ACTU Senior Industrial Officer, Linda Rubinstein on the Australian industrial relations system, and the need for reform.

Reform is like surgery – vital if needed, but generally best avoided for its own sake.


In the case of the Australian industrial relations system, there is probably a broad consensus that there is a need for reform – that’s the easy question. The hard one, of course, is what kind of reform. That’s where the disagreements kick in.


The problem is encapsulated in the debate about a unitary industrial relation system. The issue is not really about states rights or constitutional restrictions, although they do come in to it. The real core issue is the content of such a system.


The fact is that each party to the unitary system debate has its own position on the essential issue of the kind of industrial relations system we should have – an issue, I would argue, which is strongly linked to its view of society in general.


The ACTU is not wedded to having six or seven different industrial relations systems. We support the Victorian Government’s desire to have the federal system extend to Victoria through common rule awards, operating on the same basis as in the ACT and the Northern Territory.


The so-called referral of the Victorian IR powers to the federal system has not created greater uniformity – all that has happened is that a sub-standard system, seriously disadvantaging Victorian workers, particularly those with little, if any, industrial muscle, is now administered by the federal system.


We currently have the situation where a Victorian Government, elected, at least in part, because the electorate rejected key Kennett Government principles, including its 1993 abolition of the state award system in Victoria, is unable to make the changes it was elected to make because of the Coalition majority in the Victorian Legislative Assembly and the Coalition Government in Canberra.


The Victorian Government’s Fair Employment Bill has been rejected by the upper house, while Mr Abbott, on behalf of the federal Government, is showing no inclination to accept an extension of the referral, as offered, and legislate to enable common rule awards to be made covering Victorian workers.


It is in this almost farcical situation that the federal Government’s agenda can be seen – abolition of awards and replacement by legislated minimum conditions is the Coalition’s preferred approach. The problem they faced in implementing it was two fold: first, the disastrous 1993 electoral defeat led to the “no workers will be worse off” pledge, which somewhat limited their course of action, and second, the Democrats balance of power in the Senate significantly modified the full effect of their 1996 legislation.


The sincerity test is a simple one – what would be the response if the ACTU were to say to the federal Government, or to any of the employer groups supporting a unitary system, that it could be achieved on the basis of a common rule award system determined by the AIRC in relation to disputes coming within the full constitutional conciliation and arbitration power, together with union collective bargaining and organisational rights fully consistent with international conventions, including in relation to industrial action.


No prizes for guessing, I’m sure you would all agree.


The ACTU sees some obvious benefits in a unitary system, which could cut out some inefficiencies of the current system. On the other hand, however, this is a secondary question to that of the kind of system we want to have. The fact of the matter is that unions will strongly support the existence of state systems where this can provide some counterbalance to a federal system which unacceptably restricts workers’ rights and their ability to protect their employment conditions, as is currently the case in most states. Of course it can also work the other way – the existence of the federal award system was crucial in protecting many Victorian workers when the Kennett Government abolished awards in 1993.


The ACTU does not support either centralism or federalism in relation to industrial relations as a guiding principle. So long as industrial relations is treated as a key battleground for competing ideologies in this country, with significant amendment occurring with each change of government, there can be no expectation other than that unions will want to maximise the possibilities to achieve the best outcome for workers.


Unfortunately, there is little sign that the battleground combatants are packing up. The drive by some employer organisations and major employers for a legislative framework even further individualising the employment relationship and banishing unions from the workplace is deeply disturbing. The fact is that unless we can achieve some consensus on fundamental issues, a unitary system will remain an impossible dream.


There are really only two fundamental issues: first, the existence of a truly independent Industrial Relations Commission able to determine wages and conditions and assist in resolving industrial disputes and, second, a legal system which gives primacy to collective bargaining and which recognises the central role of organisations in this process.


I’m not sure how well understood it is that Australia is right outside the square on collective bargaining rights. Australia is the only country in the developed world where an employer can say to employees: “If you want a pay rise you must sign an individual agreement. I will not negotiate with your union even though you are members and you want to be collectively represented.” It is this issue which is at the heart of the ILO’s concerns about Australian law; that is, the ability of the employer to choose, unilaterally, the level of bargaining.


Our commitment to these principles does not make the ACTU anti-employer. We understand the competitive pressures facing some industries in the context of Australia’s growing integration into the international economy. We recognise the need for company profitability and for flexible and efficient work practices. We do not believe, however, that this needs to be at the expense of the low-paid and the most vulnerable, nor at the expense of universally recognised collective bargaining rights.


And make no mistake about it. The wages share of the economy as a long term trend has been declining in relation to profits since 1974. In effect, what we’ve seen is a redistribution from wage and salary earners to company profits.


It is also clear, in spite of the Prime Minister’s recent claims, that there has been a steady trend towards earning inequality, leading to the emergence of a significant group of the “working poor”.


Late last year the Smith Family released a report on financial disadvantage in Australia which found that nearly one in ten poor Australians live in a household headed by a full-time employee. The report concluded: “In Australia today, having a job no longer guarantees that you and your family will not be in poverty”.


Looking at the bottom 20 per cent of households with wages and salaries as their principal income, the Australian Bureau of Statistics found:



  • average expenditure exceeds average income by more than $50 per week;




  • almost 70% said their standard of living had worsened between 1997 and 1999;




  • 26% said they would not be able to raise $2000 in an emergency;




  • 20% said they had not been able to pay bills for utilities and insurance in time;




  • 14% bought second-hand clothes to save money and had sought financial help from family or friends;




  • 5% had pawned goods; the same proportion said they could not afford to have friends or family over for a meal once a month, while 4% were unable to heat their homes and/or had gone without meals due to lack of money.



And these are people working full-time, most likely on or near bare award rates of pay, which can be as low as $413 per week. What does that say about us as a society?


When the ACTU and unions call for a more flexible and generous attitude to award rates of pay we have in mind these people in particular – those who are not in a position to bargain for substantial increases in certified agreements, and who are most disadvantaged by the growing gap between award rates of pay and agreements. This gap averages around $60-$70 per week in industries such as transport, manufacturing and building, while, on the other hand, in industries such as hospitality, agreements are rare, and the awards set the prevailing rate of pay – a rate which is increasingly irrelevant to the real needs of working families.


The growth gap between awards and agreements threatens the relevance of the no-disadvantage test, the key safeguard for workers negotiating agreements and gives employers a huge incentive to avoid bargaining by all possible means, including de-unionisation and contracting out.


You know about the cases, but think about the people involved – the call centre workers in Stellar, the bank counter staff in PP Consultants and home help workers in Greater Dandenong City Council. These are all people earning $500-$600 per week, before tax, and whose working arrangements had been changed to allow for these modest incomes to be substantially reduced.


Equally, when the ACTU campaigns around the issue of reasonable hours we know that we are plugging into a key concern of Australian workers. There is growing evidence of the stress on workers and their families caused by inequitable and unreasonable work distribution – too many locked into casual employment, with no security or even predictability, and without the leave and other entitlements which we have traditionally taken for granted and which most still have, while others experience intolerable levels of overwork (much of it unpaid, particularly in white-collar and professional employment) and work intensification or pressure.


It is interesting to note that Australia has gone from being one of the most progressive countries in relation to labour standards to one of the most backward, at least in the democratic world. We also stand, if not proudly, then certainly alone, in our failure to provide any universal right to paid maternity leave, while we have the second highest proportion of temporary (including casual) workers and the second highest average working hours in the OECD.


So what are the key reform issues for the ACTU:


The Commission’s powers to make awards to deal with all issues the subject of an industrial dispute must be restored; that is, the restriction to 20 so-called allowable matters must be abolished. The Commission’s inability to intervene in disputes has proved costly to all industrial parties and to the community, as we have seen in relation to the MUA dispute, Hunter Valley and many others. It has resulted in a shift from conciliation and arbitration to sterile, expensive litigation in the courts. At the same time, the removal of sensible provisions like trade union training, workplace consultation and blood donor’s leave has again placed this country behind modern standards of labour rights. Rights to information and consultation, for example, are being extended in Europe, including the UK, at the very time they are removed in Australia. The ACTU is encouraging a debate amongst unions and other interested individuals and organisations about how such rights should be given effect in the Australian context, with European-style works councils one of the structures under consideration. Recent examples of company restructures and closures shows us how vital it is that workers be informed and have a say in company decisions which affect their present and future employment. Much of the anger we have seen stems from the way in which workers and their representatives are kept in the dark until the final decision is ready to be announced, whether it is liquidation or closing down and relocating.


The Commission must be given jurisdiction to deal with disputes involving dependent contractors and others in employee-like relationships. The provisions concerning transmission of awards and agreements should also be amended to ensure that they apply in cases of privatisation and outsourcing.


Employers must be required to bargain with unions in good faith (and, of course, vice versa) The ACTU welcomes the Labor Party’s commitment to remove individual agreements from the legislation and to establish a good faith bargaining system. It should not be possible for employers to deliberately undermine collective bargaining and the right of workers to be represented collectively by unions by making wage increases or other improvements in entitlements conditional on signing an individual agreement or becoming party to a non-union agreement. While it has been argued that this does not amount to discouraging or prohibiting unionism, it was best summed up by Financial Review journalist Stephen Long as a similar approach to allowing a person to join a golf club but not allowing them to play golf. The ACTU is seeking an approach to bargaining obligations consistent with the New Zealand Code of Good Faith for Bargaining for Collective Agreement which was recently adopted after being unanimously recommended by a committee comprising both employers and employees.


The right to take industrial action is integral to the right to bargain collectively: the inability of unions in this country to take industrial action on a multi-employer or industry basis is as uniquely Australian as many of the other features of our system to which I have pointed. Equally unusual is our inability to take lawful industrial action to protest on social or economic issues or to demonstrate sympathy with other groups of workers. How absurd is it when we have laws that require the Federal Court to issue injunctions against a union stop work meeting to discuss its wages campaign? Is the resentment this causes amongst unions and their members really worth the benefit of intimidating some, but far from all the workers involved, from attending?


Unions must have the ability to function effectively, with workable and fair right of entry for officials and, at least equally important, recognition of the role of union delegates at the workplace, with appropriate leave to enable them to carry out their functions and receive training.


We believe that these are fairly modest claims to be making and, if implemented, would deliver an industrial relations system broadly in line with community expectations and international standards.


Our research ahs found strong support amongst employees across the political spectrum for a strong, independent Commission and for the role of unions in bargaining. It is time this was accepted by all the industrial parties.


Linda Rubinstein, ACTU Senior Industrial Officer

IRS of NSW, 42nd Convention – 19 May 2001