This Federal Government is proposing the most fundamental re-writing of Australias industrial laws in over 100 years. This re-write is an attempt to shape a workplace culture that is both unfair and inequitable. The most vulnerable workers in Australia will be the ones most severely affected by these changes, although they will affect all Australian workers. Michelle Bissett, ACTU Industrial Officer. Speech to Northern Territory IR Society, 2 September 2005.
The first part of the Government’s reforms is to erode the safety net
set by awards, which establish a fair minimum set of conditions and
The Government will first abolish the role of the Australian
Industrial Relations Commission (AIRC) in setting and adjusting minium wages.
The euphemistically named Fair Pay Commission (FPC) will take on this role. We
know, even before the FPC is set up that they will reduce wages. The AIRC has
traditionally adjusted minimum award rates annually. The last adjustment was
effective from June this year. The FPC will not meet until at least October in
2006 putting at least a four month delay into adjusting rates – resulting
in real hardship to those 1.6 million workers directly effected by these award
adjustments for a pay rise.
The Government claim that the current system
of adjusting pay is too adversarial yet fails to outline how the FPC will
undertake the task. If Interested parties are able to make submissions on what
they think the level of adjustment should be and the FPC determines a final
amount then how is this any less adversarial than the current system where
interested parties make submissions of what they think the increase should be
and the AIRC determines a final amount? The removal of this so called
‘adversarial’ approach means the FPC will make decisions without
hearing from interested parties – and how fair will that make their
There is no doubt that the role of the FPC is to deliver lower
minimum wages than the current system. We know this because, over the last 9
years of NWC if the government preferred increases had been accepted minimum
wages would be $50 a week less than the current $467.60 a week. (If
ACCI’s submissions had been accepted the minimum wage would be $95 per
And Employment and Workplace Relations Minister Andrews has
said he thinks the national minimum wage is about $70 a week to high. The cat
was finally let out of the bag recently when Ian McFarlane, Industry Minister
said Australia should cut its labour costs to meet those of New Zealand. The
difference in minimum wages for the same work in the same companies in Australia
and New Zealand can be in the order of 30-45%, with New Zealand rates
The Government justifies such changes by perpetuating their
discredited argument about jobs growth.
The argument is examined every
year by the AIRC in its safety net review. This year, as in other years, the
commission considered this argument and concluded that it was “not
persuaded that there is any necessary association between award coverage, safety
net adjustments and employment
employment growth in the two highest award reliant industries has outstripped
the all-industry average, with health and community services growing by 28%
since 1996 and accommodation, cafes and restaurants by 30% since 1996. The all
industry average since 1996 is 15.5%.
Despite the fact that the AIRC
consistently rejects the government evidence, the government continues to claim
that Australia’s minimum wages system has suppressed jobs
How it can do so while also claiming record job creation and
record unemployment is mind-boggling.
The real losers out of this brave
new world of setting minimum wages will be low paid, low skilled workers. As
awards become irrelevant – as the value of wages are eroded over time
these workers will be forced into an agreement making system that will also see
further erosion of the safety net.
The proposed changes to the Agreement
making system is the second way the government’s reforms will erode the
In today’s world you know if you can’t negotiate
an agreement with your employer your award of 20 allowable matters provides a
fair safety net. And that if you do negotiate an agreement – whether
collectively or individually – it must provide you with pay conditions
that are, overall, no worse than those you have under your award. That is, the
no disadvantage test (NDT) ensures that you don’t end up worse off by
negotiating an agreement at the enterprise level.
– at least the collective ones – are put through an open scrutiny by
the AIRC to ensure they do meet the NDT. Parties with an interest in the
agreement (it is not a free for all) can make submissions if they believe the
agreement does disadvantage them. This public scrutiny provides is a reason for
confidence in the system.
Individual agreements are checked to see if
they meet the NDT through a private process by the Office of the Employment
Advocate (OEA). Under the Gov’ts proposal the OEA will be responsible for
approving all agreements. Yet the OEA’s processes are seriously
In a recent case in South
Australia the SA IR Court
considered an (unfiled) AWA, which paid a worker 25 per cent less that the award
and cashed out all holidays. The OEA is reported as defending the AWA on
grounds it was not formally approved by his office. Yet this defence by the OEA
ignores the fact that the Court found 50 other employees of the business were
employed on similar AWAs that had gone through the OEA.
In the case of
the Meirbin Mushroom Farm, the OEA refused to approve AWAs following Federal
Court action by the AWU that resulted in the reinstatement of four women who
were sacked from the farm when they refused to sign the AWAs, fearing they would
result in a cut in pay. The OEA’s refusal notice said it rejected the
AWAs because workers did not genuinely consent to the individual contracts not
because they cut pay. An analysis of the AWAs in this case showed that they
would cut take home pay by 25 per cent.
A study of
AWAs by researchers from Melbourne
University of found evidence of agreements approved by the OEA which gave the
employer unilateral power to reduce the non-performance related component of
wages during the life of the agreement. And agreements that expressly excluded
the operation of the award but contained no pay clause at all – how such
agreements could pass the no disadvantage test is astounding – but they
did and were approved by the OEA.
The OEA is not open to public scrutiny
in the way the AIRC is. Yet this organisation is to be given responsibility for
all agreements in the brave new world.
The proposed new system of
‘certifying’ agreements also removes the no disadvantage test.
Agreements, which previously were tested against the award, will now only be
required to meet 4 statutory minima and the minimum award wage. These
conditions are 4 week’s annual leave (though apparently up to two
week’s of the leave can be cashed out, personal/carer’s leave
(although the minister has not been prepared to commit to any particular
standard), parental leave and 38 ordinary hours of work.
be able to lawfully abolish penalty rates, overtime pay, shift loadings,
allowances, redundancy pay, the extra week of annual leave where it exists in a
number of awards, casual loading, work & family provisions and so on,
without any compensation of any kind. An examination of federal awards show most
contain all of these provisions and every award contains at least three of
It won’t be as easy as negotiating an agreement on some
specific issues and relying on the award to apply as well. Workers will have to
choose between the award and an agreement – they won’t be able to
The losers in this system will be those with little or no
bargaining power – casual workers with no job security, low skilled
workers, workers with minimal literacy and numeracy skills.
On top of
this erosion of what is in agreements, individual agreements – AWAs
– will be preferred to collective agreements.
Hurdles will be put
in the way of collective bargaining. In an effort to fragment unions and
collective bargaining the new industrial relations laws will intrude to an
unprecedented level into the voluntary negotiations between parties. But more
of these later.
The new laws will enable employers to choose the form of
agreement making in the workplace. While the Government talk of greater choice
for employers and employees in setting wages and conditions of employment,
don’t be fooled by the words.
Collective agreements are to be
subordinated to individual contracts, and collective bargaining will not only be
made far more difficult for employees and unions, it will be lawful to
discriminate against employees who wish to collectively bargain.
collective agreements will never be closed. Employers party to lawfully made
collective agreements will be free at any time to offer individual contracts to
any employee which will negate the operation of the collective agreements in
relation to that employee.
Unions will be bound by collective agreements
for their term, and be subject to severe sanctions if they act outside their
commitments, including if they act to protect the integrity of the collective
agreement against the offering of individual contracts by the
But employers will be free to opt out of collective agreements
with individual employees at any time.
Just imagine the effect of this if
it were applied to commercial contracts, if one side could freely disregard its
obligations at any time whilst the other faces crippling penalties if it
responds and seeks to protect the integrity of the contact?
The laws will
enable employers to offer AWAs as a condition of employment. The Government
says this is choice – the employee has a choice not to accept the job. This is
not choice over regulation of employment conditions!
So too, employers
will be able to refuse to negotiate a collective agreement even where that is
the determined preference of the workers. This power of employers to ignore the
preferences of employees will be further enhanced under the new
These laws are not about choice for employees, they are about
handing control to employers.
The ACTU’s view is that workers must
have a genuine right to bargain collectively. This right must be accompanied by
an obligation on an employer to negotiate with unions who represent employees in
the particular industry or occupation. Bargaining should occur in good faith
and resulting agreements must apply to all employees for the life of the
The second part of the Government’s reforms are directed
at restricting access by workers to unions and restriction on the rights of
workers to collectively bargain.
As I mentioned earlier under the new
laws collective or union bargaining will face more and substantial hurdles, many
of which will offend Australia’s obligations under international standards
to which it is a party. These restrictions will include the right of workers to
access advice and representation (through restricting access to the workplace)
and restrictions on choice of the level at which bargaining will
The proposals as well are fixated on the issue of industrial
The proposals include a prohibition on pattern bargaining (by
unions but not employers) secret ballots before industrial action, increased
penalties for taking unprotected action, extension of the period notifying the
taking of industrial action and further restrictions on union right of
We know this because the Minister has indicated that the contents
of the BCII Bill 2003 form a model for ‘reform’ for the rest of
Each of these is designed to limit the role of
unions in bargaining or to restrict the capacity of workers to bargain
The choice that employees make about their preferred
form of bargaining will carry no weight. Just as the workers at Boeing, the
Meirbin Mushroom pickers and so on chose a collective agreement as their choice
for bargaining and it was able to be ignored by the employer then so the choice
of the employee in the future will be able to be ignored to the point where it
really is only about the employer’s choice in bargaining that counts. This
means a further restriction on the rights of workers to be represented by their
union in their preferred form of bargaining – a further diminution of the
rights of the workers and the unions.
The third part of the
Government’s proposed changes to industrial laws is to make it easier for
employers to sack workers.
The Government proposes to change the unfair
dismissal laws so that employers of fewer than 100 employees will be exempt from
unfair dismissal laws.
Over 4 million workers employed in 99% of
corporations will no longer be protected from being dismissed
The Government through Andrew Robb most recently claimed that
the unfair dismissal laws have cost an estimated 80,000 jobs being created.
There is no reliable evidence that Australia’s unfair dismissal
laws has cost jobs or that their removal will create any more jobs than would
otherwise be the case.
This assertion, of the link between strict
employment protection laws, and job creation, has been tested by the OECD, and
no unambiguous link has been proven.
And lets be clear.
Australia’s unfair dismissal laws are not an ‘experiment’ of
the Keating Government. The unfair dismissal laws are how Australia meets its
international obligations under ILO Conventions to which it is a party. They
put us in step with every other OECD countries, not out of step.
removal of these unfair dismissal laws is not balanced by unlawful dismissal
laws. The laws against unlawful termination are not the other side of the
unfair dismissal laws coin. Employees who are dismissed do not have the choice
of taking unfair or unlawful dismissal action.
The removal of unfair
dismissal laws means that employers will be able to dismiss employees for any
reason with the only restriction that it cannot be for a reason that is
But what really happens today in the workplace is that a worker
is not told she has been dismissed because she took time to care for a sick
child – she is told she is dismissed for poor performance. An employee is
not told he is dismissed because he refused to sign an AWA – he is
dismissed because they are cutting back on shifts!
laws these workers can have their claims that they were unfairly dismissed dealt
with in the AIRC – they have a mechanism for getting their case heard.
Given that no unlawful reason is ever given for the dismissal under the new laws
they will have no recourse.
And let’s be clear about this. Workers
get dismissed for unfair reasons regularly. They get dismissed for questioning
their pay or entitlements, they get dismissed for refusing to extend their
hours, they get dismissed because the manager wants to employ his or her niece
or just because the manager is having a bad day.
All of this, under the
Government’s changes to the law will be fair.
But even if the
dismissal is unlawful where does a worker, unemployed, find the $20-30,000 plus
that it takes to run an unlawful dismissal case in the Federal Court?
So, what we have is first a government that wants to strip away the
safety net, then they want workers to sign an individual agreement in the
process of which they make it harder for the collective bargaining and then they
want to make it easier to sack workers.
These changes proposed by the
Government are unprecedented.
The effect on workers, and in particular
the most vulnerable workers, will be severe.
Wages and conditions of
employment will be cut – and there are a raft of changes I have not even
touched on such as further award stripping – the capacity to access unions
and bargain collectively will be restricted and the employers will be able to
sack workers with no recourse.
This proposed new system is unfair and
A system based upon an unfair imbalance of power in the
workplace is not sustainable. And this Government will not last
An effective and sustainable democracy requires checks and
Democracy also involves respect for working people, not
treating them as pawns in a big picture economic game, but giving them a real
say in their own working lives.
The Government is proposing to give the
business community all of the aces in its’ new industrial relations
system. How about a fair deal, a genuine democratic choice for
What the Government proposes is:
The changes are not sustainable and they are not
 Safety Net Review –
Wages, AIRC, PR002005, June
 Yurong Holdings Pty Ltd
v Renalla Yurong Holdings Pty Ltd v
 Mitchell &
Fetter, (200?), The individualisation of employment relationships and the
adoption of high performance work practices Melbourne University