Sharan Burrow: Financial Review speech

Speech for Australian Financial Review Workplace Relations Conference.

It's a pleasure to be here and I thank the Financial Review for the invitation.

Let me acknowledge that we stand on Indigenous land and I thank the elders for their custodianship.

For working Australians the global financial turmoil is a reminder of their own exposure to a potential downturn that could affect their livelihoods.

It adds urgency to their desire for a balanced and fairer industrial relations system that delivers better job security and a fairer share of the nation’s wealth.

Business and the economy will also benefit from new IR laws that put collective bargaining at the centre of workplace relations.

A fair and comprehensive system of collective bargaining will grow workforce skills, drive productivity, enhance energy efficiency measures to tackle climate change, and deliver increased participation through measures that assist with the balance of work and care for parents and older workers.

Collective bargaining, good faith collective bargaining with a strong independent umpire, will turn WorkChoices and the untrammelled power it gave employers to impose individual contracts, on its head. But we must get the new system right.

As we’ve seen this week in the Australia at Work report, almost a million Australians are vulnerable because they are in precarious casual employment, have no redundancy entitlements and can be terminated at any time.  This is the result of WorkChoices and it is very worrying given the possible impact of the global financial crisis on Australian jobs.

In fact there is one third of Australians who are in contract, casual and self-employment lack the full protections of Australian labour law.

This precariousness of employment again emphasises the need for new industrial relations laws to give these people job security and income certainty.

There has been a 4% increase over the past year in the number of people who a struggling to pay their bills. Right now 56% of the workforce worry every week about making ends meet.

The uncertainty of the current situation underscores the need to see the new IR laws; laws that will protect jobs and provide greater income security for Australian workers, through the Senate as quickly as possible.
While we all wait to see the detail of the legislation, the announcements that have already been made by the Deputy Prime Minister are sufficient to allow us to make some preliminary assessments of the proposed legislation.

Unions are particularly keen to ensure the new legislation delivers positive results in the six key areas we highlighted and campaigned on before the federal election. The successful Your Rights at Work community campaign subsequently saw Australians vote against workchoices and give the government a mandate for these priorities.

1. An end to AWAs
2. A strong safety net
3. A good faith collective bargaining system
4. An effective right to representation
5. Real protection from unfair dismissal; and
6. A strong independent umpire.

In the time available I will touch on each of these briefly.

1. No new AWAs
AWA’s – individual contracts were a tool for employer control of wages and conditions and too often a tool of workplace fear when combined with the loss of unfair dismissal protections.

In industries such as hospitality and retail, AWAs stripped thousands of workers of penalty rates and other award conditions. They ripped away take home pay and left too many workers vulnerable.  Vulnerable workers with little bargaining power were particularly affected, such as women, casuals and young people. Here, these abuses were obvious to all.

A more subtle strategy was pursued by employers in industries like mining and banking. There, AWAs were used to buy people out of collective bargaining – employers would offer cash benefits in order to induce workers not to pursue collective deals. Although this deal seemed good to many workers at the time, a number of years down the track, many workers complain that their pay has not kept up with inflation, pay inequity has grown, their working hours have increased, and they have less of a say at work than they had in the past, when there was a strong union presence at the workplace. Collective bargaining was broken down, and  unions were banned from entering many workplaces in order to organise.

The Australian people abhorred AWAs, and the HR strategies that they were used to pursue. They sent a strong message to Canberra that they wanted the abuses stopped.

The Rudd government banned the making of new AWAs in March this year. Although some employers are allowed to use ITEAs, these instruments cannot be used to strip people’s conditions from them, and will only feature in the system for a limited transitional period.

The challenge going forward is to ensure that employers that have been pursuing AWA strategies, such as Telstra, return to collective bargaining in a genuine way.


2. A strong safety net
Before the last election, we campaigned for the right of Australian workers to have a decent and comprehensive safety net. Under the new legislation, this will consist of the National Employment Standards and a modern and easy-to-understand award system.

The National Employment Standards
The proposed ten National Employment Standards were introduced in February this year. While they do not precisely mirror established community standards set out in AIRC test cases, they do ensure that a range of important rights and standards are now enshrined in legislation.  These include:

  • Leave entitlements - such as 4 weeks’ paid annual leave, 10 days’ paid personal leave, award-based long service leave, and up to 2 years’ unpaid parental leave. Unlike under WorkChoices, workplace agreements will not be able to contract out of most of these entitlements.

  • Control over working hours: a right to refuse unreasonable overtime, and a right to request flexible working hours. We are disappointed, however, that the right to request will not be fully enforceable, since an employer’s refusal will not be reviewable. While the awards will strengthen this provision we nevertheless will campaign for future provision and indeed believe it must be extended to all carers to meet the challenge of the work care collision as the population ages.

  • Severance pay: up to 12 weeks’ pay for workers whose jobs are made redundant. This protection is especially important in these difficult economic times. For this reason, we hope to see these provisions extended to small business through the award system.

  • Modern awards
    The Rudd Government has begun restoring the award safety net, which was ripped apart under the Howard government. As those of you who are directly involved in the process will know, award modernization is a difficult and sometimes controversial task.

    Although we do look forward to seeing a rationalized and simplified award system that can last for another 100 years, unions remain concerned to see that no worker is left worse off in the process. We know that workers traditionally covered by State IR systems are concerned that will lose a range of safety net entitlements, because of the rule that modern awards cannot contain State-based differentials and urge the AIRC to use the powers that through which we believe that they can develop ways to ensure that workers are not disadvantaged – as, indeed, they are obliged to do under the terms of the award modernization request.

    This safety net will include an award of general application that will support those workers who might otherwise fall through the cracks.

    The safety net will indeed put a floor of dignity under all workers and establish a societal benchmark that once again establishes Australia as a decent nation.


    3. Collective bargaining rights
    As a matter of fundamental principle, unions believe that all workers should have the democratic right to collectively bargain with their employer. Under the Liberals, this right was an empty one – employers could simply refuse to bargain, even if a majority of their workers wanted a collective deal. Many large employers, such as Telstra and Cochlear, have employed this strategy, and have steadfastly refused to negotiate with their own workers and their representatives.

    Another problem with WorkChoices was that, in the course of collective bargaining, employers routinely frustrated workers’ attempts to take protected industrial action in support of their claims – employers would raise technical objections to the procedural steps that unions took along the way to taking action, with the aim of delaying the action. In one recent case, it has taken the ETU more than 7 months to get a decision on whether a protected action ballot can go ahead, all because the employer took a technical objection to the ballot form.

    What Australian workers need is an end to this mockery of a system, and the establishment of a genuine collective bargaining system which is simple, easy to use, and based on principles of co-operation and good faith. In particular, we welcome the fact that:

  • Employers will be obliged to collectively bargain with their workers where a majority of them want to.

  • Good faith bargaining orders will be available to ensure that bargaining participants participate in bargaining in a genuine way.

  • Bargaining will occur at the appropriate level. In most cases this will be the level of the enterprise. However, it can occur at a multi-employer level where employers want to bargain that way, or where several employers run a joint venture or single interest enterprise.

  • Workers will be able to involve their union in bargaining whenever they want to – there will be no capacity for employers to exclude unions from the negotiating table, as they could under Work Choices.

  • The new institution, Fair Work Australia, will be able to assist multi-employer bargaining in the low paid stream. This will be vital in helping lift the most low-paid workers off the award system and into a bargaining system. It will also help lift low-margin employers out of a business strategy based on wage minimization.
  • On the other hand, we are worried there may be gaps in the new legislation in relation to:

  • Labor's promise was to allow the parties to bargain on any matter that suits them. The whole point of collective bargaining is to allow the parties to come to mutually beneficial arrangements. Not all of these arrangements will fall within the scope of the ‘matters pertaining’ test, such as cases where workers, unions and a particular employer agree to work together to help the business reduce its carbon emissions. We simply cannot understand why the legislation should forbid the parties making such arrangements. The challenge that climate change poses to the long term viability of all businesses, and all jobs is significant. So to is the future workforce and the roles and skills essential for both productivity and sustainability. Then there is generation Y increasingly experienced, wanting to be engaged and to drive new technologies and processes that may take years to give effect to.
  • The restrictions, driven by an outmoded view from employer associations, potentially mitigate the planning and possibilities for sustainable, high performance, modern workplaces.

    In other words, we hope that the new laws will help foster a new workplace culture of mutual trust and confidence between workers, unions and employers, a culture of communication and co-operation, rather than the traditional culture of unilateralism, managerial prerogative, and ‘hard’ forms of Human Resource
    Management.


    4. Right to representation
    The right of every worker to be able to join a union, to organise and access representation and information from unions in their workplace is fundamental. I remind you that this is the 60th anniversary of the Universal Declaration of Human rights, inclusive of the principle of ‘freedom of association’. And indeed it is the 60th anniversary of the ILO Convention on Freedom of Association and the associated right to organize and bargain collectively.

    Under WorkChoices, the right to representation was completely hollow – workers had the right to join a union, but this was often a pointless exercise, as workers often didn’t have the legal right to speak to union officials at their workplace, or have their union effectively represent them in bargaining. Employers could basically close the shop to unions, by entering into AWAs with its workforce, or making a non-union workplace agreement. You hear a lot from employers about the abhorrence to closed union shops but never a concern about their ambition to do the same by denial of workers rights.

    I am also sick of those employers like Rio Tinto who say they have no objection to employees joining a union but have decided they will only talk directly to their employees.

    None of these CEO’s would join a gold club if they couldn’t play on the golf course.

    The restoration of workers’ rights to have their union involved in collective bargaining is another fundamental and we will certainly be looking to see the new laws reflect the freedom of association provisions, such that workers’ rights to join a union, take part in union activities, and be represented by a union will be strongly protected.


    5. Protection from unfair dismissal
    Job security and protection from being unfairly dismissed are important rights that all Australian workers deserve.

    Work Choices effectively stripped away every worker’s rights to unfair dismissal protections. Huge classes of workers were exempted from the unfair dismissal laws: workers in small and medium sized businesses, workers in their first year of employment in the business, casuals, apprentices, seasonal workers, trainees and so on. This made a mockery of having unfair dismissal laws in the first place. In addition the provisions for “operational reasons” were simply a farce.

    Australians,  we are pleased that the Labor government is committed to going a significant way towards this goal. Under its proposed laws, only award-free high-income employees will be excluded. The qualifying period has been dropped to 6 months of employment for workers in medium and large sized businesses. It remains at 12 months for workers in small business.

    We are disappointed if workers in small businesses continue to be discriminated against in this way and will monitor for abuses.. There is no justification for a longer probationary period; if anything, small business employers probably get to know their employees better, and faster, than employers in larger firms.
    The most serious issue is to see that the test for FWA is based on circumstance and reasons not an administrative test that goes to a checklist.


    6. A strong independent umpire
    Finally, the unions campaigned for a genuinely independent workplace umpire that had effective powers to resolve disputes.

    John Howard gutted the Commission. He reduced its independence, and stripped it of its powers to resolve disputes. The result was that there was often no end to bargaining disputes, and no way for workers to resolve problems with disputes at work. This has not only resulted in exploitation of workers relative to their awards or agreements but created bad blood, eroded loyalty to the company and reduced productivity.

    Under the new laws, it is essential that Fair Work Australia will have broader powers to resolve bargaining disputes, including the power to settle the issues in dispute where the parties are taking industrial action which is harming them but is going nowhere.

    We believe there may still be a gap in Labor's proposals in relation to the role of the independent umpire.

    It is vital that Fair Work Australia can resolve disputes in regard to the NES, awards and agreements to finality.

    Unfortunately, the Deputy Prime Minister at this conference yesterday did not clarify this issue.
     
    The four main areas where there are potential gaps are:
     
    (1) disputes about the application of awards and the National Employment Standards: Give workers and employers access to FWA to resolve disputes, if necessary by binding arbitration, about the operation of the safety net of modern awards and the NES.

    (2) Disputes about the application of agreements: ensure that during the period of an EBA, when further claims are prohibited, FWA is able to resolve to finality disputes over the operation of the agreement, if necessary by binding arbitration.

    (3) Low paid arbitration: promote bargaining, by giving FWA limited or last resort additional powers to assist the transition of low paid workers into the bargaining stream.

    (4) Serious and persistent breaches of good faith: support Labor's stated policy objective by allowing FWA to make a workplace determination as a last resort and after serious and persistent breaches of good faith orders.

    In our view, these positions reflect what Labor promised in the election, and are vital to delivering on the promise of a genuinely fair and modern IR system.

    Put simply you wouldn’t send an umpire onto a sporting field without a whistle and make the game work fairly so why would we fetter the hands of the independent umpire.


    Conclusion
    Getting the new IR laws right and establishing a fair and robust national system will be an important micro-economic reform that will set our economy up for this century.

    Waiting for the legislation is a painful anxious time for those of us who campaigned so hard against WorkChoices but if the outcome supports workplace rights, facilitates high performance workplaces and sets Australia up for growth, fairness and greater equity — we will all win.

    Given that we have not seen the final form of the legislation, and it still has to pass through the rocky shoals of the Senate, it is too early for unions and the Australian people to yet celebrate the death of WorkChoices.

    However, all of the indications are that, from 1 July next year, we will have legislation in place that restores fairness and decency to the workplace. If that happens, we will indeed be proud of what union members and the Australian people, have achieved through both campaigning and the ballot box.

    The legislation will not be perfect because we didn’t write it but if it meets the test of fairness it will mean a great deal for the income and job security of working Australians and a legacy of decency for their children and grandchildren for decades to come.