94 SITUATING HUMAN RESOURCE MANAGEMENT
The award system also played a critical role in helping ensure ethical treat-
ment of those who engaged in collective or individualized bargaining within
the framework provided by the WR Act. It did this by reason of the fact
that all forms of collective agreement that were certified under the WR Act,
and all AWAs, had to satisfy a ‘no-disadvantage test’ which required that the
agreement must not, on balance disadvantage the employee(s) to whom it
applied relative to any otherwise applicable award, or where there was no such
award, an award that was designated for that purpose.
In November 2005 the Howard government introduced legislation which
became operative in the early part of 2006, and over the next four or five years
will profoundly change the character of the system of workplace regulation in
Australia.
First, the new regime, entitled Work Choices, marks an historic shift away
from reliance on the conciliation and an arbitration power in section 51 (xxxv)
of the Constitution as the basis for federal industrial regulation. Instead,
the system now derives its constitutional validity almost entirely from the
power to make laws with respect to ‘trading or financial corporations formed
within the limits of the Commonwealth’ as set out in section 51(xx) of the
Constitution.
Amongst other things, this has severely curtailed the sphere of operation of
the five State systems of industrial regulation (Victoria does not have a State
system, having referred most of its legislative powers in this area to the Com-
monwealth in 1996) by reason of the fact that the great majority of employees
in Australia are employed by corporations, and consequently now fall within
the reach of the federal system. This is in marked contrast to the traditional
system which reached only those non-Victorian employers (incorporated or
otherwise) who were (directly or indirectly) involved in an industrial dispute
extending beyond the limits of more than one State. Assuming (as is likely)
that the legislation survives the challenge that is presently before the High
Court of Australia, it will effectively mark the demise of the State systems,
if for no better reason than that they now lack a sufficient ‘client base’ to
remain viable. The Howard government has openly expressed the hope that
the various States will then follow the lead of Victoria and refer their legislative
powers in this area to the Commonwealth.
Second, the role of the AIRC has been severely curtailed in a number of
important respects. Notably, it no longer has the capacity to set safety net
terms and conditions through the traditional test case mechanism; its awards
no longer form the reference point for individual and collective agreements
under the legislation; and it no longer has responsibility for approving col-
lective agreements. Furthermore, the award system, of which the AIRC has
traditionally been the guardian, has been marginalized in a number of ways:
first, the range of matters that can be dealt with in awards has been reduced