Decision legitimises IR laws

The federal government's win last week in the High Court over the constitutional validity of its Work Choices legislation marked a major shift of power in an area traditionally the domain of state governments.

The High Court found that the Howard government had legitimately used its corporations power within the constitution to override state industrial relations legislation and implement the Work Choices legislation nationally, despite industrial relations traditionally being an area of responsibility for the state governments.

The ruling brings all employees of corporations under the mandate of national workplace laws, with state IR systems applying to employees of state governments and some unincorporated entities.

Despite losing the case, Western Australia’s Employment Protection Minister, John Bowler, asserted that the state government would continue to oppose the industrial relations reforms, consistent with other state governments.

“For more than 100 years, the states have had primary responsibility for industrial relations. This has been lost,” Mr Bowler said. “The Carpenter government will be doing whatever it legally can to protect workers from these extreme laws.”

The ruling has raised the possibility for federal governments to assume authority over other areas of state responsibility, although Prime Minister John Howard said his government did not view the ruling as a “carte blanche for a massive expansion of commonwealth power”.

The federal government also announced changes to the Workplace Relations Act last week, before the High Court’s decision, relating to leave and redundancy entitlements, as well as record-keeping requirements. 

The changes enable employers to stand down workers without pay if a company is facing circumstances beyond its control.

Employees’ redundancy payments will be protected under the changes, which hold that entitlements should continue for 12 months following the termination of a worker’s agreement.

Other amendments will cap the accrual of annual leave in circumstances where an employee could accumulate more than four weeks’ annual leave by working on weekends or overtime, while unused sick or carer’s leave could be cashed out.

Record-keeping requirements would also be streamlined.

The government’s industrial rela-tions reforms, introduced in March this year, recently caused confusion in relation to minimum wage rises.

In October, the Australian Fair Pay Commission issued its first minimum wage ruling, with a $27.36 a week pay rise for workers receiving less than $700 a week, effective from December 1 2006.

The ruling came five months after the state government raised its minimum award rate by $20/week, causing confusion among some businesses as to which employees were eligible for the rise.

Only employees of constitutional corporations, who were not on existing AWAs or collective agreements prior to the commencement of Work Choices, were entitled to the rise under federal jurisdiction.

Australian Bureau of Statistics figures released last week show wages growth running at 2.9 per cent, below the annual growth rate of inflation, suggesting that Work Choices legislation is exerting downwards pressure on wages.