Speech by Jeff Lawrence, Secretary of the Australian Council of Trade Unions

Workplace Relations Summit 2009
Sydney Harbour Marriott
30 March 2009

After a long time of speaking about the new IR system that Australian workers and their families want, and an even longer time discussing what went wrong with WorkChoices – it is exciting to speak here today on the Fair Work Act – that has now been passed.

As has been frequently noted: the last election was a referendum on industrial relations.

IR was the biggest vote changing issue of the last election: 8 out of ten who voted for Labor said IR was a key priority and over one in ten (13%) people changed who they voted for because of IR.

Opposition to WorkChoices extended beyond party lines.

70% of Australians believed that unions did a good job standing up for the rights of working people and opposing the Liberal Government’s WorkChoices IR laws.

Nine out of ten votes said the Liberals’ attack on unions during the election campaign either made no difference of made them less likely to vote for the Liberals.

The Australian public gave the Rudd Government a mandate to get rid of WorkChoices and replace it with the Fair Work Act.  The day the Act passed last week was an historic day.   One that symbolises a new era of industrial relations in Australia.

I believe the results of the last election send a clear message to us, as employers/employer representatives and unions. 

The message the Australian public have told us at is that:
1.    They want workers’ rights protected – in law and in action
2.    And they expect us to work cooperatively to achieve this.

The new laws are the framework for a fairer system.  It now needs to be delivered.  We both have a role to play in this.

Addressing the inequity of WorkChoices – coincides with the need to address the global financial crisis. 

WorkChoices was born from the same ideology that gave us the financial crisis: deregulation and blind faith in unrestrained free markets.  Resulting in unchecked power in the hands of a few. 

A sustainable economy must involve a better balance between the rights of business and the rights of workers.

The trend of attacking workers’ rights has occurred across the globe; and for the most part countries being most severely hit by the crisis are those who have deregulated their markets – financial and labour – the most.

President Obama has said of the US, “we need to reverse many of the policies towards organized labor we’ve seen these last eight years, policies with which I have sharply disagreed.  I do not view the labor movement as part of the problem; to me, and my administration, labor unions are a big part of the solution.  We need to level the playing field for workers and the unions what represent their interests.”

In Australia, the Rudd Government’s new Fair Work Act sets out a better balance for the future of work; which is good for workers, good for business, and good for our economy.

The Act provides crucial protections for Australian workers and their families at a time when they need them the most.  It also rethinks labour relations – to make them more cooperative and productive – which will be good for our economy.  

Underpinning the Act is:

1.    The strong safety net of awards and minimum standards that will help protect workers through the downturn, and provide economic stimulus for the economy to recover.
2.    On top this sits good faith collective bargaining that will provide the ability to negotiate flexibility primarily at the enterprise level, to seek productivity gains and find an equitable means of sharing the benefits.

Both elements will soften the blow of the economic downturn and assist with recovery.

The Laws
These are important changes.  But for businesses who respect their workers, I believe the Fair Work Act will be inline with current practices.

The majority of businesses didn’t use WorkChoices to sack delegates – or offer inferior individual contracts to their employees.  Most Australian businesses continued to value a trusting and cooperative relationship with their employees and their unions – irrespective of what the Liberal party, or the HR Nicholls Society was telling them they should do. 

Private business, large and small continued to enter into collective agreements, and respected their workers’ right to consultation.

After 10 years of Coalition Government there were only 750,000 AWAs, and the number of non-union collective agreements remained low compared to nearly 4 million workers on union collective agreements.

For those businesses and lobbyists afraid of employee rights – a few things will change.  And should change.

General Protections
The Fair Work Act fully protects employees in exercising their rights.  The General Protections clauses – say that employees have the right to join a union and participate in union activity. 

Under WorkChoices you were allowed to join a union, but there were many restrictions on participating in union activity.  It was like, as I think Stephen Long put it – you were allowed to join the golf club, but not play on the green.

The Fair Work Act protects this right and this is a good thing – but hardly revolutionary.  Freedom to join a union has been a long held fundamental human right and is part of international conventions Australia has signed with the ILO.

Yet, under WorkChoices this right was too often denied. 

Just recently we saw the case where a delegate was fired for wearing a union sticker.  The Federal Court judge found the sacking permissible, as it occurred against a background of ‘doctrinal differences’: meaning that some workers at the workplace wanted to join a union, others did not. 

Under Fair Work Act employers will have to respect an individual’s free choice to be a union member.  And this right includes – the right to participate in union activity.

This is what people voted for and what is expected in a democracy like our own.

Workers expect to be able to meet with the union. To consult about workplace issues.  To find out about their rights. 

There has been a dishonest campaign about the Right of Entry provisions in Labor’s new laws.  Almost all of these provisions have existed in Australian law before.

The new provision in the Fair Work Act is that it specifies that union meetings have to occur in appropriate places.  Which seems obvious really.

But we saw some employers under WorkChoices placing union meetings in the female toilets or the parking lot under security cameras.  This type of behaviour is not acceptable.

The right of entry provisions impose restrictions on union access – restrictions I’m concerned about.  For example, the provision that requires unions to give 24 hours notice before accessing a workplace. As Senator Xenophon noted, 24 hours gives a sweatshop plenty of time to shut up operation and evade prosecution for breaching the law.

And the pushback about accessing employees’ records was unreasonable.  Prior to WorkChoices there has always been the ability for unions to access payroll and other employment records, including for non-members.  And this is vital to protect union members from discrimination, as well as exploitation.

Leaders in the business community have often said to me that they believe in freedom of association.  They tell me their employees chose not to be members of the union. I’ve heard this from business leaders who have fought tooth and nail to have their workforce on individual contracts and deny access to union representation. 

Now from 1 July the business community will be required to respect their employees’ right to be a member of a union. 

I challenge all employers – and I put a special challenge out to Telstra– to not wait until 1 July, but to begin now to give workers the genuine choice to be represented collectively by their union. 

A good way to start would be to invite a union representative to your next full staff meeting or induction.

Collective bargaining
WorkChoices drove a wedge between employers and employees.

WorkChoices removed any obligation for the employer to negotiate enterprise bargaining with their employees and their union.  The obvious result is that negotiations stalled.

For example, Cochlear where the bionic ear is manufactured, has had a long history of collective agreements.  For over ten years the union has been negotiating on behalf of their largely female and migrant workforce.  When WorkChoices came in the management at Cochlear suddenly refused to sit down with their employees and their union. 

Five ballots have taken place: each time with increasing majority the workers have voted for the right to negotiate a union collective agreement.  No new agreement has been made.  Staff are upset.  And management is losing out, as no productivity gains have been agreed to.

Nobody wins from this confrontational approach.

The Australian public expect us to work cooperatively together – to ensure that employers and employees interests are looked after in the workplace.

The Fair Work Act – comes with an obligation for employers and employees to negotiate in good faith.  The obligation is on both of us.  And we both can be penalised if we refuse to.

The Act does not oblige us to agree.  This is the responsibility of those at the bargaining table.  And at times it will not be easy.  Australians will expect reasonable solutions.

Minimum wage
And reasonable solutions are more important than ever during the global financial crisis. 

And while some lobbyists and employer organizations believe a wage freeze for minimum wage earners is appropriate, this is neither reasonable – nor sensible in the current climate.

The economic downturn is being led by weakening demand.  Adequate wage increases are necessary to ensure demand and economic activity – especially in our local economy.

The Great Depression was worse, and harder to get out of, because wages were so low, demand couldn’t be restored.  Modelling of Japan’s inability to fully recover from the Asian crisis shows that the severity of the downturn was increased by low wages.

The need to maintain wages for Australia’s lowest paid workers is crucial. 

I am disturbed at the “Fair Pay” Commissioner’s commentary on the impact of minimum wages on jobs.  He made these comments before he had seen the evidence.

And the evidence is clear on this: there has never been any convincing research to prove that a correlation between reasonable and consistent minimum wage increases and job losses. 

The ACTU is proposing $21 a week pay increase for Australia’s lowest paid workers in line with inflation.

This is not an ambit claim.  This is what low paid workers living on as little as $30,000 pa need to keep up with the cost of living.  This is what they need so they can continue to pay their bills.  It is an affordable an increase of only 55 cents an hour. 

Consistent with the Government’s stimulus package – the minimum wage directly targets those workers who need it most – and who will spend their money in the economy. 

Without the minimum wage increase, the benefits of the Government’s stimulus package and the tax cuts (that have had negligible effect on the low paid anyway) will be weakened.

Australians will expect those business lobby groups that call for a wage freeze for the low paid to also put a hold on their salaries and bonuses.  So I look forward to the ACCI committing to a pay freeze for the managers and executives the represent, when their representative speaks later.

Bargaining for the low paid
The minimum wage is the only way that almost 1.3 million workers receive a pay increase; and it usually just keeps up with inflation.

These workers for one reason or another have been unable to bargain: the gap between those who are award dependent and those on a registered collective agreement is $9 an hour. Or nearly $500 a week.

A great break through for the Fair Work Act is that it allows low paid workers to collectively bargain for the first time.  This is an important acknowledgement of the hard work done by workers in the community sector, cleaners, childcare and aged care workers.
Employers should welcome the opportunity this provides – particularly the productivity gains that can be made by collective agreements.  Research has shown workplaces with collective agreements are 8.8 per cent more productive than workplaces without them.  

Award modernisation
For a long time the business community has argued for a simpler streamlining of the award system. 

The Rudd Government has undertaken the difficult process of modernising awards. 

I expect modern awards to be good for workers too.  As it will allow both employers and employees to know where they stand.

I am disappointed at the scare mongering in the press – the restaurant and catering industry association would have people believe it’s the end of dining out in Australia.  The claims about the cost to employers are spurious and misleading.

The employer groups have failed to mention that workers in SA are likely to see their casual loading fall from 220% to 175% on Sunday; permanent employees in Qld will see their Sunday loading fall from 150% to 125% – casual employees from 173% to 150%.

Our strong view is that low paid workers in the hospitality industry should not be losing their take home pay.  A better solution would be to see rates rise to the best conditions, phased in over five years.  That the hospitality industry thrives in all states demonstrates it can be afforded.

To carry on about a potential five year phase in of a 20% increase in the wage bill is misleading.  Even in the states where wages will go up to move inline with other sates, our calculations show penalty rates at most increase by 16.5% on Sunday, for some workers — this will hard spell the death knell for Sunday trading.

The ACTU and unions have put our views in the mix – as have employer associations.

All of us have to respect the process that has been consultative and lengthy.  And at many times frustrating.  But to be misleading in the press is counter productive.

We all know a cooperative approach will lead to much better results than those imposed by the Government, or even the Commission/FWA.

Australia has a proud history of acting collectively.  I don’t think John Howard ever understood this about our nation. 

His WorkChoices experiment was a product of a failed belief in labour market deregulation and unconstrained power for employers. It was a move that has been clearly shown to be out of step with the Australian tradition of the fair go.

In the current economic times the tradition of a fair go for all is going to be more important than ever.  We all have to work together to protect jobs and prepare for the recovery.

The Fair Work Act provides a good basis for this and will usher a new era of workplace relations when it begins to take effect from 1 July.

But much more will be needed.

There are other areas, such as building workers’ rights as well as the neglect of skills and infrastructure under the Howard Government, where we will continue to need to redress the damage.

We will also need to work hard to save every job we can in the current environment.

In particular, we will need to carefully hone our labour market and industry policies so that we keep the skills and productive capacity Australia will inevitably need in the recovery.

With the passage of the Fair Work Act behind us, we must now get on with the job of dealing with the economic downturn in the short term.

But we must also keep our eye on the long term, and work to rebuild a strong economy that delivers fairness and opportunity for all working Australians.