Industry Against Return Of Compulsory Arbitration In Woolworths Appeal

MEDIA RELEASE

Wednesday 3 February 2010

Industry Argues Against the Return of Compulsory Arbitration in Woolworths Fair Work Appeal This Week

Statement by Heather Ridout
Chief Executive Australian Industry Group

"The Australian Industry Group (Ai Group) has decided to seek leave to intervene in this Friday's Full Bench appeal against Fair Work Australia's decision in the Woolworths Case which will be an important test of the integrity of the bargaining provisions of the Fair Work Act," Ai Group Chief Executive Heather Ridout said today.

"Ai Group will argue that employers and employees need to maintain the right to choose whether or not they want to grant compulsory arbitration powers in their enterprise agreements.

"Employers were alarmed last month when Commissioner Greg Smith of Fair Work Australia (FWA) rejected a Woolworths Limited enterprise agreement because of the wording of the dispute settling procedure. The Fair Work Act requires that all enterprise agreements include a term "to settle disputes". The Commissioner found that this means that dispute settlement procedures in agreements need to provide for the arbitration of disputes if any of the parties to the agreement want it and cannot limit arbitration to circumstances where all parties agree.

"Ai Group is strongly opposed to this interpretation of the Act and believes that it is entirely legitimate for agreements to restrict arbitration to circumstances where all parties have to agree to it.

"Unless Commissioner Smith's decision is overturned on appeal, the validity of hundreds of already approved enterprise agreements which contain dispute settling procedures like those in the rejected Woolworths Agreement, is in doubt.

"During the development of the Fair Work legislation, employers were deeply concerned with the prospect or potential for any expansion of compulsory arbitration either when enterprise agreements are being negotiated or under dispute settling clauses of agreements which have been made.

"Ai Group disagrees strongly with compulsory arbitration because it is antithetical to enterprise bargaining which is fundamental to productivity growth and has wide implications for business and the economy. In the early 1990s Australia moved on from the bad old days of arbitrated outcomes which flowed decisions in one enterprise across whole industries with great cost to the economy.

"When the Fair Work Act was passed by Parliament in March last year it appeared that the strong representations of employers had been taken on board by the Federal Government. It looked as though FWA's arbitration powers when agreements were being negotiated were restricted to disputes over the low paid or where the economy was threatened, and in the case of dispute resolution under settled enterprise agreements, to circumstances where all parties had agreed to submit disputes to arbitration. However, as with any major legislative change a lot of issues have to be settled and tested.

"Depending upon how events unfold, changes may need to be made to the Act to clarify and settle the intent of the provisions," Mrs Ridout said.

Media Inquiries: Tony Melville 0419 190 347


SOURCE: Ai Group