Reform options for Labor

2 Aug 2006

The pressure points in the government industrial relations laws are already showing, writes Anthony Forsyth

KIM BEAZLEY’s announcement that Labor will abolish Australian Workplace Agreements if elected to office next year has added new impetus to the workplace policy debate. But while the ALP’s new billboard ads scream that they will “rip up” Work Choices, more flesh is needed on the bones of Labor’s industrial relations policy. Early experience based on the first few months of operation of the Work Choices legislation suggests several clear avenues for workplace reform under Labor.

There is already a growing body of evidence that the new agreement-making framework is resulting in deleterious outcomes for workers. In late May, the Office of the Employment Advocate revealed to a Senate committee the findings of a sample analysis of around 5 per cent of AWAs lodged in the first month of Work Choices. This showed that all AWAs had removed at least one “protected” award condition, while 16 per cent overrode all of the protected conditions. 64 per cent of the AWAs took out leave loading, 63 per cent penalty rates, and 52 per cent shift loading. More recently, it has emerged that the Office of Workplace Services is investigating almost one quarter of workplace agreements which are suspected to be in breach of the Fair Pay and Conditions Standard. Significant attention has also been focused on companies such as Spotlight and Pow Juice, which have sought to use AWAs to bargain “down” with their employees.

The current debate over whether provision should remain for statutory individual agreements (like AWAs) largely misses the point. As Woodside Energy has recently shown, employers can obtain workplace flexibility through common law employment contracts. The real issue is what form of minimum standards both individual and collective workplace deals need to comply with. With awards likely to be virtually obliterated by the time Labor is re-elected, there will be little room to revive the “no disadvantage” test as it operated in the past. Instead, agreements should have to meet a modified version of the test, requiring that workers are (overall) no worse off in comparison with an expanded set of minimum employment standards. Arriving at a sensible balance between fair and decent working conditions and the productivity needs of business should be one focus of Labor’s alternative system of workplace bargaining.

Another key element of that system should be to provide a robust structure of legal rights and obligations for the negotiation of agreements. Work Choices says very little about how bargaining between employers, employees and unions is to be conducted. Instead, it allows parties to take “protected” industrial action in support of their bargaining positions. In exhaustive detail, the legislation then places significant hurdles in the path of workers and trade unions that seek to utilise those “rights”. Disputes involving the CFMEU and United Collieries, Amcor Packaging and the AMWU, and public school teachers in the ACT, indicate that the new secret ballot provisions are already looming large. The complex secret ballot rules are not just causing headaches for unions. Employers are also becoming bogged down in needless litigation.

This is all totally counter-productive - while the parties slug it out before the Australian Industrial Relations Commission (AIRC) or the courts, nothing is being done to resolve the underlying dispute. Labor should step in here, and articulate a strong case - including the business case - for imposing “good faith bargaining” obligations on all parties negotiating workplace agreements. The AIRC could again be charged (as it was from 1993 to 1996) with overseeing the good faith negotiation rules, including duties of the parties to recognise and meet regularly with each other’s bargaining representative; quickly respond to the other party’s proposals; and disclose relevant information. This time around, Labor should go a step further and empower the AIRC to resolve bargaining impasses, thus avoiding long-running disputes (like that at Boeing) where one party refuses to enter into negotiations or conclude an agreement.

The new exemptions from unfair dismissal have also exposed considerable inequities in the Work Choices legislation. The feared mass sackings, particularly in firms with 100 employees or less, may not have eventuated. But there are signs that employers are increasingly following Cowra Abattoirs’ early lead, by using the operational requirements exemption to undertake workplace “restructures” that involve re-hiring sacked workers on AWAs or as contractors. Labor has indicated that it will close off these gaps in unfair dismissal protection, while ensuring that the processes for determining claims are “small business friendly”. It should be possible for the ALP to design a system that both preserves the legitimate rights of workers in a modern economy to job security, and weeds out the spurious claims that frustrate business operators.

Perhaps the most striking early indicator of how Work Choices is tracking is the recent survey finding that large employers, such as NAB, Foster’s, Woolworths and Woodside, do not intend to use the new laws to de-unionise, introduce AWAs or drive down labour costs. Rather than obtaining a competitive advantage in this way, these types of companies appear to be more interested in developing cooperative relationships with unions and the workforce to achieve workplace efficiency and flexibility. In contrast, medium and smaller-sized businesses are more likely to take the low road offered by Work Choices.

This opens up another significant reform option for Labor - encouraging small and large firms alike to adopt the partnership route to business competitiveness and innovation. Various regulatory mechanisms are available to achieve this objective. For example, incentives, subsidies, tax breaks or priority in government contract tenders could be offered to companies that adopt innovative strategies to align the interests of workers, unions and management. The bargaining sphere could also be oriented towards the partnership agenda, by reshaping traditional enterprise bargaining committees as “productivity coalitions” focused on major workforce issues. Former IR spokesman, Robert McClelland, began developing the partnership approach for Labor a few years ago. Kim Beazley should resuscitate these ideas, and run with them all the way to the next election.

Dr Anthony Forsyth is a senior lecturer in workplace law in the Department of Business Law and Taxation, Monash University, and a research associate at the Centre for Employment and Labour Relations Law, University of Melbourne. A shorter version of this article appeared in the Age.

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