In the lead up to the next federal election, Australians will be experiencing ‘Groundhog Day’ following the release of yet another report containing proposals for ‘industrial relations reform’.
Since the Howard government was defeated in 2007 largely as a result of its WorkChoices laws, the conservative parties have been considering alternative ways to finally achieve lasting ideological reforms to Australia’s industrial relations system. As part of this strategy, the Abbott government earlier this year commissioned the dryly economic Productivity Commission (PC) to undertake yet another inquiry and produce a suitable report which the government can use to make its case for changes at the next election.
The PC duly delivered in early August with its 1,000-page draft report into Australia’s Workplace Relations Framework. While the PC’s public take is that the IR system just ‘needs repair not replacement’, its recommendations if taken up by the government would clearly and significantly tilt the playing field towards employers away from employees.
Of most obvious concern are the PC’s recommendations regarding penalty rates, so-called ‘enterprise contracts’, and changes to the composition and independence of the Fair Work Commission.
The PC makes some positive comments about penalty rates and generally does not recommend changes in rates, stating that there are compelling grounds for penalty rates for overtime, night and shift work and notes the proven adverse health effects from night shift and rotating shift work.
The PC however makes a dubious distinction between work in retail and hospitality and other industries (including health) and goes on to recommend that Sunday rates in retail and hospitality be reduced to the level of Saturday rates. While it is encouraging that the PC supports the concept of penalty rates more widely, it does not take too much a leap to wonder what other industries will next be seen as an ‘exception’ to the general rule if workers in retail start having their penalty rates cut. No doubt the argument then will be that it is a precedent that should be extended more widely.
Another PC proposal is to introduce something called an ‘enterprise contract’. One of the key reasons WorkChoices was so unpopular was its introduction of a form of individual contract called an AWA (Australian Workplace Agreement). AWAs enabled employers to offer wages and conditions that were worse than the minimum standards contained in awards. The public backlash against them, resulting in the Howard government’s loss of power in the 2007 election, meant that the Coalition has ever since proclaimed that it “heard the message loud and clear” (as it did again last month after the release of the PC report). However the Coalition, and the economically dry Productivity Commission, are still wedded to the concept of individual bargaining.
The latest PC proposal then is simply the latest in a long line of attempts to resurrect the concept. The PC proposes that the contract be able to be offered to prospective employees on a take it or leave it basis (ie. sign or no job), and no negotiations over the terms of the contract with new or existing employees (or their union) would be required. The contract would not need to be approved by the Fair Work Commission; rather an employee would be obliged to ‘stick their head up’ and make a complaint to the Commission about the agreement if they thought the contract was worse than the safety net. While there are laws prohibiting taking ‘adverse action’ against someone for complaining, the PC also makes recommendations that these laws should be amended; in any event, most people are understandably reluctant to take legal action due to the time and expense involved.
The independent umpire (the Fair Work Commission), which among other things makes decisions on minimum wages and conditions, ensures that agreements are better than minimum conditions and determines unfair dismissal claims is criticised by the PC for a ‘legalistic approach’ and relying too much on history and precedents. Currently most members of the Commission are appointed until the age of 65, ensuring their independence from government. The PC recommends that appointments would be for periods of five years instead, with possibility of reappointment subject to ‘performance review’. This may lead to subtle pressure on Commission members to be more cautious in their decision making for fear of not being reappointed by a government that does not like their decisions.
The final report is due to be provided to the federal government in November 2015 following public hearings and submissions.
Federal Industrial Officer