In a modern economy governments can’t provide all the answers to the challenges people face in the workplace. Decisions that affect employees are often made on stock markets and in boardrooms not just in Australia but around the world. But there are things governments can do to ensure employees are better informed, equipped and supported.

Government policy and legislation has been slow to catch up with the changes that have taken place in the modern workplace.

Change is fast and constant and many employees feel their work is less secure than it has ever been.

Governments can’t and shouldn’t try to wind the clock back on the economic change that has driven the transformation of the workforce. But they should ensure workplace laws and government policies give employees the rights, protection, information and opportunities they need to succeed in the 21st century workplace.

There can be no doubt that in some areas the pendulum has swung too far toward the interest of larger businesses and against the interest of employees and the community. To restore the balance, modern policies are to address issues in a number of key areas including:

• collective bargaining
• awards
• employee consultation
• employee entitlements
• working hours
• corporate governance

Facts

• Australia has the most restricted collective bargaining rights in the developed world.

• Since 1991 the minimum award wage has dropped from 56% of AWOTE to 49%, a difference of $56.39 per week. The trades rate has dropped from 72% to 60% a difference of $100 per week.

• The restriction of the AIRC’s powers to ‘allowable matters’ has prevented the award safety net covering many issues of relevance to workers.

• While consultation requirements have been removed and weakened in Australia in recent years, they are being strengthened in other developed countries particularly in Europe with the introduction of works councils.

• ACTU^[1] research reveals 43% of Australians feel less secure in their jobs than five years ago.

• Between 1998 and 2001^[2]:

- 596,400 Australian employees or 6% of the workforce were retrenched,

- the average period of unemployment after redundancy is 22 weeks,

- the average duration of unemployment for people over 45 is 96 weeks,

- 25% or 149,100 of retrenched employees received less than one day’s notice of their termination, and

- 81% or 484,200 of retrenched employees were retrenched from full time jobs.

• The government’s promotion of non-union workplace agreements has further undermined employee representation, consultation and training:

- only 20% of non-union agreements provide for employee representation, compared with 81% of union agreements,

- only 46% of non-union agreements provide for employee consultation, compared with 77% of union agreements, and

- only 67% of non-union agreements provide for employee training, compared with 87% of union agreements.^[3]

• For all occupations other than managers and professionals, the net increase in jobs during the 1990s consisted entirely of part-time casual jobs. Middle income jobs actually declined during the 1990s (Borland, Gregory and Sheehan 2001)

• 87% of the net jobs created during the 90s paid less than $26,000 per year. An incredible 48% of net new jobs paid less than $15,600 per year.

• 1.8 million Australian - 31% of all full time employees - work more than 48 hours a week - hours that would be unlawful in Europe:

- more than half of these are non-managerial wage and salary earners

- one-third of them (300,000 people) work more than 60 hours a week

• Adjusted for full time/part-time proportion of the workforce, Australia is only surpassed by Korea within the OECD in terms of the average number of hours worked.

• Australia has the highest proportion of workers working 50 hours or more per week in the OECD

• 60% of all overtime is unpaid

• At least 17.7% of all employees regularly work unpaid overtime.

• Average hours of work for full time employees have been steadily increasing since 1980.

• The proportion of the workforce working in excess of 45 hours per week has increased by 76% since 1981

• The proportion of the workforce working in excess of 60 hours per week has increased by 81% since 1981.

• The composition of Australian Boards:

- only about 45% of all board seats in Australia's top 100 companies are held by independent non-executive directors,

- Audit, Remuneration and Nomination committee positions are comprised of 11% executive directors and 35% affiliated non-executive directors,

- the average age of directors was 57, and

- only 8% of board seats were taken up by women.

• Disclosure of Executive Remuneration:

- Australian corporations law disclosure requirements do not currently require the valuation and expensing of all remuneration arrangements. It won't be until 2005, where Australia adopts international accounting practises that will provide for the pricing of share option arrangements. US requirements include the valuation of remuneration that applies to all employees; and

- research has found that one in four of Australia’s top 100 companies don’t comply with existing executive remuneration disclosure requirements under Section 300A of the Corporations Act.

• Amongst the top 100 listed companies and audit company was likely to generate $1.4 million in audit fees with each company compared to$3.02 million for non-audit work, a ratio of 2.09:1.

• In Australian public companies that do not have a major non-institutional shareholder proxies are received for only around one third of voting capital compared to 50% in the UK and 80% in the US.

• According to KPMG, 80% of working people aged between 25 and 39 would consider investing their superannuation in socially responsible investments.

• In the US one in every $8 is invested giving consideration to corporate governance and social responsibility criteria. Investment in socially responsible funds in the US topped US $2 trillion in 2000.

Policy Responses

Collective Bargaining - Australia has the most restricted collective bargaining rights in the developed world

Awards - a fair and vibrant award system is the bedrock on which a fairer system of workplace laws will be built

Employee Consultation - employees should have a right to be informed and consulted about things that impact on their livelihoods and their families

Employee Entitlements - a number of initiatives are needed to properly protect employee entitlements

Working Hours - just as other communities, nations and governments have faced up to and taken action to address the growth in working hours, its is time that Australia tackled this issue

Corporate Accountability - the government should act to improve corporate governance regulation

^[1] ACTU National Survey 2000. The ACTU is in the process of completing its 2002 survey, which will deal with issues involving employee entitlements and job security.

^[2] ABS Retrenchment and Redundancy Cat 6266.0 May 2001; Peetz, Job Tenure, Employment Status and Labour Market Disadvantage, May 2002

^[3] Agreement making in Australia under the Workplace Relations Act 2000-01