The ACTU’s expectations of Labor are to provide an effective safety net and a modern set of employee rights says ACTU Secretary Greg Combet in this speech to the Sydney Institute.

I think it is pretty widely accepted that although we don’t yet have an official federal election date Australia already has an unofficial federal election campaign.

All the signs have been there. Mark Latham has been down to the set of Big Brother to capture the youth vote. Peter Costello has hugged a python and kissed a crocodile. And the Liberal’s have rolled out their off-the-shelf campaign of misinformation about industrial relations.

The only difference that I can see between an ‘official’ election campaign and what we have at the moment is taxpayer’s footing the bill for the Liberal Party’s political advertising – $100 million of it.

So with this in mind I want to address this evening the issues of work and workplace regulation in the context of the up-coming federal election.

James Hardie

But before I do I want to say a few words about James Hardie. What has happened at James Hardie is in my view one of the most repugnant acts in Australia’s corporate history.

This company made solid profits by selling deadly asbestos products to Australians for almost 80 years – a product that causes a form of cancer which kills within 12 months of diagnosis and for which there is no cure. Mesothelioma has already killed 7,500 Australians and is expected to kill 18,000 Australians by 2020. And rather than face up to its responsibilities for this human tragedy James Hardie skipped town leaving just $293 million to fund compensation liabilities now estimated at $2.3 billion.

I see this as a defining issue. We will fight as hard and long as it takes to ensure justice is done and asbestos victims get proper compensation from the company that is responsible for their injuries. Every Australian Government, regardless of its’ political persuasion should do what is necessary to right this outrage and ensure it can’t happen again.

The reason I raise the issue at this moment is to place in some scale and context the issues about industrial relations I will cover this evening. Here we have a truly sickening corporate act but the silence of both business and the federal government to date has been deafening. I ask you to imagine the outcry if a union had done anything evenly remotely comparable.

Even the possibility of Labor restoring the ability of the AIRC to insert provisions for blood donor leave and the like last week drew howls of outrage, with the Prime Minister warning that this represented ‘the most anti-business agenda in a generation’. But not a word about thousands of deaths that will go uncompensated if James Hardie’s scheme prevails.

A week ago counsel assisting the James Hardie inquiry released submissions accusing James Hardie of treating asbestos victims with ‘disdain’; words like ‘dishonesty’, ‘misleading and deceptive conduct’, failure ‘to exercise due skill and care’ were used.

Reporting the reaction to these findings the next day The Australian newspaper quoted a building material stock analyst as saying:

‘Ultimately, questions of negligence or other misconduct by company executives are only of interest to the extent that they affect shareholder value.’

Another analyst in The Age declared the business community had complete confidence in James Hardie CEO Peter MacDonald – he’s a ‘nice guy, he runs the company well’.

These are exceptionally callous and insensitive remarks that would sicken the families of asbestos victims. I know that this attitude is not reflective of the views of most people in the Australian business community. But business needs to make it clear that it does not condone the actions of James Hardie.

If you expect responsibility from the union movement, expect us to play a responsible role in the economy and the shape of the industrial relations system, you’d better stand up for some corporate responsibility too.

Economic change

Any analysis of the contemporary Australian workplace must start with an examination of economic change. It is this story that captures a sense of where the country has been, and where it’s going.

Like business, unions have played an important role in the process of economic change, particularly during the Hawke and Keating years when much of the heavy lifting on economic reform was done. Currency and financial deregulation, discipline exacted by competition in a range of markets, and the move to a decentralised workplace bargaining system have produced impressive economic results.

Over the past ten years Australia’s GDP growth has averaged over 4% a year – outstripping G7 and OECD averages and adding $200 billion to the economy in real terms. Employment has grown at an average of 2.2% per year compared to an OECD average of 1.1%. Productivity growth has exceeded 2% a year, each year over 10 years.

Inflation has remained low at an average of 2.5% a year. Company profits have grown an average 13.5% year on year for the past decade increasing by 233% in real terms. (Another bumper company reporting season is expected).

Per capita income has also lifted by about 4.2% a year – Australia has moved ahead of the UK, France, Germany, Japan and Sweden.

This strong economic performance is very important. It is the context in which unions operate in determining union policy. Unions support a strong economy. We want to create jobs and we want to create wealth.

But economic change has also impacted adversely in the workplace, and generated inequality in the society.

Contemporary Workplace issues

Unions have extensively researched the issues relevant to people in workplaces and industries across the country. We have found that the single most important dynamic affecting employees is the intensification of work – caused by the drive by business for improved competitiveness and flexibility.

For large numbers of employees this has meant a proliferation of low paid, part time and insecure jobs. Although we have experienced prolonged economic growth, 87% of the jobs created during the 1990s paid less than $26,000 per year. Amongst these people is an army of more than 2 million casual workers – nearly 30% of the workforce. Since 1988 more than half of all new jobs (54%) created have been casual – people in these jobs are making up a US-style working poor.

But for many other employees the biggest problem can be long working hours, stress, and dissatisfaction with the pressure work places on family life.

In this environment Australia is not investing enough in workplace skills and vocational training – competitiveness is largely sought through cost cutting and cheaper labour practices. This is denying working people of opportunities and undermining the future productivity of the economy.

Union achievements

These are the issues that are driving the union agenda. Since my election as ACTU Secretary I have set about trying to make practical improvements for working people in these areas. We have been achieving tangible results.

The ACTU has lifted minimum award wages by $94 per week since 1999. In bargaining campaigns unions have delivered new standards like nurse to patient ratios in the health system, smaller class sizes in schools, new family rights, better health and safety standards and improved superannuation contributions. Union campaigns have secured a Government guarantee for employee entitlements in the event of company collapse. We have significantly improved severance pay for the many workers made redundant by economic change and achieved new rights for casual workers to access permanent work and parental leave.

The ACTU is currently running the first ever work and family test case in the Industrial Relations Commission to improve rights for working parents. After a sustained union effort to attain paid maternity leave for women, it is now effectively the policy of both major political parties going into the election.

We have worked hard to make gains for people in these areas but we also believe that important changes in workplace regulation are needed. They are needed so that Australia’s economic prosperity and competitiveness is underpinned by an effective safety net and a modern set of employee rights. It is this gaol which is central to the ACTU’s expectations of Labor.

Industrial relations legislation

Howard Government talk of a union or Labor plan to re-centralise workplace regulation in Australia is nonsense. Australian unions are committed to a decentralised system of collective bargaining. We supported its introduction in 1993 and we support it now. Unions want to see more workers access the bargaining system not less.

To do this we need to get rid of John Howard’s divisive and unfair AWA individual contracts and establish a genuine right for Australian workers to bargain collectively.

Our award safety net also needs to be strengthened. This is vital to ensure that those workers with little labour market or bargaining power are not denied their fair share of the nation’s wealth.

Unions also believe that the Industrial Relations Commission should have the authority to make decisions, resolve disputes and encourage workplace fairness and cooperation.

A fair collective bargaining system

Australia is the only country in the democratic world where an employer can refuse to negotiate with a union to which its employees belong, demanding instead that employees sign individual contracts removing their collective bargaining and representation rights.

Employees who refuse to sign and individual contract generally do not receive the wage increases and other benefits which go to those who do sign, and can even be locked out by the employer until they do, as occurred three years ago at the G&K O’Connor meatworks in Victoria.

Undermining union representation and collective bargaining in this way contravenes internationally recognised rights and we are bitterly opposed to it. Far from strengthening enterprise bargaining it undermines it.

For this reason, the ACTU strongly supports Labor’s pledge to abolish Australian Workplace Agreements (AWAs). AWAs are secret and unreviewable. The only way to challenge a decision of the Employment Advocate who is responsible for secretly reviewing AWAs is through the High Court on a question of law.

Workers who want to bargain collectively with their employer should be legally empowered to exercise that right. To make that right real and effective the ACTU supports the introduction of good faith bargaining. What this means is that the Industrial Commission should be empowered to ensure that all the industrial parties bargain genuinely and in good faith – that it be able to order the parties to achieve this goal.

Before I leave the subject of AWAs I want to briefly address the issue of AWAs and productivity. The Business Council of Australia – the business group representing Australia’s largest 100 companies – recently released a report prepared by Access Economics claiming to detail the effects of Labor’s workplace relations platform on the Australian economy.

The many and serious flaws in the report are too numerous to detail here. But one of the key claims made by the BCA and Access was that abolishing AWA’s would have a negative impact on the productivity of Australian workplaces and the economy.

The principal evidence presented to support this claim was that the mining industry has the highest concentration of AWAs; and that this industry had strong productivity growth between 1994 and 2002.

But when you examine the facts of this claim you find that it says very little about any connection between AWAs and productivity. Rather it speaks volumes about the shoddy research and selective use of data that is characteristic of the whole BCA/Access Economics report.

Access’s first fudge is that it chooses to examine productivity growth between 1994 and 2002. AWAs did not even exist in 1994. They did not exist in any practical sense until the middle of 1997.

And why did Access stop their analysis of productivity in 2002 when figures for 2003 are publicly available? It is because 2003 figures show a significant downturn in mining productivity and this would have undermined the conclusions they wanted to draw from the data.

A fair dinkum examination of any connection between AWAs and productivity would examine data from 1997 through to the most recently available 2003 figures. What this would show is that in the mining industry where 18.6% of employees are on AWAs average annual productivity growth was 2.5% compared to an all industry average of 2.1%.

Over the same period annual average productivity growth in manufacturing was 3%. Yet just 2.1% of employees in this industry are covered by AWAs. In wholesale trade average annual productivity growth was also 3%. Only 0.8% of employees in this industry are on AWAs – 0.8%. In electricity gas and water supply where AWAs cover a comparatively high 13.4% of employees’ productivity went backwards by 1.4%.

The available evidence simply does not sustain the BCA and Access Economics contention that AWAs are a formula for high productivity.

Strong award system

Effective employee collective bargaining rights need to be underpinned by a strong system of awards. A strong award system is not about union power or imposing complicated and inflexible workplace arrangements. It is about ensuring all workers have access to basic and fair workplace arrangements.

The majority of workers who rely on awards are low-paid. Award wage workers make up almost 25% of the Australian workforce but only receive 12% total national wage income. Many of these workers simply do not have the bargaining power to get a fair go. As the Commission President said when handing down the recent minimum wage decision:

“…no one would suggest that all employees are capable of bargaining. Bargaining is not a practical possibility for employees who have no bargaining power.”

The average hourly rate of pay for award-only workers is about a third less than those on registered collective agreements. This gap is inequitable and needs to be narrowed. Nor should the award workers be locked out of accessing family friendly work arrangements or basic entitlements like leave from work to donate blood.

That is why unions support Labor’s policy to remove the Government’s restrictions on what the Industrial Commission can include in awards. To remain relevant and effective awards must be able to deal with contemporary workplace issues like work and family balance and casual employment.

Unions do not want to go back to the days of omnibus over-the-top awards.

But nor do we want to entrench a US style two-tiered workforce where the working and living standards of low-paid award wage workers are pushed further and further behind those of the rest of the community.

An effective industrial relations commission

The community would also benefit if the Industrial Relations Commission was given greater power to fulfil its proper function in settling industrial disputes.

Under the current legislation the IRC is prohibited from providing assistance in too many disputes that would benefit from its intervention. Sometimes industrial action drags on to the detriment of both the business and the employees, when it could be ended by conciliation backed up by arbitral powers to be used if necessary. The dispute settling role of the Commission has strong support in the community who rightly see this as essential to ensure fairness, efficiency and stability in our industrial system.

These changes would not undermine the competitiveness or efficiency of Australian businesses.

Vocational education and training

A much more real threat to our competitiveness and continued economic growth is this government’s failure to sufficiently invest in vocational education and training.

And on this business agrees with me. A recent survey of business attitudes by the ACCI has, for the first time in the survey’s history identified the ‘availability of suitably qualified employees’ as the number one constraint on business investment. Resistance to workplace change came in a distant eighth place.

The Australian Industry Group has also been vocal about this problem. There are serious skill shortages in many of the traditional trades. In the next five years it is estimated that up to 170,000 tradespeople will leave industry and only 40,000 will enter it. Job vacancies in the traditional trades have already risen 20% in the past year and are now at their highest level for 15 years.

Despite the growth in the Australian economy and workforce the training rate of traditional apprentices has declined by 15% since 1987. Less than one third of the apprentices in the Governments much trumpeted New Apprenticeships program are in the traditional trades – two thirds are apprentices and trainees in non-traditional areas such as hospitality. Program incentives are biased against employers prepared to invest in a full four-year apprenticeship – the same $4,125 incentive is also given for a one-year trainee.

This is a key area where many larger businesses, like some of those represented by the BCA, are not pulling their weight. In 1990 more than 42,000 apprentices were training in workplaces employing more than 100 employees. This represented 26% of all apprentices in training. By 1997 less than 17,000 apprentices were training in large workplaces – just 13% of total apprentice numbers. This is the foundation of today’s skill shortages.

It is estimated that skill development contributed about 28% of productivity improvement in the late eighties compared to only 3% in recent years. This is a real worry for the Australian economy.

These are the sort of challenges unions, employers and governments used to work together on. I would like to tackle not only this but also other pressing issues – investment in infrastructure, building superannuation savings, plotting a course for a competitive manufacturing industry, rebuilding bulk-billing, making sure young people can access higher education based on their merit not their capacity to pay.

What I would be seeking from a Latham Labor Government would be the commitment that we could once again work together in the interests of the country. To look after people better, to foster economic growth; and to distribute the benefit of economic prosperity more fairly.

Speech to Sydney Institute
Greg Combet
ACTU Secretary
4 August, 2004