Arbitration in Constraint: The Role of the Australian Industrial Relations Commission in the Award Simplification Test Case

Abstract

This study examines the role of the Australian Industrial relations Commission (AIRC) in conducting the Award Simplification Test Case. This case required the AIRC to make a determination of section 89A – Allowable Award Matters – of the Workplace Relations Act 1996, the federal industrial relations legislation of the newly elected Howard government. Before this time, the AIRC had conciliated and arbitrated industrial disputes to produce federal awards containing a comprehensive array of employment conditions and rates of pay. Section 89A restricted the capacity of the AIRC to a specified range of only 20 matters that the federal government, through the legislation, would ‘allow’ the AIRC to include. Throughout 1997, the AIRC conducted the Award Simplification Test Case based on an employer application to vary the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 (the Hospitality Award) to establish the benchmark not only for all future awards but for ‘simplifying’ all existing awards. I argue that the Howard government used this legislation as a vital first step in reregulating the regulation of the Australian industrial relations system, a meta-regulatory approach since the federal government could not under the conciliation and arbitration power of the Constitution regulate employment relations directly. My analytical framework incorporates Mitchell and Rimmer’s (1990) two-tiered model of Australia’s arbitration system, and Hancher and Moran’s (1989) concept of ‘regulatory space’ to demonstrate how the Howard government’s legislation put the AIRC, awards and the arbitration system in constraint. My analysis of the test case proceedings explains how the Howard government used this legislation not just to resume a substantial part of the AIRC’s regulatory power, but also to begin embedding regulatory principles consistent with this government’s political philosophy, a very different philosophy to the AIRC’s tradition and constitutional mandate. The Award Simplification Test Case was therefore an arena of conflict over regulatory principles – by whom, for whom and to what end. Here the intrinsic ‘disputed matter’ was the regulators’ exercise of regulatory power – the AIRC and a federal government – to reregulate the industrial relations system through their regulatory instruments, awards and legislation respectively. I explain why the AIRC did not treat the case as an administrative matter as the Howard government demanded, and arbitrated this case as it had always done. The AIRC’s legal status bound it to make awards in settlement of interstate industrial disputes. Thus the AIRC had to conduct the Test Case according to its principles of fairness, equity and the public interest despite the legislation’s aim to predetermine the outcome of the dispute. Through the legislation the Howard government expressly sought to embed new regulatory principles to remove union rights of entry and representation from awards and most importantly to reduce the scope of the AIRC’s powers.