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Redistributing Work: Methods and Possibilities
Steve O'Neill
Economics, Commerce and Industrial Relations Group
Abbreviations
Major Issues
Introduction
Conclusion
Appendix 1 Terminology
Appendix 2 ACTU Codes of Conduct on Twelve Hour Shift
Work and Casual and Part Time Work
Appendix 3 European Directive: Working Time
Appendix 4 US Guidelines on Short Term Compensation
Appendix 5 Options for Managing the Workload when Employees
take Prolonged Leave:
Appendix 6 ICI Botany: The 'Annualised Salary' Approach
For Engineering Technicians (Fitters and Riggers)
Appendix 7 Sheraton Pacific Hotels: The 'Annualised
Salary/Loaded Hourly Rate' Approach
Endnotes
- ABS
- Australian Bureau of Statistics
- ACTU
- Australian Council of Trade Union
- AIRC
- Australian Industrial Relations Commission
- APS
- Australian Public Service
- ARP
- Award Restructuring Process
- DIR
- Department of Industrial Relations
- DOL
- Department of Labor
- EWTD
- European Working Time Directive
- GDP
- Gross Domestic Product
- ILO
- International Labour Organisation
- PPT
- Permanent Part-Time
- RDO
- Rostered-Day Off
- SEP
- Structural Efficiency Principle
- UK
- United Kingdom
- US
- United States
- V-Time
- Voluntary Reduced Worktime
In a number of countries work redistribution through changes to standard
working hours is being investigated as a means to reduce unemployment. Economic
growth has not translated into employment growth, an outcome known as the
'jobless recovery'.
However, some countries have performed better than others in generating
jobs along with increases in Gross Domestic Product (GDP). On a comparative
basis, Australia has performed well in job creation. Although unemployment
in Australia has been reduced over the past two years, the fall does not
appear to be sustained. Flexible work arrangements potentially offer the
scope to share the available work.
If new work arrangements are to benefit employees and perhaps the unemployed,
there needs to be a 'decoupling' of workplace hours from those performing
it. This means that the operating times of plant and equipment will be
separated from the period which any one individual worker spends at work.
It is still possible to keep operating times of plant long, or even continuous,
while working times of individuals can be reduced. Such working hour arrangements
are termed by the OECD few time arrangements Unless decoupling
is facilitated in some way, the opportunities for hours flexibility seem
less.
One feature of working hours for full-time employees is the increase
in the proportion of these who are working 'long' weekly hours. This proportion
has increased from under 30 per cent in the mid 1960s to about 43 per
cent currently. However there have been other trends in hours worked and
the pattern might be best described as dispersion-away from the forty
hour week, i.e. both toward longer and shorter hours. Nevertheless, Australians
are reporting that they are overworked and often they would prefer lesser
hours.
The shift to enterprise bargaining has allowed employers to put the
working hours arrangements on the bargaining table. However 'liberated'
working arrangements such as job-sharing or working from home are not
prevalent, as revealed in a survey of enterprise agreements.
Such trends beg the question: to what extent can current working arrangements
be altered to provide more of those without work with work, and lessen
the burden on those in work? There have been some specific examples of
the alteration to working hours in certain enterprises leading to either
a halt on retrenchment or the creation of some jobs.
There is also a bargaining process concerning working time arrangements.
Employers seek the removal of restrictions on night, shift and weekend
work, as well as on daily maximum hours, while unions typically seek to
limit the detrimental affects of working hours flexibility.
The ACTU released guidelines in 1990 on part time work, casual work,
job sharing and twelve hour shifts. Enterprise bargaining has enabled
experiments with a variety of hours and pay arrangements, with recognised
examples being at the ICI Botany chemical plant and the Sheraton Pacific
Hotels enterprise agreements.
More recently, the two family Leave Test Case ecisions (1994,1995)
have broached the matter of working hours flexibility from the interests
of employees, and on an award basis thus reaching more of the workforce.
The objective of the union claim was to allow (private sector) employees
access some of their current leave entitlements for the purpose of caring
for family members. The decisions (affecting federal award employees)
have covered other issues pertaining to working hours and for example
have sanctioned overtime work being taken as time off rather than as income.
Also it was decided that permanent part-time work provisions are to be
promoted in the current review of awards under s.150A of the Industrial
Relations Act 1988. As well, employees who elect for these shorter
hours are to have access to similar benefits as full-time employees such
as training.
The European Working Time Directive (EWTD,1993) recognises the concern
of European Union countries to set upper limits on time worked so as to
allow work redistribution to occur. No similar policy on working time
has so far been adopted or canvassed in Australia, yet given the extent
of unpaid 'overtime' by the professional classes, government policy on
reasonable working hours seems warranted.
The test of the success of work hours redistribution is that it will
direct jobs to those unemployed. Detractors of work redistribution cite
a potential fall in productivity as quality labour may be replaced by
poorer quality labour, or by labour with different (and inadequate) skills
and labour on-costs may increase. The unqualified success of work redistribution
to reduce unemployment measures therefore cannot be guaranteed and most
academic study confirms this. However, giving employees the optionto
take increases in productivity in leave rather than income should be recognised
as legitimate in a bargaining process and that certain sections of the
workforce may pursue this option.
What scope is there for work to be redistributed such that unemployment
levels might be reduced? This is a question on the agenda of employment
policy makers in governments, unions, the Organisation for Cooperation and
Economic Development and the International Labour Organisation (ILO).
Using trend statistics, Australia's unemployment level stood
at 768 400 in January 1996. Of these, 234 200 had been unemployed for
a year or more. Unemployment has been reduced over the past two years.
By early 1993 it reached 11 per cent and by mid 1995 it had fallen to
8.3 per cent, although this fall has not been sustained. The Australian
Bureau of Statistics (ABS) estimate of the total labour force (January
1996) includes 9.09 million individuals either working or seeking work.
In January 1996, employment stood at 8.32 million which is above the last
peak of employment reached in 1990 (7.89 million).
The growth in employment seems to have stalled in late 1995: the contribution
of the September 1995 quarter to jobs growth was a mere 15 000, and the
December quarter added 28 000 jobs. If the rates of unemployment reduction
and employment growth have stalled, is there any scope to redistribute
the work available? Also, if incomes and GDP are rising while employment
growth remains flat, do these trends provide even superficial evidence
that we are working harder than we have in the past, and if so, is it
possible for work to be redistributed and thus providing work for those
without it?
This paper evaluates the options to redistribute work. It discusses:
- the characteristics of unemployment amid prosperity which has lead
academics to term the current phase of recovery as jobless growth
- the interests of employers, unions and governments in seeking more
flexibility in working hours, and the advantages and disadvantages for
employers and employees: note that terms such as flextime, job sharing,
work sharing, annualised hours and others are explained in Appendix
1
- the Australian debate flexible work hours which in the late 1980s
through the centralised wage system favoured the operating needs of
employers but more recently the Family Leave Test Cases have
broached the working hours issue from the needs of workers.
- the paper evaluates some statistics and information on working arrangements:
- which employees are working long hours
- the trend of people working 'harder' and thus the scope for work
redistribution as well as
- the role of enterprise agreements in promoting new time arrangements
- international initiatives to create flexible hours work arrangements
and so redistribute employment
- the counter arguments to work sharing as a method of alleviating
unemployment are also considered:
- that work sharing is a poor approach to solving unemployment
and that those who work share do so because of their personal preference,
not of an altruistic motive
From the perspective of OECD countries, the gravity of unemployment has
generated a number of inquiries and possible solutions, particularly within
the European Community. Work redistribution is certainly one option under
evaluation. The OECD commissioned a number of workshops and studies on options
for employment generation. These are reported in a series under the title
of the Jobs Study.
The OECD also convened seminars of its (tripartite) Working Party on
Industrial Relations in 1993 to evaluate job sharing, work redistribution
and working arrangement flexibilities. It commissioned eight national
reports (Canada, France, Germany, Italy, Japan, The Netherlands, Sweden
and the UK) on flexible hours in three industries: metal manufacturing,
the retail trade and health services. A report of these workshops was
released by the OECD in 1995 (1).
From these workshops policy makers have observed that economic progress
has not uniformly translated into employment—the so-called 'jobless
recovery'. The charts in the following pages correlate the growth (or
fall) in employment with the growth of output for selected countries.
The charts also show that employment generation is not necessarily linked
to GDP growth—spectacularly so in the case of France, the UK and
Germany. The employment generation effect has been healthy for the US
and Japan, with Australia being a better performer on employment generation.
These tables are reprinted from the OECD's OECD Societies in Transition,
The Future of Work and Leisure (1994). Employment and GDP data for
Australia has been prepared by the Parliamentary Research Service.
Chart 1: GDP and employment growth in industrialised countries 1960-87
(Source: OECD societies in transition, OECD, 1994)
Chart 2: GDP and employment growth in Australia 1960-1987
(Source: Parliamentary Research Service)
As a response to jobless growth, a number of countries are promoting
flexible work arrangements to spread paid work, and so mitigate rises
in unemployment. Arrangements such as part-time work, job sharing, flex
hours and other work arrangements are being devised to provide flexibilities
for individuals and to offset retrenchments. The OECD terms these flexible
working arrangements new time arrangements. They can operate to the benefit
of employers or employees and sometimes both.
Employers seek various forms of workforce flexibility. They particularly
seek 'numerical flexibility' allowing the size of the workforce to be
adjusted by the hiring/firing of temporary workers. It is helpful to distinguish
the new time arrangements from the traditional working hours arrangements
of shift work and the working of overtime. These schemes of providing
numerical flexibility have been used extensively-a point made by Gerhard
Bosch of the OECD,
Flexible working time arrangements are actually nothing new.
Overtime is a long established way of extending operating time and working
hours to meet firms' requirements. Shift, night and weekend work are equally
familiar. Everybody who has looked in detail at the reality of firms'
time arrangements in the past is well aware of the wide range of formal
and informal arrangements that exist in order to create the flexibility
needed to match working time and operating hours to the needs of firms
and individuals (2).
The working hours flexibility debate is also often described in the
context of a 'core-periphery' labour market (3). Firms employ a core of
full-time employees. These comprise employees who are well-trained and
thus valuable to the employer. Where seasonal factors or operational demands
require, additional temporary workers may be employed (and later dismissed).
Flexibility can go beyond the employment relation and extend to the use
of contractors who may work off the employer's premises.
However, the work redistribution issue centres mainly on the core workforce
wanting or being willing to reduce their hours. Less than full-time employment
such as casual and part-time work appear to be the converse of 'full-time'
work and the two terms are often used synonymously. Part-time work may
be permanent or casual. To make the change to less than full-time hours,
employees usually seek permanency and, as will be discussed further,
this approach often conflicts with employers' perceptions of the responsibilities
of the 'core' workforce.
Changes to ordinary working hours may also bring about a further restructure
of roles and responsibilities of individuals and families. Patricia Hewitt
suggests that what is involved in adopting working time flexibility arrangements
is more than a slight adjustment to standard working hours. She is critical
of the mindset which accompanied the former regimen of the eight hour
day and five day week:
It pervades the culture of business, management and public
life. It affects the organisation and strategies of trades unions as well
as most discussion of full employment. It indirectly influences decisions
in many other policy areas, including transport, leisure provision, child
care and the care of elderly dependants .. . This model ... simply does
not fit modern industrial countries (4).
One development which has prompted the use of new time arrangements has
been the international liberalisation of retail hours and the downstream
harmonisation requirements to service the retail trade in manufacturing,
storage and transport. The composition of cost structures in large part
support the use of 24 hour operation in retailing. Probert observes that
in the case of large supermarkets, the extra costs of being open as opposed
to closed are marginal (5).
A second factor promoting new time arrangements has been the increasing
personal and social costs associated with the journey to and from work
i.e. traffic congestion and parking shortages at peak periods Also important
in the US context, has been the force of 'Clean Air' legislation. This
federal US law targets ten or so heavily polluted US cities and requires
employers to devise ways of reducing the use of car transport by their
employees.
The third factor has been industrial restructuring, technological change
and the effects of recession whereby employers and unions seek alternatives
to retrenchment and firms seek to re-arrange their cost structures. The
combination of changes to work patterns, the labour force composition
(the change to two income families especially and the movement of more
women into paid work) and transport needs has also been recently explored
in an Australian context (6).
Additionally, workers with family responsibilities and older workers
may have different concerns, but they may share an interest in some forms
of working time flexibility, such as educational leave, shorter hours
and other arrangements and more flexible hours or phased retirement.
The OECD notes that the in the course of a century, annual average working
hours for an individual have decreased from 3 000 to 1 700 (7). The ILO
in its review of working hours flexibility cites the dominant reason for
the current re-examination of the arrangement of working time is the long
term reduction in hours of work which has occurred in many industrialised
countries. As it says,
it would be impossible to ignore the stimulus given to greater
flexibility. As working time gradually has become disconnected from the
operating time of enterprises, both workers and employers have been faced
with new scheduling needs and opportunities.
Behind the pressure for reduced hours and increased flexibility are
the high levels of unemployment found in many countries. While
the potential for employment generation through reduced hours or increased
flexibility is highly controversial it is apparent that the
momentum for shorter hours and greater flexibility will not be easily
reversed (8). (emphasis added)
From its review of literature (such as company personnel practice manuals),
the ILO notes that the organisation of working time 'affects and is affected
by' three elements: economic efficiency, working conditions and employment.
Each of these elements has a number of issues attached to it. These are
- Investments An enterprise needs to calculate whether
it is more advantageous to extend the operating hours of existing equipment
or whether it would be preferable to invest in new equipment.
- Volume of production An enterprise might consider
the options of increasing or decreasing the volume of production.
- Market demand.The enterprise needs to ascertain
whether the market can absorb an increase in production without a decrease
in product price. If competition is strong, an increase in production
may lead to price changes. Thus market demand, potential changes in
demand, the number of competitive enterprises and their size, as well
as delivery time should he considered.
- Capital costs This refers mainly to interest rates
and the amortisation time of equipment. The useful life of equipment
and the pace of technological development need to be evaluated.
- Labour costs Certain working time options may increase
labour costs due to the need to compensate for inconvenient hours by
paying special rates or premiums. Depending on the schedule, these extra
costs may either be compensated or reinforced by an increase or decrease
in labour productivity.
- Other factors. Other economic factors that may play
a role in determining working time options are the cost of power, light
and heat; stocking and shipping costs; and transport costs and commuting
time of workers.
While the potential for employment generation through reduced hours
or increased flexibility is controversial, it is apparent that the momentum
for shorter hours and greater flexibility has nevertheless gathered.
Any redistribution of work using new work arrangements will change standard
'ordinary' hours. When the rewards of increases to output are taken as
time, it is likely to cause an employment gap and for some period increase
the demand for labour. Some practical options for overcoming temporary
absences are given in Appendix 5. Rewarding workers for improving productivity
by allowing them to take the increase or part of the productivity increase
as leave rather than pay may provide employment opportunities. However,
Gerhard Bosch of the OECD notes that extensions to working hours by working
overtime are still the preferred option for most employers rather than
employing new staff (9).
Employers' demands for flexibility extend to numerical flexibility to adjust
the numbers in the workforce, functional flexibility to alter the duties
and tasks of individuals, wage flexibility to move to 'performance' criteria
and to respond to local labour market conditions and the flexibility to
contract out work when required. Where employees prefer shorter hours, employers
may regard these non full-time employees as lacking the commitment full-time
employees. The implication is that employers may not see PPT arrangements
as true alternatives to full-time employment and may not promote its use.
Temporary staff may be employed to achieve any required numerical flexibility.
The tendency of management to doubt the commitment of part-time workers
has been criticised by one US academic, as reported by Olmsted and Smith:
We have here a really a cultural or attitudinal stereotype
situation as to how managers think about part-time employment. It is not
that part-timers are less productive; no, they are probably more productive
... the difference is that employers believe that part-timers are not
career oriented (10).
Olmsted and Smith also contend that in the US context, the emergence of
regular part–time employment and its subsets—job sharing, phased
or partial retirement, leave time and work sharing programs (see Appendix
1)—has come about largely because employers want to retain good employees
(over periods of slack demand for the firm's product) and to avoid the costs
of retrenchments. There has also been a growing understanding that employees
perform better if work schedules can be constructed to meet the needs of
both the job and the worker.
The main advantage for employers in new time arrangements cited by the
ILO is the extension of operating hours beyond the normal working day.
Other considerations are:
- longer operating time of equipment means that fixed capital costs
can be distributed over a greater number of hours or units of output,
thus lowering the portion accounted for by fixed capital in the price
of the finished product
- the increasing cost of investments often necessitates changes to working
hours to reduce the pay-back period of equipment
- the ability to adjust the production capacity to the level and composition
of demand and thereby use the available working hours more efficiently.
Variations in business intensity may occur during the day, or on certain
days of the week or month, or over longer seasonal periods
- flexible work arrangements can also be used by companies to address
unforeseen staffing needs.
However the OECD makes a critical observation of annual hours
schemes (see terminology in Appendix 1):
In many cases, new time arrangements have nothing to do with
the introduction of interesting and innovative working time models, but
are merely attempts to reduce wage costs by replacing expensive forms
of working-time organisation with cheaper ones. This is indeed the purpose
behind most annual hours schemes (11).
The potential disadvantages of flexible or new working time arrangements
for employers are not often addressed. This may either be due to the fact
that negative consequences are not perceived at all, or that they are considered
as marginal and negligible in comparison with the benefits. The few disadvantages
cited are:
- increased demands with regard to planning, organisation and management
- the medium and long-term personnel planning capacity of the enterprise
needs to be strengthened
- co-ordination and supervision may become more difficult and thus
require more personnel resources and more responsibility from managers
and supervisors
- higher administrative costs associated with operating and monitoring
flexible working patterns, including investment in additional technical
equipment, such as electronic data processing equipment; increased costs
for social security and enterprise benefits that are independent of
wages (e.g. medical benefits, canteen or transport subsidies)
- increases in training costs, in particular with regard to multiskilling
and supervisory and co-ordination needs.
Australian public sector unions sought and gained federal awards facilitating
home-based work in 1994; eighteen months later the number of workers using
the arrangement was reported to be less than twenty (12). Management has
restricted access to the arrangement on the grounds of the cost of locating
and connecting computer systems to the homes of workers, possible lack
of supervision and potential occupational health and workers compensation
concerns.
Trade unions tend to draw a sharp distinction between working time flexibility,
which may have advantages for workers, and working hours deregulation, which
they consider a threat to acquired rights and which they strongly oppose.
The need for some numerical and functional flexibility and to decouple
of working hours from operating hours is sometimes recognised. Flexible
arrangements leading to work during unpopular hours, to irregular schedules,
to an intensification of performance standards, and to work at short notice
and at any time (in the absence of offsetting penalty rates) are strongly
rejected.
Unions recognise the popularity of flexible work arrangements with workers
and tend to concentrate on developing equitable ground rules for utilising
this scheduling arrangement (13).
Collective agreements containing appropriate long-term provisions on
working time and personnel planning and a certain degree of flexible organisation
seem acceptable to many unions. The demands of workers' organisations
as compensation for increased flexibility include:
- the reduction of working time without loss of income
- increased employment security and reduction of precarious work
- creation of jobs
- reduction of overtime
- leave provisions that are advantageous to workers
- special leave and working time arrangements for specific categories
of workers (workers with family responsibilities, older workers, workers
with disabilities etc.)
- equal rights for full-time workers, part-time workers and temporary
workers
- improved education and training possibilities
- improved working conditions.
Flexible working time schedules can have the following consequences.
- they may shift the emphasis from collective arrangements to individual
arrangements and contracts
- this may decrease solidarity among workers and diminish the bargaining
strength of trade unions
- individualised working hours may also shift attention away from collective
reductions of working hours and thus take pressure off employers
- flexible hours arrangements may limit the creation of full-time job
opportunities.
The main advantage of flexible hours is the aim of reducing working
time without loss of salary so as to increase employment.
It is not surprising then that the main advantage seen by unions is
a reduction of working time. This may have positive effects on the health
and social and family lives of workers, either for all workers, for workers
in hazardous or strenuous employment, or for special categories of workers,
such as workers with family responsibilities, older workers, and workers
with disabilities.
The ILO cites certain advantages for workers such as:
- the safeguarding of employment through increased competitiveness
- more possibilities to adjust working time to individual needs and
thus better co-ordination between personal and working life
- greater job satisfaction as a consequence of being more independent
and receiving more responsibility.
The ILO mentions the following disadvantages for workers, and these
mainly concern family life:
- the organisation of family life can become particularly strained,
since rest, leisure and working time may be different from the rest
of the family. The preparation of meals, household work, taking care
of the children, all must be constantly adapted to the irregular working
hours
- time spent with family members is reduced. This may cause serious
problems between parents and children or between spouses. If the spouse
works as well and on a different schedule, difficulties increase and
may lead to a separate family and social life
- contacts with friends and relations have to be planned more carefully;
sports, cultural and political activities may become more difficult;
leisure time is more often spent alone
- potential transport difficulties are mentioned, since public transport
schedules are frequently adjusted to normal working hours
- all of these problems are compounded if the worker lives in rural
areas.
The advantages and disadvantages for employers and employees are not
clear cut. They are meant to be a general representation of interests
and in specific circumstances may have much less (or greater) importance.
Governments have sought to assist the introduction of more flexible
working arrangements. However the nature of introduction of working time
arrangements has been at the enterprise level, as the OECD observes:
Negotiations have tended to become increasingly concentrated
at enterprise and plant levels where positions have become more detailed
and sophisticated (14) .
Therefore the form of any government intervention has been tailored
to the particular institutional structures of the country's labour market
and usually is not prescriptive, and where legislation has been enacted,
it can be considerably out of kilter with shop floor operations. The OECD
report on flexible working time found that the letter of the work hour
law is often side stepped and some countries tolerate practices which
violate the letter of the law (15). It also quotes one labour lawyer's
reference to a 'certain helplessness' of the legislator in respect to
regulating new work arrangements (16). As a response to demands for working
hours flexibility, governments prefer to add a margin of flexibility to
working hours regulations.
Nevertheless, governments have regulated certain entitlements, increasingly
broaching family care leave and paid leave arrangements. The United States
has attempted to support employers demands for numerical flexibility and
employees demands for income security through short time compensation
legislation. The federal law prescribes model legislation which might
be adopted by the States and it is described in Appendix 4.
The United States has also responded to employees needs for working
hours flexibility by introducing a form of (basic) family care and personal
sick leave entitlement. The Family and Medical Leave Act 1993
requires employers of fifty employees or more to provide job security
and leave to employees who have worked twenty or more workweeks in the
current or preceding calendar year. It mandates up to twelve weeks unpaid,
job-protected leave for the birth or placement for adoption of a child,
or a serious health condition of an employee, spouse, child, parent. Many
US States have similar laws. The federal law does not diminish the provisions
State laws which provide a better standard.
For other countries, hours of work are often legislated but are capable
of being modified through collective agreements. In short, governments
find it difficult to weaken working hours regulations, while nevertheless
favouring the new time arrangements. A review of some national approaches
to working hours flexibility is contained below in the section 'Working
Hours: Overseas Experience'.
In Australia, the last major industrial claim for an across the board
reduction in standard hours occurred in 1979-82. This was the period when
key unions in engineering and manufacturing pushed for wage improvements
as well as the introduction of the thirty eight hour week. The forty hour
week had become the norm by the mid 1940s.
Working time arrangements became an issue during the wages processes
under the AIRC's Restructuring and Efficiency process in 1987 and later
under the SEP or ARP (1988-1991). It is this period which opened the debate
on working time demands, particularly in respect to shift work, overtime
arrangements they use of casual and part-time employment.
The reluctance of unions to readily embrace permanent part-time arrangements
in awards has been noted by Romeyn in her report on casual and part-time
work arrangements. She quoted a 1986 survey of federal awards which showed
part-time provisions to be half as prevalent as casual employment provisions,
although this has possibly improved since (17). Awards are more likely
to feature casual employment provisions and this helps explain the growth
in casual employment, i.e. casual employment is the more prevalent award
provision to part-time employment provision. Casual employment grew from
20 per cent of the workforce in August 1989 to 22.7 per cent by August
1993 (18). Casual employment is a more precarious form of employment by
comparison to permanent part-time employment, but unions have assumed
that the added cost of casual employment would limit its use.
A report prepared for the DIR at the conclusion of award restructuring
(prior to enterprise bargaining), summed up the progress made on working
time arrangements (1992),
Wages policy in Australia over recent years has focused on
the need to improve our productivity and international competitiveness.
As a result of award restructuring and workplace bargaining a broader
range of options is now available to achieve greater working-time flexibility.
These options include continuous twelve hour shifts, loaded base hourly
rates, flexible working hours and time off in lieu arrangements (19).
The demand by industry for more flexible working arrangements resulted
with the union movement developing guidelines advising unions and employees
as to how the new time arrangements might be best managed. This can be
seen in release of guidelines by the ACTU in 1990 on part-time and casual
work, job sharing and twelve hour shifts. These guidelines are reproduced
in Appendix 2. The ACTU guidelines on new time arrangements represent
an in-principle acceptance of these arrangements by the union movement.
The guidelines also make clear to individual affiliates that the construct
of a new hours package for a particular enterprise, such as a twelve hour
shift arrangement and any consequent leave or time off arrangements, will
determine its suitability and acceptance by a particular workforce.
Another aspect of flexibility concerns pay structures. The work and
pay motives created by the traditional Australian pay system comprising
a base rate and allowances was confronted at ICI in the late 1980s and
the replacement remuneration system using annualised salaries have been
emulated in a number of enterprises and industries since. The traditional
base pay and allowances wage system has been recently characterised by
a House of Representatives Report on the long term future of work,
The traditional pay system which was characteristically a weekly
wage with additional overtime or bonuses creates the situation where workers
are, in effect, paid for attendance rather than work done which encourages
workers to spread the work out to ensure overtime (20).
The new hours arrangements operating at that plant have provided ICI
workers with secure pay, including allowances and much greater access
by workers to social activities and a social life than was the case under
the former continuous eight hour shift arrangements. This does not mean
that each employee has been clearly financially advantaged in the move
from a base rate of pay and allowances.
The Sheraton Pacific Hotels Agreement is noteworthy because it attempted
to limit the use of casuals in Sheraton hotels by basing its staffing
needs on an extremely complex roster arrangement (See Appendix 7). As
Probert notes, the Sheraton Agreement has been rightly held up as an example
of 'best practice' (21). Both the ICI and Sheraton examples highlight
the potential gains for working hours arrangements to be made under enterprise
bargaining compared to the more circumscribed hours arrangements typified
under the centralised wage system.
This period of change to the standard working week warrants some analysis
of the current working arrangements used within the workforce. An ABS
survey on working arrangements (for August 1995) found that out of a workforce
of 6.69 million about 4.24 million workers had fixed start and finish
times, and of these about 905 300 had negotiated start and finish times
(22). For 2.44 million employees, start and finish times were not fixed,
with about 1.51 million of these able to vary their start and finish times
on a daily basis. The ABS found a slight increase in the proportion of
full-time workers who were able to vary their start and finish times compared
to 1993. For part-timers the proportion who were able to vary their times
remained unchanged. The occupations most likely to be able to vary their
times were managers, professionals and clerks. The occupations were times
were most likely to be fixed were labourers, plant/machine operators and
tradespersons. About 1.77 million workers had access to an RDO as part
of their work routine.
Overtime was worked by 2.38 million workers regularly. Of these about
608 000 worked overtime of one to four hours per week; 682 000 (1993:
630 000) worked five to nine hours and 653 900 (1993: 568 000) worked
between ten to nineteen hours, while 252 200 (1993:217 000) worked twenty
hours or more. About 43 per cent of full-timers worked overtime, while
12 per cent of part-timers worked overtime.
The variations to the standard Monday to Friday working week were strong
but not overwhelming. Of the 5.1 million full-time workers, 75 per cent
(3.825 million) worked the standard five day week (1993: 78 per cent),
13 per cent worked week days and weekends (1993:12 per cent) and 9 per
cent worked varying days each week (unchanged).
Three tables have been prepared indicating the incidence of full-time
employees working long hours. Table 1 shows the strong increase in the
percentage of full-time employees working more than forty
hours per week. Table 2 shows the percentage working forty hours or more.
Until the mid 1980s, this trend was downward and would no doubt reflect
the trends to shorter hours which the ILO and OECD refer to. It can be
seen that whereas it was the norm in the 1960s for about 30 per cent of
full-time workers to work more than forty hours, by the early 1990s and
taking the recession into account, it was common for forty per cent or
more full-time workers to work more than forty hours. Table 3 further
breaks down hours worked.
Table 1 Proportion of full-time employed persons working in
excess of 40 hours per week
----------------------------------------------------------------------------------
Worked > F/T Employed Worked >40 Total Labour Worked >40
40hrs Persons* as% F/T Force as % Total
Employed Labour
Persons Force
'000 '000 '000
----------------------------------------------------------------------------------
Aug-66 1241.4 4348.8 28.5 4902.5 25.3
Aug-67 1294.8 4423.2 29.3 5019.8 25.8
Aug-68 1335.1 4524.8 29.5 5136.8 26.0
Aug-69 1418.0 4610.3 30.8 5261.9 26.9
Aug-70 1501.6 4825.9 31.1 5473.8 27.4
Aug-71 1511.1 4939.6 30.6 5608.4 26.9
Aug-72 1542.4 4988.4 30.9 5753.9 26.8
Aug-73 1630.9 5092.9 32.0 5888.7 27.7
Aug-74 1571.0 5127.8 30.6 5996.1 26.2
Aug-75 1440.4 5046.8 28.5 6119.7 23.5
Aug-76 1403.2 5036.9 27.9 6190.5 22.7
Aug-77 1443.3 5094.6 28.3 6354.7 22.7
Aug-78 1583.0 5045.3 31.4 6403.7 24.7
Aug-79 1687.7 5113.1 33.0 6456.0 26.1
Aug-80 1712.6 5251.1 32.6 6675.9 25.7
Aug-81 1719.5 5337.1 32.2 6774.3 25.4
Aug-82 1650.2 5285.9 31.2 6840.7 24.1
Aug-83 1616.0 5150.3 31.4 6927.9 23.3
Aug-84 1783.7 5318.8 33.5 7070.1 25.2
Aug-85 1850.3 5464.0 33.9 7248.3 25.5
Aug-86 1956.9 5608.8 34.9 7516.2 26.0
Aug-87 2026.4 5671.1 35.7 7694.4 26.3
Aug-88 2249.9 5874.6 38.3 7892.1 28.5
Aug-89 2416.4 6096.8 39.6 8183.7 29.5
Aug-90 2358.2 6141.6 38.4 8392.6 28.1
Aug-91 2229.2 5905.8 37.7 8428.1 26.4
Aug-92 2282.8 5752.2 39.7 8515.9 26.8
Aug-93 2425.8 5800.5 41.8 8537.0 28.4
Aug-94 2660.0 5961.7 44.6 8683.5 30.6
Aug-95 2711.7 6183.5 43.9 8939.6 30.3
----------------------------------------------------------------------------------
*Defined as persons who worked 35 hours or more a week.
Source: ABS Labour Force (Cat.No.6203)
Table 2 Proportion of full-time employed persons working 40
hours or more per week
--------------------------------------------------------------------------------------------
Worked F/T Employed Worked 40+ as Total Labour Worked 40+
40+hrs Persons % F/T Force as % Total
Employed Labour Force
Persons
'000 '000 '000
--------------------------------------------------------------------------------------------
Aug-66 3535.6 4348.8 81.3 4902.5 72.1
Aug-67 3556.2 4423.2 80.4 5019.8 70.8
Aug-68 3578.8 4524.8 79.1 5136.8 69.7
Aug-69 3576.7 4610.3 77.6 5261.9 68.0
Aug-70 3630.3 4825.9 75.2 5473.8 66.3
Aug-71 3846.5 4939.6 77.9 5608.4 68.6
Aug-72 3861.1 4988.4 77.4 5753.9 67.1
Aug-73 3935.4 5092.9 77.3 5888.7 66.8
Aug-74 3790.0 5127.8 73.9 5996.1 63.2
Aug-75 3699.4 5046.8 73.3 6119.7 60.5
Aug-76 3686.0 5036.9 73.2 6190.5 59.5
Aug-77 3729.8 5094.6 73.2 6354.7 58.7
Aug-78 3518.9 5045.3 69.7 6403.7 55.0
Aug-79 3664.3 5113.1 71.7 6456.0 56.8
Aug-80 3669.1 5251.1 69.9 6675.9 55.0
Aug-81 3671.0 5337.1 68.8 6774.3 54.2
Aug-82 3370.1 5285.9 63.8 6840.7 49.3
Aug-83 3266.2 5150.3 63.4 6927.9 47.1
Aug-84 3340.3 5318.8 62.8 7070.1 47.2
Aug-85 3262.1 5464.0 59.7 7248.3 45.0
Aug-86 3358.1 5608.8 59.9 7516.2 44.7
Aug-87 3447.4 5671.1 60.8 7694.4 44.8
Aug-88 3674.8 5874.6 62.6 7892.1 46.6
Aug-89 3857.8 6096.8 63.3 8183.7 47.1
Aug-90 3841.6 6141.6 62.6 8392.6 45.8
Aug-91 3590.2 5905.8 60.8 8428.1 42.6
Aug-92 3594.4 5752.2 62.5 8515.9 42.2
Aug-93 3654.9 5800.5 63.0 8537.0 42.8
Aug-94 3943.8 5961.7 66.2 8683.5 45.4
Aug-95 4012.5 6183.5 64.9 8939.6 44.9
--------------------------------------------------------------------------------------------
Source: ABS Labour Force (Cat. No 6203)
Table 3 Weekly hours worked 1975-1995 Hours Worked by Employed
Persons
--------------------------------------------------------------------------------------------------------
Weekly
Hours Male Married Friends Unmarried Female Total Female
Worked ----------------------- ----------------------- ----------------------- -----------------------
1975 1985 1995 1975 1985 1995 1975 1985 1995 1975 1985 1995
--------------------------------------------------------------------------------------------------------
0 230713 206488 185706 103793 82950 105356 43877 48397 60553 147670 131347 165909
1-15 89471 144865 292022 197020 303813 398781 68557 148211 291906 265577 452024 690687
16-29 128704 249137 314938 221954 331202 483255 38848 115225 183440 260802 446427 666695
30-34 129622 334636 265289 103712 142047 187522 36386 100158 101146 140098 242205 288668
35-39 403636 721233 717577 184607 241245 357222 161023 243923 260524 345630 485168 617746
40 1602343 953951 844213 371245 214548 266987 285362 243325 189591 656607 457873 456578
41-44 188705 253750 264039 33811 43266 85939 29562 54489 67972 63373 97755 153911
45-48 321962 385795 474631 26317 51799 102855 21915 46328 76481 48232 98127 179336
49+ 725470 861237 1314044 61180 97835 205647 31505 55757 120090 92685 153592 325737
TOTAL 3820626 4111092 4672459 1303639 1508705 2193564 717035 1055813 1351703 2020674 2564518 3545267
--------------------------------------------------------------------------------------------------------
% Hours Worked by Employed Persons
--------------------------------------------------------------------------------------------------------
Weekly
Hours Male Married Friends Unmarried Female Total Female
Worked ---------------------- ---------------------- ---------------------- ----------------------
Aug-75 Aug-85 Aug-95 Aug-75 Aug-85 Aug-95 Aug-75 Aug-85 Aug-95 Aug-75 Aug-85 Aug-95
--------------------------------------------------------------------------------------------------------
0 6 5 4 8 5.5 4.8 6.1 4.6 4.5 7.3 5.1 4.7
1-15 2.3 3.5 6.2 15.1 20.1 18.2 9.6 14 21.6 13.1 17.6 19.5
16-29 3.4 6.1 6.7 17 22 22 5.4 10.9 13.6 12.9 17.4 18.8
30-34 3.4 8.1 5.7 8 9.4 8.5 5.1 9.5 7.5 6.9 9.4 8.1
35-39 10.6 17.5 15.4 14.2 16 16.3 22.5 23.1 19.3 17.1 18.9 17.4
40 41.9 23.2 18.1 28.5 14.2 12.2 39.8 23 14 32.5 17.9 12.9
41-44 4.9 6.2 5.7 2.6 2.9 3.9 4.1 5.2 5 3.1 3.8 4.3
45-48 8.4 9.4 10.2 2 3.4 4.7 3.1 4.4 5.7 2.4 3.8 5.1
49+ 19 20.9 28.1 4.7 6.5 9.4 4.4 5.3 8.9 4.6 6 9.2
TOTAL 100 100 100 100 100 100 100 100 100 100 100 100
--------------------------------------------------------------------------------------------------------
Source: ABS, The Labour Force (Cat. No. 6203.0)
What is striking from Table 3 is the dramatic departure from the forty
hour week for both males and females over a twenty year period and for
males at least, it would be difficult to explain this change solely by
the introduction of the thirty eight hour week. It would be important
to look at how the composition of the workforce has changed, particularly
with the growing proportion of managerial and professionals over the period.
A proportion of the slippage has gone into that sector working forty five
hours or more, but there has also been slippage toward more people working
less than forty hours. Wooden discounts the possibility that the growth
in the number of males and females working excessive hours can be explained
by people working more than one job. While this has occurred, he calculates
that the practice would account for little more than a fifth of the growth
(over 1982-1992) of full-time people working more than forty hours per
week (23).
The proportion of professionals working more than forty nine hours per
week is reported to have risen from nineteen per cent in 1986 to 26.7
per cent in 1994 (24). Probert, refers to social perceptions which require
people with higher status jobs to work very long hours with attendance
at meetings at either 7.00 am or 7.00 pm expected. Those in lower status
jobs are expected to make themselves 'available' at non-social hours-a
particular feature of employment in tourism and retail sectors (25).
Freeland, Australian Council of Social Service (ACOSS), argues that
Australia is currently at an historically high level of paid employment
and that this has come about by more people participating in paid work
(26). Freeland argues that to understand the level of 'high' employment,
it is useful to calculate the number of hours worked (full-time and part-time)
across the working age population. On this basis, he shows that each individual
of working age 'worked' an average of ten hours in 1966 and 12.5 hours
in 1991. Australians have never been more employed-at least as far as
paid employment is concerned. Meanwhile male participation in the labour
force has fallen while women's employment has risen strongly and is now
at a plateau. Freeland and other researchers argue that we need to redefine
'work', and respond to the redistribution of work which has occurred.
There are additional features of modern work arrangements which belie
the trend of the reduction in working hours. There is the problem for
many workers of the time taken to travel to and from work which can add
considerable hours to the daily work routine. These demands no doubt add
to the perception of Australians that they feel that they are overworked.
This perception is borne out in a survey on work and leisure conducted
by Mackay Research. It reported that most respondents preferred 'a bit
less work' than at present and that most responders sought to get the
'balance' between work and leisure right. Survey comments included:
I have never worked so hard in my life. There have been a lot
of retrenchments at work, and everyone knows that they have to put their
heads down and get on with it and,
No-one ever died saying 'I wish I'd spent more time at the office'.
I believe that, but it is amazing how you can get involved in a job
and then suddenly find you haven't spent any time with the kids for
weeks (27).
This Mackay report found that most respondents did not welcome the idea
of working a four day week:
Given the widespread belief that there is not for the time
being, enough work to go round, is there, perhaps, some readiness in the
community to accept a radical redeployment (for example in the form of
a shift to shorter working hours)? The answer to that question appeared
to be a resounding "no".
An explanation for the apparent spread of hours worked away from the
standard working week has been raised by Tracy and Lever-Tracy. It concludes
that the overall trends are towards shorter standard weekly hours arrangements
and shorter annual and lifelong worktimes. Within these trends are elements
of polarised and redistributed work reductions. Polarised reductions means
an increase in work hours for some with an absence of work altogether
for others. For males, work distribution is more markedly polarised, i.e.
many working long hours but other males are unemployed Women have done
better at redistributing their paid employment hours, thus keeping more
women in paid work (28). Nonetheless there does appear evidence of stress
from long working hours for those in paid employment.
One response by workers to longer working hours might be to put working
hours on the industrial agenda of enterprise agreements. A DIR report
on enterprise bargaining (required under federal legislation to be presented
to Parliament annually)) attests to the managerial preoccupation of adjusting
working hours to 'suit' their enterprise. The report reviews the 1 360
federal agreements registered in the twelve months to April 1995. It claims
By far the most common employment condition provision included
in ... agreements was the issue of hours of work. This provision was included
in 68 per cent of (Part V1B) agreements ... The incidence of different
initiatives categorised under the broad heading of hours worked varied,
with the most common provisions relating to rostered days off ... and
span of hours. Most of the hours of work provisions appear to have concentrated
on providing employers with greater numerical flexibility, although they
have also provided improvements in administrative efficiency (29).
Another analysis by DIR of the 4 996 agreements contained on its database
(i.e. including those operating before April 1994) prepared for this paper
(table below), shows that the issues of part-time and casual work are
being included in agreements, but the more 'liberating' arrangements such
as telework or job sharing are much less a feature (although one large
industry, the banking industry, is pursuing job share arrangements and
the low number of job share provisions in agreements possibly misrepresents
the position where thousands of employees may have access to these arrangements).
Table 4 New time arrangements in certified and other agreements
recorded by the Department of Industrial Relations' database
---------------------------------------------------
All Agreements 4996 Proportion %
---------------------------------------------------
Part-time 666 13.3
Casual 1215 24.32
Home based work 24 0.48
Job share 62 1.24
Flexible working hours 1157 23.16
RDOs 1919 38.41
---------------------------------------------------
(Source: Evaluation of contents of agreements contained the DIR database,
as at September 1995, provided by DIR for this paper)
This information does not allow a qualitative assessment to be made
of these working time arrangements, but their appearance in agreements
is some indication of the priority of the parties toward flexible arrangements.
Leave issues are on the industrial agenda. The family leave case has
been before the AIRC, with a decision given in 1994 (30). This allowed
private sector employees under federal awards access to their sick leave
to care for family members. It also allowed facilitative clauses to be
inserted into awards providing access to part of annual leave so the employee
could use the time to care for family members. Unions sought to aggregate
certain award provisions which allow access to leave (other than annual
and long service leave) into a block and five days of which can be taken
depending upon the particular contingency. Bereavement leave, which is
usually an entitlement of two to three days per year, remains dormant
for most workers for most years. A decision by the AIRC on 28 November
1995 substantially granted the ACTU's claim (31).
The working hours debate received a strong impetus after an agreement to
reduce hours was signed between the Volkswagen (VW) auto company and its
workforce in 1993. Researchers such as Jens Bastian accord much significance
to the VW agreement since it marks an important concession from the unions:
namely for job sharing to work unions cannot claim increased wages for the
lost time (32). Also important is the European Working Time Directive which
is reproduced as Appendix 3. The importance of this directive is that it
tries to set a limit of forty eight hours per week of paid work. The following
summary of international working arrangement rules and options is taken
from the OECD and ILO reports cited earlier.
Hours of work of part-time workers in Denmark are
a minimum fifteen hours per week and a maximum of thirty hours. In
Belgium minimum weekly working hours for part-time workers are
a third of the weekly working hours for full-time workers. Overtime hours
are all those performed by the part-time worker above the hours set out
in the work schedule. Part-time workers in Belgium have priority for full-time
employment with the same employer. The maximum daily hours are ten and
the maximum weekly hours are fifty. Overtime is compensated for by giving
half-days or full days off. Over a three-month period, the average working
time must correspond to the hours set out in the collective agreement.
France has less jobs being created than other economically
comparable countries with similar growth rates. Agreement has been reached
between the major employers' group Patronat and four large unions to commence
to cut the five day-thirty nine hour week to four days and thirty three
hours. It is hoped that 300 000 to 400 000 jobs can be created over 1996-97.
This will include a cut of 50 per cent on employers' social security contribution
with each new job created, or for each permanent job converted from a
full-time job if this means an additional job is created (33). Also, French
employers are relaxing their opposition to working time reduction, but
seek that over the course of a year overtime compensation should take
the form of time in lieu for the first 100 hours (34). The application
of these principles is to be applied on an enterprise basis.
nency for part-time employment. It hopes for the creation of 2 million
jobs.
The Netherlands all new positions in the public sector
are limited to a maximum thirty two hour week. It did experience a 30
per cent rise in employment between 1983 and 1991, along with a 13 per
cent reduction in hours worked per person.
Switzerland in mechanical engineering, an industry
arrangement recently concluded allows contractual work time of forty hours
per week, but a 'flexi-year' can be introduced. The length of the working
week can fluctuate between thirty and forty five hours, provided that
over one year, actual hours coincide with contracted hours. plus a maximum
of forty hours can be carried over from one year to the next (35). This
arrangement is now spreading to other sectors such as construction textiles,
watch manufacturing and furniture. Overtime only paid when the upper limit
on the bandwith is exceeded.
employers associations and unions as a 'means of increasing the number
of people who retain a solid labour force attachment' (36).
The German Government has also encouraged the use of part-time work
in a policy approach of June 1994. It is based on the belief that:
- there is widespread prejudice by employers against part-time employment
- there is demand for part-time employment from employees
- administrative and production structures are too inflexible to take
full advantage of part-time employment.
Research commissioned by the Government suggests about two million in
full-time jobs are willing to convert to part-time. Research undertaken
at the Government's request by McKinsey and Co. suggests there to be an
initial increase in costs from a conversion of full-time jobs, but offset
by better morale and attendance, equal to between to 2 and 4 per cent
of labour costs. The program seeks to convert 60 per cent of full-time
jobs in Germany to less than full-time arrangements (37).
nd central Europe, processes of economic restructuring are now underway
that are very likely to result in greater flexibility in labour legislation.
Thus far, most of the changes are still in the planning stage. An example
of the likely outcomes is the Czech legislation on flexitime. While it
is more flexible than the existing law, limits are placed on the form
of the schemes that may be introduced.
In the US there has been little reduction in actual
hours of work in industry since 1960. The types of working time arrangements
that are found reflect this: they are less comprehensive and less connected
to the organisation of work. However, the relatively flexible legislation
that has been in force for many years, together with the interests of
individuals in more flexible and (sometimes) in shorter hours, have led
to the development of novel working time practices.
Japanese practices are quite different from those of
other highly industrialised countries. The long hours of work found in
Japan and the fact that they have not declined since 1975 are very important.
The working time arrangements in Japan tend toward being more rigid. It
is also difficult to decouple these working hours arrangements in Japan
from the system of life-time employment. However government policy is
to reduce average hours from the early 1990s average of 2 050 to 1 806
by the year 2010 (38).
Some reports show that new time arrangements have warded off the threat
of redundancies or created new jobs. The ILO reports that some experiments
have generated employment. It cites, for example, a French company which
increased the number of its workers by 25 per cent, a British car manufacturer
recruited 1 200 new workers, and two German car producers hired 900 and
1 200 more workers respectively after flexible working time practices
were adopted. These achievements aside, the ILO is also aware that the
potential employment benefit resulting from these arrangements is 'highly
controversial' (39).
Will there be a broad demand for universal reduction in hours again?
Bastian, amongst other researchers, suggests not, at least not while income
levels are not reduced on a pro rata basis (40). The OECD suggests that
more consideration is likely to be given to flexible hours rather than
an across the board reduction.
Bastian argues that there is a growing understanding on the part of
employees, and increasingly unions, that work-sharing means pay-sharing
and must not be allowed to increase unit labour costs. But as an offset,
a decade of growing incomes for most of those in employment in Europe
and other countries, increased the numbers of employees who are sufficiently
well paid to countenance a tradeoff between pay and working time.
Work sharing is popular because it goes with the grain of more flexible
and family friendly working hours. However, the working hours redistribution
system hinges on workers' preferences and living standards, and while
VW did cut hours leaving many of its workforce unhappy with shorter hours
and less pay, Nissan workers in the UK preferred to keep their hours and
pay, with a number being offered redundancy (41).
Olmsted and Smith acknowledge that the 1990-93 recession in the US was
not conducive to experimentation with hours due to a focus on downsizing
and consequent loss of interest in work sharing. They also quote an American
Management Survey 1993 which criticised the downsizing philosophy:
Fewer than half the firms that have downsized since January
1988 report that profits increased after the cuts were made, and only
a third reported increases in productivity. Almost invariably worker morale
suffered As organisations reach the limit of their cutbacks, and understaffing
begins to be recognised as a critical issue, the desire to relieve employee
stress and retain skills may provide a revived interest in worksharing
(42).
In Australia, the case for work sharing has been promoted by the former
NSW Coalition Government, while John Langmore MP and John Quiggin have
put the case for humanising work through shorter working hours (43).
There are those who doubt the potential of work redistribution. The
Hon. Barry Jones MP has agreed that job sharing may be suitable for some
workers, and while work can be redistributed with more workers working
less hours, 'it rarely works out like that' (44). Sloan is also critical
of job sharing on two grounds: one objection arises if workers demand
shorter hours without accepting lower pay-'this is unambiguously adverse'
since it drives up labour costs. But where workers do accept a cut in
income for working fewer hours, the uptake in employment is not certain
since the 'employed have different characteristics to unemployed ' (45).
Wooden also argues against the mathematical approach which attempts
to redistribute excessive, usually overtime, hours. Many of these hours
are unpaid and, where they are paid, the distribution of overtime across
a large number of small firms would not be enough to create just one full
time job of forty hours, he suggests (46). Wooden does allow for the possibility
that there may be some improvement in the productivity of firms due to
reduced boredom and fatigue in the workforce, but taking up the unemployed
may mean taking up poorer quality labour. Also, the publicised attempts
to save jobs by cutting hours (e.g. the VW approach) appear to target
those who are not already working excessive hours. In other words reducing
the hours of those working say a 38 hour week, while not targeting those
working more than 48 hours.
Finally, the Commission on Employment Opportunities commissioned by
the Prime Minister in 1993 to prepare the blueprint for the Working
Nation strategy, argued against schemes such as work sharing and
early retirement. It reported
The evidence to the Commission suggests that while these sorts
of approaches may in some cases increase employment in the short-term
they lead to a poorer long term employment result primarily because they
lower overall productivity levels, and therefore per capita incomes ...
This is not to deny that work sharing in particular might have positive
implications in some individual cases when the people concerned are prepared
to share their incomes as well as their jobs. The evidence suggest, however,
that while there are some people in this category, the majority of workers
... would increase their working hours (and their incomes) if they could
(47).
The evidence seems to suggest that reduced working hours are more likely
to be promoted during downturns and as an alternative to retrenchment. The
schemes operate heavily on individual preference and circumstance and do
not appear to be amenable to regulation. The debate is obviously associated
with quality of life issues, and it would be fair to say that during the
late 1980s boom, quality of life issues gave ground to increasing consumption.
However, Probert is confident that the cause of redistributing work can
be established on the industrial agenda:
We can develop concrete proposals aimed at redistributing work
in a range of different ways appropriate to different industries - from
banning overtime to promoting flextime, and from pushing for the right
to a six hour day to establishing yearly banks of hours as the basis for
negotiation (48)
Enterprise bargaining may allow for the improvements in productivity
to be returned to the workforce through shorter hours or enhanced leave
entitlements. However staff often prefer the income option in preference
to leave or shorter hours and this has also suited employers.
The AIRC is required to review federal awards to ensure that they are
relevant to industries' needs (49). The recent Family Leave Test Case
decisions recommended that unions and employers address permanent part
time arrangements with the aim of encouraging less than full time employment
practices by including such provisions in awards (if the relevant award
was silent on part time employment). A mechanism to review part time work
arrangements is now in place with the major industrial tribunal. The Family
leave cases will no doubt be recognised in State industrial jurisdictions.
So, there are now processes being developed to encourage the investigation
of reduced hours for employees who seek or require these.
The impediment to work redistribution appears to be employers' perceptions
that key staff who opt for leave or short time arrangements lack commitment
to the organisation, and this would seem the most difficult obstacle to
overcome since it will determine preferences and practice. Firms are recognising
the value of trained employees and a number of enterprise agreements have
provided leave and time off options as means of recognising valued staff
and their domestic obligations. Overall, there would seem to be limited
opportunities to redistribute work to the degree required to make an impact
on unemployment.
The data on hours worked in Australia indicate a dispersion of working
hours away from the standard working week , both toward shorter hours
and excessive hours. The research on excessive hours (more than 49 hours
per week) suggests that much of this is unpaid (ie not as overtime), making
the task of redistribution that much harder. In addition, where reduced
hours have been used to stave off retrenchment as in the VW Germany example,
there is not clear evidence that the employees were working 'excessive'
hours. The redistribution of hours has affected those working much closer
to standard weekly hours.
Nonetheless, the working hours debate opens opportunities for reviewing
the imperatives which underpin excessive hours. Even where excessive hours
worked are unpaid (ie, voluntary), should the practices be condoned? Do
such work demands coincide with a balanced life and balanced domestic
responsibilities? Possibly the debate will be expressed in Australia through
workforce pressures to create national policy on working hours, most probably
along the lines of the European Working Time Directive, and may attempt
to set guidelines on limits on time worked on the basis of health and
safety and quality of life improvements and less so on employment targets.
Flextime is the generic term for flexible scheduling
programs or work schedules that permit flexible starting and quitting
times within limits set by management.
The flexible periods are usually at either end of the day, with a 'core
time' set in the middle, during which all employees must be present. The
employer can adapt flextime to the organisation's individual needs through
the decisions made about such issues as 1) whether flexibility is a daily
or periodic choice; how core time is defined and whether credit and debit
hours and 'banking' of hours are allowed.
According to Olmsted and Smith, flextime was the first major divergence
from the standardised forty-hour, 9-5 workweek. The concept of allowing
employees some individual choice in their starting and quitting times
was introduced in Germany in 1967. At that time, it was seen as a means
of relieving transit and commuting time problems. Shortly thereafter,
flextime began to gain adherents in Switzerland as a way to attract women
with family responsibilities into the labor force. The Hewlett-Packard
Company is credited with introducing flextime in the US in 1972, after
having tried it first in a German division.
Flexplace is another term for: telecommuting,
working from home, satellite office or telework .
Its use is based on the growth of personal computer use. It is dubbed
the alternative lifestyle method of work and allows management to decrease
their accommodation overheads while employees can escape the daily commute.
The US Federal Clean Air Act 1990 requires employers of one hundred
or more employees in designated badly polluted region to design 'trip
reduction programs'. One recognised trip reduction program is the adoption
of telecommuting practices.
Permanent part-time (PPT) is part-time employment
that includes job security and all the other rights and benefits available
to an organisation's regular full-time workers on a pro rata basis. Most
countries have witnessed a growth in part-time arrangements. PPT has become
popular due to increased participation of women in the workforce, the
shift from production based to service based manufacturing, and the increasing
need of workers for more personal time.
Compressed workweek refers to a (standard) workweek
that is condensed into fewer than five days, e.g. into 4x10 hour days,
or 3x12 hour days, or the 9/80 format which allows a day off once a fortnight.
In the Australian construction industry 'shorter hours' were introduced
through a form of this system which facilitated the reduction of the forty
hour week to thirty eight hours, so gaining a rostered-day-off (RDO) once
per fortnight. It is said that the compressed work week can be used to
attract labour into otherwise unattractive shifts.
Job sharing is a form regular part-time work in which
two people voluntarily share the responsibilities of one full-time position,
with salary and benefits pro-rated. The term covers a spectrum of shared
responsibility ranging from jobs that are essentially split between two
people, requiring no, or very little interaction, to jobs that must be
shared collaboratively in all aspects. At one end are job sharing receptionists
or production line workers, where the amount of sharing may be limited
to discussing the co-ordination of their schedules. At the other extreme
are occupations such as executive assistants, engineers or marketing directors
who often need to be interchangeable.
Work sharing is an alternative to retrenchment, in
which all or part of an organisation's workforce temporarily reduces hours
and salary in order to cut operating costs. It has a long history in the
US where state and federal legislation support its use, and in some situations
make work sharing mandatory. In states where work sharing known as short
time compensation (STC) Legislation has been passed, the reduction
in incomes can be partly recompensed. An extract from US Department of
Labor (DOL) guidelines on STC is included in this paper as Appendix 4.
STC avoids the legal contest associated with mass redundancies. It is
also said to provide equity in the workplace since the opportunity for
cost saving through reduced working hours can be distributed across a
firm, whereas retrenchment more likely affects production workers and
is less likely to affect administrative staff.
V-time programs are a way to offer reduced work time
options to a broad base of employees in a way that integrates part-time
with full-time employment. V-time is a time/income trade-off arrangement
that allows full-time employees to reduce work hours for a specified period
of time with a corresponding reduction in compensation. It differs from
part-time employment as there is usually a time limit designed for a return
to full-time work.
Leave time is one V-time option. It is an authorised
period of time away from work without loss of employment rights. This
absence may be paid or unpaid and is usually extended and taken for such
reasons as family responsibilities, health care, education and personal
growth, or career breaks. Is usually linked to periods of paid leave-can
be for extended holidays or sabbaticals.
The APS is experimenting with leave time arrangements such as the 48/52
scheme which allows an employee to reduce their salaries over a year by
about seven per cent and so 'purchase' an additional one months leave.
Phased and partial retirement: Phased retirement is
a way for individuals to retire gradually by reducing their full-time
employment commitment over a set period of years. Partial retirement is
a part-time employment arrangement in which salary may or may not be combined
with partial retirement income. It has become relevant due to the cost
of downsizing programs; the spectre of employee shortages over future
years, especially for older workers with difficult to replace skills and
can also create options for younger employees.
Annual hours: This also is a system to allow for a
variety of both leave taking and hours working over the course of a year.
The move to annualised hours is said to have started in Swedish and Finnish
pulp and paper industry in 1970s. It is most often used in continuous
production industry; can be used to bring on cultural change via adoption
of a 'salaried' perspective. It forces a redefinition of overtime.
Annualised salary is a variation of the annual hours
approach. In Australia, the best known experiment with annualised salaries
has been the ICI Botany plant, which introduced annualised salaries, incorporating
penalty and other allowances into weekly or fortnightly pay (see Appendix
6 for a description of the ICI approach to annualised salaries).
Timesharing: This arrangement allows one individual
works for more than one organisation on a regular basis.
Twelve Hour Shifts (1990)
This code of conduct by the ACTU spells out that the introduction of
twelve-hour shifts should only be permitted where there is a continuous
work process or other special circumstances can be shown to exist; where
twelve-hour shift work will not impose excessive physical or mental workload;
where, after a proper examination of the possible injurious effects to
employee health and social well-being, there are demonstrated benefits
for the workers concerned; after full consultation with union(s) and with
the support of at least two-thirds of workers affected; and in conjunction
with possibilities of reducing working time generally.
The ACTU also insists that rosters must be developed in consultation
with employees through their unions, and provision made for on-going consultation
and resolution of disputes about the rosters. It further suggests that
the introduction of twelve-hour shift work should be on a trial basis
for twelve months to allow workers to evaluate the changes.
To minimise the health and safety risks of twelve-hour shift work, the
ACTU also advises unions to negotiate measures, such as a maximum of two
night shifts in succession; at least a twelve-hour interval between shifts;
a short cycle period with regular rotation; at least two free weekends
each month; allowing workers some flexibility about shift change times
and shift length; additional paid breaks and an extended rest period during
night shift; no overtime; special rosters for workers exposed to hazards,
where health and safety standards are determined on the basis of exposure
over eight hours; additional paid leave; early retirement provisions;
continued application of weekend and holiday premiums; provision of adequate
information on issues such as shift rosters, rest, fatigue, etc.; provision
of welfare facilities and services, such as meals and drinks, transport
services, rest areas and recreational facilities, etc.; training of supervisors
to increase awareness of the special requirements of twelve-hour shift
working; provision of health services, including pre-placement health
examinations and periodic examinations afterwards and health counselling;
and the requirement for employers to take all necessary steps to find
suitable alternative employment for workers who are unable to continue
shift work for health reasons.
ACTU policy recommends that part-time work should be negotiated on the
basis of 'permanent' part-time work with pro-rata benefits, in a controlled
,manner with a clear ratio of full-time to part-time jobs; and that
Union organisation for part-time workers should involve:
- union collection of separate membership figures for full-time and
part-time workers
- recruitment to unions of part-time workers
- removal of barriers to union involvement for part-time workers
- negotiation of part-time work arrangements, and
- extension of all employment benefits to part-time workers
- casuals employed on a regular, long term basis for months or years
should not be casual, but 'permanent' employees
- casual employment should be limited to a short period of time and
used only for short-term, irregular , seasonal or emergency employment.
The ACTU guidelines also recommend strategies to decasualise workforces
by using PPT work as a means to counter casual employment, and using award
provisions to limit the employment of casuals to certain hours or for
a limited period.
(Source: Flexible Working Time: Part-Time and Casual Employment,
DIR, 1992)
The Working Time Directive, adopted by a qualified majority vote of
the Social Affairs Council of the European Union Employment Ministers
on November 23, 1993 (to be implemented by November 1996), contains the
following provisions for all workers:
- a maximum forty-eight hour week (including overtime) on an average
over four months
- eleven consecutive hours of rest per day
- thirty-five consecutive hours of rest per week, in principle including
Sundays, although this would not be mandatory. The weekly rest periods
could be averaged out over two weeks. The thirty-five hours could be
reduced to twenty-four for objective technical or work organisation
reasons
- rest break during the day for all workers working over six hours
and terms to be fixed by collective agreement or national legislation/practice
- four weeks' paid annual leave, subject to the conditions of entitlement
laid down by national law/practice. three weeks would be permitted for
the first three years after implementation of the directive (that is,
until 1999). Leave entitlements could not be cashed in (except for outstanding
leave on termination of contract)
- work organisations to take into account health and safety and workers'
needs.
The directive also includes special provisions for night workers and
modifications to the general rule for certain industries/circumstances
to allow them to deviate under specified circumstances-for example, some
kinds of seasonal work or activities where a permanent presence is required
or continuity of production services is necessary. The details of these
modifications would be defined by national law or by collective agreements
at national, regional, or local levels as appropriate.
In the future the concepts embodied in annual hours systems would appear
to be a promising area for employers seeking to move beyond the programmatic
use of flexibility towards more strategic applications.
(Source: Olmsted, B. & Smith. S. Creating a Flexible Workplace-How
to Select & Manage Alternative Work Options AMACON, 1994)
Highlights of the US Department of Labor guidelines (to State governments)
are:
- there must be a need for the workweek to be reduced at least 10 per
cent before a request for STC can be considered
- STC benefits should be pro rata of regular unemployment insurance
benefits
- employees should not be required to make themselves available for
other work or conduct a job search as a test of their eligibility to
collect benefits but are required to be available for a normal work
week
- the total reduction in hours under STC should be no greater than
the reduction in hours would have been had layoffs taken place
- during the preceding four months, the employer's workforce must not
have been reduced by more than 10 per cent by layoffs
- the employer must continue to provide health and retirement benefits
as though the workweek had not been reduced.
- where the workforce is unionised, the union must consent to the STC
plan.
- 'Affected Unit' means a specified plant, department, shift. or other
definable unit consisting of not less than ( employees to which an approved
short-time compensation plan applies.
- 'Fringe Benefits' include, but are not limited to. such advantages
as health insurance (hospital, medical, and dental services. etc.),
retirement benefits under defined benefit pension plans (as defined
in Section 3(35) of the Employee Retirement Income Security Act
of 1974). paid vacation and holidays, sick leave, etc., which are
incidents of employment in addition to the cash remuneration earned.
- 'Short-Time Compensation' or 'STC' means the unemployment benefits
payable to employees in an affected unit under an approved short-lime
compensation plan as distinguished from the unemployment benefits otherwise
payable under the conventional unemployment compensation provisions
of a State law.
- 'Short-Time Compensation Plan' means a plan of an employer (or of
an employers' association which association is a party to a collective
bargaining agreement) under which there is a reduction in the number
of hours worked by all employees of an affected unit rather than temporary
layoffs of some such employees. The term 'temporary layoffs' for this
purpose means the separation of workers in the affected unit for an
indefinite period expected to last for more than two months but not
more than one year.
- 'Usual Weekly Hours of Work' means the normal hours of work for full-time
and PPT employees in the affected unit when that unit is operating on
its normally full-time basis, not to exceed forty hours and not including
overtime.
- 'Unemployment Compensation' means the unemployment benefits payable
under this Act other than short-time compensation and includes any amounts
payable pursuant to an agreement under any Federal law providing for
compensation, assistance, or allowances with respect to unemployment.
- 'Employers' Association' means an association which is a party to
a collective bargaining agreement under which the parties may negotiate
a short-time compensation plan.
An employer or employers' association wishing to participate in an STC
program shall submit a signed written short-time compensation plan to
the Director for approval. The Director shall approve an STC plan only
if the following criteria are met.
- The plan applies to and identifies specified affected units.
- The employees in the affected unit or units are identified by name,
social security number and by any other information required by the
Director.
- The usual weekly hours of work for employees in the affected unit
or units are reduced by not less than 10 percent and not more than (
percent.
- Health benefits and retirement benefits under defined benefit pension
plans (as defined in Section 3(35) of the Employee Retirement Income
Security Act of 1974), will continue to be provided to employees in
affected units as though their work weeks had not been reduced.
- The plan certifies that the aggregate reduction in work hours is
in lieu of temporary layoffs which would have affected at least 10 percent
of the employees in the affected unit or units to which the plan applies
and which would have resulted in an equivalent reduction in work hours.
- During the previous four months the work force in the affected unit
has not been reduced by temporary layoffs of more than 10 percent of
the workers.
- The plan applies to at least 10 percent of the employees in the affected
unit, and when applicable applies to all employees of the affected unit
equally.
- In the case of employees represented by an exclusive bargaining representative,
the plan is approved in writing by the collective bargaining agent;
in the absence of such an agent, by representatives of the employees
in the affected unit.
- The plan will not serve as a subsidy of seasonal employment during
the off season, nor as a subsidy of temporary part-time or intermittent
employment.
- The employer agrees to furnish reports relating to the proper conduct
of the plan and agrees to allow the Director of his/her authorised representatives
access to all records necessary to verify the plan prior to approval
and, after approval to monitor and evaluate application of the plan.
(Source: Olmsted, B. and Smith, S. Creating a Flexible Workplace-How
to Select and Manage Alternative Work Options, AMACON,1994: 333 et
seq.)
- Work is re-routed to other departmental employees.
- A replacement from within the company is obtained on a temporary
basis.
- A replacement from outside the company is hired on a temporary basis.
- Only urgent work is rerouted to other employees, with the remainder
of the work held for the leave-takers return.
- Work is forwarded to the leave-taker at home.
- A permanent replacement is obtained, and the leave-taker is transferred
to another job.
- A permanent new replacement is hired.
(Source: Olmsted, B. and Smith, S. Creating a Flexible Workplace-How
to Select and Manage Alternative Work Options, AMACON,1994: 341)
This summary outlines the 'annualised salary' arrangements under the
Metal Trades ICI Botany Agreement negotiated with the Metals and Engineering
Workers Union (MEWU) and Federation of Industrial Manufacturing and Engineering
Employees (FIMEE).
This s.115 agreement and three others assisted in achieving a dramatic
turnaround in performance, profitability and employee morale. There is
now one s.134C site agreement incorporating all unions at ICI Botany.
ICI Botany first started turning its operations around in 1986 through
a Green Paper (developed solely by management) outlining a log of claims
by management aimed at removing a number of negative workplace practices
that emerged over the last thirty years.
In early 1988 meaningful consultations with the workforce about their
vision for the future took place. Needs identified by the parties included
an improved organisational structure, greater reliability and precision
in the making of the product, improved service and innovation, and an
appropriately multiskilled workforce
The need for real change saw changes in the way people worked, rather
than a new form of words, as the key outcome. This was reflected in the
three years taken to develop new work organisations and put appropriate
training programs in place which are ongoing.
The Agreement was negotiated with the MEWU and FIMEE. The Agreement
was negotiated as a Certified Agreement under the former Section 115 of
the Industrial Relations Act ('the Act'), and certified by the
Commission on 18 November 1991 to expire on 29 January 1992 to bring it
in line with the expiry dates of the other certified agreements.
Under the Agreement former weekly wage rates have been renegotiated
into a composite annualised salary based on a previously developed formula
(see below).
Employees are paid an all-inclusive annualised salary which includes
base salary, overtime, call ins and all other allowances and shift premiums
associated with the conditions of employment under the Agreement.
This annualised salary is based on averaged overtime levels over the
previous three years. In the event that overtime levels are reduced, the
Agreement provides that salary levels will be maintained.
Salary adjustments are granted on attainment and successful assessment
of agreed skill levels in the career structure.
Flexible working hours are provided for permanent employees and casuals
employed either 'part-time' (employed one day to three months) or temporaries'
(in excess of three months).
The parties mutually agree on the hours of work having regard to business
needs and provided that an average of thirty eight hours per week is worked.
In ensuring 24 hour plant coverage employees maintain their own workgroup
rosters and cover any absences within their workgroup having regard to
safety and statutory requirements. Agreed work-force levels are maintained
during the life of the Agreement.
No employee will be required to work more than sixteen hours per twenty
four-hour period with a ten-hour break allowed between work completion
and commencement time.
Meal breaks are to be determined by the workgroup and may be staggered
to meet the needs of the business.
Plant shutdowns have been included in the salary formation, but do not
attract any additional overtime payments.
As penalty rates are included in the annualised salary, employees are
only entitled to one day off for each day worked. All statutory public
holidays are observed with the proviso that employees working on any public
holiday shall receive an alternative day off as agreed by their workgroup.
For employees remaining in employment, accrued annual leave, long service
leave and leave loading are paid at the annualised rate. Employees leaving
of their own volition are not entitled to payment at the annualised rate
except when they die or leave for reasons of retirement, voluntary retrenchment,
or retirement due to ill health.
Annual leave loading is paid in full in December of each year. As a
transitional arrangement outstanding annual leave loading (based on pre-existing
base rates) was paid to employees over a maximum period of six months
to minimise the cash flow impact. Any leave loading under the new Agreement
is paid at the annualised rate.
Maternity, paternity and adoption leave are covered by the Agreement.
Annual leave is based on the Metal Industry Award standard. Long
service leave applies as per the NSW Long Service Leave Act of 1955.
An example of the substantial improvements in productivity involves
the Botany Propathene Plant which last year (1991) cut its first-run reject
rate (that requiring reworking or discarding of poor quality output) from
16 to 4 per cent.
(On 3 September 1992 Commissioner Johnson of the AIRC ratified a s.134C
agreement at ICI Botany covering all unionised employees (FIMEE, MEWU
and Electrical Trades Union).
Calculating the Annualised Salary of an ICI Engineering Technician Level
1
- The base weekly rate is determined from the relevant MTIA award for
a fitter. This rate includes a supplementary payment and a trade tool
allowance
- To this base rate add site allowances such as the Chemical Industry
Special Rates Allowance, Availability Allowance, Laundry Allowance,
Site Tool Allowance, Post Trade Training Allowance. Also add the 2nd
instalment of the Structural Efficiency round and the ICI productivity
allowance.
- Determine a weekly value for periodic payments associated with former
shift and overtime arrangements including: Meal Allowance, Travel Allowance
(Call-ins), First-Aid Allowance, Confined Space Allowance, Dirt Allowance.
Reduce this to an hourly rate.
- To the rate determined in point 2, add an average overtime period
of 8.4 hours per week at a 1.8 hourly loading rate (which adds the $
equivalent of 15 hours work).
The final salary will comprise the values of 2+3+4 , ie the revised
base rate including regular allowances, a value for periodic allowances,
a shift/overtime component and the weekly rate for these can be multiplied
by 52 to derive the annual salary.
(Source: Making Time, Flexibility in the Workplace, DIR, 1992)
The Sheraton Towers Southgate Employee Relations Agreement 1992
was negotiated with the then Federated Liquor and Allied Industries Employees
Union at the company's new establishment in Melbourne.
The Agreement utilised the recent amendments to Division 3A of the Industrial
Relations Act which are specifically designed to assist parties in
registering enterprise agreements. Signed on 23 July 1992, the Agreement
covers 300 permanent full-time and PPT employees and is effective for
a period of twelve months. The parties anticipate that the next agreement
will last for twenty four months.
The Agreement operates in lieu of the parent award, the Hotels,
Resorts and Hospitality Industry Award (1990) ('the Hotels Award').
The Hotels Award was restructured to provide greater flexibility, including
alternative arrangements for penalty rates.
A key feature of the Agreement is its emphasis on dealing with the issue
of penalty rates and working time flexibility, which Is a major issue
within the twenty four-hour day/seven day week tourism/hospitality industry.
Sheraton has not approached the penalty rates/working-time flexibility
issue in a negative cost cutting manner, but has consulted with the union
and employees in order to address the issue as part of a broad process
of workplace reform, as evidenced in the Agreement outlined below.
Flexible working hours are provided for full-time and part-time employees
through the following means.
Full-time employees' ordinary hours are 152 hours in any four week cycle;
providing:
- ordinary hours are between six and ten hours on any given day, before
overtime becomes applicable, provided they are part of the monthly roster;
employees are entitled to eight RDO per four-week cycle, not necessarily
on weekends; and
- if necessary, employees may work up to ten days in succession PPT
employees' ordinary hours of work provide for a minimum of forty eight
hours and a maximum of 128 hours in any four-week cycle; with between
three and ten hours to be worked on any given day.
Rotating monthly rosters, covering all hours in which the premises operates,
are posted on a monthly basis with employees informed in writing at least
one days prior to the commencement of each month. However the roster may
be altered by mutual consent at any time or by amendment to the roster
provided no less than seven days' notice is given.
All time worked in excess of or outside ordinary rostered hours is considered
overtime and is paid at overtime rates. However at the instigation of
the employee there may be an agreement in writing between the employer
and the employee to take time off with pay equivalent to the amount for
which payment would otherwise have been received. Overtime is allocated
according to the company's needs and shared among employees as far as
possible.
The additional cost of employing staff on public holidays is offset
by granting the employee a day off in lieu of additional payment or a
day with pay can be added to their annual leave enti | 
