The new Workplace Relations Act has not, so far, proved to be the swallow heralding the dawn of a brave new industrial era says ACTU President Jennie George.
As you know, the legislation was strongly opposed by the ACTU and the union movement. We maintain our view that it will lead to a deterioration in wages and working conditions, particularly for those employees whose lack of industrial muscle makes them especially vulnerable, and will accelerate the growth of part-time, precarious employment.
As far as unions are concerned, the Act will make our job harder in some respects, and we will have to change the way we do things. This does not mean, however, that the Act will ensure that unions subside into irrelevance; in some ways, it will assist them to become more relevant.
There can be little doubt about the Government’s objective in framing the provisions dealing with trade unions.
The clear aim was to make life difficult for unions, to marginalise them by restricting access to workers and to limit their ability to maintain an award system which protects all employees.
At the same time, the Act is designed to drive unions into costly, time consuming and frequently futile litigation.
Superficially, it looks like a clever plan, but without much chance of success because it is based on a quite false idea of what trade unionism is about. As a result of the legislation, there has been a change of emphasis, and unions will be forced to concentrate more on the needs of their members at the enterprise level, rather than on all workers in the industry through the award system.
It is likely to be considerably harder for unions to achieve improvements in living standards for workers other than at an enterprise level. This has been made clear in the Commission’s disappointing decision in the Living Wage Case, and its refusal to increase award rates of pay in the transport industry award to bring it into line with standards generally applying as a result of enterprise bargaining.
The avenue of negotiations at the political level, which resulted in the Accord process, has been rejected by this Government. At the same time, the clear intention of the Government is to restrict economy wide safety net increases to the very low paid at a minimal level.
In order to achieve this, it has had to rely on exhortation to employers to resist union claims, backed up by the Reserve Bank, which seems to see a new role for itself as the creator and enforcer of wages policy.
In the face of this, the trade union movement has no choice but to shift its efforts to the enterprise.
There is nothing revolutionary about this, as those of you who remember the over-award campaigns of the fifties and sixties will know.
This shift will allow the union movement to re-establish its relevance in the eyes of those workers who may have felt that we were too close to Government, and that their ability to fight for higher wages and improved conditions was limited by the Accord. Having so comprehensively dismissed the Accord approach, the Government is having to come to terms with the consequences of this approach to industrial relations, including a continuing concern about the level of wage increases.
Having promised workers that its policies would lead to better pay, the Government does not like the reality, which is that many workers are achieving substantially higher pay.
The only legislative strategy to deal with this is a range of new prohibitions on taking industrial action, together with provision for penalties for breach of these prohibitions by unions and individual members.
The Government’s only advice to employers is to use the courts to take on their employees and the unions which represent them.
Over the last six months, a number of employers have used the new section 127 to apply for orders from the Commission to stop industrial action. Some applications succeeded, some did not.
There is nothing to suggest that the Commission is taking a different view to section 127 than it did to the issue of insertion of bans clauses, or the making of orders under its general powers. This has led to complaints from some employers that the legislation has not delivered them an instant, automatic means of stopping industrial action.
It is well understood that employers want to stop industrial action, but generally they know that there is little to be gained by all out war with their employees.
It needs to be remembered that prior to the introduction of “protected action” in the 1994 Reform Act, all industrial action in this country was unlawful. Workers and their unions have always been liable to damages at common law, as well as to the “penal provisions” of the Conciliation and Arbitration Act for breaching a bans clause in an award.
That potential liability did not invariably inhibit workers from engaging in such action, including against the “penal provisions” themselves. Some of you may remember the gaoling of Clarrie O’Shea and the consequent national strike which saw the end of the use of those provisions.
There is clearly a very strong belief in Government circles that sanctions provide the means of resolving industrial disputes. On the other hand, in quite a public way, employers in key industries, such as the waterfront, have been making it clear that they are not interested in taking advantage of the new sanctions and the increased penalties in order to go to war with the union movement.
They know that, even if they win, the costs for both sides are horrendous, just as in any war. This is not an approach that is of much use in developing a more productive and quality-oriented work environment or a workforce willing to work co-operatively with management. If that is all the Government is offering employers, there is good reason to be disappointed.
Much has been made of the Government’s claim that it has outlawed compulsory unionism and the closed shop.
Again, credit is being claimed for solving a problem that wasn’t really there, in that closed shops are increasingly rare and, in any event, have never been legally enforceable. There is now a specific prohibition on an employer refusing to employ a person on the grounds that the person is not a member or does not propose to become a member of a union. The Commission’s ability to award preference to unions has also been abolished.
At the same time, however, Senator Campbell (the Parliamentary Secretary to the Treasurer and the Government member with carriage of the Workplace Relations Act in the Senate) released legal advice from the Attorney-General’s Department to the effect that agreements committing employers to encourage union membership by deducting dues, distributing application forms and giving union representatives access to workers do not contravene the freedom of association provisions of the Act.
This type of agreement is common in many industries. Nothing in the legislation prohibits such agreements.
In my view, the new legislation will assist growth in unionism rather than the opposite. The more workers see the results of collective union organisation, the more they are likely to turn towards unions in order to achieve similar results.
Through the introduction of Australian Workplace Agreements the Government believes that it has created the means for employers to conduct their relations with their employees on an individual, rather than a collective basis.
Again, there is nothing new about this. Many employers, particularly in small business or where particular and specialised skills are involved, negotiate or simply provide different terms and conditions of employment to individual employees. The significance of AWAs is that they enable such individual agreements to operate inconsistently with the award, thus allowing for a result determined by the unequal bargaining power between the employer and each employee.
The intention that such agreements be used to lower wages and conditions can be seen in the original Bill, which provided for total secrecy, with no third party scrutiny whatsoever. Resulting from the Government’s agreement with the Australian Democrats, a number of significant changes were made, including scrutiny by the Employment Advocate and, in some cases by the Commission, together with the ability for the Advocate to make the agreement public, although without identifying information.
How these agreements will operate in practice is another question. Is the Advocate, or even the Commission, going to do the painstaking job of comparing the agreement with the terms of the award for the purpose of working out whether there is compliance with the no-disadvantage test? The experience with non-union agreements to date shows that it has been the union interveners who have put together the evidence to demonstrate where an agreement does not comply with the statutory requirements. Who is going to bring any problems with an individual agreement to the notice of the Advocate or the Commission?
I know of one case, where employees at a newly opening establishment had authorised the union to be their bargaining agent. However, when told to come in, allegedly for a medical, they were informed they would not be able to start work unless they signed the AWA, and that they should not involve the union, but tick the box that said they did not have a bargaining agent.
The union brought this to the attention of the Advocate, together with evidence that the AWAs seriously disadvantaged employees in relation to award terms and conditions. Nevertheless, the AWAs were approved, with no reasons being given as to why the union’s submissions had been rejected. The case raises real questions about the secretive operation of the Employment Advocate, a concern which has been raised with him during a hearing before the Senate Estimates Committee.
Unless the content of AWAs (without information identifying the parties) is made public, the community cannot have confidence that the Employment Advocate is ensuring that employees are not disadvantaged. It is worrying that the Advocate will not even release the guidelines which he uses to apply the “no disadvantage” test.
It is not my view, however, that AWAs will be taken up to any significant extent, other than in the public sector by governments which have a vested interest in demonstrating some success for the concept. This is likely to be the case, in spite of public and private haranguing of employers by Mr Reith to take up individual agreements as a means of reducing penalty rates and other such objectives.
Most small business already has sufficient flexibility – none of the research or other evidence put to the Senate Inquiry into the Workplace Relations Act indicated any great demand amongst small business for a shift from the award system.
The May 1996 Yellow Pages Small Business Index found that “government regulations” (presumably including industrial relations legislation as this was not listed as a separate category) was a concern to only three per cent of respondents.
The Australian Chamber of Commerce and Industry’s own survey of what business wants from the Howard Government showed compliance with award regulation as 28th out of 30 issues. Similarly, most large employers are unlikely to take up AWAs, with the exception of those few who are ideologically driven towards shifting from collective to individual relationships, and who see an opportunity to attempt to de-unionise.
Undoubtedly, however, there will be a number of employers, mainly in small business, who will try to use AWAs to reduce employees’ overall employment conditions. I am aware of a Melbourne restaurant which has had an AWA approved for its staff which trades off all penalty rates, overtime and annual leave loading for a ten per cent wage increase. The Opposition brought this to the attention of the Employment Advocate at the Senate Estimates Committee, and is waiting for an explanation of why he approved an agreement which seems to have left employees up to 30 per cent worse off.
AWAs do not involve individual negotiations; in every case which has come to my attention of where individual contracts have been used for significant number of workers, the same basic contract terms have been offered on a take it or leave it basis. There is no real negotiation; when you think about it, the transaction costs of such a process would be prohibitive.
This will immediately become obvious to workers, particularly if they decide to appoint a bargaining agent so as to get the best possible deal. The fact is, no matter how individualised and confidential employers try to keep the process, it doesn’t take long for everyone to know what’s been offered to everyone else.
The trade union movement is committed to collective bargaining as the only effective means by which there can be some equalisation of the power relationship between employers and employees.
The right to bargain collectively is a fundamental right and recognised as such in a number of internationally binding instruments to which Australia is party. This legislation does represent a breach of Australia’s obligation to encourage and promote collective bargaining, in particular by favouring individual agreements over collective instruments, such as awards, and by excessively restricting the right to strike. I am confident that findings critical of the legislation will be made when the matter is put formally before the International Labour Organisation, although it needs to be understood that this is a lengthy process.
At the same time, where workers do become involved in individual agreements, unions will not abandon them. Strategies will vary in different industries, but in some cases unions will become bargaining agents, acting for a number of workers whose employers have offered them individual contracts.
This is analogous to the old non-union Enterprise Flexibility Agreements; where unions became involved they were sometimes able to negotiate better deals. One can see a scenario where employer attempts to establish AWAs end up as collective negotiations, almost certainly to the benefit of all parties.
So, what can employers expect from the trade union movement in the new environment?
In many ways, it’s business as usual for us, but with more emphasis on direct claims and direct action.
I do not believe that unions will allow themselves to be diverted into futile areas of litigation. The provisions of the Act in relation to union eligibility rules and disamalgamation are clearly designed to draw unions into fighting amongst themselves and engaging in protracted legal proceedings. In relation to eligibility rules and coverage, the changes are not all that great.
The modification of the “conveniently belong” rule represents an almost total back-down from the Government’s initial commitment to repeal it. A new organisation will be able to achieve registration only if there is no other organisation to which members can more conveniently belong and which can more effectively represent them. The same criteria will apply to unions wishing to extend their rules into areas of other unions’ coverage.
This does not represent a great shift in substance from the current situation, even taking into account the ability of the Commission to register an organisation on the basis of undertakings designed to avoid demarcation disputes.
Similarly, there has been a change to the operation of section 118A which removes the requirement to consider whether or not to consult with the ACTU and puts a specific emphasis on the wishes of the employees involved. Again, no massive change.
There is a new ability for enterprise unions to be registered, without consideration of the application of the “conveniently belong” rule. However, such organisations are required to obtain the support of a majority of employees eligible to be members at the workplace prior to obtaining registration.
In some cases, enterprise unions may be established by non-unionised workers. The ACTU welcomes any move towards collective organisation by workers not currently in unions, so long as that organisation is genuine, independent of the employer and directed towards improving the terms and conditions of employment of the workers involved. Over time, those organisations may decide to become part of an established union through federation or amalgamation. In some cases, however, employers may sponsor and encourage the formation of enterprise unions in order to weaken collective organisation at the workplace and remove the existing unions with traditional coverage.
This is unlikely to occur on a large scale, given the demarcation disputes and on-the-job dissension which would be the inevitable result.
The provision for enterprise unions is yet another example of a solution to a non-existent problem. I don’t hear employees or employers crying out for more unions or for different unions. To the extent that the possibility of enterprise unions spurs existing organisations on to operate more effectively, it is not necessarily a bad thing.
However, the trade union movement as a whole will strongly oppose any move to use enterprise unions to de-unionise or to restrict collective organisation.
Disamalgamation is another virtual non-issue, even more so since it was discovered that, as a result of an apparent drafting error, the provisions do not apply to most unions.
Although this technical oversight is likely to be rectified, there is no evidence of anything more significant than a very few, relatively small organisations, interested in disamalgamation.
In relation to disamalgamation, it needs to be noted that members do not automatically transfer to the newly disamalgamated union; they must be individually signed up and the original union retains its coverage. Another recipe for demarcation disputes at the workplace. The union movement will be rejecting the invitation in the Act to engage in in-fighting and litigation, in favour of concentrating on the many positive opportunities available to us in 1997 and beyond.
We will continue to negotiate enterprise agreements and see this as our main focus. Where employers attempt to utilise the new legislation by reducing wages and conditions, whether through changes to awards, or through non-union agreements and AWAs, I am sure that workers will be coming in their droves to unions for advice and assistance.
There is already some early indications that workers’ fears about the effect of the new legislation is leading them to contact their union; in some cases these are workers who have not previously been union members.
The irony for the Government may well be that as it becomes harder for the trade union movement to operate through the political process, or through the Commission, members and potential members will come to the view that they require union representation in order to keep up with improvements in wages and conditions occurring in other workplaces.
Although, as I said earlier, the ACTU was disappointed with the Commission’s decision to grant only $10 in the Living Wage Case, we will continue to focus on the issues raised by the case.
Through the Living Wage claim, the union movement was asking employers, the Government and the Commission to face up to the challenge of ensuring that Australia retains a fair and properly maintained system of safety net awards. The claim was directed particularly at ensuring fair wages for those unable to negotiate enterprise agreements and who are not in receipt of over award payments. Evidence presented during the Living Wage Case showed that award wages have lagged well behind average weekly ordinary time earnings, with the greatest rate of increase being executive salaries. There was also evidence that 12.4 per cent of the Australian workforce can be characterised as low-paid, defined as earning less than $9 per hour, or $342 for a 38 hour week. This proportion rises to around a quarter in service industries, such as retail and hospitality, and the female-dominated clothing and footwear industry.
This growing disparity in incomes is not something which a should be tolerated in a country such as Australia, with its historical commitment to fairness, particularly given that fairness remains a key object of the Workplace Relations Act.
The union movement understands that many unions and their members will prosper in the industrial environment which will result from the legislative path being pursued by the Government.
However, there will be some groups who will not prosper. Those without industrial strength and workplace organisation may not be in a position to withstand the assault on their wages and conditions planned by the Government.
The award system has provided a secure safety net of minimum wages and conditions to many workers who would not otherwise be able to secure them. This is particularly the case for workers in the service sector and other labour intensive industries – the unskilled, women, migrants, young people, part time and casual workers.
The achievement of a free labour market was the rationale behind the Government’s original proposals in relation to limiting the Commission’s arbitral power and promoting secret, unvetted individual contracts which would override federal awards. This goal also underlies the requirement that minimum hours of work for part time workers be removed from awards, a move which is likely to lower wages and increase uncertainty for employees, particularly in the service sector.
If we are not careful, we will go down the path towards the creation of an underclass of vulnerable, marginalised workers, as in the United States, where over 4 million people work for the minimum wage of $5.15 per hour, with virtually no access to health care or public housing, locked into poverty for generation after generation.
Labour market deregulation in the United States and in Britain has led to large increases in the “working poor” as part time, low paid, service sector jobs replace full time, secure employment.
The union movement can survive and grow by focussing on its members and using its strength to gain the greatest possible benefits for workers on an enterprise or industry level.
Traditionally we have done this, but we have done more, by accepting a wider responsibility towards all employees in a national economic context. The Workplace Relations Act will make that harder, although far from impossible. There is no legislative bar to a truly fair award system which protects and improves the living standards of employees at risk of becoming the working poor, so long as the Commission doesn’t allow itself to be spooked by the Reserve Bank.
In spite of the Workplace Relations Act, and in some ways because of it, the union movement is in a position to grasp new opportunities and develop new ways of doing things, as well as returning to some traditional strategies.
I am sure that we will find that most employers want to be part of a positive approach; if that is the case, they will find that unions are prepared to work with them.
On the other hand, if employers take up the Government’s invitation to a fight, they will not find it an easy one to win.
ACTU President Jennie George, ICM Workplace Reform Conference, Sydney