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An appealing outcome? Industrial arbitration and extended retail trading hours in New South Wales in the 1980s.

Saturday afternoon retail trading commenced in New South Wales in 1984. At the same time a specialist industrial tribunal was established to deal with disputes in the retail industry. The main issue of dispute associated with extended trading concerned the penalty rate payable to retail employees. An allied issued concerned the protection of full-time and permanent work opportunities over the employment of casual and junior staff. Employment in the industry was regulated by outcomes from both industrial arbitration (awards) and collective bargaining (agreements). The dispute is noticeable for the willingness of some retail employers to appeal the outcomes from industrial arbitration if they did not meet their interests. The dispute is also noticeable for repeated legislative action of the government to circumvent this conduct by employers. The analysis identifies reasons for the inability of the specialist tribunal to settle the issue of penalty rates. While the article highlights a major weakness with industrial arbitration, it is argued that the structural flaws of the system could have been evaded if the conduct of the parties had been different.


The year 2005 is the twentieth anniversary of the publication of the Report of the Committee of Review of the Australian industrial relations law and systems. The Committee, chaired by Professor Keith Hancock, recommended that formal Australian industrial relations should continue the system of compulsory conciliation and arbitration (Report of the Committee of Review, 1985). The report of the 'Hancock Committee' was criticised at the time for its endorsement of the status quo. Dabscheck (1985), for example, found the recommendations to be confused and contradictory. Noakes (1985), however, embraced the recommendations for their 'innovations', specifically the proposals to deal with the problem of overlapping jurisdictions between the federal and State industrial arbitration systems and jurisdiction 'jumping' by unions. The Hancock Committee paid only minor attention to the topic of 'specialist' industrial tribunals. The Hancock Committee report noted that specialist industrial tribunals in the federal arbitration system were often created in a 'piecemeal' process to deal with problematic matters (Report of the Committee of Review, 1985: 415). The Committee concluded that federal industrial arbitration should be conducted by a single tribunal to deliver 'consistency of approach and equity of outcomes' (Report of the Committee of Review, 1985: 416).

At about the same time as the Hancock Committee was conducting its review, a future premier of New South Wales (NSW), Robert Carr, claimed that the industrial relations system should adopt 'greater specialisation' (Hansard, 22 November 1983: 3725). Carr's remarks were made in the context of the establishment of a specialist industrial tribunal to arbitrate on industrial disputes within the State's retail industry. At the time, NSW was in the process of extending retail trading hours to allow 'general shops' to trade on Saturday afternoons and for an additional evening on a weeknight. In this respect, the direction taken by the NSW arbitration system was at odds with its federal counterpart. While the federal system was moving towards more centralisation, the NSW system was adopting a more devolutionary approach. For instance, in 1983 the president of the Industrial Commission of NSW, Justice Fisher, noted that a major characteristic of the NSW industrial relations system is its 'pronounced devolution of power' (Shields, 2003: 242-243). Specialist tribunals are a not uncommon feature of the history of Australian industrial law and employment regulation. However, most of these forums are created to deal only with individual matters and not collective employment relations issues. In other words, most function to administer 'industrial justice' (administrative appeals, anti-discrimination and the like) but only a few of these specialist tribunals deal with matters concerned with 'industrial peace' and collective disputes (Thornthwaite, 1994).

This article examines the events surrounding the introduction of extended retail trading in NSW in the mid-1980s. Despite opposition from employers and unions, the government was able to reach an agreement with the parties over the employment conditions for retail workers that permitted Saturday afternoon trading to proceed. However, a dispute arose over the appropriate penalty rate applicable for staff. Notwithstanding the establishment of a specialist tribunal to deal with industrial relations in the retail industry, and collective agreements between the major retailers and the unions, the dispute continued for over two years. The existence of a specialist industrial tribunal and collective agreements between unions and major retailers furnishes a rare opportunity to assess the capacity of a compulsory conciliation and arbitration system to deal with the dispute relative to collective bargaining. The analysis of these events highlights a major weakness of the arbitration system; the opportunity to appeal decisions if the outcome is not to a party's liking. The analysis also highlights the political dimension of State industrial relations systems, as the government was forced to react to employer initiatives with legislation. Therefore the findings have relevance for contemporary industrial relations in terms of the policy reform process and the appropriate industrial relations law and systems for Australia.

Data for this case study comes from a number of sources. Background information was obtained from interviews with key personnel associated with the principal union, the Shop, Distributive and Allied Employees Association (SDA), the principal employer association, the Retail Traders' Association (RTA), and the NSW industrial arbitration system. A condition attached to these interviews was that the views expressed would not be attributed to their original source. In this way the interview participants were more forthcoming with their reflections and perceptions than would have been the case if their comments were subject to attribution and identification. The interview data is supplemented by contemporaneous remarks and assessments found in newspaper reports, tribunal decisions and court judgments, and parliamentary debates.


The concept of industrial arbitration is not unique to Australia. However, the manner and form adopted in Australia is, according to Creighton (2000: 843), 'unequalled anywhere in the world'. With the exception of public sector and emergency services employment in some other countries, the 'Australasian model' of compulsory conciliation and arbitration was restricted to the industrial relations systems of Australia and New Zealand (Nolan, 1998). A criticism of industrial arbitration is that the parties do not feel constrained by either the 'letter' or the 'spirit' of the agreements they make (McCallum, 1998: 95). The reluctance to feel bound by undertakings made is partly due to the relatively easy access to an appeals process. Thus overlapping industrial jurisdictions, and rights of appeal, can weaken the arbitration system's image and status if there is a likelihood of different outcomes before different tribunals (or tribunal members) (Patmore, 2003a: 3). In other words, rights of appeal can focus the parties' attention on the possible outcomes from an appeal or 'full' bench rather than the processes before the primary decision maker, and thus diminish the standing of the initial dispute settling procedure (Report of the Committee of Review, 1985: 598). In this regard, the Hancock Committee concluded that unfettered rights of appeal 'encourage parties to appeal simply on the basis of hoping to get a better outcome from a 'second opinion" (Report of the Committee of Review, 1985: 599). Moreover, court challenges to the jurisdiction of industrial tribunals can become an element of a party's industrial strategy (Creighton and Stewart, 2000: 105), a tactic employers participating in the NSW industrial relations system have used for much of its history (Patmore, 2003a: 11, 54). In addition, rights of appeal from the decisions of specialist industrial tribunals can 'delay and complicate the process of dispute resolution and generate mistrust' (Report of the Committee of Review, 1985: 420). These weaknesses of industrial arbitration were evident with the introduction of extended retail trading hours in NSW in the mid 1980s.

Australian industrial arbitration tribunals are not only subject to 'attack' from judicial decisions of the courts, they are also subject to 'attack' from political decisions made by governments. State tribunals are more vulnerable to political interference than the federal tribunal due to the unfettered legislative powers of State parliaments (Dabscheck, 2004: 133). The fact that the NSW industrial tribunal, the Industrial Commission of NSW, is the longest continuing industrial court or tribunal in Australia and also the world (Wright, 2003: v) has not meant it is immune to political 'attack'. During the 1920s, for example, efforts were made to overturn a decision of the NSW Commission by legislation (Patmore, 2003a: 16), and non-Labor governments in NSW have restructured the Commission at the request of 'disgruntled' employers (Patmore, 2003b: 268). This feature of Australian industrial arbitration was also evident with the introduction of extended retail trading hours in NSW in the mid 1980s.


According to Marshall, retail trading hours is a contentious issue as it entails 'irresolvable conflicting interests--between big retail chains, small retailers, unions representing shop workers, consumers and so on--always mak[ing] this a difficult issue for governments to resolve' (Marshall, 1995: 292). For instance, Saturday afternoon trading was introduced in Tasmania largely due to lobbying from the large retailers (Tanner, 1995: 314). Baker (1994) argues that extended retail trading hours favours large retail chains, shopping centre operators and consumers with high disposable incomes, and disadvantages small retailers, low income consumers, and women employed in the industry. The issue of extended retail shop trading hours has attracted opposition from trade unions and the small business sector because it is often seen as 'a threat to their continued viability' (Tulloch, 1997: 393). While the gender composition of the retail workforce is a convenient explanation for the relative weakness of retail staff trade unions, Roberts (2002) suggests that an equally compelling explanation is the very nature of the retail industry. Despite the industry's high concentration of female and part-time employment (Baker, 1994: 112), Earle contends that retail employers are some of the least 'friendly' to their workforce in Australia (Earle, 2002). In this context, trading hours and conditions of employment are interrelated (Roberts, 2002). For example, during an attempt by the South Australian government in the 1990s to introduce extended trading, by a scheme of ministerial exemptions from the legislative limitations, the High Court of Australia noted in a judgment '... any alteration in those hours necessarily affects the terms and conditions of [retail workers'] employment. Legislation regulating shop trading hours in South Australia arose from the need to protect employees from being required to work for excessively long periods.' (1)

Retail Trading in NSW

The 1909 Royal Commission recommendations of Justice Street were that Saturday and evening retail trading should be retained for 'the public's convenience and comfort'. However, the Early Closing Act was amended to provide a 'half-holiday' for staff by introducing a compulsory closing time of 1.00p.m. for stores on Saturday in Sydney (Pollon, 1989: 306). Stores were required to close at 12.30p.m. on Saturday due to a further legislative amendment in 1956. (2) A distinction was made between 'general' and 'small' shops, with the latter exempt from the trading hours restrictions. (3) In the early 1970s, general shops were allowed to trade until 9.00p.m. on one night a week, and full-time retail employees were awarded a forty-hour week. Importantly, the RTA and the SDA agreed that the penalty rate payable to staff working on evenings and Saturdays should be time-and-a-quarter. In December 1982, justice Macken of the NSW Industrial Commission commenced an inquiry, pursuant to section 35 (1)(o) of the Industrial Arbitration Act 1940, into the desirability of extending retail trading hours. Justice Macken had previously conducted an inquiry of the industrial matters concerning oil refineries in NSW (Patmore, 2003a: 43). The terms of reference of the inquiry paid considerable attention to conditions of employment in the industry, and any adverse impact extended trading would have on staff and small shop operators. Most employer submissions to the inquiry argued for no change to the trading hours regime, and the RTA argued against Sunday trading and 'deregulation'. Some employers argued that extended trading was only viable if staff penalty rates were abolished. The only submissions to fully embrace extended trading came from the major grocery supermarket chains. Unions, predominately the SDA, submitted that extended trading would result in more casual staff and a decline in full-time and permanent employment (Industrial Commission, 1983: 75-117, 3728-3784). Indeed, the NSW secretary of the SDA stated publicly that the union did not favour Saturday afternoon trading (Taylor, 1982).

Justice Macken's report of October 1983 recommended that general shops be allowed an additional evening's trading and to open till 4.00p.m. on Saturdays (Industrial Commission, 1983: paragraphs 11.1 and 11.2). The report also called for an inquiry into staff employment conditions and hours of work (Industrial Commission, 1983: paragraph 11.10). The report was seen by the SDA as 'a great victory for retail workers' because of Macken's proposal to favour permanent jobs over casual employment (Taylor, 1983). The government accepted the recommendations (Dunn and Taylor, 1983), and legislation giving effect to the Macken recommendations was introduced into parliament in November 1983, (4) together with legislation establishing a 'specialist tribunal' to determine disputes in the retail industry. (5)


The specialist tribunal established was the Retail Trade Industrial Tribunal ('the Tribunal'), the membership of which consisted of a chair and a deputy chair (both members of the Industrial Commission), and two 'assessors' to advise the chair or deputy. The Labor Council and the RTA were to each nominate one assessor, while justice Macken and Commissioner Mawbey were appointed as the chair and deputy, respectively. The 1983 amending legislation directed the Tribunal to review all retail industry industrial awards to 'guarantee the rights of current full-time weekly employees'. (6) In early 1984 the Tribunal commenced its review of the retail awards. The main issue of dispute between employer and union submissions concerned the penalty rate for Saturday work. The union argued that the penalty rate should increase to time-and-a-half, consistent with the State wide standard established by the Shiftworkers case of 1972, (7) and the Tribunal concurred stating: 'The general rule is that a standard, once set, should not lightly be departed from, and I [Justice Macken] do not propose to depart from it'. (8) The new penalty rate was to apply to all staff, otherwise a strict application of section 38v (2)(b) would favour casual over full-time employment because of their cheaper wage costs. (9)

With their strong desire to have extended trading the major retailers came to an accord with the government and the retail unions to vary the conditions of employment, and this was formalised with the certification of industrial agreements. (10) The main agreement, Shop Employees' (Major Retailers) Agreement, (11) made significant changes to retail employment, including: a thirty-eight-hour week for full-time staff; a minimum of sixteen hours and a maximum of thirty hours for part-time staff per week; a pegging of casual employment to 15 per cent of total hours worked; a penalty rate of time-and-a-half for Saturdays for both permanent and casual staff; and proportions clauses limiting the number of junior and part-time staff. Myer Stores Limited had a separate industrial agreement with similar terms. (12) In the process of certifying the two agreements, the 'full bench' of the Commission (Industrial Commission in Court Session) commented 'no one has appeared before us to oppose the certification of the agreements'. (13) The lack of objectors to the certification of the agreements reflects the understanding between the government, major retailers, and RTA that the terms of the agreements would eventually apply to all employees in the industry as the quid pro quo for the unions' acceptance of extended trading hours (Taylor, 1984).

In August 1984, the Tribunal created a new award to apply to all employees in stores of fifteen or more staff, except for those retailers party to the industrial agreements. (14) In essence, the new award was very similar to the terms contained in the agreements. The RTA appealed to the Commission over the penalty rate, the proportions clause, and also sought a 20 per cent reduction in junior staff pay. The Commission decision of August 1985 created a single award for retail shops, reduced the penalty rate to time-and-a-quarter, and abolished penalty rates for casuals working on Saturday afternoons. The Commission asserted that any dangers of increased casualisation of the retail industry workforce could be dealt with in a flexible 'self-regulatory way' as an 'experiment'. (15) The Commission noted that there was a public interest in having Saturday afternoon trading, yet concluded--based on employer submissions--that Saturday morning trading was now 'less busy' and thus was not willing to 'impose a further cost burden' on employers.

The Commission's decision was applauded by the RTA's executive director as 'a step towards the eventual removal of all penalty rates'. The unions, on the other hand, claimed it was 'one of the worst [decisions] inflicted upon the union movement in this State', as it was contrary to the understanding that the terms of the industrial agreements would also be the award standard (Campbell, 1985a). A meeting of the Labor Council resolved the decision treated retail workers as 'second class citizens', was an attack on penalty rates, and was a breach of the terms by which extended trading was to be introduced (Labor Council of NSW, 1985). The Labor party Premier, N.K. Wran, criticised the decision for reducing the pay of '150 000 shop assistants', and the SDA called on the government as a 'last hope' to reverse the decision (Anonymous, 1985). The government's response was swift: the Minister for Industrial Relations, P. Hills, announced in late August it would overturn the penalty rate decision by legislation in order to 'reintroduce uniformity into the rates of pay' (Campbell, 1985b). According to the Sydney Morning Herald, this was the first occasion where a judgment of the Commission was to be overturned by statute. While the RTA was 'disgusted' by the announcement, the unions welcomed the action because there had 'never been a Full Bench decision as bad as this' (Campbell, 1985b). Not surprisingly, the President of the Commission, Justice Fisher, was critical of the government's action, asserting it was unprecedented and would 'reduce the regard for the proper administration of industrial justice' (Patmore, 2003a: 46).

Legislative Response

The legislation was introduced in November 1985, and it allowed the Minister to make regulations fixing a penalty rate for Saturday afternoon work by permanent and casual employees at time-and-a-half. (16) The Minister justified the amendment on the basis it would 'ensure that shop employees receive the benefits agreed to prior to the introduction of Saturday afternoon trading', and by the fact that retail staff covered by the award had been paid time-and-a-half for the previous twelve months (Hansard, 19 November 1985: 9844). The regulation of December 1985 reinstated the penalty rates of the Tribunal's mid-1984 award. (17) The opposition parties criticised the government's action because it was 'throwing out the umpire's decision' (Hansard, 20 November 1985: 1089). However, the same could be said of the retail employers' proclivity to by-pass the Tribunal and seek relief from the Commission. Indeed, Justice Macken noted 'whichever way a decision goes before the Retail Trade Industrial Tribunal, an appeal will be brought to the Commission in Court Session'. (18) To overcome this practice, the government inserted a 'privative' clause into the Industrial Arbitration Act giving the determinations of the Tribunal the same status as the full bench of the Commission, and proscribing appeals to the Commission over any 'order, award, ruling or decision of the Tribunal'. (19) The clause was justified in order to 'maintain industrial harmony and confidence in the decisions of the tribunal [sic]', and to ensure it remains 'the final arbiter' on industrial issues for the industry (Hansard, 23 April 1986: 2256-57).

Despite the privative clause, the retail employers continued the practice of seeking to by-pass the Tribunal by appealing to the Commission on interpretative and jurisdictional grounds. (20) In November 1986 the Tribunal made a new award to cover the larger retailers, the Shop Employees (Major General Shops) (State) Award. With appeals to the Commission limited, the employers 'appealed' to the NSW Court of Appeal (Supreme Court) on the grounds that the new award was void, because at the time the award was established the Tribunal was not properly constituted, as one of its 'assessors' was not present during the Tribunal's hearings and determinations. (21) Amazingly, the absent assessor was the nominee of the RTA, and the RTA's advocate before the Tribunal's hearings made no objection at the time to his absence, as this had been a common practice with the Tribunal's proceedings since 1984. In granting the 'appeal' the Supreme Court quashed the new award, and also called into question the status of all the Tribunal's determinations since its formation. To overcome the possibility of retail employees in NSW being 'award free', the Tribunal--duly constituted--created an interim award in December largely reflecting the terms of the industrial agreements because they 'reflected the consensus views of both parties' and thus would not be an 'injustice to either the union or the employers'. (22) The uncertainty created by the Court of Appeal's judgment over the status of the Tribunal's determinations resulted in the government enacting further legislation in mid-1987 to validate all its rulings made in the absence of the assessors. (23)

In April 1988 applications were made by both the RTA and the SDA to the reconstituted Tribunal (with Deputy President Wells as its chairman) for a single retail award. While most terms of the proposed single award were settled by consent of the parties, penalty rates were still an issue. The union's submissions conceded that the consent agreement in 1974 to fix the penalty rate for evening work at time-and-a-quarter was an error, due to ignorance of the 1972 shift work principles, by both union officials and the relevant conciliation commissioner. In rejecting the union's submission that the rate should be consistent with the Shiftworkers case (i.e., time-and-a half) the Tribunal noted that fourteen years was too long a time period to rectify the problem simply due to 'some bleated erratum'. (24) Deputy President Wells did not regard the fact that there was a different penalty rate regime contained in the industrial agreements to be a factor worthy of consideration in making this decision. The Tribunal remained the principal arbitral forum for the retail industry until its abolition in late 1988. (25) The terms of the industrial agreements were converted into a new award in April 1988 when the life of the agreements came to an end (SDA, 1988). The Tribunal was formally abolished by the newly elected Coalition government on the grounds that industrial matters within the retail industry should return to 'the accepted conciliation and arbitration system' (Hansard, 18 October 1988: 2269). The Labor party opposition concurred with the Coalition government, with its spokesperson noting that both employers and unions found strong weaknesses with the workings of the Tribunal (Hansard, 30 November 1988:4059).


The disputes associated with the extension of retail trading hours in NSW can be analysed in a variety of ways, and a range of potentially contradictory assessments can be drawn from the events concerning the merits of industrial arbitration and collective bargaining, and the regulation of wages and employment conditions. Carmody (1986: 239), for instance, argues that the Wran government's action of reinstating the penalty rate of the Tribunal's mid-1984 award with legislation in November 1985 demonstrated that the Commission was a 'subservient' to the needs of the government and the union, and that it challenged the Commission's 'impartiality and credibility' (Carmody, 1986: 270). He also suggests that the introduction of the privative clause to protect the impartiality and credibility of the Tribunal was part of a process 'to ensure enshrinement in awards of a particular view (or, more accurately, the asserted undesirability) of casual employment in the retail industry' (Carmody, 1986: 272). However, such views fail to appreciate the competing interests connected with the dispute. These competing interests resulted in the NSW arbitration system being attacked on two flanks: the Tribunal was attacked from judicial decisions, and the Commission was attacked by political decisions.

An alternative assessment of the events surrounding the introduction of extended trading in NSW in the mid-1980s is that the experiment of a specialist industrial tribunal for the retail industry was a relative failure. There is still considerable debate about the desirability of specialist forums, in contrast to tribunals which deal with all matters and issues within the relevant jurisdiction. One concern is the duplication and 'overlapping' roles, functions and processes between the specialist and generalist tribunals resulting in jurisdictional conflict and uncertainty (Moore, 2001). Due to the unique circumstances of industrial relations tribunals in Australia, privative clauses are justifiable, both in terms of the special nature of the employment relationship and the need to develop a body of jurisprudence reflecting employment's distinctive characteristics (Coffey, 2003: 82 note 95; Moore, 2001: 144-45). The object of privative clauses is to protect industrial arbitration tribunals from judicial attack. Indeed, the NSW Coalition government, elected in early 1988, retained a privative clause in its industrial relations legislation. (26) The privative clause of 1987 sought to secure the standing of the Tribunal and its decisions, and deny the parties, both employers and unions, the opportunity to seek a more favourable outcome from a 'second opinion'. The Minister defended the measure on the basis that the Tribunal could remain 'the most expert body' for retail industry industrial relations, and so that in future 'the word of the tribunal [sic]' could not be 'broken by a decision in another place'. Moreover, at the time, NSW was the only State with Saturday afternoon trading and dealing with the industrial issues this generated justified a specialist arbiter for the industry (Hansard, 24 April 1986: 2555-57, 2781-87).

With the avenue of appeal to the Commission restricted, the employers turned to the Court of Appeal. It was suggested in those proceedings that the principal reason for the 'appeal' was that the award made by the Tribunal was against the employer plaintiffs' interests, as their representatives--particularly their solicitor advocate--was a party to the workings of the Tribunal called into question. Given the choices, the RTA advocate admitted he did not fully understand the NSW industrial statute that created the Tribunal; a surprising move for a legal practitioner, specifically one claiming expertise in industrial law and the retail industry. (27) The reasons for the abolition of the Tribunal in 1988 were partly administrative, and partly due to the willingness of the parties to by-pass the Tribunal, and not due to some failed experiment in industrial specialisation, as the new Minister conceded: '... given the substantial number of matters before the tribunal [sic], its limited resources and the urgency and complexity of some of the issues involved, many of the matters before the tribunal have had to be formally referred to the Industrial Commission in Court Session for ultimate processing' (Hansard, 13 October 1988: 2270). In short, the Tribunal's failure to settle the dispute was not necessarily due to its specialist function, but due to the parties focusing on the possibility of achieving a better outcome outside the Tribunal which met their specific interests.

During the period of the Tribunal's existence, the most stable employment regulation originated from the industrial agreements. For the entire period under study, the workers covered by the industrial agreements had the benefit of a consistent penalty rate, the proportions clauses, and the cap on casual employment. This was in stark contrast to those employees covered by the Shop Employees (State) Award and its successors. The certainty created by the agreements was a significant achievement for the SDA as about 70 per cent of the union's members were employed by the retailers who were parties to the agreements (Grant, 1986a). (28) While the relative success of the collective bargaining agreements could be interpreted as an endorsement of an industrial relations system based on agreement making, when compared with the difficulties found in achieving a stable outcome with industrial arbitration, the market position of the major retailers must be considered in any such evaluation. As the submissions to the Macken inquiry of 1983 show, at the time most employers in NSW did not favour an extension to trading hours. The main--if not only--industry supporters of extended trading were the major stores and supermarket chains. At the time, about 90 per cent of the RTA's membership consisted of small retailers, employing less than twenty staff, who were already exempt from the trading hours restrictions (RTA, 1983: 14). Moreover, a survey of RTA members conducted in October 1984, about the same time extended trading commenced, found only 17 per cent indicating rates of pay to be an impediment to longer trading hours. Almost as many RTA members (12%) considered lack of 'efficient' staff to be an obstacle to extending their trading (SDA, 1984). In that light, the union took the opportunity to extract from the major retailers improvements in the conditions of employment that would have been unlikely if the matters went to arbitration. The SDA acknowledged this strategy in its submission to the federal parliament's Joint Select Committee inquiry into the retail industry, noting that the major retailers have often taken the lead in improving the pay and conditions of their employees, as well as promoting skills development within the industry (Joint Select Committee, 1999: paragraph 3.58). According to the SDA, agreements with the major retailers provide pay rates in excess of the award rates and also provide, in certain respects, superior employment conditions; a view supported by the major retailers who claimed that they are leading the way with regard to wages and working conditions (Joint Standing Committee, 1999: paragraphs 5.135 and 5.134).

To that end, the dispute in the retail industry in NSW in the mid-1980s has relevance for the desirability and capacity of employers and unions to 'take wages out of competition'. The understanding of the retail employers and the RTA that the terms of the industrial agreements would also apply to the entire industry via award regulation confirmed the attraction of the concept. Yet the conduct of the employers--and employer disunity over the issue--questions the capacity. The practice of employers of by-passing the Tribunal and focusing on the outcome from a 'second opinion' was a major problem in this context. The certainty regarding the employment conditions of the agreements was due to the inability of the retail employers to appeal their own decision to enter the agreements. In the alternative, the employers appealed to the 'court of public opinion', the media, arguing that they had been 'conned' by the government and the unions to enter into the agreements. The chief general manager of one of the employers, Woolworths, claimed that the government and the unions had reneged on their 'promise' to make the terms of the agreements the industry standard (Grant, 1986b). This is a curious comment, for when the Tribunal sought to have many of the terms of the agreements carried over to the November 1986 major retailer award, one employer who was a party to an agreement was the first named plaintiff in the 'appeal' to the Supreme Court. The concept, however, is still important for retail employers and unions. During the recent certification process of a multi-employer industrial agreement in Western Australia both employer and union evidence asserted that 'inconsistent wages and working conditions between the stores' was undesirable because of the potential for disputes and dissatisfaction if different employment conditions were offered by the various employers. (29)

The events in the NSW retailing industry in the mid-1980s have lessons for the appropriateness of regulating collective industrial relations with a conciliation and arbitration system or a system based on agreement making. If these events were viewed in isolation, a reasonable assessment could be that arbitration is an inferior method because of its inability to deliver stability, consistency and predictability to industrial relations in the retail industry. In contrast, it was the collective agreements which delivered these outcomes. However, such an understanding would be skewed, for the problems identified with industrial arbitration in this case had little to do with the functions of the system, but rather the parties' behaviour in seeking redress from another forum when the arbitral outcome did not meet their expectations or interests. To be sure, the major retailers' assertion that they had been 'conned' into entering the agreements, and would have withdrawn from it if such relief was available, acts to confirm the contention that it was the attitude and conduct of employers which generated the industrial problems connected with the introduction of extended trading hours in NSW.

In addition, the events sustain the position of Marshall (1995), that any reforms considered by policy makers to employers' business activities will have an impact on their employment relations, and hence have industrial consequences. Governments' ability to reconcile the competing interests associated with such decisions is doubtful, for any reforms adopted will tend to benefit one set of interests over others. In the case of extended trading hours in NSW, the government and the unions regarded the interests of retail workers--and full-time and permanent workers in particular--to be equal to other interests. The employers, however, deemed the interests of consumers and their own financial interests to be superior. In short, this case illustrates the difficulties of distinguishing which set of interests should carry the burden for reform. The employers on the one hand, and to some degree the Commission, believed it should be retail employees. On the other hand, the government and the unions, and arguably the Tribunal under justice Macken, believed the burden should be carried by the retail employers, for it was their commercial decision to trade or not to trade during the extended hours.


The introduction of extended retail trading hours in NSW during the mid-1980s generated conspicuous disputes concerning the regulation of retail workers' employment. The recommendations of the Macken inquiry and the creation of the Retail Trade Industrial Tribunal were aimed at ameliorating these disputes. The disputes occurred at the same time the Hancock Committee had proposed the continuation of industrial arbitration as the primary means to reconcile and settle industrial disputes, and rejected calls for a shift to collective bargaining. To that end, the disputes in the NSW retail industry of the 1980s are a rare opportunity to reconsider the Committee's recommendation, as efforts to resolve the disputes over penalty rates and casual employment contained outcomes from both industrial arbitration and collective bargaining. The relative failure of industrial arbitration to settle the disputes can be attributed to the lack of 'ownership' by the parties of the various tribunal decisions. As a result, the parties sought alternative outcomes from other decision makers which suited their particular interests. The employers turned to the Industrial Commission of NSW. When appeals to the Commission were blocked by legislation, they turned to the Supreme Court for a more appealing outcome. Conversely, the unions turned to the NSW government to reverse the decisions of the Commission and the Supreme Court by direct statutory intervention. These events illustrate a limitation with industrial arbitration: the outcomes from industrial tribunals are subject to intervention from both the judicial and political system, and this limitation is magnified with State industrial relations systems.

Superficially, the industrial agreements between the major retailers and the industry unions were better able to deal with the disputes. However, a lack of ownership of the outcome was also a problem. The employers asserted that they had been deceived, by both the government and the unions, into entering into the agreements. Had the opportunity been available the employers would have sought to withdraw from the agreements. However, the failure of the terms of the agreements to be incorporated into the industry-wide award standard was due to the actions of the same employers. When both the 1984 and 1986 award absorbed the terms of the agreements the employers sought to overturn this outcome by appealing the decision of the Tribunal. In conclusion, the Hancock Committee defined an effective industrial relations system as one which promotes and encourages 'harmony and co-operation' between the parties. But it also noted that the objectives of an industrial relations system can conflict, if the parties have different priorities (Report of the Committee of Review, 1985: 15). As the circumstances surrounding the introduction of extended retail trading hours in NSW demonstrate, it was the different priorities of the government, unions, and employers that allowed the dispute to continue regardless of the character of the industrial relations system.


The author publicly expresses his deep appreciation for the assistance supplied by those individuals and organisations connected with the events discussed in the article for providing both documentary material and background interviews. Any errors or omissions are due to the author.


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(1.) Shop, Distributive and Allied Employees Association v Minister for Industrial Affairs, (1995) 60 Industrial Reports 11, p.14.

(2.) Factories and Shop Act 1912.

(3.) Factories, Shops and Industries Act 1962.

(4.) Factories, Shops and Industries (Retail Trade) Amendment Act 1983.

(5.) Industrial Arbitration (Retail Trade) Amendment Act 1983.

(6.) Section 38v (2)(b) Industrial Arbitration Act 1940.

(7.) Shiftworkers Case, [1972] (NSW) Arbitration Reports, p. 633.

(8.) Re Shop Employees (State) Award and Clerks &c. in Retail Shops (State) Award, (1984) 8 Industrial Reports, p. 27.

(9.) (1984) 8 Industrial Reports, p. 28.

(10.) Section 63 Industrial Arbitration Act 1940. The employer parties were: G.J. Coles and Coy Limited, Grace Bros Holdings Limited, Target Australia Pty Ltd, Australian Safeways Propriety Limited, Woolworths Limited, and Jack Butler and Staff Propriety Limited.

(11.) Industrial Agreement no. 7249, Matter No. 1529 of 1984.

(12.) Industrial Agreement no. 7258, Matter No. 1564 of 1984.

(13.) Industrial Commission of New South Wales in Court Session (Fisher P, Macken and Sweeney JJ), Statement, Matter Nos. 1529 and 1564 of 1984, 2 August 1984.

(14.) Shop Employees (General Shops)-Interim (State) Award.

(15.) Re Shop Employees (State) Award, [1985] 314 Australian Industrial Law Review, pp. 275-278.

(16.) Factories, Shops and Industries (Further Amendment) Act 1985, inserting section 79A into the principal Act.

(17.) Shops (Premium Rates of Pay) Regulation 1985.

(18.) Re Shop Employees (State) Award, (1986) 15 Industrial Reports, p. 27.

(19.) Industrial Arbitration (Further Amendment) Act 1985, inserting section 38T into the principal Act.

(20.) Re Shop Employees (State) Award, (1986) 19 Industrial Reports, pp. 344-357.

(21.) G.J. Coles & Co Ltd & Ors v Retail Trade Industrial Tribunal & Ors, (1986) 17 Industrial Reports, pp. 134-154.

(22.) Re Shop Employees (Major General Shops) (State) Award, (1986) 17 Industrial Reports, pp. 155-57.

(23.) Industrial Arbitration (Tribunals and Delegations) Amendment Act 1987.

(24.) Shop Employees (State) Award, [1988] 232 Australian Industrial Law Reports.

(25.) Industrial Arbitration (Retail Trade) Amendment Act 1988.

(26.) Section 301 Industrial Relations Act 1991; for a discussion of the workings of the privative clause, see Supreme Court of New South Wales Court of Appeal, Walker v Industrial Court of New South Wales, (1994) 53 Industrial Reports 121.

(27.) (1986) 17 Industrial Reports, p. 144.

(28.) Despite the insertion of provisions in industrial statutes in Australia during the 1990s proscribing union security measures in awards and agreements, the SDA's industrial strategy is noteworthy for its success in being able to have included in collective agreements 'union recognition clauses where employers have agreed to promote membership of the union to its employees; see for example, Australian Industrial Relations Commission, McDonalds Australia Ltd v Shop, Distributive and Allied Employees Association, (2004) 132 Industrial Reports 165.

(29.) McDonalds Australia Ltd v Shop, Distributive and Allied Employees Association, (2004) 132 Industrial Reports 165, pp. 167-69.

Micheal Lyons

University of Western Sydney
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Author:Lyons, Micheal
Publication:International Journal of Employment Studies
Geographic Code:8AUST
Date:Apr 1, 2005
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