To protect women’s wages and working conditions through the award system and enterprise bargaining some conditions need to be met says Jennie George, ACTU President.
I should start by saying that I feel a little ambivalent about the use of the term “protection” in the title of this session. On one hand, the notion that women need “protecting” has seriously paternalistic overtones, and was used as the basis for legislative provisions which had the effect of keeping women out of certain occupations. Prohibitions on lifting more than specified weights and on women working at night (except in “female jobs”) are well-known examples.
On the other hand, it is incontrovertible that women are in a more vulnerable position in the labour market, along with other groups with less bargaining power, such as unskilled and young workers, and those whose first language is not English.
Women are concentrated into a narrow range of occupations – over half work in clerical, sales and service occupations. Women are also more likely to be employed on a less secure basis; 32 per cent are casuals, compared to 21 per cent of men.
Women are far more likely to be employed part-time; 43 per cent compared to 11 per cent of men. While this in part reflects the need to combine paid work with family responsibilities, it is also notable that the industries in which women’s work is concentrated are increasingly based around a part-time structure, with rapidly narrowing career opportunities.
Women’s weaker labour market position can be seen in an examination of wage differentials. While full-time non-managerial women earn, on average, 91.6 per cent of male award or agreed base rate of pay, this drops to 87.5 of average weekly ordinary time earnings and 79.6 per cent of average weekly total earnings. These differentials reflect the fact that women earn 21.2 per cent of male overtime earnings, and 48.2 per cent of male over-award earnings.
It is simple logic that women, together with other groups with a weak bargaining position, will do better in a centralised wage fixing system, particularly one geared towards giving greater assistance to those on the lowest wages. This could be seen most clearly in the period from 1984 to 1994, prior to the introduction of statutory enterprise bargaining, when a combination of flat money national wage increases and the introduction of supplementary payments for those without access to over-awards, operated to narrow gender-based wage differentials. During that period, female award wages rose from 89 per cent of male rates to 94.1 per cent.
In the Living Wage Case, the ACTU is attempting to ensure that the gap between workers on award rates of pay and those covered by enterprise agreements does not widen even further. Women, in general, are more dependent on award rates of pay than men, particularly in service industries such as hospitality and retail. Part-time employees, three quarters of whom are women, are also less likely to benefit from overaward payments.
Yet the Government is supporting only an $8 increase, and is vehemently opposing the ACTU’s claim to increase minimum award rates of pay to a modest $10 per hour, and a further safety net increase for those who have not been able to achieve higher increases through bargaining. The ACTU’s claim has most relevance for workers who are dependent on award rates and do not receive over-award payments, which includes a high proportion of women. The second stage of the case has now finished, and we are waiting for the decision.
It is my strong belief, and ACTU policy, that a strong award system, alongside and underpinning enterprise bargaining, is imperative if we are to prevent a rapid widening of the gap between those with and those without market power.
How important you think this is will depend on your general economic and social perspective, but I would hope that most of us would remain committed to the great Australian tradition of fairness and equality. Even if one look at the issue from a self-interested business point of view, there can be little attraction in the example of the United States, with its growing army of working poor, and consequent staggering social problems, including homelessness, uninhabitable cities and collapsing services.
The notion of an award safety net, as part of the general social safety net we provide for those who need it, is integral to the kind of society we are, and to the way we see ourselves.
This was recognised by the previous Government which, when it introduced a system of enterprise bargaining through the Industrial Relations Reform Act 1993, ensured that this was underpinned by a strong award system which is “maintained at a relevant level”, meaning that it is adjusted from time to time to take account of developments in employment conditions achieved through bargaining.
Without the ability for conditions to be extended to those with weaker bargaining power through the award system, the Australian workforce would never have achieved benefits we now take for granted as part of a civilised society – four weeks annual leave, parental leave, redundancy pay, penalty rates, the 38 hour week and many others. In almost all cases, conditions are first won in the over-award arena, and then, after spreading through the stronger areas of the workforce, passed on to those remaining, those last in the queue, by the Industrial Relations Commission.
Following the last election, the Government embarked on an effort to destroy the award safety net, which is so important for the most vulnerable workers. As a result of changes insisted upon by the Democrats, many of the worst features of the original Workplace Relations Bill were improved, in particular by increasing the scope of matters which the Commission can include in awards.
The Government has not succeeded in convincing the Commission that workers dependent on the award should be thrown to the economic wolves. In its recent Award Simplification Decision, which applied the new Act to the Hospitality Industry Award, the Commission made it clear that it was not prepared to remove entitlements from workers in the name of productivity and efficiency, unless a very good case was made out by employers. The Commission also stated that the bargaining strength of workers under the award was a factor to be taken into consideration in provisions allowing for agreements at workplace level about implementation of particular award entitlements.
A few days after this decision, Workplace Relations and Small Business Minister Peter Reith announced that the Government would go to the election with an industrial relations policy which would further limit the scope of awards and restrict the powers of the Commission. The assault on the low paid, and those with little bargaining power, will continue if this Government is re-elected.
The previous system included a number of other safeguards which were of particular value to women. For instance, although there was provision for non-union agreements, approval involved a public hearing by the Commission at which relevant unions could make submissions if they felt the agreement did not meet the statutory requirements, such as the no disadvantage test.
Whether or not you like unions, the reality is that in a number of cases, it was only union intervention which brought to light the inadequacies of an agreement imposed by an employer on employees. The Tweed Valley case, for example, which achieved notoriety because it provided for payment in lieu of sick leave, was found to seriously disadvantage employees in relation to their wages. This fact emerged only because of the union’s involvement; without it, the true picture would have remained hidden.
Contrast this with the current system, where unions can make submissions to the Commission only where a member is prepared to come out and say that he or she wants the union involved. Is this going to happen in work situations where employees are terrified of losing their job if they upset the boss?
Even under the previous legislation, there was evidence that women do less well than men in enterprise bargaining. Women are less likely than men to be covered by workplace agreements, as agreements are more common in male dominated industries such as manufacturing, construction, transport and storage, with over 40 per cent of businesses covered. By contrast, industries such as health and community services, retail, hospitality and property and business services have less than a quarter of enterprises covered by agreements.
There is also some evidence to show that the industries in which women predominate receive slightly lower wage increases than the overall average level. Significantly, agreements in mainly female areas of the workforce are more likely to involve changes to hours of work and penalty rates, which have the effect of lessening the full impact of the associated wage increase. In 1995, 71 per cent of female workers were covered by agreements containing hours of work provisions, compared to 56 per cent of men.
The Government’s introduction of a system of individual agreements, called Australian Workplace Agreements, or AWAs, has the potential to be extremely damaging to women’s employment conditions, although to date take-up by employers could not be said to be spectacular.
The union movement opposed the AWA system primarily because individual bargaining leaves the individual employee exposed to the greater workplace power of the employer. It needs to be remembered that unions were formed when workers realised that they would need to join together, to combine, if they were to be able to prevent employers using their stronger position to force down the price of labour.
In some cases, where workers have skills in demand, individuals may be in a position to bargain up their wages and conditions. But this is not the case for most workers, particularly women working part-time in the clerical, finance and service industries.
Prior to the introduction of AWAs, there was no prohibition on individual agreements which provided for wages and conditions above the minimum award standards. This can be seen in the prevalence of over-award payments, an area in which women are disadvantaged, as I have shown earlier.
The key point about AWAs is that they allow employers to reach agreements with individual employees which are inconsistent with their awards. Although the Act does require the Employment Advocate to apply a no disadvantage test to these agreements, to ensure that overall employees are not worse off, there is some evidence that agreements, particularly in the hospitality and retail industry, are making drastic changes to hours of work and penalty rates and loadings in the name of “flexibility”.
The AWA system is shrouded in secrecy; the approval proceedings are not open to the public, or to any intervener not directly requested by a party, and the agreements themselves are not publicly available.
The Employment Advocate maintains that although some AWAs, on their face, would appear to disadvantage employees, this is rectified by undertakings obtained from the employer. For example, where weekend penalties are abolished, the employer might undertake that no weekend work will be required of employees.
The problem with this is that the undertaking remains even more secret than the AWA itself, as does the method of enforcement. The reality is that AWAs were designed to allow employers to obtain more flexible working conditions from employees, with the effect of lowering wages and worsening conditions.
The ACTU has documented a number of examples from unions showing how AWAs were used by employers to reduce employment conditions, sometimes after workers had voted against a proposed collective agreement. Employers then turned to a strategy of applying individual pressure on employees to sign.
This issue of flexibility is one which is often brought up in the context of women’s employment, in the sense that many women value flexible arrangements which allow them to better manage work and family responsibilities, particularly involving the care of children.
There is no dispute that this is the case. However, the current pressure for ever greater flexibility, encouraged by Government exhortations to employers and the Commission, is not, in my view, motivated by the need to give employees more flexibility. As Sara Charlesworth concluded, in her report for the Human Rights and Equal Opportunity Commission on enterprise bargaining and flexible hours, “These changes have been overwhelmingly employer-driven, particularly in relation to the removal of restrictions on part-time and casual work and an increased span of hours and days”. The report found that these changes could lead to increases in working hours without increased pay, or to flexibility involving sporadic hours of work, less consistent income or a decline in earnings, increased work intensity and an inability to balance work and family.
The debate about part-time work is a good example to demonstrate the difference between employer and employee driven flexibility.
Although many women wish to work part-time, and can afford to do so, it needs to be remembered that certainty and predictability are critical for workers trying to juggle work and family.
Employee driven flexibility means being able to take time off when unexpected family needs arise, choosing to work at home or to nominate working hours which fit in with child care availability, for example.
Employer driven flexibility means hours of work can be set and changed, with no concern about the needs of employees.
Predictability of hours of work is crucial, particularly where the care of young children is involved. Child care centres do not operate flexibly; generally parents are required to pay for care not used, and it is not always possible to arrange extra care to meet additional hours of work. Use of centre-based child care is simply incompatible with frequently changing hours of work.
A recent survey of child care centres found that many parents were switching from quality, regulated child care to unregistered, unqualified home based care, while others were giving up work so that they could look after their children at home. In other cases, parents had reduced their working hours in order to cut back on child care.
While the survey found that the cause of this trend was the increased cost of child care resulting from cuts in Federal Government subsidies to centres, I wonder whether greater employer insistence on flexible (meaning changeable) working hours could be a factor in the move from centre-based care. If this is the case, it is a clear indication of the potential harm to children caused by the growing requirement that workers subordinate their need for stable working arrangements to the short-term business needs of the employer.
It is one thing for women in professional or executive positions to negotiate a four day week, for example, or for additional leave in school holidays. It is quite another for women on low wages (a retail worker’s award wage, for instance, is around $420 per week before tax) to have their hours of work reduced or increased with the highs and lows of the employer’s business.
I can only think that this distinction was not understood by the Democrats when they agreed to prohibit the Commission from including minimum or maximum hours for part-timers in awards, and from providing for ratios of part-time to full-time workers.
The conventional wisdom is that restrictions on part-time work reflect the desire of male trade union officials to protect their full-time male members at the expense of part-time women.
The reality is quite different. Industries like finance, hospitality and retail already employ a large proportion of women. It is women who will find that their current guarantee of minimum hours (usually somewhere between 10 and 20 per week) will be reduced to as little as three or four per week. It is women working full-time in the finance industry or the clothing industry, for example, who will find that only part-time work is available to them.
This kind of move towards part-time work has nothing to do with the needs of women. While part-time work does suit some women, for a woman earning $400 per week, a cut in her working hours will greatly affect her standard of living and that of her family. Yet, in many cases, part-time work is all that is available. In a study of women retrenched from the clothing industry, Sally Weller, from the University of Melbourne, found that those who were able to find employment generally did so only on a part-time basis in the service sector.
It is, of course, possible for more protection for part-time workers to be included in enterprise agreements, but women are least likely to have the bargaining power to do so, although there are good examples of agreements with conditions such as paid maternity leave, and part-time work provisions activated at the initiative of the employee.
There is real evidence to show that the best protection for workers, especially female workers, is union membership. You might be thinking “She would say that, wouldn’t she”, but just look at the figures. Unpublished date from the Australian Bureau of Statistics, released two weeks ago by the ACTU, showed that, on average, female union members earn $95.10, or 22.4 per cent, more than their non-union counterparts. Unionised part-timers earn $65.10, or 26.3 per cent, more than non-unionists, and casual members $48.30, or 14.9 per cent, more than non-unionised casual employees.
The data also showed that union members were far more likely to receive standard employment benefits such as superannuation, sick leave, annual leave and long service leave, particularly for part-time and casual employees.
So, in conclusion, if we are to protect women’s wages and working conditions through the award system and enterprise bargaining, the following conditions need to be met:
- A strong and relevant award system which ensures that workers on award rates are not totally left behind community standards reflected in enterprise agreements.
- An effective no-disadvantage test for agreements, which distinguishes between employer initiated flexibility, and work arrangements which genuinely help workers meet all their work and life responsibilities.
- An end to individual AWAs and strong encouragement for collective bargaining.
- A public process for approval of agreements by the Commission, with a role for unions in ensuring that statutory requirements are met.
And most important, the drive for productivity, efficiency and flexibility should not be at the expense of the low paid, and those with the least bargaining power in the workplace.
Speech By Jennie George, ACTU President. To The IIR Equal Employment Opportunity & Diversity Management Conference – Sydney, 11 March 1998