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Australian Greens' Dissenting Report
This legislation fails the Government own test of fairness, simplicity
and choice. The bill has unfair consequences for many in our society, makes the
industrial system in this country much more complex, and removes choice for
hundreds of thousands of Australian workers.
The impacts of this
bill include lowering the minimum wage and putting downward pressure on the
wages of most Australian workers, and removal of their capacity to bargain
effectively. It hands greater power to employers, undermines unions and
collective bargaining, has significant implications for safety, and will impact
most profoundly on those already vulnerable in our community. The Greens
believe this is ideologically-driven reform that has a reckless disregard for
the impacts on our community.
The manner in which
this legislation has been unduly rushed is extremely irresponsible – especially
given its far-reaching implications for the daily lives of millions of
Australian workers and their families. There has not been enough time for
public analysis and scrutiny of this complex legislation, limiting the
opportunity for detailed analysis and submissions. With only 5 days of public
hearings in Canberra, only a small proportion of those making
written submissions were able to appear before the committee. While the
committee attempted to present a balance of the range of voices for and against
this legislation, this meant in effect that those supporting the legislation
were over-represented in committee hearings, as the majority of submissions
were critical of many aspects of the legislation.
Given the number of
contradictions, loopholes and unintended consequences that emerged during this
short time in committee, the logical conclusion is that the drafting of this
complex legislation was also rushed through on an irresponsible timetable. With
virtually all witnesses who appeared before the committee indicating that they
had not had sufficient time to undertake a comprehensive analysis of this
legislation, it would seem reasonable to expect that there are further as yet
unspotted flaws in this legislation which are likely to emerge further down the
track – with expensive consequences for the government and the economy, and
tragic consequences for workers and small businesses.
The haste to draft
and push through this legislation is not only irresponsible, it is unnecessary.
If the intention was to undertake genuine reform of the Australian labour
market to address skill shortages, work-family tensions, precarious employment
and the need for ongoing productivity gains, the responsible course would be to
engage all stakeholders in an open process of inquiry that gave the parliament
and the public time to evaluate options and proposals – so they could draw out
their implications for different sectors and develop a more comprehensive and
thought-out approach. The fact that this dialog has not happened, and that
consultation has been so severely limited to make it ineffectual, would seem to
suggest that the government does not have the best interests of all
stakeholders at heart and are pursuing their own ideological agenda.
While it is our
belief that this legislation is fundamentally flawed and should be rewritten,
should the government continue to pursue it in its present form (as it has
indicated it will) then there are a large number of amendments required to
address the flaws, loopholes and unintended consequences discovered to date.
The timeline for the
committee hearing has prevented the drafting of a comprehensive dissenting
report. To this end this report will be limited to a brief overview of some of
the key issues and failings of this Bill.
Impacts on the vulnerable and families
These amendments
will impact most significantly on the most vulnerable in society – particularly
those in low paid jobs, those with disabilities, Indigenous people, people
moving from welfare, women, outworkers and those in casual and temporary work.
Workers in the low-end of the
workforce are already vulnerable. The absence of award protection will result
in increased vulnerability. Low income households will be unable to protect the
balance between family and work, leading to intergenerational disadvantage.
Children growing up in households affected by low income, long and irregular hours,
housing instability and lack of parental capacity to assist with education and
physical development are more likely to have difficulty obtaining vocational
skill and employment, or in forming successful relationships.[224]
The impacts on the
vulnerable and families include:
-
People will end up working longer, less family
friendly hours
-
Rather than improve the work family balance as
claimed, many more families will find it harder to find family time, as it
becomes more difficult to negotiate working hours and the pressure to work
unsociable hours increases
-
HREOC said the Bill is likely to '... significantly
undermine the capacity of many, although not all employees to balance their
paid work and family responsibilities.'
-
The gender pay gap is likely to increase, as it
did during the period of 'reforms' in Western Australia during the 1990s
-
Women are more likely to be in part-time and
casual employment and will suffer more impact from the removal of allowances
and penalty rates
-
Working mothers and family carers are less able
to be flexible in their work hours and will be strongly disadvantaged by
measures that encourage unsociable hours and allow employers to alter working
hours at will
-
Previous parental leave provisions including a
right to return to work on a part-time basis and an obligation on employers to
communicate significant changes to the workplace to those on parental leave
have been lost
-
The legislation explicitly excludes parental
leave provisions for people in same sex relationships (clause 94A), in
contradiction of the many rules within the Workplace Relations Act 1996 which
require non-discrimination on the grounds of sexual preference
-
Young people entering the work force are
disadvantaged by their lack of experience and skills and are less able to
bargain and negotiate
-
Young people bargaining from a position of less
power are willing to accept lower conditions and trade away existing
protections – which will ultimately drive conditions down for everyone
-
Disadvantaged young people who are already marginalised
are likely to be further marginalised and existing problems further exacerbated
-
This legislation is likely to lead to the
development of a permanent class of working poor in Australia
-
There are limitations to the idea that ‘any job
is better than no job’ – where employment does not lead to improved living
standards
-
We may well see the formation of a vicious cycle
of double disadvantage – less support, and less incentive to try for employment
with little monetary benefit, and a further marginalisation of people who are
actually in need of government assistance.
Unemployment and the minimum wage
The removal of
'fairness' as a criterion for setting the minimum wage and the focus on purely
economic criteria (such as unemployment rates) will force the Australian Fair Pay
Commission to take an extremely cautious approach to increasing income of the
lowest paid workers.
-
The minimum wage is likely to drop – as it did
in Western Australia during the 1990s when similar (though less harsh) measures
were introduced.
-
There is no evidence to support the claim that
pushing down the minimum wage will create more jobs (and a 40% increase in the
minimum wage in the UK actually corresponded to an increase in employment for
those on it).
-
Using the minimum wage rate as an economic tool
means that the lowest paid in our society bear a disproportionate burden of
economic management.
-
It has been suggested that for the minimum wage
rate to have a noticeable impact on unemployment the rate would have to drop
substantially – but this may also have the unintended effect of making
unemployment benefits more attractive. Unemployment benefits would then be
driven down – leading to a ‘race to the bottom’ and the development of a class
of working poor.
-
The interactions between the provisions of this
Act and the ‘Welfare to Work’ provisions are of great concern, with the
implication that those on unemployment benefits will be obliged by the unduly
harsh ‘breaching’ regime to take jobs with below award conditions.
-
Those on low wages spend a high proportion of
their income on consumables – reducing their spending power will directly
impact on the economy.
-
In some industries it is likely competition will
lead to a bidding war driving down wages – as experienced in Western Australia
during the 1990s.
-
Eliminating overtime and penalty rates will not
increase employment but may in fact have the opposite effect – leading to
longer and less sociable hours for potentially fewer existing employees.
-
Higher hourly rates for overtime will no longer
be an incentive to employers to properly manage workload or encourage hiring or
more staff.
-
Workers currently in an area of skill shortages
with a good bargaining position are unlikely to suffer any immediate drop in
wages – however they will become more vulnerable to future decreases when the
economy inevitably slows down.
-
The definition of ‘standard working hours’ (as
an average of 38 hours per week taken over an entire year) does not comply with
community expectations and leaves significant room for abuse and manipulation.
-
The standard working week should be build around
a community standard of 38 hours Monday to Friday during daylight hours, and
appropriate compensation should be offered to those working unsociable hours.
Occupational Health and Safety
Inadequate attention
has been paid to the safety implications of Work Choices, with a failure to
adequately acknowledge the role that collective bargaining plays in ensuring
safe work practices.
-
The virtual impossibility of taking industrial
action under the bill means that the final sanction of unsafe work practices by
workers is practically unavailable, with the onus of proof on the workers to
prove imminent personal threat
-
The increasing emphasis on prosecuting people
for alleged safety breaches makes it difficult to talk about safety in the work
place
-
Public safety is of particular concern, as under
the bill industrial action is only permitted where workers can demonstrate
immediate threats to their own personal safety – concern for the safety of
others (such as patients, school children or the general public) does not
constitute valid grounds for action
-
Employee awareness and education about OH&S
issues is a crucial factor in reducing the costs to businesses and the impacts
of the well-being of workers.
-
‘Corporate knowledge’ of OH&S incidents is
important in devising preventative measures, but individual workers are
unlikely to have sufficient experience of risks and accidents to deal with this
issue alone.
-
In the past OH&S education and negotiation
of best practice has been taken on by unions, who are increasingly excluded
from this role under the bill
-
The combination of decreasing workforce skills
and experience, greater workforce turnover and increasing unsociable hours are
likely to have severe impacts on OH&S
-
The impact on the economy of time lost to
OH&S problems versus time lost to industrial action is 20 to 1 – the minor
gains this bill may have for reducing already low levels of industrial action
will be overwhelmed by the potential OH&S costs
Bargaining and Industrial Action
This bill is
purported to encourage bargaining in the workplace, however there are a number
of provisions which work against and actively discourage it.
-
If you can't reach agreement there is no
capacity to enter into arbitration to resolve the deadlock.
-
Employers can manipulate the process to contrive
a situation where they can end the bargaining process
-
Employers and employees can only agree on terms
prescribed by Government, which will discourage genuine agreement making
-
Employees on AWAs have little bargaining power
to help them integrate work and family
-
Loss of the 'no disadvantage test' is a
disincentive to bargain as employers can unilaterally terminate the bargaining
period at any point with the result that a worker falls back on the five
minimum conditions
-
The mandatory requirement for the AIRC to
suspend a union's bargaining period once
the employer has gone to the AIRC will enable an employer to contrive a
situation to force an end to protected industrial action (e.g. a lockout) –
further reducing employees ability to negotiate
-
Workers, even if not being paid, can be forced
back to work by the AIRC
-
Essential
services provision in the legislation allows the Minister to stop bargaining
and require workers to go back to work
-
Employee
Greenfields ‘Agreements’ effectively allow employers to unilaterally declare
workplace pay and conditions for a ‘new’ venture without bargaining with anyone
-
The
definition of a new business, venture or undertaking is so broad as to
encourage employers to quickly move out of existing arrangements by
‘restructuring’. The current provisions in the
bill would allow, for example, a franchise setting up a new outlet for a
fast-food chain to declare it a new enterprise.
This legislation is
clearly designed to disempower and disenfranchise unions in the way that it:
-
Restricts the capacity of unions to represent
workers
-
Restricts the capacity of unions to bargain on
the workers behalf
-
Makes it easier to sue unions
-
Restricts right of entry
-
Is in contravention of International standards
and our obligations as signatories to the ILO
-
Contradicts OECD evidence of the role played by
unions in both occupational health and safety and productivity gains.
One simple national system?
Work choices has
been promoted on the basis that it will offer a simpler national system that
will encourage flexible workplace agreements and convince employers to take on
more staff. In practice the legislation is overly complex and difficult to
interpret.
-
Small businesses have concerns about their
capacity to understand and enact these measures
-
They may have to employ or buy in additional
expertise to rewrite old agreements and ensure compliance with new measures
-
The ability of the Minister to change the Act
through regulation and to declare prohibited items could mean agreements will
have to be rewritten on a regular basis
-
While a unitary national system may simplify
matters for larger organisations working across state jurisdictions, it reduces
the number of choices to businesses currently able to compare federal and state
systems and choose the one that best fits their enterprise requirements
-
The use of corporations powers adds complexity
to smaller businesses and third-sector organisations who do not easily fit the
corporate model.
Corporations powers
The use of
corporations provisions as a constitutional ‘back door’ method of overriding
the constitutional role of the states in industrial relations creates
additional complexities and leaves the door open for a constitutional challenge
in the High Court.
-
Section 51 of the Constitution is a clear
indication of the intent for industrial relations to be managed by the states
in the context of collective bargaining
-
Using corporations powers means that small
businesses and not-for-profit organisations will have to determine how they
function as corporations and is likely to result in more complex compliance
requirements
-
Being or becoming a corporation is not a simple
matter, and a push towards incorporation can have unintended consequences
-
Submissions from farming organisations expressed
reluctance to go down this path because of its implications for matters such as
drought relief and tax breaks
-
Corporations powers have been designed to suit a
particular kind and scale of business venture – their use will disadvantage
those who do not fit well into the model and possibly skew their efforts in
perverse directions
-
Ultimately the use of corporations powers and
other one-size-fits-all measures within the bill force small businesses to
compete on an unequal playing field with bigger corporations – where they lack
the capacity to deal with the complexities and do not have the benefit of
economies of scale.
Increased Executive Powers
This legislation
conveys unprecedented executive powers to the Minister to make determinations,
intervene in workplace agreements and disputes, and to alter the Act through
regulation.
-
A large number of items are left to Ministerial
discretion (196 references to “the regulations”)
-
The Minister can amend or veto outcomes of the
AFPC (sections 90Q, 90T & 130)
-
The Minister can materially alter the Act
without parliamentary scrutiny (Schedule 15, section 30 allows regulations to
“apply, modify or adapt the Act”)
-
The Minister can unilaterally add ‘prohibited
items’ which restricts the ability of parties to negotiate workplace conditions
to increase productivity and improve work-family balance
-
The Minister can declare particular enterprises
as ‘essential services’ – thereby restricting bargaining periods and the
possibility of industrial action, and allowing the Minister to force workers
back to work
-
This level of executive power is incompatible
with the proclaimed spirit of the legislation of encouraging flexible
bargaining and may act as a disincentive to employers and employees entering
into discussions that may be limited by Ministerial decree or overwritten by
Ministerial fiat.
Office of the Employment Advocate (OEA)
There are serious
concerns about reducing the role of the OEA to a repository for the lodgement
of AWAs, and the lack of any ability to examine and enforce compliance. This
will result in a lack of adequate review of AWAs, and leave no reason for the
OEA to examine whether AWAs are in fact compliant or whether an employee has
genuinely consented to an agreement.
-
Under existing arrangements there have been
numerous examples of agreements not being lodged with the OEA, not being signed
by employees, and not complying with the regulations.
-
There will not be adequate scrutiny of
agreements to ensure compliance – as the role of OEA has effectively been
downgraded to lodgement of agreements which immediately come into force.
-
An employer will immediately have the benefit of
a non-compliant AWA or collective agreement operating as soon as it is lodged –
even when they have ignored all the requirements.
-
The same applies to terminations and variations
of agreements – a termination or variation will take effect even when there has
been non-compliance by the employer with the statutory provisions to inform
employees
-
In effect employers can ignore all provisions
requiring genuine advice and consultation in making, varying and ending
agreements
Productivity
The case that these
changes are required to increase productivity has not been made, and there are
indications that any minor short-term productivity gains will be far outweighed
by longer term negative impacts.
-
There is no hard evidence to suggest that
productivity will increase under these reforms, with the Department of
Employment and Workplace Relations (DEWR) relying on dubious economic modeling
and ignoring relevant international studies.
-
The claims rely on IMF and OECD studies which
have been discredited
-
The claims ignore evidence from New Zealand of a
drop in productivity (and a growing gap with Australian figures) after the
introduction of similar measures
-
The only way that these changes will increase
business ‘productivity’ is through driving down wages to reduce inputs relative
to outputs – this will not increase the productivity of individual workers
-
Shorter, more uncertain employment increases
labour turnover costs and decreases ‘corporate knowledge’ and the incentive to
invest in training and human resource development
-
International evidence suggests that the biggest
productivity gains are linked to collective bargaining
-
The bill does not encourage team work and shared
decision making that promote collaboration, communities of practice and dynamic
learning – which are important aspects of the innovation and creativity that
drives sustained productivity gains
-
Reducing awards, dropping wages and conditions
could lead to cost cutting measures that reduce employers incentives to invest
in training, innovation and upgrading capital stock - which in the long run
will have adverse implications for productivity
Skills Shortages
The current skill
shortage crisis is supposedly another imperative for this legislation, however
the bill only specifically addresses this issue through school based
apprenticeships and piecemeal comments about vocational education and training.
-
Shorter and more uncertain employment will
potentially exacerbate existing skill shortages
-
Australian data relating to skill shortages in
nursing suggest that the problem is actually related to job quality – with many
qualified nurses opting not to work in unattractive positions where they are
unable to deliver quality care.
-
International evidence suggests greater
collaboration between stakeholders is needed to address skill shortages in
highly skilled and dedicated professions – by undermining unions these changes
will exacerbate the problem
-
Solutions to ‘job quality’ issues often involve
sector-wide solutions (like mandated nurse-patient ratios) to improve work
quality – which cannot be achieved by
any one employer in isolation because of competition pressures
-
The fundamental design principle of this bill
makes multi-employer agreements impossible – which undermines the capacity to
establish industry-wide skill sets and training standards
-
There has been under-investment in training,
with declining on the job training, exacerbated by increasing casualisation –
these reforms do not address these areas
-
Changing career structures and increasing
workplace insecurity have meant that personal investments in education and
training are more uncertain and likely to deliver reduced returns
Conclusion
Analysis of the
proposed legislation in the light of available data on labour markets suggest
that the Workplace Relations (Work Choices) Amendment Bill 2005 will:
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Undermine workplace rights and conditions
-
Deliver flexibility to employers at the cost of
employees
-
Add unnecessary levels of complexity to the
regulation of industrial relations that will disadvantage smaller businesses
-
Create additional problems for those trying to
balance work and family
-
Disadvantage those already most marginalised in
our society – including women, young people, Indigenous Australians, those with
disabilities, the low paid, and those in part-time or casual work
-
Widen existing disparity in wages and entrench
inequalities
-
Create an underclass of ‘working poor’
This is badly flawed
legislation with a raft of serious intended and unintended consequences that
will impact on the daily lives of most Australians. This legislation is being
pushed through with unnecessary haste when in reality there is an urgent need
for more time to properly assess and evaluate its impacts. The best approach
would be to abandon this draft and start again. Failing that, a number of major
amendments are needed to improve a range of unintended and perverse effects. It
is the considered opinion of the Australian Greens that enacting this
legislation will have widespread deleterious effects for the Australian way of
life and will ultimately undermine productivity and innovation and foment an
undercurrent of workplace unrest.
Senator
Rachel Siewert
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