The Legal Framework

1
Chapter 7

• The Legal Framework

2
Objectives

• Understand the Australian legal framework and how
  it relates to industrial relations
• Understand the sources, and types, of law that
  regulate industrial relations
• Understand that the legal framework of employment
  is merely one aspect of both the
  conceptualisation and practice of industrial
  relations
• Explain the difference between the employment
  relationship and the contract of employment
• Outline the processes involved in forming
  contracts of employment and other work
  relationships
• Identify the legal duties and obligations of
  employers and employees
• Analyse the strengths and weaknesses of the
  regulation of employment.

3
Law and Employment

• The legal framework of IR is the process of
  creating and enforcing right and duties in work
  relationships
• Status-based societies and status-based
  relationships
• Slavery, Feudalism, Master and servant
• Now work relationships are contractual
  relationships
• Judge-made law
• Common law contractual relations and tort law
• Equity unconscionable conduct
• Statute law
• Legislation (Acts of parliament)
• Regulations (subordinate legislation authorised
  by statute)
• Tribunal decisions (awards and orders authorised
  by statute)

4
The Contract of Employment

• Contractual work relationships
• employer-employee contract (contract of service)
• independent contractor (contract for service)
• offer and acceptance (terms and conditions)
• consideration (exchange of value between the
  parties)
• intention to be legally bound by the contract
• Implied terms
• implied by law (work/wages bargain)
• implied by fact (conduct of the parties,
  variation of contractual terms)

5
The Contract of Employment (contd)

• Legal tests to ascertain the type of contractual
  relationship
• control employers right to control employees
  labour
• integration employee part and parcel of
  employers organisation
• multifactor totally of the relationship

6
Australian Legal Framework

• Federation of six States
• written Constitution details law-making powers of
  the federal parliament
• state parliaments omnipotent few limits on
  powers
• section 109 of the Australian Constitution
• Primacy of federal law if inconsistent with a
  State law

7
Australian Legal Framework (contd)

• Federal parliament
• most law-making powers detailed in Section 51 of
  the Constitution
• Arbitration s. 51(35), Corporations s. 51(20),
  External affairs s. 51(29), Express incidental
  power s.51(39), Territories s. 122
• State parliaments limited only by s.109
• High Court of Australia
• interprets Australian Constitution
• declares common law and equity law for Australia

8
Australian Industrial Relations Law and Systems

• Federal and State IR law and systems dual
  system
• Federal IR system 1904-2005
• compulsory conciliation and arbitration (s.51(35)
  of the Constitution)
• prevention and settlement of interstate
  industrial disputes
• conciliation and arbitration tribunal
• registered organisations (trade unions and
  employer associations)
• industrial awards bind only respondents

9
Australian Industrial Relations Law and Systems
(contd)

• State IR systems
• mirror federal IR system
• arbitration tribunals, registered organisations,
  dispute settlement, etc
• common rule awards
• not limited by separation of powers doctrine
• unlike federal tribunal

10
National IR System

• Complexity of dual system
• primacy of federal laws and awards (Section 109)
• State laws on OHS, long service leave, holidays,
  etc
• Alternatives to the dual system
• amend the Constitution (ALP policy till 1979)
• referral of State IR powers to the federal
  parliament
• Victoria 1996, 2003

11
National IR System (contd)

• External affairs power
• Federal law enacting an international treaty (ILO
  labour standards)
• IR Reform Act 1993 (Cth) equal remuneration and
  unfair dismissal
• Corporations power
• Reform Act (non-union agreements)
• Workplace Relations Act 1996 (Cth)
• Non-dispute agreements, unfair dismissal, AWAs

12
National IR System (contd)

• Corporations power (contd)
• WorkChoices Act 2005 (New South Wales v
  Commonwealth (2006) 229 CLR 1)
• covers the field to regulate work relationships
  of corporations
• non-corporate employers regulated by State IR
  systems
• thus, not a national IR system (non-corporate
  employers Crown employees excluded)
• Rudd government national IR system for the
  private sector
• Transition to Forward with Fairness Amendment Act
  2008
• Fair Work Act 2009

13
Employment Rights and Duties

• Matrix of common law, statute, awards and
  agreements
• Duties of an employer
• safe workplace and system of work
• provide employee with work
• remunerate employee for her/his labour (wage or
  salary)
• Duties of an employee
• obey lawful directions (employers control of
  labour power)
• exercise care and skill when performing work
• protect employers interests, reputation, etc
• supply labour to the employer

14
Employment Rights and Duties (contd)

• Contract of employment needed to accrue statutory
  rights in most cases (except for OHS, workers
  compensation and anti-discrimination)
• remedy for breach of duties determined by a court
  (if common law) or industrial tribunal (if
  awards, agreements, and legislation)
• Federal tribunal has no powers of enforcement

15
Status of Employment

• Permanent employees
• ongoing relationship, notice period, paid leave
  entitlements
• Full-time employees
• permanent employees, standard working week and
  shift
• Part-time employees
• permanent employees, shorter week/shift, pro rata
  entitlements

16
Status of Employment (contd)

• Fixed-term employees
• specified duration of contract, full- or
  part-time employees
• Casual employees
• fixed short-term contract, new contract for new
  shift, no leave entitlements but can be paid a
  casual loading as compensation
• Vicarious employment (labour hire agencies)
• hired to third party employer

17
Statutory Rights

• Anti-discrimination
• direct, indirect, sexual harassment, vicarious
  liability
• determined by anti-discrimination commission,
  tribunal, or board
• Unfair contracts non-employees only
• Unlawful termination
• dismissal for discriminatory or proscribed reason
• Federal system determined by a court

18
Statutory Rights (contd)

• Unfair dismissal
• dismissal harsh, unfair or unreasonable
• determined by an industrial tribunal
• remedies of reinstatement or re-employment or
  compensation
• cf. common law wrongful dismissal damages only
  for breach of notice period
• WorkChoices Act exemption for small- and
  medium-sized employers
• Fair Work Act small business fair dismissal Code
  ( lt15 employees)

19
Summary

• Common law contract of employment underpins
  statutory rights
• Federal New Workplace Relations System
• WorkChoices Act 2005 covers the field of IR
  regulation (Section 109)
• NWRS limited to employment or engagement by
  corporations only
• use of Section 51(20) as a de facto IR power
• ALP 2007 National Conference A Rudd Labor
  Government will rely upon all the Constitutional
  powers available to it in government to legislate
  national industrial relations laws (ALP 2007, p.
  6)

20
Summary (contd)

• Australian IR regulated by common law, federal
  and State laws, federal and State awards and
  agreements
• 1900s to 2005 dual system of parallel federal and
  State arbitration tribunals, awards and
  agreements
• compulsory conciliation and arbitration of
  industrial disputes
• Federal system limited by Constitutional powers
  and separation of powers doctrine
• Section 109 gives primacy to a federal law, award
  or agreement