The disastrous impact on workers in this global capitalist financial crisis requires changes to the Fair Work Bill now before the Senate to better protect workers’ rights.
The government did not know about or develop this proposed labour law, the Fair Work Bill (FWB) as a response to this most severe global capitalist financial crisis since the great depression (GFC).
Continuing economic growth was envisaged at the time of the formation of ALP election policies in ‘Forward with Fairness’. The ALP policy instructions for the drafting of the FWB were given when the new government’s fight was against inflation with the Reserve Bank raising interest rates.
Although the warning signs in the US crisis of the egregious corporate financial practices and a world capitalist slow-down were evident from early 2008, the government maintained their stance in the consultations and the economic assumptions on which the FWB was developed without any understanding of the banking financial crisis to come.
In hindsight how bad the crisis is was not clear for all to experience until the October 2008 crash in share market values heralded world recession. This is a very severe capitalist crisis, but how deep and how long is unknown, with some economists fearing depression.
It is publicly acknowledged that the neo-liberal free market economic theories and policies are not working, and flawed in response to this GFC challenge.
These dominant free-market ideological doctrines and for this submission those governing labour/capital relations and earlier workplace policy are now wrong.
The workings of government institutions, economic management and corporate policies throughout the world are not only under critical questioning but quite reasonably being reversed…and the Rudd government has prudently changed.
After years of going backwards on workers’ rights, the tide may have turned for the right to bargain collectively, for protection from unfair dismissal, for the right to be represented by a union, for a safety net of pay and conditions and in the backing of an industrial umpire, but the GFC tsunami threatens the ability for these reforms to be successful…so the FWB requires re-evaluation.
The GFC must force critical questioning of fundamental premises of neo-liberal policies applying to the labour market and the capital and labour relationship that underpin both WorkChoices and the (slightly fairer) FWB. But the DPM in her consultations did not re-design let alone reverse the earlier Forward with Fairness plan designed for very different economic and social times.
The government now acknowledges the economic slowdown (and even in China that impacts adversely on the Australian resources sector) and has been forced to economically respond to the GFC with revised policies.
Despite this, there is no major reworking in the FWB to afford greater protection for working families, despite the daily reports of the spread of the deeply troubling crisis from speculative financial markets into productive capital investment.
Despite the common criticisms of the FWB from unions and others, there is no reasonable changes to the scope of the minimalist protections for workers to be able to face the GFC.
There is no changing of details providing greater legal ability for the lower paid and now even more precarious workforce to defend their conditions of employment, nor strengthening the rights of workers to exercise their freedom of association collectively in unions.
The labour market position for employees has now reversed from any previous experiences of being tight in some areas and in demand that earlier may have enhanced the negotiating position of workers.
With consumer spending down, the government responded with a prudent $10 billion boost for families and pensioners. Many other policy changes are necessarily being put in place in 2009, as earlier minimalist reforms are clearly insufficient. Demand management is being pursued. Government ‘Keynesian’ intervention into the finance system and economy linked in internationally is necessary. But not yet in workplace relations.
The corporate lobby, responsible for WorkChoices, it seems still gets their way for employers, as we shall see in the following FWB details.
Professor Keith Ewing (2008) observed:
‘When the world was last in a recession on this scale, the British government of the day – a Conservative government – under the influence of the Liberal economist working in the Treasury – one J M Keynes – undertook to support the rebuilding of collective bargaining, so that within a period of 12 years, 85% of British workers were covered by collective agreements. This was presumably to create a virtuous cycle of
(i) higher wages and greater spending power,
(ii) to stimulate demand and production to meet the demand,
(iii) to stimulate employment growth.’
‘It is supreme irony that the challenge for the Labour government in Britain is to embrace the ideas of a Liberal economist and the politics of a Conservative government. But as we struggle to find a new economic paradigm in an uncertain world, there is not only an opportunity but also a responsibility on the part of national governments in many parts of the world to intervene much more actively in economic management.
We must ensure that it is not only in America where ‘labour is on the rise’.
Professor Keith Ewing, University of London 10.11.08 ‘Restoring rights at work Lessons from the UK.’ 2008 meetings in Australia. Published by Catalyst http://www.catalyst.org.au I support Keith Ewing’s lessons outlined. To date the government with the FWB has not adopted them.
I cite now a common economic position, this time from the US, and Obama politics: Christian Weller and Amanda Logan from the Centre for American Progress ‘A Strained Relationship: Worker Rights and Financial Crises’ in International Union Rights ITURC vol 16 issue 1 2009:
‘Many countries have seen rising income inequality amid slow income growth for low-income and moderate-income workers for several decades. Strengthening workers’ income growth through better worker rights is an important ingredient to create strong and stable growth in the long-term.
Policy makers also need to pay attention to worker rights during a time of crisis, when profits are under pressure, which can translate into pressure to reduce worker rights.
Weaker worker rights however, would make it harder for income, demand and economic growth to resume.
A resolution to a major economic crisis requires a sensible policy approach to strengthening worker rights, even though private sector pressures will emerge to weaken such rights.
…good worker protections limit the impact of an economic and financial crisis on people’s incomes and thus on consumption and growth. …South Korea is cited….they refer to the US crisis and cite economic research.
Academic research is cited showing stronger worker rights link to increased productivity. As productivity increases, so do profits and, if worker rights are strong, so does wage growth.
With stronger domestic demand, incentives for speculative investing are reduced. This results in more stable income growth over the long-run and ultimately more stable and stronger economic growth – just what the financial doctor ordered for the troubled world economy.’
‘Labour rights have a long-term stabilising effect. They tend to reduce one of the inherent long-term economic imbalances – more people having to borrow ever larger amounts.’
As you will see later with my criticisms of the FWB details, it is now necessary for workers’ rights to be strengthened to ensure that not only do unions have the legal capacity for collective bargaining and its scope covering all workers, but also that wages are indeed raised in much broadened bargaining rounds to stimulate the economy.
Under WorkChoices millions of low paid workers had their wages cut, and face this again with the GFC. Of course, individual employers will be enraged with any call for general higher wages; yet overall this is one essential way of stimulating demand.
I go further and argue for economic progress that includes working families as well as profitable and sustainable business, historically that the downward slide share of wages to profits has to be reversed and be increased.
I now reiterate what everyone knows as one flawed premise of right-wing ideology. The Howard claim of the power of the individual employee in the labour market to negotiate was always ‘1984 spin’.
The obvious reality is, whatever the labour law framework, employees under capitalism are economically and legally in a subordinate position to the power of employers. The employer and employee relationship is experienced as not one of free contracting equals, notwithstanding legal mythologies.
‘It is not a partnership voluntarily entered into between equals to generate wealth for themselves and all others; it is a relationship between unequals; of superiors and inferiors. In a capitalist society, normal employment relations are class relations…
WorkChoices was an unacceptable measure to regulate capital/labour based relations on the assumption that, if left unchecked, employers will use their wealth to oppress workers, to exploit them as much as possible.’ (Professor Harry Glasbeek ‘Rudderless in a Sea of Choices: The Defeat of Your Rights At Work—Analysis and a Possible Response’ 2008) published on this blog.
The same point as this submission argues applies to the FWB.
The global corporates in mining, finance, telecommunications, manufacturing and governments as employers particularly exercise their economic power as does any employer.
It cannot be denied that the most serious deterioration in the labour markets face the Australian workforce. All are at greater risk and disadvantage in protecting their economic, social and occupational interests. Workers’ experience is a weakened negotiating position (except the most privileged elites, such as senior executives and MPs).
Despite the government’s responsible spending initiatives, as Australia moves more slowly into recession, more job losses and higher unemployment are a reality into 2009 – look at the December 2008 loss of full-time jobs. Some industry sectors and regions are already in recession. Thousands of employees in the last six months have suddenly been made redundant, often dramatically with no notice or redundancy compensation to be able to adjust being unemployed and with no prospect of jobs. At workplaces into the future, uncertainty and doubt will prevail for employment conditions, with pressures for lower wages and worse conditions. Many working families face devastating lives in a recession.
Australia’s workforce is in a demonstrably weaker bargaining position against the exercise of management power, both for negotiating collective agreements and responding to any unjust and capricious ruling by management.
The threats of dismissal and the realities of lengthy unemployment make it more difficult for workers against corporations than through periods of economic stability and growth.
The question is does the FWB meet the challenge? Does the FWB protect workers from ‘extreme capitalism’ and those employers driven by ‘greed’? I argue no.
I cover more details later but now give two illustrations of ‘the devils in the FWB detail’ in a GFC.
A Labor government supporting working families requires a labour law that provides strong job security provisions, looking after employees with long service, with family responsibilities, those close to retirement etc and when made redundant some compensation and new training.
What is standard is at least some redundancy payment when made redundant to ease the problems of being unemployed through no fault of your own, such as in some union agreements, one month’s pay for each year or service.
Paul Munro (2008 former Judge of the AIRC) commented:
‘The proposed Strong and Simple Safety Net is too rigidly strung from the populist polls of direct Parliamentary and Executive legislation and regulation, and has big holes in it’
(Australian Institute of Employment Rights launch of their new magazine www.aierights.com.au). Here are two holes (and there are others, see later).
First, it is a disgrace that the DPM can say that the Fair Work regime meets working families’ needs in recessionary times, when over two million have no rights for redundancy payments at all.
Compensation in recognition of past service, to cope with unemployment and ease the transition is recognised as a standard.
But in the (so-called) National Employment Standards and ‘modern’ minimum award safety nets, on instructions from the DPM, there are no rights for employees in small businesses of less than 15 employees to receive any notice of retrenchment, neither time to adjust such as not committing to mortgages etc nor any redundancy payments at all.
The SA Industrial Commission accepted some 20 years ago the principle that looking after the redundant individual employee was important to override management prerogative of making an employee with 20 year’s service redundant at 5pm on a Friday night with no notice and no compensation. They accepted as a general principle that employees of small business ought not to be discriminated against. The shock and loss suffered with no wage income facing unemployment is the same as those employees in larger businesses.
Unions gained minimum award provisions in 2004 in the National Redundancy case and WorkChoices abolished this so many workers lost the safety net for severance pay.
It returns in the NES – nothing under one year’s service, 1 year and less than 2 years is 4 weeks’ pay up to 9 years less than 10 years 16 weeks’ pay, at least 10 years 14 weeks – not much, but better than nothing at all under the exclusion for small business. It still has the right for an employer to claim incapacity to pay.
Many union collective agreements of course contain more reasonable notice such as three months and more adequate redundancy payments.
I note in passing that the new Chinese labour law operative 1/1/2008 has severance rights of one month’s pay for each year of service – fair, as western corporations and Chinese employers due to the GFC are now making thousands redundant.
The DPM ruled out any severance pay in the National Employment Standards for workers in small business and asserted that the award minimums for small business should not have redundancy pay in the AIRC award review.
The ACTU argued strongly for ‘the inclusion in all modern awards of a redundancy standard which includes small business redundancy entitlements as the standard will play a critical role in maintaining the existing entitlements of many employees to redundancy pay and in restoring a degree of fairness and equity to the federal award safety net.’
The DPM rejected this, as ‘an appropriate balance does not appear to have been struck between employee entitlements and employer costs when introducing a small business redundancy entitlement in all modern awards.’ Such so-called balance, with nothing for employees! Her Department predicted redundancies and cost for small business of $58.8 million…but this is what redundant employees deserve to survive! And those redundant employees spend that money!
That redundancy provisions ought to be denied to employees in small business was hailed in the press as a victory. Powerful business associations welcomed in the coming recession this employer ‘freedom’.
Two, in the FWB is a requirement to notify redundancies to Centrelink and the union, already practiced by reasonable employers. Employers dismissing workers ‘for reasons of an economic, technological, structural or similar nature’ have to consult with the union to avert or mitigate the redundancies and adverse effects on employees who through no fault of their own face unemployment in a period of world recession. The FWA can make orders against employers not consulting with unions.
But these rights inexplicitly only apply to dismissals of more than 15. Why not to every individual made redundant? Why allow employers this legal loophole to do a series of dismissals under 15 denying union negotiations and notice to Centrelink?
Orwellian labour laws and 1984
I digress. It is indisputable that under WorkChoices we lived in an Orwellian 1984 workplace world, where opposites of what politicians said apply.
The endless chanting of one Liberal party slogan was ‘More jobs, better pay.’ ‘Doublethink’ was one device. ‘Doublethink’ is the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them. ‘Doublethink’ involves the forgetting of any fact that has become inconvenient, and then, when it becomes necessary again, drawing it back from oblivion for just so long as it is needed. This denies the existence of objective reality and all the while taking account of that reality which one denies. MPs perhaps will be familiar with this experience.
One use of ‘doublethink’ is to label union organising which is not unlawful, or to be more specific, which is lawful, to be deemed by opponents as ‘inappropriate’. Legislative changes are pushed which transforms that which is ‘inappropriate’ into that which is ‘unlawful’. Through the interplay of ‘unlawful’ and ‘inappropriate’ the vice of doublethink is played out. That which is lawful is unlawful. Or at other times the interplay of ‘permissible and not permissible’ and applies to ‘protected/unprotected’ action and so on. I contend this ‘doublethink’ applies again with the FWB – albeit in a different form, a new ‘1984 spin’.
But back to this main narrative. In a recession many workers are often kept on but face pressures.
ACTU Sharan Burrow warns that ‘employers must not use the uncertain jobs market to pressure workers into accepting cuts to their pay and conditions. Using the threat of job losses to force workers into poor deals is unconscionable behaviour, especially since the crisis has been caused by unrestrained greed and a short-term drive for profits. Employers need to take a look at themselves and begin by cutting back on the excessive salaries and lavish perks they have enjoyed in recent years.’
On this last point, the FWB could under the Corporations power have a provision on executives pay, restricting the obscene millions in CEO salaries and golden handshakes, as they depart after bankrupting a company.
The corporation’s normal more powerful market position and HRM control over the workforce ought not to be enhanced legally in the FWB, as it was under WorkChoices to exploit vulnerable workers. Some of the most powerful global companies in all sectors did use the law for exploitative and repressive ends.
The changed global economy means that enterprise bargaining occurs with the threat of unemployment. The discipline of the fear of being made redundant is used in negotiations. Workers are less able to have the confidence to have discussions with an employer, to organise in a union and exercise union rights in bargaining.
When an issue of power between management and their workforce or resolving workplace conflict is at issue, more effective counter-balancing rights for employees are needed. The workforce during a recession is less likely to be able to organise effective industrial action to achieve a fair go, unless the labour law mandates a ‘firewall’ right to strike (see later).
Notwithstanding Australian citizens voted against the corporate WorkChoices agenda, their powerful associations are maintaining a deceitful pushback on Senators, backed by the mass media, against the minimalist FWB reforms pleading special instances for watering down provisions.
Unfortunately, new 1984 double-speak mythologies are promoted that the FWB is ‘too fair for employees’ or ‘unfair for management in the GFC’ or ‘give union bosses too much power.’
Using an argument from Professor Ewing:
‘Unequivocal government support is especially important to resist the political power of employers who seek to use the political and parliamentary stages to lobby to dilute the legislation, to secure concessions of three kinds: to carve out exclusions from the coverage of the legislation; to make it easier for employers to resist it; and to make it harder for unions to use it.’
‘In the UK we failed also to confront the problem of union busting US consultants, who advise employers on how to remain union free, whose activities were completely under-estimated…’
This Senate Review can acknowledge the changed GFC realities and re-design the FWB to more appropriately defend the interests of employees by significantly strengthening workers’ rights; by adopting ACTU and union policy. The issues in this blog ought to be taken up by this labor government.
Fair Work Bill
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