Dispute Resolution in the Workplace

1. Dispute Resolution in the Workplace Presentation to the ACTU Industrial Officers Conference July 2006 Anna Booth Clive Thompson CoSolve www.cosolve.com.au

2. Presentation points • Principles of fair & effective dispute resolution • Dispute resolution under Work Choices • A critique of Work Choices and effective ADR in practice • Open discussion

3. Principles of fair and effective dispute resolution • Legitimacy – process: the DR system must be the product of consent (negotiated agreement) between the key parties whose interests are at stake: employees and their representatives and employers and their representatives • Legitimacy – substance: the features of the DR system must be objectively fair (they must not infringe human rights, international labour standards or fair labour practices); they must be consistent with effective and efficient business management • Scope: the DR system must be able to cover the full range of issues that give rise to conflict in the workplace

4. Principles of fair and effective dispute resolution • Powers: the DR system must be able to bring the full portfolio of ADR processes to bear, from mediation to arbitration and everything else in between • Dispute resolvers’ credentials: The dispute resolvers must be independent, expert, credible and selected by agreement or a legitimate process • Simplicity: The DR process must be straightforward • Speed: the DR process must be readily accessible and able to effect a reasonably quick resolution • Cost: the system must be affordable to the parties on a cost/benefit basis • Integration: the AIRC and private dispute resolvers must ideally complement one another but in any event not undermine one another

5. Distinguishing disputes of right & disputes of interest • Rights disputes • Concern legal entitlements, e.g. disputes over the interpretation & application of laws and agreements • Must ultimately, failing agreement, be capable of resolution by speedy adjudication or arbitration – med-arb a good process • Interest disputes: • Disputes over economic issues – the creation of new rights; these disputes typically arise in negotiations or collective bargaining • Normally resolution by mediation or the exercise of economic power, though the parties may agree to an arbitrated outcome

6. Different procedures for rights and interest disputes • When the AIRC had a comprehensive jurisdiction to supervise workplace relations, armed with a full suite of conciliation and arbitration powers, the rights-interests distinction was not important. With that jurisdiction and those powers now stripped back, the distinction becomes crucial. • Rights disputes: • Parties must give the Commission or private dispute resolvers arbitration powers – entitlements are at stake, not favours. If no agreement is reached on arbitration powers, rather just sue in a court of competent jurisdiction if this is possible and feasible. A well-crafted, expedited med-arb procedure (and not the effete stuff of the ‘model’ Work Choices) is indicated. See www.cosolve.com.au soon for examples • Interest disputes: • Here space for the right to strike as the ultimate guarantor of good faith bargaining must be preserved (even given the severe constraints that Work Choices imposes on the right, measured against international labour standards. Hence a well-crafted negotiation procedure supported by a dispute procedure grounded in independent mediation (and not arbitration) is indicated. Arbitration may still be appropriate ad hoc to break particular impasses. See www.cosolve.com.au soon for examples

7. Dispute resolution under Work Choices The “Model” DR process (s 694 onwards) Applies to, amongst others, disputes over: • entitlements under the Australian Fair Pay and Conditions Standard (s 175) • terms of a workplace agreement, where the agreement itself includes the model dispute resolution process or defaults there (s 353) • the application of a workplace determination (s 504) • the application of awards (s 514) • meal breaks (s 609) • public holidays (s 614) • parental leave (s 691)

8. The “Model” DR process Disputes of right: entitlements, dispute arising out of the interpretation and application of workplace agreements • Invoking the process • Selecting a dispute resolver • The powers of the dispute resolver: • AIRC: no power to compel a person to do anything or to make an award (even if the parties would agree to this) • Private DRs: (med-arb, arbitration, status quo orders, etc)

9. Interest disputes Disputes arising out of the bargaining process • Commission has no power to compel or to arbitrate, even if the parties would have agreed to this • Private DRs: can do anything the parties agree to (med-arb, arbitration, status quo orders, etc)

10. Dispute referred to Commission under Workplace Agreements • Commission can do anything except make orders • However, Commission only has dispute resolution jurisdiction in respect of matters that can be incorporated in workplace agreements

11. The Commission’s model procedures For disputes arising out of workplace agreements: • Facilitative models – mediation and conciliation • Informal determination • Formal determination • Arbitration

12. The Commission’s dispute procedures: example clauses For disputes arising out of workplace agreements: • If a dispute in relation to a matter arising under the agreement is unable to be resolved at the workplace, and all agreed steps for resolving it have been taken, the dispute may be referred to the Australian Industrial Relations Commission for resolution by mediation or conciliation. • If a dispute in relation to a matter arising under this agreement is unable to be resolved at the workplace, and all agreed steps for resolving it have been taken, the dispute may be referred to the Australian Industrial Relations Commission for resolution by mediation and/or conciliation and, if the dispute remains unresolved, by arbitration. If arbitration is necessary the Commission may exercise the procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

13. The Commission’s dispute procedures: example clauses For disputes arising out of workplace agreements: • On a dispute being notified to it, the Australian Industrial Relations Commission may exercise such powers and functions as the parties agree are appropriate at the time. • Any dispute referred to the Australian Industrial Relations Commission under the clause should be dealt with by e.g. Senior Deputy President X, Deputy President Y or Commissioner Z or, should that member not be available within a reasonable time, a member nominated by the President. • The decision of the Commission will bind the parties, subject to either party exercising a right of appeal against the decision to a Full Bench.

14. ADR under Work Choices: the policy implications and policy choices Option hierarchy: • Opt out of Work Choices altogether – use a genuine and effective ADR process captured in a common law agreement (Why? Because Work Choices does not regulate conflict over several interests of vital and legitimate concern to employees and unions [unfair dismissal being chief amongst these]. It simply purports to prohibit recognition of these interests, and then to prohibit conflict on the subject – a foolish and untenable policy. To accept the Work Choices framework on conflict resolution is to accept the illegitimate and untenable.) • Use a mixture of common law agreement ADR and statutory DR (in short, make good the deficiencies of Work Choices through supplementary agreements reflecting sound DR principles) • Avoid the default “Model” – negotiate an agreed DR process in a workplace agreement reflecting sound DR principles (s 353) • Rework the “Model” as much as possible • Ignore ADR under the statute – take rights disputes to courts of competent jurisdiction and manage interest disputes ad hoc

15. Challenges in opting out • Need the consent of the employer. Why would any employer agree if its competitors are using Work Choices to grind workers? The proposition is that, especially in a period of skilled labour shortage, an employer who offers a fair total employment package, including job security backed by equitable processes and who endorses genuine workplace representation on all matters of mutual interest, will be seen in the labour market an employer of choice, with accruing competitive advantages. • This requires the development of a sophisticated employer-employee-union relationship, grounded in mutual respect and trust • (Lawfully) coercing an employer into a substantively satisfactory dispute system offends against fundamental design principles: effective systems are legitimate ones; legitimate systems are the product of negotiated consensus • Investment must be made in the design of comprehensive, fair, effective and enforceable dispute systems. This work has scarcely begun in Australia • Need to find independent, credible, accessible and affordable dispute resolvers (the AIRC is likely the best for areas of conflict falling under Work Choices, but it has no jurisdiction any more over the full range of workplace interests and concerns) • Need to skill representatives in the use of genuine and effective ADR

16. A truly alternative dispute resolution system turns on … • an emphasis on building and maintaining strong relationships between the parties – genuine & effective information-sharing, consultation and mutual gains bargaining serve as the best antidote to disputes (in short, work at effective dispute prevention) • workplace agreements that deal comprehensively with all key matters of mutual interest to employers and employees and their representatives (wages and working conditions, workplace change, training & development, grievances, unfair dismissal, union access, bargaining fees, etc) • providing for rights and duties, structures and processes in a comprehensive set of agreements extending beyond the shackles of Work Choices • dispute resolution processes that are the product of negotiated agreements between true stakeholders (whoever they are)

17. A truly alternative dispute resolution system turns on … • comprehensive dispute resolution processes, where - • all unresolved disputes arising out of the interpretation and application of the agreement are channelled into expedited med-arb • all unresolved interest disputes are channelled into expedited mediation, with the right to strike preserved and arbitration as an ad hoc option • formalities are minimised, yet there is sufficient process detail • the dispute resolvers shape up: independent, expert, credible (the AIRC qualifies, but its jurisdiction is now truncated) • care being taken in the drafting of agreements to ensure their efficacy and enforceability – in a competitive world, agreements must support fair outcomes and successful business operations