in society. An integral part of this is ensuring that all people are treated with dignity at work. Properly functioning institutions such as the Industrial Relations Commission and the Industrial Court support this and we think they are vital to the public good. 

While the new industrial relations landscape has seen the private sector workforce move to the Federal system there remains important protections that the New South Wales system can and should provide for the whole community, particularly where Federal law is inadequate or absent. Labor’s industrial relations laws that we have argued for would focus on ensuring that all working people in New South Wales should enjoy rights to a safe workplace free of bullying and all forms of discrimination. We think that there should be a single, properly resourced independent umpire to properly deal with all matters involving the world of work that currently arise under State law. This is not a new proposition; it is something we have consistently argued for. We think the Industrial Relations Commission and court should be given the widest possible scope for protecting working conditions that are possible under State law.

The New South Wales Industrial Relations Commission has been at the centre of ongoing innovation for not only the public sector but also the private sector workforce. For the most part, what people now enjoy—for example, the national employment standards in respect of rights to redundancy—started as test cases in the New South Wales Industrial Relations Commission in the early 1980s. During the recession people were thrown out of work with no financial cushion to soften the impact. It was the New South Wales Industrial Relations Commission that embraced the notion of redundancy pay, initially in awards but then more generally. That idea migrated to the Federal system by the mid 1980s. The approach being taken by the current Government would seek to prevent that kind of innovation occurring in the future.

Under the Coalition Government the enforcement and prosecution of work safety laws has been significantly scaled back. Trade unions have largely lost the ability to enforce those laws, except in extreme circumstances. We think the rates of accidents, including fatalities, remain unacceptably high. The 2012 workers compensation changes reduced benefits to injured workers to the lowest level in living memory. Of course, amongst the harshest changes were the time limits of medical treatment, the removal of coverage when travelling to and from work, and the retrospective removal of rights from workers injured many years before the changes were implemented. While there have been some more recent winding back of those laws, it is very little. 

We think that there need to be mechanisms so that workers and unions can more effectively enforce work safety laws outside criminal prosecutions, including obligations on employers regarding rehabilitation and return to work, including ensuring that any disputes about treatment or compensation are resolved by an independent tribunal, and returning all work safety prosecutions to the Industrial Court but, if it is not to be, to a superior court of record. That is the context in which we approach this bill. We think it is just a continued attack on the jurisdiction that has protected working people. 

If the court is to be abolished it is sensible to transfer all of those functions to the next most like court, the Supreme Court. I can see at one level the superficial appeal of that, but again when we look at the nature of the litigants—individual workers, often not well-remunerated; industrial organisations, both unions and employer associations—we see that the sort of strict black-letter approach of the Supreme Court is probably not the most appropriate forum. For example, in relation to breaches of industrial instruments and the recovery of wages we think that should be left in the Industrial Relations Commission, although dealt with by tribunal members who are legally qualified. It does not need to be in a court. 

Similarly laws to do with the regulation, registration and de-registration of industrial organisations should be left to the tribunal. For example, at the moment the commission can make dispute orders and the settling of industrial disputes. When those dispute orders are breached traditionally those matters have been heard in the Industrial Court because they are serious matters. Again the judges are not just black-letter-law judges, they are judges drawn from a background and a specialty where they understand the industrial landscape and the nature of workplaces. That background and experience can inform their decision-making. By simply passing on that function or enforcing dispute orders to the Supreme Court, there is no guarantee that any of the judges who do have an industrial relations or workplace background, of whom there are a number on the Supreme Court, would necessarily be the ones who would deal with these matters. So again there is a risk of judges taking a different legal perspective and tradition to these matters—and I do not mean that unkindly—which could lead to harsh outcomes that are not warranted in the circumstances.

We think there are functions of a court that should be left in the Industrial Relations Commission. Similarly there are approaches taken in the industrial jurisdiction which we think should follow any work that goes to the Supreme Court. This is embraced in part by the bill but not fully. For example, section 166 of the Industrial Relations Act provides that non-lawyers can represent parties to proceedings and, in the case of unions, there are officers, and parties can appoint agents. The bill before the House enables the Supreme Court to allow that to happen, but there is no right for it to happen. We think that process should follow the work, as it were.

Equally, while the Industrial Court as a superior court of record has the costs’ powers as the Supreme Court those functions are very differently applied, particularly when the parties are industrial parties. We think that the current costs approach that constrains the Industrial Relations Commission and is embodied in section 181 should again follow any work transferred from the Industrial Court to the Supreme Court. The Opposition foreshadows a series of amendments that seek to achieve that outcome. As we say, we think the abolishment of the Office of President is an effort to further downgrade the seriousness and importance of the tribunal. We seek to resist that. 

I refer to the workload of the tribunal and the resources that it has been given. It is simply the case when we read the annual reports that despite the contraction of the jurisdiction, retirements, non-replacement of members has led to the tribunal struggling for a number of years to stay on top of its work, which it has done in a very cost effective way and in a way that has met the needs of parties. However, it is becoming increasingly harder to do so. The Government, despite repeated promises, was very slow to make new appointments. I recognise in the past couple of years the appointment of Peter Newall and John Murphy as commissioners, both former barristers. I acknowledge that Commissioner Murphy was my former tutor when I came to the bar. They are both well respected members of the industrial community and they are doing a very good job. Again, those two appointments have not proven to be sufficient to keep on the top of the work of the commission.

The Government, in its targeted consultation about this bill, has said that there are currently five members of the tribunal and it intended to keep five members of the tribunal in place. That is fine but, apart from needing to appoint a Chief Commissioner, at least one commissioner of the tribunal who will be retiring in the near future. 

I ask the Government to give a commitment that it will honour what it said in the brief to stakeholders that it will keep at least five full-time equivalent members of the commission in place. It should go beyond the commitment the Government gave orally or in writing. There is no diminution of the workload of the commission in sight, so there should be a legislative guarantee that there will be at least five full-time equivalent tribunal members. However, that will probably not be enough to ensure the commission keeps on top of its work, as the Government has acknowledged in relation to appeals involving proceedings under the Police Act. 

Clause 2.30 of schedule 2 to the bill deals with proceedings and appeals under the Police Act. With only five tribunal members there is a problem in constituting a full bench of three members to hear appeals from any one member. It is an obvious mathematical question: If all five have appeals against their decisions where will the full bench come from? This problem has become acute in police matters in recent years. In its exposure draft the Government provided an inelegant proposal whereby the Chief Commissioner could, as it were, appoint temporary commissioners to make up a full bench. The problems with that are manifest. The head of the jurisdiction would be handpicking his or her co-workers. Although I am sure they would take their oath of office very seriously, there would be a perceived lack of independence in those decisions. 

The Government has replaced that with an equally inelegant mechanism in clause 2.30, whereby if the Chief Commissioner feels there is a need to do so, and the Chief Magistrate agrees, the magistrate can be co-opted to act as a member of the Industrial Relations Commission. That is inelegant and not very good, but at least it provides the resources for the tribunal in section 181D matters in which a police officer is removed from the police force or disciplinary matters under section 173 and the like. What about non-police matters such as unfair dismissals, industrial disputes and award matters in the rare cases where they are appealed to a full bench? There will be a significant and acute problem with resourcing full benches under the model the Government is proposing. That is a shame and the Government needs to address it. 

As I acknowledged at the outset, the Labor Opposition has consistently taken the view that we should be rebuilding and enlarging the jurisdiction of the IRC and the Industrial Court. That is the sound and appropriate course of action for public policy reasons. For those reasons, we will oppose the second reading of this bill. However, should the legislation survive the second reading vote and we move to the Committee stage, we have addressed our concerns and the shortcomings in the legislation in 50 amendments that have been lodged with the clerks. Although that is a reasonably high number of amendments, they essentially fall into two categories. 

One category of amendments relates to the jurisdiction and membership of the Industrial Relations Commission, the chief amendments of which are Nos 6 and 7. A series of supplementing and ancillary amendments largely reflects those. Another series of amendments deals with industrial proceedings in the Supreme Court and the processes that should govern them, which I have outlined in my contribution. They also touch on work health and safety matters. If the Industrial Court is to be abolished rather than—as we would prefer—rebuilt, all work safety matters should be in the superior court. Our reason for that view is not punitive, it is important. Judgements of District Court judges dealing with work safety matters show a clear trend towards significantly lower penalties in matters involving workplace injuries and fatalities. The Industrial Court set high and stringent standards for work safety in this State and there was a high level of prosecutions in years gone by. 

This Government has run down the number of prosecutions. Even those that have been brought in the District Court have led to significantly lower penalties. As I said, we do not take this view for punitive reasons: We think it is bad public policy. It suggests, perhaps unwittingly, to unscrupulous employers who are feeling financial pressure to get quicker, cheaper outcomes that they can cut corners and get away it. First, they are relatively unlikely to be prosecuted because this Government has wound back significantly the number of occupational health and safety prosecutions brought by the prosecutor, and unions are no longer really able to do it. Secondly, because a court is likely to impose much lower penalties when prosecutions are brought the consequences of breaking the law are diminished significantly. 

When this Parliament debated the work health and safety laws in 2011, 2012 and even in 2013 to patch up the legislation due to poor drafting in 2011 I was not the only person in this place to say that the risks of transferring these functions to the District Court without giving it adequate resources and ensuring it was properly trained in this jurisdiction would be lower penalties, lower outcomes and lower work health and safety standards. We said that those laws would lead to less safe workplaces, which would mean more injuries and more fatalities. Sadly, we think that has proven to be the case. Our series of amendments say if the Government is not going to have an Industrial Court that deals with these prosecutions then all these matters, excepting the least serious ones, should be dealt with in the Supreme Court. We have left open the possibility that less serious matters can be brought in the Local Court. That facility will still be available for a prosecutor. 

In conclusion, I acknowledge the significant contribution made to the Industrial Relations Commission, the Industrial Court, industrial law and practice, and indeed social outcomes in this State by Justice Michael Walton. Justice Walton was a leading industrial barrister before being appointed Vice-President of the Industrial Relations Commission on 18 December 1998. He led many full benches setting important industrial standards and hearing test cases. As a judge, he made many leading and important decisions, including as the judge at first instance in the Kirk matter. That went to the High Court and effected a significant change to law and practice in the industrial jurisdiction—wrongly, the Labor Opposition thinks.

On 3 February 2014 Justice Walton was appointed President of the Industrial Court and the Industrial Relations Commission. With diminishing resources, he has ensured that the court and the commission have acquitted themselves properly and effectively in their roles and jurisdictions. As the head of jurisdiction of a superior court of record, Justice Walton has also been a member of the Judicial Commission of New South Wales and acted with some distinction in the Australasian Institute of Judicial Administration. Our opposition to this legislation is in no way a reflection on Justice Walton or his record. Indeed, if the court is to be abolished it is appropriate that he be transferred to the Supreme Court.

We take the view that the court ought not be abolished. It ought to be rebuilt using the laws and processes that are already reposed in different courts and tribunals in this State. All workplace matters should be focused in a single court and tribunal. We ask members not to participate in the continued dismantling of this specialist jurisdiction but to call a halt to the process. The Government can then rethink its approach, hear the needs of working people and perhaps take the view that there are plenty of processes under State laws that should be made more accessible to those who need them in a single tribunal focused on the workplace.