Review of the Principles for Approval of Enterprise Agreements 2015 [2015] NSWIRComm 24

DECISION By a summons to show cause issued by the Acting Industrial Registrar, Mr J A Wiseman, on 15 July 2015, the Commission summoned, on its own initiative, industrial parties to appear before it to show cause why the Commission should not alter the Principles for Approval of Enterprise Agreements ('the Principles') made pursuant to s 33 of the Industrial Relations Act 1996 ('the Act') in Review of Principles for Approval of Enterprise Agreements 2000 [2002] NSWIRComm 342; 121 IR 144 ('the 2002 review decision'). The Principles were originally established by a Full Bench on 19 December 1996 pursuant to s 33(1) of the Act in Re Principles for Approval of Enterprise Agreements (1996) 94 IR 98 ('the 1996 review decision') and were subsequently reviewed and amended pursuant to s 33(3) of the Act in two Full Bench decisions: Review of the Principles for Approval of Enterprise Agreements [2000] NSWIRComm 250; 101 IR 332 ('the 2000 review decision') and the 2002 review decision. Section 33 of the Act is in the following terms: Principles for approval of enterprise agreements (1) A Full Bench of the Commission is required to set principles to be followed by the Commission in determining whether to approve enterprise agreements. (2) In determining those principles, the Full Bench is to have regard, in particular, to the following: (a) the objects of this Act and the public interest, (b) the relevant criteria for approval imposed by this Part, (c) the need for an appropriate process for approving agreements to be followed by the Commission, (d) the need for an appropriate process for ensuring sufficient information about the effect of the agreement is provided to employees who are to be covered by the agreement, (e) the need for an appropriate negotiating process for the agreement. (3) A Full Bench of the Commission is to review the principles for approval at least once every 3 years. (4) Principles for approval may be set or reviewed on the application of any party that can apply for approval of an enterprise agreement or on the Commission's own initiative. (5) Industrial organisations are entitled to be notified of any proceedings of a Full Bench under this section and to make submissions on the setting or review of the principles for approval. (6) The Industrial Registrar is to publish the principles for approval on the NSW industrial relations website. (7) Principles for approval are to be set and published under this section within 6 months after the commencement of this Act. The meaning of the expression 'review' in s 33(3) was discussed by the Full Bench in the 2000 review decision as follows (at [52] and [53]): 52 In our view, a review conducted pursuant to s 33(3) should not proceed upon a presumption that the existing principles are necessarily correct. A review requires the Commission to inquire into the principles in order to determine whether those principles are appropriate having regard to the requirements of the Act and, in particular, Pt 2 of Ch 2 of the Act. It is not necessary for the parties to such proceedings to demonstrate that special circumstances exist or that changes have occurred from the last established principles in order to demonstrate a basis for an alteration to the existing principles in a review (although such factors would, no doubt, be a relevant consideration in a review conducted pursuant to s 33(3)). 53 Rather, the Commission should consider whether a particular principle is sound having regard to the requirements of the statute and all other relevant circumstances. Hence, it may be demonstrated (by the calling of appropriate evidence) that a particular principle does not operate in the manner intended or creates adverse or inappropriate outcomes. Nothing in this approach, however, would prevent the Commission from re-adopting the principles earlier established where it is satisfied, on the materials before it and the submissions made by the parties, that the existing principles were appropriate. Whilst there was a large measure of agreement as to the Principles in the proceedings giving rise to that decision and the 2002 review decision, there were disputed matters. In the present case, the parties and the intervener in the proceedings, the Minister for Industrial Relations, were in complete agreement as to the proposed Principles. The terms of their agreement appears in Annexure A to this decision. In that light, it is useful to set out the further observations of the Full Bench in the 2000 review decision as to the significance of consent arrangements with respect to the setting or review of Principles under s 33 of the Act. The Full Bench stated (at [55]): 55 The consent of the parties to the proposed principles is nonetheless an important consideration in the review. Thus, the Commission will place substantial weight upon the agreement reached between the parties: Re Principles for Approval of Enterprise Agreements (at 115) and State Wage Case 1999 (at 394). However, the agreement of parties (even significant industrial parties) is not determinative of any application before the Commission: Re Equal Remuneration Principle (2000) 97 IR 177 at 195. This is particularly so in review proceedings where the Commission is required to consider the principles required to be established having regard to various statutory criteria: see s 33(2). We do not consider that the fact of the principles having been derived from the agreement of the parties at the time of the making of the principles necessarily has any significant bearing upon the review of the principles. That earlier consent of the parties may or may not have been well founded and would need to be considered in the light of all relevant circumstances, including the actual operation of the principles in the intervening period. In this matter, no evidence was called by the parties. However, Ms M Rizzo, who appeared for the Industrial Relations Secretary, made submissions as to why the Commission should adopt the Principles established by the 2002 review decision with the following modifications: Varying Principle 1.5 and Attachment 1.1 to ensure the Principles reflected the current form of the Anti-Discrimination Act 1997. This approach was adopted following suggestions made by the Anti-Discrimination Board of New South Wales; Some updating to ensure reference is made to the current form of legislation or rules; By amending Principle 5.2 so as to provide that the provision will require parties to negotiations for a proposed enterprise agreement to acknowledge "the availability of the Commission to assist in the facilitation of cooperative employment relations principles". The last of those amendments is of particular importance. On 14 July 2015, the Commission made an announcement on its website concerning 'Cooperative Employment Relations' ('the Announcement'). That Announcement is Annexure B to this decision. In the Announcement, the Commission stated that the success of, and increased interest in, the innovative methods for dispute resolution that it had introduced over time, including the interest based bargaining processes associated with the 'Hunter Model' (the methodology adopted by the Commission for dispute resolution in the Hunter region of New South Wales) led to the conclusion that further facilitation and promotion of cooperative and collaborative workplace relations or partnerships by the Commission would improve its capacity to prevent or resolve industrial disputes with long term, positive and sustainable outcomes. The Commission also put in place procedures designed to enhance the introduction of cooperative employment relations. Having considered in detail the Principles proposed by the parties, and having regard to the requirements set out in s 33(2) of the Act, we are satisfied that it is appropriate to make the Principles in terms of Annexure A to this decision. Our review indicated no basis to alter the existing Principles other than as proposed by the parties and the intervener. In particular, and having regard to s 33(2)(e), we consider the newly amended Principle 5.2 will enhance the negotiation processes associated with the making of enterprise agreements. The Full Bench accordingly makes the following orders: (1) Pursuant to s 33(1) of the Industrial Relations Act 1996, the Full Bench sets the Principles contained in Annexure A to this decision as the Principles to be followed by the Commission in determining whether to approve enterprise agreements; (2) The Principles determined shall operate on and from 8 September 2015 and remain in force until further order of the Commission.