Debate resumed from 11 November 2010.

Mr ANTHONY ROBERTS (Lane Cove) [7.30 p.m.]: On behalf of the New South Wales Liberals-Nationals Coalition, I indicate that we will not oppose the Industrial Relations Amendment (Non-operative Awards) Bill 2010. The purposes of the bill are to create a new category of awards, that is, non-operative awards; to give the New South Wales Industrial Relations Commission power to declare an award non-operative if it does not currently have application to any employer or employee; to allow the Industrial Relations Commission to continue to maintain non-operative awards by applying State wage case decisions to their minimum rates of pay and to vary them to reflect relevant national decisions by Fair Work Australia; and to prevent current State common rule industry and occupational awards from rescission because they are obsolete when the Industrial Relations Commission conducts its three-yearly reviews, pursuant to section 19 of the Industrial Relations Act.

Following the enactment of the Industrial Relations (Commonwealth Powers) Act 2009 and the referral of industrial powers to the Commonwealth Government by the New South Wales Government, the role and significance of the State award system has been reduced substantially. Private sector employers and employees now fall within the scope of the Fair Work Act 2009. The referral Act excludes a number of matters and specified persons, including matters relating to public sector employees and local government sector employees. As such, employees in the public sector and local government may be affected by a small number of common rule industry and occupational State awards. The New South Wales Liberals and Nationals supported the referral of powers. Early indicators suggest that although there may be some call for finetuning the arrangements, having uniform industrial relations law is already beneficial, providing certainty, clarity and efficiency for businesses and workers.

In light of the referral of the remaining private sector employers into the Federal Fair Work system and a general lack of coverage of common rule State awards to public sector employees, common rule State awards lack relevance and serve no benchmark purpose. Most common rule State awards have no work to do. Keeping these awards on the books carries the implication that these awards are applicable and it creates uncertainty for employers previously covered by these State awards. Amending rates in awards that have no application cannot be considered to be consistent with the New South Wales Government's initiatives to ensure the regulations are effective in achieving their objectives and do not impose unnecessary burdens on business and the community. It is more of a "make work" scheme for the New South Wales Industrial Relations Commission, similar to the recent State wage case proceedings. Like the recent back flip by Labor on the harmonisation of occupational health and safety legislation, this is another instance where the New South Wales Government has publicly signed up for referral powers, only to try to hedge its bets months later by preserving the old dysfunctional New South Wales system for possible future resurrection.

The Liberals-Nationals Coalition believes that there are already too many instruments in the New South Wales industrial relations system that have no effect. This bill further increases the confusion. Although most of the affected private sector awards no longer have application to employees and employers, the justification of keeping them on the books is that these awards are valuable benchmarks and represent many years of arbitral history. The bill is a just-in-case measure to preserve and maintain the awards, just in case the Federal system falls over and there is a need to return to the State-based system for private sector employees. In that event, one could envisage that the awards may be declared operative again. Even if the bill is misconceived, it will not materially impact on the vast bulk of private sector employers and employees within New South Wales. The Liberals-Nationals Coalition will not oppose the bill.

Ms LYLEA McMAHON (Shellharbour—Parliamentary Secretary) [7.36 p.m.]: This State's industrial relations system historically has been based on a consultative and cooperative approach which fosters successful, harmonious and productive workplaces. The New South Wales Industrial Relations Act 1996, which remains the cornerstone of the State's industrial relations system, was developed after an extensive process of consultation with key stakeholders. The Act has always evolved, where necessary, within a dynamic industrial environment. It has always encouraged and will continue to encourage a cooperative approach to industrial relations in this State. Over the years the Act has been amended, successfully adapting to the increasingly significant changes at a Federal level. These amendments are ordinarily implemented after a consultation process has been undertaken with stakeholders in the New South Wales system.

The bill before the House is one such amendment. In late October 2009, after the final and full form of the Commonwealth's Fair Work legislation became available, the New South Wales Government decided to join the national system, subject to agreement on a number of principles and terms. As a result of this referral, the industrial landscape in this State changed dramatically and the New South Wales Industrial Relations Commission is now operating in a different environment. The principal effect of the New South Wales Government's decision to refer its industrial relations powers to the Commonwealth is the transference of most private sector employers and employees from the State jurisdiction to the Federal jurisdiction. In turn, this means a number of New South Wales State awards that apply to the private sector may have limited or, in some instances, no application in the post-referral State system. Unfortunately, the forthcoming award review process under section 19 of the Industrial Relations Act may result in the rescission of some New South Wales awards with limited or no application. The amendments before the House will prevent awards such as these from being rescinded by enabling the commission to create a new category of award, to be known as a non-operative award.

This has been done for two reasons. First, the national system is less than 12 months old and the full implications of the national system are not known at this stage. The New South Wales Government believes that such circumstances merit a prudent and cautious approach and that important awards should not simply be discarded at this early stage. The New South Wales award system provides a fair and just framework for the conduct of industrial relations. An integrated system of relevant awards delivers this goal and plays an important role in underpinning industrial regulation of the public and local government sectors. Secondly, common rule industry and occupational awards contain many years of arbitral history and perform important benchmark functions within the New South Wales industrial jurisdiction. For these reasons, the New South Wales Government believes that a cautious approach to this matter, which has as little impact on the industrial parties as possible, is the appropriate way forward at this point in time.

Mr PAUL LYNCH (Liverpool—Minister for Industrial Relations, Minister for Commerce, Minister for Energy, Minister for Public Sector Reform, and Minister for Aboriginal Affairs) [7.40 p.m.], in reply: I thank the member for Lane Cove and the member for Shellharbour for their contributions to the debate on the Industrial Relations Amendment (Non-operative Awards) Bill 2010. The bill will make important amendments to the Industrial Relations Act concerning New South Wales private sector awards. Following the New South Wales Government's decision to refer its industrial relations powers to the Commonwealth to create a truly national industrial relations system, the State system no longer has any relevant application to private sector employers and employees. Nevertheless, private sector awards continue to have an important benchmarking role within the existing New South Wales industrial relations system.

The amendments before the House seek to maintain the future of private sector awards by ensuring that they are not rescinded. These amendments have an important public interest role to play for those awards with continuing application. Current section 19 of the Industrial Relations Act provides that the New South Wales Industrial Relations Commission is required to review each award at least once every three years. The purpose of a section 19 review is to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards. Following the referral of industrial relations powers, the next review of awards will clearly take place in a different legislative context to that of previous reviews. Having regard to these circumstances, the New South Wales Government considers it necessary to make appropriate amendments to the Industrial Relations Act to prevent the rescission of private sector awards during the forthcoming section 19 award review process. The bill will provide that the New South Wales Industrial Relations Commission may, if it is satisfied that an award does not have any current application to any employer or employees, declare that the award is a non-operative award. Given that the New South Wales Government considers it appropriate to protect private sector awards from rescission, it is also prudent to ensure that these awards are kept contemporary.

Unions and employer organisations—the traditional parties to awards—have precious resources and time. The New South Wales Government recognises this fact and the bill ensures that the New South Wales Industrial Relations Commission is to vary non-operative awards on its own motion when giving effect to any flow-on of national decisions or State decisions it has made. There can be no doubt that the future of private sector awards is an important issue that must be considered and dealt with. Other referring States, namely South Australia and Queensland, are also currently contemplating this issue. For our part, the New South Wales Government believes that the future of New South Wales awards is a matter that requires careful consideration and consultation with the industrial parties. We believe that a cautious approach to the existing features of the New South Wales industrial relations system is required at this time.

While the issue of which awards will be deemed non-operative is to be determined ultimately by the New South Wales Industrial Relations Commission, the Government considers that the integrity of the State industrial relations system will be best maintained by the preservation of private sector awards at this time. The New South Wales Government does not hide from the fact that a significant number of private sector awards no longer appear to have any current application to employers and employees in this State. However, in making our decision to ensure that non-operative awards do not simply disappear, the New South Wales Government has considered three main factors. These three factors are the role private sector awards play in setting a benchmark for minimum rates and conditions; the new national system is less than 12 months old following its commencement on 1 January this year and is still developing; and the long-term future of non-operative and other awards as well as many other important matters need to be the subject of full consultation with stakeholders.

It is thus anticipated that in the future a broad review of the Industrial Relations Act will provide a further opportunity to consider the existence of non-operative awards. Such a review would be conducted with full and proper consultation from interested parties. In relation to comments from the member for Lane Cove, I do not believe that this will create uncertainty. After the referral of powers to Canberra it is very clear what awards apply to which employers and employees. It is misconceived to argue that this legislation in any way creates further uncertainty. The member for Lane Cove also referred to the bill as a make-work bill. In fact, by instituting the category of non-operative awards it means that there is far less work to do because employers and employees do not have to participate in the regulatory reviews. It is a way of cutting down unnecessary work whilst maintaining, on a prudent and responsible basis, the current system of State awards, albeit on a non-operative basis. I commend the bill to the House.

Question—That this bill be now agreed to in principle—put and resolved in the affirmative.

Motion agreed to.

Bill agreed to in principle.


Bill declared passed and transmitted to the Legislative Council with a message seeking its concurrence in the bill.