Inquiry into the Workplace Relations Framework actu submission to the Productivity Commission

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An exemption without exception

Australia is not the only country where there has been some contention between competition policy and industrial relations policy. In our view, the latter should prevail and note this regard that the European Court of Justice has reached the same conclusion (topically, on the issue of sectoral collective agreements concerning compulsory contributions to particular pension fund):

It is beyond question that certain restrictions of competition are inherent in collective agreements between organisations representing employers and workers. However, the social policy objectives pursued by such agreements would be seriously undermined if management and labour were subject to Article 85(1) of the Treaty when seeking jointly to adopt measures to improve conditions of work and employment.

It therefore follows from an interpretation of the provisions of the Treaty as a whole which is both effective and consistent that agreements concluded in the context of collective negotiations between management and labour in pursuit of such objectives must, by virtue of their nature and purpose, be regarded as falling outside the scope of Article 85(1) of the Treaty.

The next question is therefore whether the nature and purpose of the agreement at issue in the main proceedings justify its exclusion from the scope of Article 85(1) of the Treaty.

First, like the category of agreements referred to above which derive from social dialogue, the agreement at issue in the main proceedings was concluded in the form of a collective agreement and is the outcome of collective negotiations between organisations representing employers and workers.

Second, as far as its purpose is concerned, that agreement establishes, in a given sector, a supplementary pension scheme managed by a pension fund to which affiliation may be made compulsory. Such a scheme seeks generally to guarantee a certain level of pension for all workers in that sector and therefore contributes directly to improving one of their working conditions, namely their remuneration.

Consequently, the agreement at issue in the main proceedings does not, by reason of its nature and purpose, fall within the scope of Article 85(1) of the Treaty.”34

The Competition and Consumer Act presently contains a limited exemption from its provisions for “..any act done in relation to, or the making of a contract or arrangement of the entering into of an understanding, to the extent that the contract, arrangement or understanding, or the provision, relates to the remuneration, conditions of employment, hours of work or working conditions of employees”.35 This exemption is limited because of the exception it does not apply to the secondary boycott provisions or the trading restrictions provisions. The exception is tacit recognition that both the secondary boycott provisions and the trading restrictions provisions engage with the conditions of employment of employees – were this not the case the exception would be entirely unnecessary from a drafting point of view. We are firmly of the view that the exemption should be without exception and in fact should be broadened in the manner it was broadened in 1974, in response to Australia ratifying CO87 the previous year.

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