Labor was elected 12 months ago with high expectations that it would get rid of the Howard government’s repressive, anti-union, anti-worker industrial relations laws, WorkChoices. Your Rights at Work Committees and other trade union and community organizations had campaigned hard to bring about the defeat of an extremely unpopular government and restore basic democratic and trade union rights. On November 25, Deputy Prime Minister Julia Gillard presented Labor’s Fair Work Bill 2008 to Parliament, a bill to replace WorkChoices.
In her second reading speech, Ms Gillard said the legislation would create "a new workplace relations system", Fair Work Australia (FWA). WorkChoices strengthened the hand of employers, opening the way for a massive onslaught on wages and working conditions. The question is whether the new system being put forward by Labor will adequately curb the arbitrary powers of employers and restore basic trade union rights and protection of workers rights.
At the very minimum, legislation is required for:
industry-wide collective agreements, negotiated by unions, with no restrictions on pattern bargaining;
the removal of capacity for non-union bargaining and agreements;
abolition of individual employment contracts;
the right to strike at any time around industrial and political issues and in solidarity with other workers;
trade unions to have right of entry to workplaces to recruit, organize, represent and protect workers;
legislated minimum conditions that apply to all workers;
bring all workers under the same umbrella, on a non-discriminatory basis.
The bill creates Fair Work Australia — a one-stop-shop — incorporating and renaming existing industrial relations infrastructure and creating new bodies, including special divisions of the magistrates and federal courts.
Wages and conditions of employment will be governed by a system of awards, legislated minimum standards and workplace agreements. WorkChoices’ AWAs (individual contracts under statute law) will be phased out, but it will still be possible for individual contracts under common law.
Safety net
As Ms Gillard’s claim suggests, the focus of Labor’s industrial relations system is on the workplace — on enterprise agreements. Underpinning these agreements, and giving minimal protection to workers who are covered by a workplace agreement, is a safety net. The essentials of the safety net are:
10 National Employment Standards (NES) — including personal, parental, annual and long service leave; public holidays; 38-hour working work; notice and redundancy pay; flexible work for parents. All workers are covered by the NES.
"Modern awards" which are being developed by the Australian Industrial Relations Commission – covering 10 areas of the employment relationship and building on the NES including minimum wages, arrangements for when work is performed, overtime and penalty rates, allowances, leave and leave loadings, superannuation, procedures for consultation, dispute resolution and the representation of employees. Awards will also contain dispute settlement procedures which provide for compulsory conciliation and in most circumstances are restricted to voluntary arbitration. Workers on higher incomes may not necessarily be protected by an award – details below.
Minimum wages in awards set by and reviewed annually by a specialist minimum wages panel in FWA.
The bill specifies that enterprise agreements and awards can build on the NES. The old "no disadvantage test" has been replaced by the "better off overall test" (BOOT) – "each award-covered employee must be better off under an enterprise agreement than under the relevant modern award." There are special cases where this may be waived such as in "a short-term business crisis."
Awards will not be restored to their former comprehensive nature covering wages and conditions prior to they’re being stripped by the Howard government. They will be limited to 10 areas of the employment relationship. They exclude right of entry provisions for trade union officials.
This safety net certainly offers greater protection than the flimsy "protected by law" award provisions that employers could remove in AWAs and enterprise agreements under WorkChoices. There are, nevertheless, still two potentially dangerous let-outs for employers.
Employer loopholes
The first is the mandatory inclusion in awards of a "flexibility term to enable employers and employees to negotiate an individual flexibility arrangement to meet their needs that may vary the application of specified award terms." These are "entirely voluntary" and the legislation specifies that the employee should not be disadvantaged.
It remains to be seen how flexible these clauses become and how employers use or abuse them – past history during award restructuring and initial enterprise bargaining suggests they could become a nightmare for unions and workers. The term "voluntary" offers little protection – after all AWAs were "voluntary"! During times of economic crisis or recession workers have even less choice.
The second danger is that an employer may sign an agreement with an individual worker guaranteeing an income of $100,000 (indexed) that exempts the employer from having to meet the provisions of the award. Again this must be on a "voluntary" basis. The opt-out of award protection poses longer term dangers, apart from being the possible thin edge of the wedge that could be extended to more workers at a later date.
The payments that count towards this high-income threshold, as the bill describes it, include wages, the agreed value of non-monetary benefits and superannuation top-ups. It is not difficult to imagine how employers could use this to lure workers into trading off overtime payments, penalty rates and hours of work provisions of awards for the monetary carrot of $100,000. Although the majority of workers are paid much less than this, there is substantial body of workers whose income is close to that.
If higher paid workers — those who historically have had the industrial muscle to make gains and set standards — jettison penalty rates, etc — then who in the future is going to fight for them to be retained?
Anyone can negotiate an agreement
FWA does not give preference to, let alone guarantee, unions negotiate collective agreements. The minister in her second reading speech declared: "The bill provides a new framework for enterprise bargaining which does not use any concept of union or non-union agreements." In reality, regardless of her balanced sounding language, either the union does or it does not negotiate the agreement.
Agreements are made between employers and the employees covered by the agreement. A union can be a bargaining representative if it has a member who will be covered by the agreement. If it is a bargaining representative, then it can apply to FWA to be covered by the agreement. If the FWA agrees, and it is covered by the agreement, then the various provisions relating to unions (e.g. right of entry) may apply.
In negotiating an agreement it is assumed that union members are represented by their union, unless they indicate to their employer that they wish to be represented by another bargaining representative. Non-union members can nominate the union to represent them; the union may accept or decline that request.
Alternatively, workers can also nominate themselves or anyone else they choose as their bargaining representative.
This opens the way for a multitude of other unions to put their foot in the door, including company unions set up by bosses. The provision allowing individual workers (including bosses’ stooges) to participate in negotiations on the same footing as unions; it is an extremely dangerous, anti-union, regressive move. The bill even makes provision for when negotiating meetings become unworkable because of the large number of participants.
While individual contracts are abolished, individual workers are given the right to negotiate in the place of or alongside a trade union.
Unions have their democratic structures, elected representatives (including from the shop floor) who negotiate on their behalf and then take the outcomes to their membership for approval or rejection.
One of the reasons for trade unions is that they enable collective representation, a single united voice in negotiations, eliminating the vulnerability of individual employees being victimized by employers or workers being pitted against each other. This unity, this single voice is the source of worker strength, of union power — without it talk of trade union rights is meaningless.
The bill follows the approach of WorkChoices, in that the employer is responsible for holding the vote to seek ratification of an agreement by workers. The employer "may seek approval of the agreement by ratification of any agreement by means of a ballot or by any other method"!
The negotiating process, which undermines trade unions in a manner even John Howard did not come up with, and the extent of its abuse by employers will depend on the organizational strength of trade unions in workplaces.
There is also a host of provisions governing "good faith negotiations" with a system of compulsory conciliation where employers fail to come to the table and a system of voluntary or last resort compulsory arbitration.
Limitations on enterprise agreements
With a few exceptions (such as franchises of the same company), industry agreements, pattern bargaining for the same agreement across an industry or number of enterprises is still outlawed, as under WorkChoices.
Contrary to pre-election promises, the content of workplace agreements is restricted to matters pertaining to the relationship between the employer and employees; the employer and any union covered by the agreement; payroll deductions to third parties; and matters relating to the operation of the agreement.
They must contain a flexibility clause; provision for consultation in the event of major workplace change; a nominal expiry date (4 years or less); and a process for the settling of disputes by an independent party (e.g. FWA) which must allow employees to be represented. This process can only involve arbitration if both parties to a dispute agree. If agreement is not reached on arbitration, then the only other avenue if the dispute is not settled is through the courts as a breach of agreement.
An employer can unilaterally propose an agreement and after 21 days hold a ballot. The employer must provide employees with access to the proposed agreement at least seven days prior to seeking approval, and must explain the effect of the agreement to them. The process, as outlined in the bill, is fraught with dangers that could see unions left out in the cold.
Trade union rights
As already outlined above, the rights of trade unions in regard to collective bargaining have been severely undermined.
The right of entry provisions are very similar to those under WorkChoices, with only minor improvements.
The WorkChoices system of "protected action" during negotiation of a new enterprise agreement after the expiry of the old one remains virtually intact, including the holding of ballots and other restrictions on its use.
FWA has considerable powers to suspend or halt industrial action. For example FWA must suspend protected action where a third party is suffering considerable harm or if the action is causing or threatening to cause significant harm to the economy, or to the safety, health or welfare of the community or part of it.
These provisions firmly establish the role of FWA as one of suppressing struggle and leaving unions and workers with very little legal room to maneuver (this will be covered in a future issue of The Guardian.)
The one significant departure from WorkChoices is that the definition of industrial action does not include stopping work when workers fear for their own safety. The onus is on the employer in this situation to prove that it is industrial action if they want to sue or take other action against the workers.
The Labor government has failed to repeal the restrictions on secondary boycott actions under the Trades Practices Act, or extend the right to take industrial action without being sued to issues beyond support for a claim during a bargaining period.
Changes to the unfair dismissal provisions fall far short of what are necessary to protect workers. There is a qualifying period of 12 months for employees of small businesses before they can make a claim regarding unfair dismissal.
The above outline only touches on some sections of the 600 pages of legislation. Further details, including the new Fair Work Ombudsman with its wide powers of inspection and interviewing of people in workplaces and its compliance enforcement role, will be covered in future issues of The Guardian.
The Fair Work Bill should be seen in conjunction with other legislation and changes that are planned. The Australian Industrial Relations Commission is presently reviewing all awards under its jurisdiction (not state awards) and stripping, canceling and merging them with the aim of producing a relatively small number of streamlined "modern awards", in line with the provisions of the Fair Work Bill. Another review is examining how to bring the Australian Building and Construction Commission (ABCC) into Fair Work Australia, possibly as a special division. The government has no intention of abolishing this highly secretive, union-busting industrial police force, despite union expectations that it would do so. The struggle for its complete abolition must continue.
Fair Work Australia removes or eases a few of the worst features of WorkChoices. It falls far short of expectations of those many workers who threw out the Howard government. The section of the Fair Work Bill on enterprise agreements needs a complete rewrite to ensure the system is based on union-negotiated collective agreements.
The bill is only small step in a long struggle to restore the basic trade union rights that have been removed over the past 20 or more years. Even these modest improvements will need to be fought for, and independent Senators, in particular lobbied, as the government could face considerable opposition in the Senate.
