Unfinished Business: Fair Work Act

Unfinished Business: Labor’s Fair Work Act and the New Union Agenda
by Search President Rob Durbridge
The Fair Work Act 2009 starts to replace Workchoices in July but the final chapter will take a disappointingly long time…some AWAs may continue until March 2013. The new laws are a welcome change from the anti-union radicalism of the Howard/Costello years but they do
not mean that a fair or enduring workplace balance has been established. In the light of the deepening economic crisis. This could have severe consequences for workers and unions. How will unions respond to the crisis in the light of the new laws?

In 2007 the incoming Rudd-Gillard ALP leadership developed a “Policy Implementation Plan” for the ALP Federal Conference policy. This modified ALP policy considerably in a plan developed with major employer groups and announced in August 2007 to limit the roll-back of Workchoices. This plan was reached without the agreement of the ACTU while the union movement was flat-out campaigning in the community under the banner of the Your Rights at Work (YRAW) Campaign.

The YRAW campaign was decisive in the defeat of the Howard Government, but it is the revision of the ALP policy for the 2007 election which defines the nature of the new Act and is the Minister’s well-practised “mandate” rationale for its content.

Corporations at the Centre

The FWA represents a massive legislative exercise which, like Workchoices, is fearfully inaccessible. In essence it removes the primacy given to individual employment contracts over collective instruments. In its place it puts collective bargaining, union and non-union, with individual “flexibility” requirements above a set of minimum legislated standards and Modern Awards made by the AIRC under Ministerial direction.

In doing so it brings the Australian system closer to that of the US by excluding the operation of the Labour (or “C&A”) Power of the Constitution under which an independent tribunal dealt with industrial disputes by compulsory conciliation and arbitration (S.51 (xxxv)) in return for which unions accepted regulation and limits to industrial action rights.
Instead of the Labour Power, the new Act is based (as was ‘Workchoices’) on the Corporations Power (S.51 (xx)).

Henceforth industrial regulation will focus on the rights and responsibilities of the corporation, the dominant institution at the core of capitalism, rather than the settlement of disputes between parties. The tribunal Fair Work Australia is directed by Ministerial “Request” and the terms of legislation but not under the constitutional power to establish machinery to prevent and settle disputes on merit, according equal rights to the parties.

This is a cause for concern about the independence of the tribunal and the way in which current and future governments will direct its operations.

The new law is the most profound industrial relations policy shift by the Federal ALP since unions created the party to legislate an alternative to industrial action and lockouts in industry.

It has major consequences for unions and the future of the ALP itself. It registers the declining influence of unions on the ALP and the rise of the “political class” in both major parties which shares a broad policy consensus. That the FWA gives unions less of a role than did the legislation under the Fraser Government for example illustrates the shift which has occurred.

The Government argues this is unions’ fault…that private sector unionisation density has fallen so non-union processes are necessary. But when the original Act was passed in 1906, unionisation was only 6%.

Strong Cop on the Beat

Under the FWA, union action and independence remain under tight legislative control but the capacity to initiate and to be parties to awards made by an independent tribunal exercising compulsory arbitration has not been restored. The right to strike, internationally the hallmark of a free society, is circumscribed by rules and regulations for balloting and approval and constraints on subject matter to give “protected action” rights from penalties and civil damages.

In the case of the building and construction industry restrictions on union freedoms are draconian and discriminatory, but for the whole workforce they still arguably breach ILO provisions on Freedom of Association which have been adopted by Australia since 1949.

Limits to the Right of Entry to workplaces, the capacity of employers to use transmission of business arrangements to avoid liabilities and thresholds for the operation of unfair dismissal provisions also limit the effectiveness of the new laws.

Awards, Bargaining and Arbitration
Unions will not be parties to Modern Awards which are created and can be varied by Ministerial “Request,” a request which cannot be refused and thus is actually a direction. (The defeat of the Howard Government has not seen an end to Orwellian nomenclature.)

No general access to arbitration exists, but in limited circumstances such as a threat to health and welfare or where low-paid workers cannot reach agreement with a multiplicity of employers, Fair Work Australia can make a once-off determination.

Despite this provision many workers will not benefit from Modern Awards and will not be able to bargain effectively as the recession tightens. This can be expected to cause greater inequity (‘wage dispersal’) in the workforce particularly in sectors where unskilled, women and migrant workers predominate.

The ALP policy originally promised a system which would allow unrestricted bargaining to replace the “allowable” list of the Howard years. Instead FWA incorporates the restriction requiring that matters for bargaining are those “pertaining to employment” which will limit bargaining around broader social questions.

This piece of arcane legalism has survived the new broom. Thus employees may be unable to take protected industrial action over the environmental policies of a corporation (such as Green Bans) or the excessive remuneration packages of its executives.

The FWA also contains a prohibition against “pattern bargaining”…the capacity of unions to campaign for similar outcomes across an industry which characterised the major gains made in industries like manufacturing and mining in the past. Pattern bargaining continues behind the corporate veil but for unions public solidarity campaigns are prohibited. This prohibition is a direct product of employer hostility to manufacturing and building union campaigns in the 1990s, was contained in Workchoices and is now maintained by the FWA.

The Safety Net
A “safety net” of legislated National Employment Standards (NES) and Ministerial “Requests” in Modern Awards (MA) underpin the system. But how safe is the net? There are rules allowing the tribunal, Fair Work Australia, to maintain relevant standards in awards but they can only be reviewed on “work value” grounds and not until 2014. The NES require agreement by Federal parliament to change minimum standards by legislation. In the US the requirement for Congress approval has led to the growth of the working poor as politicians fail to put fairness above the power of corporations.
The NES in some cases do not create real entitlements for the standards they purport to create. A number of the NES go no further than a right to request flexible working conditions or extended parental leave; worse, the NES codify how an employer can provide “reasonable business grounds” to decline the request. A Court must deal with allegations of breach of the NES.

The new system centres on enterprise bargaining with new requirements for “good faith” rather than to allow stonewalling which was legal under Howard. Just how well the provisions will deal with employers who just “go through the motions” (as the Telstra board has been doing) will be instructive. The whole notion of relying upon enterprise bargaining to defend or improve living standards at a time of economic crisis is patently fraught.

Where to Now?

There is no doubt that when Minister Gillard describes the previous system as “arcane and archaic” that much of the jurisprudence and processes which developed through litigation over the past century were in need of reform. It was often a lawyers’ picnic in which the Minister was a willing participant. Much of this legal maze has been replaced in the Fair Work Act by another maze of provisions. Much will depend on the way test cases are taken and determined under the new Act. It is certain that lawyers will continue to prosper.

In essence the Fair Work Act 2009 is an expression of ascendant neo-liberal policy as it was at the time of the end of the boom. Industrial relations and the labour market were to be deregulated at the behest of global corporations so that business could operate and deal with labour across the world as with any other commodity. In order to guarantee the “free market” the unions, as third parties to the employment contract, had to be kept under tight restraint.

But this strategy behind the FWA now appears as anachronistic as market solutions, privatisation and deregulation which sponsored the crisis. Job security is evidently the highest priority in workers’ minds at present and unions are busy negotiating downtime and training arrangements to prevent sackings.

Instead of economic rationalism, employers are calling for government spending and even temporary management of banks and firms as huge as General Motors. Massive government deficits are encouraged by the IMF in the name of stimulating economies sinking into recession.

The New Union Agenda

The new agenda demands stronger action around job security and employment creation. This involves measures to stop employers’ easy access to casual and contract forms of employment, to improve information and consultation standards around redundancy, training rights prior to redundancy and alternatives to redundancy where work is genuinely short. In sectors such as finance, unions believe that banks are using the economic crisis as an excuse to offshore back-office jobs, which calls for more stringent tests and regulation.

As the crisis unfolds and more jobs are lost it is imperative that the union movement and unemployed workers retain organised links with the unemployed. A campaign for job security insurance to retain workers involvement in an industry and to link with industry superannuation has become an issue for today, not a wish for tomorrow.

UK labour law Professor Keith Ewing reminds us that it was the restoration of industry-wide collective bargaining by legislation under the Tory government in the 1930s, as advocated by Maynard Keynes, which restarted the UK economy by raising the spending power of workers. Employers got their wish to proscribe pattern bargaining in the FWA, but this may prove to be a poisoned chalice.

Imbalance

Minister Gillard has thus far been able to portray the FWA reforms as a binding mandate which achieve “balance” because employers and unions have both been critical in the media. But the ALP as a political entity was created to enact workplace rights to allow unions to organise and act as collective instruments of workers’ interests so that they could balance the power of the employer in the workplace. In that respect the FWA fails to give substance to the claims of balance…the interests of the corporations are firmly at the centre of the Act’s operation.

Unions are not excluded, but their role is limited and non-union processes have equal status.

Unions have never relied upon legislation or arbitration for their existence, and do not expect to do so now. But some unions will struggle for identity and relevance under the FWA which establishes non-union processes as a parallel track for employee bargaining and does not give a central role for unions as the award system provided hitherto. The result is likely to compound existing inequities on the basis of gender and industry sector.

This may well prove counterproductive for the restoration of demand in the economy. The powers which now exist under the FWA are extensive and if used by Ministerial “Request” to actually raise standards they could prove essential to national economic recovery. This would take a big shift in the Federal government’s self-proclaimed “conservative” thinking to achieve.

New Needs, New Directions

In the new demands arising in the workplace can be seen elements of new campaigns and job action. They are part of the pursuit of what has been called “democratisation of capital” issues like control of executive pay, workers’ rights to participate in major corporate restructuring decisions and workforce input into decisions on technological change or takeovers involving job losses or health and safety questions. (1)

In addition to these issues there is the need for Green Jobs; investment in sustainable industries and renewable energy sources as well as the building of public infrastructure to reduce carbon production. The intersection of the need for large-scale investment at a time when private funds have dried up and the need for secure areas for investment by superannuation funds boosted by taxation concessions gives the government and industry funds an obvious opportunity for mutual benefit through the sale of bonds.

A broad social alliance is also critical. Strong links with the unemployed victims of the economic crisis will also be imperative, calling for more rights, a living income and ultimately retraining for jobs created by investment in the new economy. While the Federal Government has been quick to disown any responsibility for the economic crisis, and similarly discount any blame on employees, the level of unemployment benefits has not been raised. Training requirements and benefits need to provide real skills for real jobs rather than continue the punitive approach of the Howard years.

Together these imperatives foreshadow a set of policies which are socialist in direction because they challenge the monopoly of corporate power over the direction of the economy and society. They are policies which put working people first, an imperative which unions ignore at their peril.
Further reforms like this will need organised labour as part of a civil society alliance to provide the will. An alliance of that kind can win community support for change, provided the strategy is based on the needs and involvement of rank and file union members, their families and communities.

The campaign against Workchoices showed that.
Economic crisis in the era of globalisation means that labour and social movements are tackling the same issues at the same time in many countries, and the fortunes of each will be influenced by those of others.

But unions must respond to the new uncertainties with positive campaigns rather than expect the Federal government to provide solutions or worse to leave the community prey to dangerous and dead-end solutions of the far- Right.

Harry Glasbeek, “Rudderless in a sea of choices: the defeat of Your Rights at Work”, Dissent, Autumn/Winter 2009, p33.
ACTU Submission to the Senate Committee on the Fair Work Act

https://senate.aph.gov.au/submissions/comittees/viewdocument.aspx?id=254ebf88-b29e-4170-9777-aae468cf23c6

Devils in the FWB details