OHS and NOLS - a rockier passage for seamless economy national schemes?

As we have previously discussed, the COAG process is an exercise in ‘executive federalism’.

When it comes to 'seamless economy' national schemes, the relevant Ministerial Council signs off on legislation that is then usually rubber stamped by state parliaments with nary a change, because ‘COAG said’.

However there have been some signs that state parliaments may be less inclined to acquiese.

States and territories are introducing legislation that broadly introduces the model Work Health and Safety Act agreed by the Workplace Relations Ministerial Council (the WMRC).

We have previously noted the relevant intergovernmental agreement permitted some variation from the model legislation provided it doesn't ‘materially affect the operation of the model legislation’.

A major commitment of the incoming NSW Government was to implement the model law as agreed.

This meant not re-enacting some current NSW provisions, including the ability of unions commencing OHS prosecutions, hearing OHS cases in specialist industrial courts rather than courts of general jurisdiction, the reversal of the onus of proof and the effective imposition of absolute liability on employers.

However, the Shooters and Fishers Party were successful in moving some amendments in the Legislative Council.

As the party’s leader said:

If politics is the art of the achievable this is the best that we believe could be achieved in terms of a middle ground between both starting positions, that is, what the Government, farmers and business wanted and what the unions wanted. A number of issues raised with us have been considered by our party in coming to our position.

The Shooters and Fishers Party supports the concept of harmonising occupational health and safety laws in New South Wales with those in the rest of Australia. This gives effect to a Council of Australian Governments [COAG] agreement signed on 3 July 2008, when each State and Territory agreed to develop and implement uniform national occupational health and safety laws by December 2011.

At the same time we recognise that there will be minor differences between States and Territories. I believe that most members of this House and the Legislative Assembly would acknowledge the unique position of the New South Wales economy in the Commonwealth, and it is imperative for all of us to maintain and develop the competitive position of New South Wales in respect of other States and Territories.

In the event, unions will be able to prosecute in some circumstances (but not claim a moiety or bounty) and some prosecutions will still be heard in the Industrial Court rather than the Local and District courts.

In South Australia, the model bill was introduced and then withdrawn by the Government in the Legislative Council.

This was because there was some dissention about the ambit of the primary duty of care imposed by the legislation.

The model bill imposes a general duty on people conducting a business or undertaking to take all reasonable steps to ensure health and safety.

However, some argue this duty should be restricted to duty holders who have ‘control' over the relevant workplace.

It is understood the Government may not have got the bill as introduced through the Council.

However, an unamended bill was reintroduced into the House of Assembly on 19 May 2011.

So it will be interesting to see if the opposition to the terms of the model law will be sustained.

Western Australia is considering the Occupational National Law Bill 2011.

This is an ‘applied’ law - where one jurisdiction passes a 'template’ law (in this case, Victoria), and the others adopt that law as a law of the jurisdiction.

Sadly, the WA Legislative Council Uniform Legislation and Statutes Review Committee hated the law, saying:

1.2 The Bill does not introduce national occupational licensing. It proposes a process for developing a national licensing system. Other than that, it largely consists of a list of matters about which regulations may be made. It is not uncommon for uniform legislative schemes to leave detail to regulations. However, the Bill goes beyond this. It requires the substance of the licensing scheme to be in regulations.

1.3 Given this, it is particularly important that the Bill meet minimum standards for good legislation. It should provide a reasonable degree of certainty and coherence as to the legislative framework , to which the regulation-making powers relate. The Bill does not meet this standard. It lacks clarity. Too often the Bill is silent. Too much is still to be developed. Too many options are left open. Too much is left to regulations. The Bill is not clear on what is permitted and what is not, what is to occur and what is not.

1.4 As a result, it is not clear whether the Bill asks Parliament to delegate its legislation making power (to a Ministerial Council) in respect of the proposed licensing system or abrogate it.

Other jurisdictions have passed the law, although in most the law has yet to be proclaimed – that is, it is not in operation.

Proposed draft occupational licensing regulations for the occupations regulated by the so-called NOLS scheme (ranging from real estate agents to refrigeration mechanics) are about to be released.

It will be interesting to see that whether, following consideration of the regulations stakeholders and governments will be happy to see NOLS continue as proposed.

It is finally noted the South Australian House of Assembly has been given notice to consider providing the parliament’s Legislative Review Committee a reference to develop a process to consider ‘the issue of sovereignty separate to any other debate on a bill, thereby avoiding unnecessary debate on this issue in parliament and instead enabling the debate to focus on the purposes and content of a bill.’

This is because:

(o)n many an occasion when a bill has sought to apply a law scheme from another jurisdiction—the most recent example I am aware of is the Controlled Substances (Therapeutic Goods and Other Matters) Amendment Bill—the issue of sovereignty is raised and an unnecessary amount of time is spent debating constitutional law issues instead of debating the purposes and content of the bill.

During the debate on that piece of legislation, and one other, I said to the member for Morphett—because I understand the issues being raised by the opposition in terms of sovereignty—'How about we refer the matter to the Legislative Review Committee to see if it can come up with an appropriate way of dealing with these types of measures so that we can reach some consensus about how to do it?' So, that is what I seek to do. The I advice I have is that, given the nature of what I am asking the Legislative Review Committee to do, it has to go through both houses of parliament, so I commend this motion to the house.

Unfortuately the reference lacks clarity.

The issue of whether a state should yield (or if a European Union fanatic, 'pool') sovereignty with other jurisdictions is a threshold issue when considering whether a particular Bill has merit. It is difficult ot divorce this consideration from others.

Perhaps the question is whether the South Australian Parliament should either create, or clothe the Legislative Review Committee with responsibility for, the functions discharged by the WA Legislative Council’s Uniform Legislation and Statutes Review Committee.

It would be appropriate to have the matter clarified, as this reference could play an important national role as a mechanism that can assess the appropriateness of the model law and applied law models of implementing ‘seamless economy’ national legislative schemes.

The Slow Breakdown of COAG - Part 1

The slow breakdown of COAG – Part 1

NSW Labor leader Kristina Keneally is leading the most unpopular Labor Government in the history of Newspoll.

To stay relevant, she is playing to her core constituencies.

One of the ways she is trying to ‘save the furniture’ is to renege on promises made to accept changes to the NSW occupational health and safety (OHS) issue to permit OHS to be harmonised around Australia.

This is an interesting development. As we said at the time the OHS intergovernmental agreement was made:

As part of the (Workplace Relations Ministerial Council) decision, unions will not be able to commence prosecutions, and prosecutors must prove OHS offences beyond reasonable doubt – the Council expressly voted down the current position in NSW – making union stakeholders quite cross.

WA declined to sign the communiqué as they were unhappy about the use of conciliation to resolve OHS issues, the low standard of proof for workplace discrimination claims, union right of entry to workplaces and the level of gaol terms. It remains a question how much of the national model each jurisdiction takes into its own law, although it is noted that uniform OHS laws are one of those things for which states and territories receive ‘reward payments’ under the National Partnership to Deliver a Seamless Economy

It is disingenuous for Keneally to argue her position on not agreeing to harmonised OHS provisions is the same as WA. At least WA refused to sign the agreement. NSW folded.

As the Sydney Morning Herald said on 14 May 2009:

(Then Minister) Mr Tripodi said NSW was committed to harmonisation of legislation, and he was disappointed that NSW laws allowing unions to prosecute for safety breaches were not adopted.

As one would nearly expect the Prime Minister has threatened NSW its ‘reward payments', with the Prime Minister reported as saying that 'the Council of Australian Governments must work on the basis that jurisdictions honour their commitments.'

This yet again raises the issue of the proper function of COAG within the Australian federation.

This will be discussed in the next couple of articles.

When Should Legislation be Federalised?

Safe Work Australia has now published an exposure draft of occupational health and safety legislation to be largely adopted by Australian jurisdictions.

It was accompanied by a consultation regulatory impact statement prepared by Access Economics, which proves again that the ‘seamless economy’ agenda is for the big end of town.

As it says in the part of the RIS dealing with impact on businesses:

While dealing with multiple OHS regimes does impose significant costs on a number of businesses, only a small proportion of businesses are affected.

Not only are the vast majority of Australian businesses small, but
the Productivity Commission (2004) estimated that 99% of Australian businesses only operated within one jurisdiction in 1998.

Of the businesses that do operate in multiple jurisdictions, nearly two-thirds (65%) only operate in one other jurisdiction than their home one (ABS, 2007).

Even for large businesses with over 200 employees, the Productivity Commission (2004) reported that the majority (58%) still only operate within one jurisdiction.

However, of the remaining large businesses that operate across jurisdictions, they tend to have operations in around five jurisdictions on average (ABS,2007).

These ratios are somewhat different if weighted by employees. While only 0.3% of businesses have more than 200 employees, according to the Productivity Commission, these businesses accounted for 44% of private sector employment. Because of large businesses’ higher propensity to operate across borders, and large employment share, this means that an estimated 28.5% of private sector workers are employed in businesses that operate in multiple jurisdictions.

Access says in its conclusion:

The costs and benefits of the model Act are small and not readily quantifiable.

The qualitative assessment so far suggests that the model Act is expected to bring medium sized benefits for business, principally in reduced red tape for multi-jurisdiction operations. These will be partially offset by a small increase in adjustment costs…. There will probably be some small safety benefits for workers, with no significant offsetting costs to workers. There will be a small increase in adjustment costs for government (relative to such ongoing costs in the counterfactual); partly offset by some marginal benefits in improved compliance efficiency.

Combining these effects, Access Economics expects that the model Act will confer an overall marginal to small net benefit.

An ‘overall marginal to small net benefit seems a small reason to change the legislative requirements for 99% of the regulated cohort – not to mention the loss of clear political responsibility for the development of OHS law in Australia as it passes from parliaments to an unelected COAG ministerial council.

As various pieces of economic literature have suggested, state level governments within a federation should minimise taxing highly mobile tax bases.

Using similar logic, perhaps there should be a threshold test applied when redesignating responsibilities within the Australian federation so that if the thing being regulated is either fixed in one spot (in particular, anything fixed to the land), or happens at a particular spot (for example, law and order issues, or the provision of services to residents) it is appropriate for legislation to be state or territory based.

However, if it is genuinely something that is mobile - for instance either the trade of goods (particularly consumer goods) capable of easy movement across state borders or the setting of performance standards for such moveable goods - it is more appropriate for national regulation.

This would appear to maximise economic efficiency, without overly forfeiting all the advantages of competitive federalism, or, if in particular if the outcome is government by COAG committee, of democracy itself.

Lawyers Federalise as Occupational Health and Safety Bickers

There has been movement on two proposed national schemes.

Lawyers will join doctors, plumbers and real estate agents as professions that will operate under one set of rules, following a COAG decision made in February at the request of the Commonwealth.

At a speech in Perth on 17 September, the Attorney-General (Mr McClelland) said:

Australia now operates within a vastly different legal and economic landscape to that under which the present system of legal profession regulation developed.

Australian lawyers and consumers no longer operate in just one State or Territory.

To deliver a seamless national economy we can no longer justify such disparate regulation for just one profession.

If other professions in Australia can be regulated through a simple, unified, national structure there is no reason why the Australian legal profession should be an exception.

A better approach is required if we are to remain successful in the long-term – and given the wide variety of interests involved, we must think creatively about operating together in a Federation.
………

Given the undeniable economic imperative, the collective political will of COAG and good will from all stakeholders, I am sure we will be able to achieve an outcome that will deliver significant tangible benefits to not only the profession, but the Australian community in general.

He inveighed against the fact that consumers, lawyers and firms have to deal with nearly 5,000 pages of regulation, and indicated he hadn’t met one lawyer that has read, let alone digested all of this regulation.

Probably that’s because most practitioners operate in one jurisdiction, and consumers are only concerned about the laws relevant to their state and territory. This is a bit of a straw man, really.

Nevertheless, a National Legal Profession Taskforce has proposed the establishment of a National Legal Services Board – a joint state and territory entity that seems a cross between the proposed National Body anticipated by the IGA for Specified Professions and the National Boards to be established under the national registration and accreditation scheme for health professionals.

The Board would be a single standard-setter for all lawyers in Australia, constituting ‘key experts from differing backgrounds including legal practice, consumer protection (whatever that constitutes!) and the regulation of professions.'

It is to deal with issues relating to admission eligibility, the granting of practising certificates, practising entitlements and conditions, the form and manner in which practise is conducted, complaints handling and discipline,

So they retain their 'relevance', state bodies (including professional bodies) could perhaps be delegated responsibility to determine whether someone was eligible for either admission or a practising certificate.

During his speech, the Attorney said:

In short, in framing new national regulations, we need to keep in mind the experience the average punter has with the system and we need to consider how we can make that better.

A good test is to ask whether lawyers would be willing consumers of legal services.

Currently, I don’t think many would.

Actually, as an ‘average punter’, I don’t think the Australian legal system is operating that badly.

Nevertheless, one set of regulations from a board containing (amongst others) consumer protection experts will undoubtedly change it all.

A national scheme closer to fruition is that dealing with occupational health and safety.

As we noted earlier, WA indicated to the Workplace Ministers Ministerial Council in July that it had problems with penalty levels and right of access granted to unions under the proposed OHS package.

As the Australian reported on 22 September:

Mr Buswell (the WA Treasurer) said he supported elements of the Rudd government's reform agenda, but there was potential for unionists to do backroom deals to change the regulations over time. "Our view is that the changes the commonwealth are trying to implement are not good for Western Australia, not
good for employers nor employees in Western Australia and at this stage we're not going to be supporting it," he said.
"They're changes which we think open us up to a potential where Western Australian occupational safety and health is driven, potentially, by the sorts of backroom meetings and negotiations we've been seeing between the union movement and the government, and that's not good for Western Australia."

As we have also noted earlier, the unions aren’t necessarily thrilled with the proposed OHS package either.

The OHS package is the first real test of how the COAG executive federalism model will have to resolve disputes between stakeholders with clear and legitimate interests to protect. Unfortunately, there is no parliament to break these sort of impass.

It will be interesting to see how this pans out .... and whether the 'collective political will of COAG and good will from all stake holders' will last the distance with the creation of a national legal profession.

The challenge to the seamless economy commences

The ACTU is commencing a campaign against the harmonised OHS law being developed by Safework Australia on behalf of the Ministerial Council on Workplace Relations.

The Secretary of the ACTU (Mr Lawrence) said ‘the draft legislation was unacceptable and safety standards needed to be ''improved, not reduced in any shape or form''’.

The AMA is equally unhappy with the proposed legislation proposing to introduce a national registration scheme for health professionals, which in its view ‘fails the public interest test’.

These reforms form part of the ‘seamless economy’ agenda, which generally collapses eight laws developed at state or territory level into one law operating throughout Australia.

As we have said earlier:

As a general proposition, the ‘applied model’ of legislation – where one jurisdiction will develop and pass model legislation through its parliament with the remaining states or territories subsequently passing legislation that picks up the model legislation is the favoured way of introducing harmonised
legislation when regulating areas previously the province of states and territories.Whilst nominally capable to amend legislation, state parliaments – including those chambers without government majorities - have typically accepted the national legislation without batting an eyelid, on the grounds that ‘COAG decided’.

The COAG executive federalism model of public administration, in which state parliaments passively pass laws decided by either COAG as a body (or a ministerial council within the COAG structure) is now at an interesting stage of its operation.

This is because the legislation designed to implement the ‘seamless economy’ is now being rolled out - stakeholders are now challenging the merit of the contents of the finalised legislation.

This beggars the question: to which democratically elected body can these stakeholders appeal?

It can hardly be to those legislative chambers where the governments who form COAG have majorities.

So, the interesting thing will be whether the AMA and the ACTUs of the world actively lobby state parliaments for amendments to COAG approved harmonised legislation.

If so, it will be fascinating to see whether those parliamentary chambers where there are government minorities – the Legislative Assemblies of the ACT and the NT, the upper houses of NSW, Victoria, Tasmania and South Australia and both houses of the Western Australian Parliament (if the National Party can be persuaded to side with the ALP on a particular issue) – have the chutzpah to amend COAG legislation – particularly as it could cost their state money.

It will be finally interesting to see what the Liberal Party chooses to do in this situation. In most legislatures, it will be the vote of the Liberals that will determine whether an amendment will pass.

It would therefore be desirable for the Liberal view on the role of COAG and (more generally) the role of state parliaments as standard setters to be clarified. This will be discussed more in the next article.

Harmonising Australia's OH&S law - the next step

On 10 June the new Safe Work Australia Council held its first meeting.

One of the first things it was charged with was to give effect to the decisions of the Workplace Relations Ministerial Council (the WMRC) made on 18 May 2009 as to how model occupational health and safety legislation should be framed, following consideration of the two volume National Review Into Model Occupational Health and Safety Laws prepared by a committee chaired by Robin Stewart-Compton.

It decided it would release the model occupational health and safety legislation (and accompanying regulatory impact statement) during September.

The legislation is broadly based on the Victorian model.

The general test for liability will be whether it is ‘reasonably practicable’ to avoid a hazard in a particular workplace.

However, there is no longer a concept of ‘employers’ having duties to ‘employees’.

Indeed, the objective is to move away from the traditional emphasis on the employment relationship when working out whether a duty of care is owed; rather, the intention is to provide greater health and safety protection for all persons involved in, or affected by, work activity.

Company officers will be have a duty to exercise ‘due diligence’ to ensure that workplace hazards are reduced or removed.

The new legislation will also capture independent contractors as well as people working from home.

One significant change is the expansion of the duty of care imposed by OHS legislation owed by a business to anyone who is ‘in or adjacent to’ a workplace.

Whilst the Ministerial Council did say in its consideration of the Stewart-Compton report:

Care needs to be taken during drafting to ensure that the scope of the duty is limited to matters of occupational health and safety and does not further extend into areas of public safety not related to the workplace activity

this will be a tricky drafting job.

Done poorly, it could impact broadly on the general law relating to occupiers liability and negligence.

It remains open how uniform OH&S legislation will be.

As we have remarked earlier, paragraph 5.1.8 of the COAG agreement on OHS reform says:

The adoption and implementation of model OHS legislation is not intended to prevent jurisdictions from enacting or otherwise giving effect to additional provisions, provided these do not materially affect the operation of the model legislation, for example, by providing for a consultative mechanism within a jurisdiction.

And as we remarked earlier:

And so in this case legislation will be uniform – unless it isn’t.

As part of the WMRC decision, unions will not be able to commence prosecutions, and prosecutors must prove OHS offences beyond reasonable doubt – the Council expressly voted down the current position in NSW – making union stakeholders quite cross.

WA declined to sign the communiqué as they were unhappy about the use of conciliation to resolve OHS issues, the low standard of proof for workplace discrimination claims, union right of entry to workplaces and the level of gaol terms.

It remains a question how much of the national model each jurisdiction takes into its own law, although it is noted that uniform OHS laws are one of those things for which states and territories receive ‘reward payments’ under the National Partnership to Deliver a Seamless Economy.

So money may ultimately speak in favour of uniformity.

The Seamless Economy Regulatory Project - Occupational Health and Safety

On 3 July 2008 an intergovernmental agreement (IGA) was signed, which records a COAG agreement to introduce harmonised occupational health and safety laws.

It is proposed to implement harmonised OHS laws through the model legislation method, where a model principal Act supported by model OHS regulations and model codes of practice will be prepared.

Each jurisdiction would then give effect to the laws in as uniform a manner possible after having regard to the drafting protocols in each jurisdiction.

Unlike other national schemes, this agreement anticipates a capacity for some differences between states and territories.

Paragraph 5.1.8 of the Agreement says:

The adoption and implementation of model OHS legislation is not intended to prevent jurisdictions from enacting or otherwise giving effect to additional provisions, provided these do not materially affect the operation of the model legislation, for example, by providing for a consultative mechanism within a jurisdiction.

And so, in this case legislation will be uniform….unless it isn’t.

The Workforce Ministers Ministerial Council have agreed to resolve outstanding policy issues by May 2009, prior to the publication of an exposure draft in August.

There is no particular indication as to what policy issues are ‘outstanding’ between the jurisdictions.

The next article looks at the proposed national licensing scheme for specified professions.