AUSTRALIA’S WORKCHOICES: EXPLOITATION AND SUPRESSING STRIKES
Or do not follow Australian Labour Law
Paper for San Francisco Labor Centre University of California Berkeley by Chris White March 2007
Australia’s Prime Minister John Howard proudly aligns his politics with President Bush. PM Howard has led a right-wing neo-liberal government since 1996 and in July 2005 won power for the first time in the Australian Senate so now controls the Australian Parliament.
He moved decisively to implement his long held anti-union ideology and backing corporate lobbying enacted an unprecedented workplace relations regime.
First, he targeted Australia’s militant building and construction workers and their unions with the Building and Construction Improvement Act BCII (2005): ˜improvement” as we shall see only for companies. Then his radical right changes for all workers with, in ˜spin” language, WorkChoices, passed in December 2005, in force in March 2006.
What is this about, what has happened in the first year to the low paid and for strong unions what has happened to the right to strike?
The already powerful multi-national corporations dominating the Australian economy and workplaces had their corporate agenda implemented with these radical right industrial relations changes to Australian labour law.
WorkChoices shifted even more bargaining power to employers, with large weaponry of management legal powers available to be used at work. New legal processes in the Australian Industrial Relations Commission AIRC further favours employers and imposed the worst restrictions on workers’ and unions’ rights seen for a hundred years.
WorkChoices was not mentioned during the election. PM Howard ignored half a million strong Australian Council of Trade Union ACTU community rallies all over Australia (these rallies continued throughout 2006). One hundred and fifty one industrial relations and labour law academics presented sustained critical analysis.
The Australian Labor Party (ALP) opposition, the small Democrats party and the Greens party, community and church groups all opposed vigorously. PM Howard spent a staggering $50 million to sell WorkChoices to the public (Parliament report 13/2/2007). This ˜spin” is unsuccessful, with 70% of public opinion opposed. WorkChoices has no democratic legitimacy.
An ACTU strategy is TV ads. The latest, 14/3/2007, has suited businessmen in a corporate boardroom discussing how they can use WorkChoices to increase company profits by scrapping conditions. (http://www.youtube.com/watch?v=bIVkFWYM61A)
ACTU Secretary Greg Combet:
˜PM Howard’s IR laws are a huge free kick for big business at the expense of Australian working families. PM Howard’s only plan for the future of the Australian economy is to cut the wages and conditions of Australian workers. ABS statistics last week show that the profit share of the national income is higher than it has ever been, but wage rises for full time workers are not keeping up with inflation. These ads are hard hitting, and we make no apology for that â€“ workers and their families are being put under enormous and unnecessary pressure by these IR laws and the only winners are big businesses and senior executives.
The ACTU and unions have committed resources to campaign in the community with social movement unionism in the Federal election late in 2007 to vote out PM Howard. If this happens and the current polls indicate this, then a Labor government in 2008 with new ALP leader Mr Kevin Rudd as Prime Minister and Ms Julia Gillard as Workplace Relations Minister will â€˜rip upâ€™ the unfair WorkChoices. These labour laws would then be only an historical blip.
However, if PM Howard is re-elected, then the WorkChoices regime will be entrenched and worse labour laws will be enacted. Such a labour law model has ominous implications for other countries’ workplace relations systems, and as you will see not a model to follow.
Australia’s unique model: legal repression
The WorkChoices model is a radical right wing state intervention into industrial relations.
There are very detailed legally prescriptive rules against workers’ rights and interests.
Designed with the advice of employer legal firms, the WorkChoices Act 2006 has 2000 pages of amendments and 400 pages of Regulations!
Such extensive complex regulation can be contrasted with a de-regulation model of paring back regulation and allowing the forces of capital to dominate with few rules, as applied in New Zealandâ€™s Employment Contracts period in the 1990â€™s (since failed and replaced).
WorkChoices is an oppressive, command and control, and overly legalistic regime. It both removes protections for the weaker sectors of the workforce, those already enduring fragmented working lives, and as well targets the organised unions, those with a history of strong collective bargaining and political struggle.
WorkChoices abolished Australia’s 100-year-old proven system of arbitration, with the Australian Industrial Relations Commission (AIRC) settling union claims.
Weaker sectors of the workforce can now no longer have minimum award rates and conditions arbitrated. Nor is a fair collective bargaining system legally available.
The purpose of Labour Laws has been turned on its head, from the historical practice of some workplace justice for workers, some industrial fair play and ensuring some balance between the greater power of capital over labour (Creighton and Stewart 2005; Hancock 2004).
WorkChoices is all for employers having a greater choice to exercise legal domination over workers.
Collectivism at work is undermined. Fear and intimidation at work prevails.
Few legal remedies for workers remain. Disputes are now not resolved in the AIRC in a fair manner with good outcomes for workers.
WorkChoices limits workers’ rights to lawfully organise, collectively bargain and better their work conditions in collective agreements, if necessary, with the threat of a strike in reserve.
˜We won’t remove the right to strike” government advertising
With so many changes, I focus mainly on the right to strike and its limitations. I argue these are almost to the point of suppression.
PM Howard did not in a simple way ban strikes outright. Rather he has a complex set of new legal restrictions for taking a lawful strike, called â€˜protected actionâ€™, whilst adding unique and extreme methods to stop and penalise strikes. Strikes are unlawful when â€˜unprotectedâ€™. When workers respond to managementâ€™s new powers enforcing unfair work conditions, then they risk high penalties. Employers use new legal sanctions against workers during a dispute and to maintain discipline.
I examine two categories of workers. How are they faring after a year of WorkChoices?
1. Despite a decade of sustained economic growth and nominally low unemployment of under 5%, over a third of the Australian workforce are at the low wage end, many casuals, many women workers, migrants and youth, mostly not in unions.
Already in precarious jobs, they have felt the downside of neo-liberal politics and globalisation on Australia in the last decade. The Australian casualised workforce is one of the highest in the OECD world. Under WorkChoices they are now being further exploited. The main focus of union and community outcry is after one year’s impact on the most vulnerable. I summarise what happens to these marginalised workers. These employees do not take strike action in practice. But if they are organised in a union, the dangers for them are much greater when resisting management prerogative with the threat of new penalties.
2. Stronger workers collectively bargaining in unions are finding enterprise bargaining much more difficult in the first year. The WorkChoices legal restrictions on collective bargaining for enterprise agreements with legitimate strike action as we shall see favour the employers’ bargaining strategy. The ˜choice” to strike is so legally restricted, I argue that suppression is clearly PM Howard’s strategy, despite his political spin of ˜I wont remove the right to strike”.
Precarious Workforce Further Exploited
One hundred and fifty one labour law and industrial relations academics in a Senate submission 2005 criticised the WorkChoices Bill and concluded: (Peetz 2005):
˜Australia faces labour market challenges that need to be addressed, including labour and skill shortages, work-family tensions, production issues in a globalised economy, and the growth of precarious employment. The Government asserts that jobs and productivity will grow as a result of the Bill. On the evidence available from existing research there is no solid research basis to give confidence that this Bill will address these economic and social problems.
However, there is persuasive evidence that WorkChoices will contravene long established international labour standards, strengthen employer prerogative, create new hazards for many working Australians, widen inequality and disadvantage the most vulnerable.
In sum, the evidence we have provided suggests that these proposals will:
+ undermine workers’ rights at work;
+ deliver a flexibility that in most cases is one way, favouring employers;
+ do little or nothing to address work-family issues and exacerbate problems on several fronts;
+ have no direct positive impact on productivity and wages or employment growth;
+ disadvantage the individuals and groups already most marginalised in Australian society;
+ widen inequality;
+ add levels of complexity to the regulation of industrial relations, that both employers and employees will struggle to understand and apply.
These effects will not all happen immediately. The pressure on firms to cut labour costs will be manifest over time. Initially, many employers, concerned about maintaining good relations with their workforce, will decline to take advantage of the opportunities provided by WorkChoices. But as other employers obtain an apparent competitive advantage through cutting labour costs, they will be forced to follow suit.
The long run consequences will be much more serious than those apparent immediately after the legislation takes effect. It is these long term effects, and their consequences for Australian workplaces and society that provokes our shared, grave concern and opposition to WorkChoices.
PM Howard ignored these valid criticisms. After one year, employers are now cutting wage and conditions and Peetz (2006, 2007) and others provides the evidence that the above outcomes are now happening. I now summarise key features.
Basic award protections stripped back
Prior to WorkChoices, almost all working Australians enjoyed the protection of the arbitrated award system. Around 1.6 million Australian workers rely only on awards to protect all their pay and conditions. Millions of other workers relied on awards to underpin their basic rights and conditions. PM Howard abolished this award safety net.
WorkChoices takes away the basis for agreements to be consistent with award rights. Agreements have just five minimum conditions: a minimum hourly rate, 10 days sick leave, 4 weeks annual leave (2 weeks of which can be ˜cashed out”), unpaid parental leave and a maximum number of ordinary weekly working hours. The 38 hour week exists in theory – but there are no guarantees of extra pay for overtime, weekends, shift work or public holidays. There are no rostering limits on when you work these hours. Workers could work 50 hour weeks for half the year. As they can be averaged out over a year, the employer can refuse to pay overtime. Protection for rights are removed like: limits on when you are to work, overtime pay, weekend or night rates, work allowances and annual leave loading.
Prior to the Howard Government, the AIRC decided what should be in awards after hearing from employers and unions. Agreements had to provide for wages and conditions better than the award. After 1996, many award rights were removed in the first Howard period.
After WorkChoices, many conditions are not guaranteed: rostered days off; payment for public holidays; annual leave loading; overtime payments; penalty rates for shift and weekend work; meal, travel, clothing, tool, higher duties and other allowances; paid maternity leave; part-time loadings; existing casual loadings; redundancy pay. In new workplace agreements workers have to negotiate with their employer to ensure their conditions are not cutback. See ACTU notes www.yourrightsatwork.com
Individual contract bargaining enforced
WorkChoices enforces individual contract bargaining, in propaganda terms called Australian Workplace Agreements, (AWAs) over awards and collective agreements. PM Howard uses ˜doublethink” about an individual’s ˜choice”, spinning the opposite of what he is doing by inverting workplace reality.
But he is not convincing, when asserting that individual bargaining is good because the employee has the power. This is clearly wrong and experienced as the opposite by workers. This takes industrial laws back 150 years. AWAs allows for a reduction in wages and conditions and without the union (Peetz 2006, 2007). About 5% of the workforce is on AWAs with employers forcing more on every day, ˜take it or else”. Employers, both the giant mining corporations and small business are enforcing individual ˜agreements”, lower than the earlier arbitrated legal award minimums, without overtime pay, penalty rates, shift and weekend rates, meal breaks, annual leave loadings and allowances and public holiday rates. But in a recent March poll, 69% say AWAs gives too much power to employers.
Women workers impacted
After a year, women workers are particularly disadvantaged with women in full time jobs now earn $100 a week less than men and that the pay gap for working women is getting wider. A new ACTU 2007 analysis shows full time women now earn on average 10% less than men â€” the same gender pay gap as 1978, almost 30 years ago. ABS data also shows the real wages of female workers has fallen 2 per cent over the last 12 months. ACTU President Sharan Burrow said:
˜PM Howard is presiding over a significant worsening of women’s right to equal pay and the right to family-flexible working conditions. With almost one in four women (23%) reliant on awards (compared to only 15% of men), the erosion of award conditions like penalty rates, leave loading and public holiday payments is having a serious impact on womenâ€™s take home pay. The PM Howardâ€™s refusal to include in the new minimum legal standards rights to family-flexible working conditions that were won in the Work and Family Test Case has also been a major setback. The Minister should not be proud of a system where mothers returning from parental leave are expected to work in the lowest paid jobs in our country and have the least job security and least control over their hours of work.
While many women are suffering, with numerous cases in the media of women forced onto inferior AWAs, there are cases of great fightback.
Lorissa is one such young woman. A mining contractor has agreed to pay compensation and legal costs to a 21-year-old trainee truck driver who alleges she was bullied, harassed and then dismissed when she refused to sign an AWA last year. Lorissa alleged that the company unlawfully applied duress to force her to sign the AWA. She refused to sign the individual contract, saying at the time she was â€˜horrifiedâ€™ at the provisions, and cited three she found most objectionable:
1 requiring her to give 12 hours notice of any absence from the 12-hour roster, or face a $200 fine (on top of missing out, as a casual, on payment for the shift);
2 obliging her to pay back induction costs; and
3 giving the company the right to dismiss her on one hour’s notice, while requiring her to provide a week’s notice of leaving, or face having all outstanding pay being withheld. She believed her former employer had targeted her because of her young age. Just before the court case, the company settled.
Despite the increase of individual contracts, unions have been winning over AWAs where with militant action, stop works and media exposure threatening the employer. I have not here given the examples, but they are on the ACTU website www.actu.org.au
Non-union agreements increase
WorkChoices has impacted adversely some 9% of the workforce by the beginning of 2007 (ABS 6202). Many companies not favouring individual contract bargaining are enforcing more non-union collective agreements at lower annual rates of wage increase. In December 2006, the data reveals a big growth in non-union collective agreements, almost three times higher than in any quarter before WorkChoices. The 46,600 employees covered were double the record achieved previously. Downward pressure on wages â€“ including from AWAs â€“ mean that, relative to inflation, average full time adult earnings fell by 0.6% over the past 12 months. The figures were worse for full time private sector workers (-1.1%) and women in the private sector (-1.8%).
But unions survive. Workers are still entitled to join unions. Union strategy to unionise workers, prioritising an organising strategy was gradually improving union density down from 40% 25 years ago, in the hostile political and corporate opposition Crosby (2005).
But union membership has plummeted under WorkChoices, with ABS data showing a loss of 126,000 members in the year to last August, and density dropping to just 20.3% overall and 15.2% in the private sector.
Australia’s inflation rate has between 2.5% to 4%. So unions collectively bargain at the enterprise with companies are getting a minimum of 4% wage increase each year, although campaigns are much more difficult. Some 56% of workers were covered by new union collective agreements that are able to average about 3.8% in the private sector and public sector wage growth running at 4.4%. (Department of Employment and Workplace Relations data 12/3/2007 and ABS Wage Cost Index).
Union collective agreements performed strongly covering 172,000 workers. This is close to the 216,000 workers covered in the March quarter 2006 and the 179,500 workers covered in the December quarter 2005 as unions rushed to register workplace agreements before WorkChoices took effect. Union collective agreements retained their recent slim â€˜union wage premiumâ€™, with increases of 3.8% in the December quarter to remain ahead of the non-union increase of 3.7%. Data shows productivity fell by 1.6% in the first six months after WorkChoices, although there was stronger growth in the last quarter.
WorkChoices abolished the 100-year-old arbitration system setting the minimum living wage. But the new Pay Commission, stacked with PM Howard neo-liberal economists, still awarded a third of the low paid workers dependent on minimum wages a wage increase about the rate of inflation. This was decried as too high by employers, but the economic reality and all the evidence was that such a increase in a growing economy with low unemployment was fair, not inflationary and did not cause job loss as claimed by PM Howard and employers.
The rest of the workforce are covered by various common law agreements above the minimums, where higher skilled and professional workers, in short supply, are able to command good incomes.
Work/Life collision worsened
In Australia, our work life/collision is a major workplace and political issue (Pocock 2006). Union, community and political opposition campaigns highlight the increasing stress of work on families. Numerous reports analyse the difficulties of working life balancing needs of children.
One recent example, Australia’s Human Rights and Equal Opportunity Commission (7/3/2007) called for new family/caring responsibilities with 45 recommendations to improve work and family balance. They argued for a new stand-alone Family Responsibilities and Carers’ Rights Act to protect workers with family and caring responsibilities and for a right to request flexible working arrangements.
A new report “It’s About Time” 6/6/2007 by Relationships Forum Australia shows working families are under enormous pressure as a result of long, irregular working hours and a lack of job security. Australia is worse than any other high-income nation when it comes to workers having time for their family relationships. The report highlights the link between job insecurity, long hours, irregular hours and pressures within families and IR laws. It shows that large numbers of Australians are working very long hours, including on weekends and that many are in casual and insecure jobs that have no annual leave or paid personal leave. Another issue is the current denial of the right of casual workers to request more secure permanent employment.
Migrant workers exploited by temporary worker visas
Public controversy has raged over migrant workers being exploited by Australian employers through a new Howard government temporary visa programme. Unions are campaigning, with media expose on underpaid migrant workers.
The ACTU at a Parliamentary Inquiry into Migration 14/3/2007, called for an overhaul of Australia’s temporary visa program as it is being used to reduce wages and job opportunities for Australian workers and that migrant workers are being exploited. ACTU President Sharan Burrow:
˜WorkChoices, in conjunction with the visa program, is being used by employers to hold down the wages of working Australians. It is out of control and should be immediately overhauled. In the last year there was a 42% increase in visas issued by the Government and the number of employer sponsors grew by 20%.˜
The ACTU calls on PM Howard to conduct more extensive checks on whether Australians can fill local job vacancies before issuing visas and to ensure that migrant workers are not being exploited and correct wages are paid. The long-stay business visas allow overseas workers to stay in Australia for up to four years and are having a major impact on the local job market. Employers are using overseas workers to avoid their responsibility to train and upgrade the skills of local people.
The minimum salary that employers are required to pay overseas workers are not set high enough to prevent the exploitation of guest workers and in many areas are not high enough to stop employers using the migrant workers to drive down local wages and conditions. Employers and labour migration agents should not be docking the pay of overseas workers with unreasonable charges for recruitment fees, rent, transport and other costs that they make compulsory. The ACTU Submission on Migration www.actu.org.au 14/3 2007. This issue of Australian unions organising migrant workers is a similar challenge to that in the US and throughout the world.
Dismissal at will starts
Previously, the arbitration system had an unfair dismissal jurisdiction. Now for employers with less than 100, this workerâ€™s right to seek reinstatement or compensation for harsh, unjust or arbitrary dismissal is abolished. Companies with less than 100 are now sacking at will.
I do not here detail the more outrageous dismissals exposed in the media. Corporations with over 100 workers are using the wide-open allowable legal reason of dismissal for ˜operational reasons.”
It is ˜pure spin” from PM Howard that unfair dismissal rights stops job growth. Data disputes government claims about the relationship between unfair dismissal laws and employment growth. ABS results shows stronger job creation after the ALP’s introduction of the original federal unfair dismissal laws in 1994 (3.25% or 256,400 jobs over eight months) compared to 2.38% or 241,300 jobs in the first eight months after WorkChoices.
In a March poll, 59% reject PM Howard’s argument that unfair dismissal laws cost jobs and believe that all workers, including those in small businesses, should be protected from unfair dismissal.
State systems abolished
Under Australia’s Constitutional Federal system for a hundred years both National and State industrial relations systems co-existed. With ALP governments now in every State some greater fair play for workers at the State level governed some 40% of the workforce. WorkChoices abolished these State systems, taken over compulsorily. Previously, Australiaâ€™s High Court said the National government could only legislate according to the Constitution for the prevention and settlement of disputes extending beyond the states by conciliation and arbitration. But in an historic controversial recent decision, the High Court has validated the legal power of WorkChoices saying the government can now pass labour laws that are â€˜connected toâ€™ corporations. Only workers not working for corporations remain in the State systems.
Precarious workers cannot strike
For the right to strike to be effective, the employer has to know that this pressure can be legally enforced and put into practice. These precarious workers are already unable to organise to take industrial action, but even where in unions, the WorkChoices restrictions, explained in the next section, makes lawful strike action nigh impossible.
I have not continued this paper as the section on the right to strike is similar to what is posted on this site.