The Future Of Workplace Relations In NSW by Omesh Jethwani

NSW MASTER BUILDER NEWS

THE FUTURE OF WORKPLACE RELATIONS IN NSW

feed their families and deliver a reasonable lifestyle. This is where the tension exists. We must ensure a reasonable balance between employee demands and employer demands. As the Minister for Employment Relations, what do you believe is the single most important issue in workplace relations in NSW today? The biggest issue is the cost of living and getting it right to ensure that we get a fair and reasonable outcome for both employers and their employees. In New South Wales, the public sector is the employee group for which we are most responsible. The Federal Government and the Fair Work Commission have responsibility for the private sector. We have nearly 450,000 public sector employees in New South Wales, and our responsibility for the public sector is first to recognise the pressures on those public sector employees and make sure that we can afford the pay increases and the work conditions which they are seeking.

Omesh Jethwani, Government Projects & Programs Manager and Cameron Spence, Workplace Relations Manager, in conversation with The Hon. Damien Tudehope, Minister for Finance and Minister for Employee Relations. Since you were sworn in as Minister for Finance and Employment Relations in December 2021, how has your journey been so far? It has been an interesting journey because we live in a time of heightened industrial activity but I welcome the challenges and opportunities that brings. There are a lot of issues facing both employer and employee groups, and getting the policy settings right is an important component of the job. Those outcomes flow across the full suite of Government service delivery so its important that we get it right. What are you most proud of so far in your time serving NSW? It is difficult to identify one thing but I think as a Government, in which I previously held the role of Small Business Minister, the response to Covid-19 stands out. I think we can be proud of the manner in which we assisted small businesses through Covid-19 to make sure that we got as many businesses through that period when they were under enormous pressure, with no customers, no income and no ability to repay debt. We put in place a whole lot of policy settings for small business to be assisted to get through the pandemic. We were probably the leading State in our economic response to Covid-19. That meant getting the balance right between economic response and health response. In doing so we were able to help a lot of businesses get through that period. What does work-life balance look like for you?

It varies from Minister to Minister. I would have found it hard to balance political life with looking after an ever-growing family given the level of demands placed on politicians. I have come into politics reasonably late in my life. My children have all left home and got careers of their own. In many respects, I think this is an ideal time to draw on the experience that I have had as a lawyer and as a father. Also, having a large family helps me to understand the pressures that those bring and contribute to politics with that in mind. I have a profound admiration for people who can balance family and politics as it is challenging. I think the Premier is a beacon in terms of the manner in which he does balance family life. I have to say that the demands of political life make that balance difficult, but I am probably doing it at a stage of my life where it is best able to be done for me. In a classroom of six-year-olds in a show and tell, how would you describe your role?

employers. We are also living in a different political environment. The head of Unions NSW, Mark Morey, came out and quite openly said this would be a year of strike and industrial activity. He foreshadowed that the unions were in a pre-election environment. They were going to influence that environment through industrial activity. So, we are facing increased industrial activity against a different economic climate background. In addition, a political climate is playing into that scenario, and I think those who have an input into the industrial climate recognise both factors. As the State returns to work postCOVID-19, what employment issues do you think will be front and centre in 2022? The pre-eminent issue which is confronting everyone in their lives at the moment is the increase in cost-of-living pressures, regardless of whether you are an employer or employee.

Industrial relations disputes seem to be on the rise in the State (Trains, Nurses) — why is this?

Employers are very cognisant of all those things which impact how they run their business, whether that is increased payroll, whether it is increased rent or difficulties with supply chains. The cost of running a business is clearly increasing across a whole range of things, such as turning on the lights, paying rent, etc. The cost of doing business is clearly escalating.

It is complex and very different in different segments of the workforce. There has been a long period of industrial harmony accompanied by low inflation and consistent real wage increases for public servants. Now we are living in a different economic climate which presents challenges for employees and

From the employee side, the mums and dads who take home a weekly wage — because of inflationary pressure and mortgage pressures — are effectively seeing a reduction in real wages. Getting that tension right, between making sure the employers can keep employing people and that employees have sufficient means to

I would say that my role is to improve the lives of all the kids in this class and their parents.

MBA NSW | Issue Three | July-September 2022

For example, we have had the health services union come to us with a variety of demands in relation to their employees. Everyone in our community recognises health workers’ contribution during the pandemic. We have put in place what I think is a very reasonable package to recognise the contribution of the health service sector, provides a fair and reasonable wage increases and looks to areas where we can modernise and improve awards. Getting those policy settings right has been important. The wages policy, when first introduced in 2011, was one of the single most important factors in ensuring that we got wages under control. This was needed to provide the capacity to deliver a desperately needed infrastructure pipeline for the people of the State. Getting our wages policy correct allowed us to deliver outcomes for the whole of the people of the State; whether it is rail infrastructure, road infrastructure, hospitals, or schools, they are the things that people expect us to deliver, but we also have got to make sure that we would look after our public sector employees at the same time. NSW has a notable city/country divide — do you see different employment relations issues facing people in regional areas as opposed to people in Sydney? There are obviously differences in lifestyles in regional and metropolitan areas. However, whether you are in the country or the city, the same pressures exist in respect of the cost of living. Turning on the lights every day, as I said before, is a costly enterprise. Paying your electricity, gas, and grocery bills are the same whether you live in the country or the city. If you have a family in the country, you still must pay your child’s care costs and mortgage. There are tree change opportunities for people who

want to relocate to regional areas because they can potentially get better cost of living arrangements. However, from an industrial perspective, when the Government sets employee relations policies, it is the same things that they take into account. In two recent decisions, the High Court has clearly stated that contract is king when determining the status of a worker as an employee versus a contractor. In making these decisions, the High Court has reversed a long line of decisions that had previously enabled courts to infer a relationship based on post-contractual behaviour. What are your views on this development? I think something is to be said for the High Court taking the position. I am a lawyer by profession, and I have to say there should be an acceptance of the fact that when two parties who are acting in good faith reach an agreement between each other, the court should not interfere with that contract unless they can demonstrate that there are other factors which show that there is inequity in the bargaining positions of the parties and they are truly not independent contractors.

unions to represent employees’ interests. Where potentially I think there is animosity between governments and unions is whether there is a perception by Government that a union oversteps their bargaining rights in relation to properly representing their employees. Now everyone will have a view with regard to that, and sometimes you lose public sympathy, and sometimes you gain it. However, because unions are vital in many respects, they should not abuse their position in terms of the representation of employees for the purposes of obtaining political outcomes, because I think it diminishes the function that unions should rightly play in representing their employees. Given that the vast majority of Industrial Relations is now a Federal matter under the Fair Work Act 2009, what do you see as the primary role of the NSW IRC going forward?

As I have said before, the primary role is that we have a relationship with and retain jurisdiction over 450,000 public sector employees. The Industrial Relations Commission has an enormous role to play in managing wages disputes and implementing fair and reasonable employment conditions in industrial instruments. It has a considerable role to play in resolving industrial disputes and But where the parties’ unfair dismissal claims bargaining positions There has been a long in respect of public are equal and enter period of industrial harmony sector and local into a contract, the accompanied by low inflation government sector black letter lawyer and consistent real wage employees. in me says the increases for public servants. High Court should Now we are living in a different Another important honour the terms economic climate which presents aspect that is of the contracts challenges for employees and often overlooked people enter into. employers. We are also living is the work that the I am well aware in a different political Industrial Relations environment. of cases involving Commission does with independent contractors regard to the transport where courts have sought sector in NSW, mainly to form a view about whether owner-driver, couriers and taxis. someone is an independent It provides a safety net for these contractor, employee, or the like and have sectors where some of the operators may not ignored the contract’s provisions. I think these have equal bargaining power. Recent consent cases go to circumstances where the court is amendments to some of these Contract saying if there is a contract between the parties, Determinations, it would appear the system if you are a true independent contractor, for is supported and working well. Chapter 6 example, an owner-driver or any of a whole of the Industrial Relations Act was a unique range of activities that people enter, then you mechanism to the NSW industrial relations should honour the contract, and I support that landscape that other jurisdictions are now liking decision. and copying. Unions are obviously a major player in State Industrial Relations. How would you describe your relationship with them? Whenever you are the Industrial Relations Minister in a conservative government, you are often construed as an enemy of the union. Quite frankly, I think that is unfounded. I respect and believe that there is an essential place for

What key issues do you want the NSW Industrial Relations Commission to address? I do not dictate to the NSW Industrial Relations Commission. It is an independent industrial tribunal. I think that it has an important role to play in applications in relation to employment agreements for endorsing those employment agreements to make sure that they comply with

Issue Three | July-September 2022 | MBA NSW

NSW MASTER BUILDER NEWS

the Government wages policy and to make sure that the terms of those agreements are fair and reasonable and are agreed to properly by the parties. The NSW Industrial Relations Commission has a significant role to play. Some of the issues it has been involved with — certainly during COVID-19 — are critical issues such as COVID-19 vaccination mandates and related issues regarding the timing of returning to work. Some employees have chosen not to be vaccinated and have brought proceedings to the Industrial Relations Commission. These are complex issues which need to be thrashed out. The Government has a handsoff approach in relation to that. We might have a policy, but we are hands-off. The Industrial Relations Commission generally tries to reach an outcome in respect of those employees and their employer, often a department, to ensure that they are treated properly and fairly. Given the ‘rough and tumble’ history of industrial relations in the construction space, do you see a role for increased law enforcement in industrial relations in NSW?

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There are two things I shall say with respect to that. Firstly, I think there is a demand that we enforce orders that the NSW Industrial Relations Commission makes. I have reasonably given notice that we shall introduce legislation to increase penalties for parties who do not comply with orders made by the NSW Industrial Relations Commission. Currently, we have the lowest penalty regime of any state in Australia in respect of the penalties imposed for noncompliance. If the penalties for non-compliance are seen as merely a feather duster approach to industrial relations policy, then they’re easy to flout. I think we should be sending a signal that the rule of law needs to be complied with, and the rule of law should apply in relation to industrial activity as it does with respect to every other aspect of our life. We cannot have an industrial relations system in which parties feel free to flout as they wish. The second thing we must be cognisant of is that we have had a long period of industrial peace, but people often forget or do not have the corporate memory of when we did not have

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industrial peace. Certainly, the building sector has had a number of Royal Commissions in relation to activity in the building sector. We should not lose sight of the fact that there was, in many respects, a serious degree of lawlessness attributed to those unions involved in the building sector. I have that memory, whether it was the Giles Royal Commission, Cole Royal Commission, or the Hayden Royal Commission, where it exposed a significant amount of what can only be described as lawless behaviour by building unions which need to be addressed. I have serious concerns about the dismantling of the Australian Building and Construction Commission (ABCC), and I think that we have projects in New South Wales which are essential for the economy and productivity of the State. We cannot allow a circumstance to arise where we have industrial lawlessness, which creates a blowout in the cost of those projects. If the ABCC is to be dismantled, we need to be able to look at other ways to make sure that we have an industrial relations framework that appropriately serves employees and the broader community.

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MBA NSW | Issue Three | July-September 2022

Issue Three | July-September 2022 | MBA NSW