CHAPTER 5
Effects On Particular Groups Of Employees And Employers
Introduction
5.1 The inherent nature of the bargaining process, which places employee
against employer in discussions aimed at reaching an agreement, will
disadvantage some people. People particularly at risk include those
who are inexperienced in bargaining or industrial negotiation, those
who have a poor command of the English language, or those who for cultural
reasons or reasons relating to age see themselves in positions of inferiority
or subservience.
5.2 While the Government has argued that it has taken measures to ensure
that such people are not disadvantaged, [1]
many individual employees and their unions presented a strong case to
the Committee that they would be disadvantaged should the legislation
be enacted. As well as many individuals, three main groups made representations
to the Committee, namely, women, migrant workers, and young people.
5.3 In addition, the NSW Attorney-General noted that, as a general principal,
when wages are regulated by tribunals, rather than through individual
agreements, there is usually a fairer outcome for potentially disadvantaged
people in terms of wage equity. [2]
5.4 Most importantly, however, the submission presented by the Human
Rights and Equal Opportunity Commission stated that the Workplace Relations
Bill does not provide adequate protection for women, people of non-English
speaking backgrounds, people with disabilities, young people and Aboriginal
and Torres Strait Islanders. The reasons given for this view were that
the Bill would:
- reduce Australia's observance of its international obligations by
reducing reference to a number of international conventions ratified
by Australia;
- reduce the role and powers of the Australian Industrial Relations
Commission to ensure equal opportunity, (with the Employment Advocate
not able to provide the same level of protection);
- not provide adequate or appropriate mechanisms for equal remuneration
to be achieved between men and women; [3]
- not provide a coherent framework for the regulation of different
forms of employment such as part-time and casual employment;
- be prescriptive in relation to the structure and function of unions
in ways that unduly infringe on the rights of union members to associate
freely on terms and within structures that they themselves determine;
- reduce the role of representative bodies and place an emphasis on
individuals who may not be as effective at bargaining; and
- leave to regulation many areas of crucial importance in the achievement
of equality for all Australians. [4]
PART-TIME AND CASUAL WORKERS
5.5 One of the most contentious issues before the Committee was the
limitation on the Commission's powers to deal with certain aspects of
the employment of part time and casual employees. Proposed section 89A
gives the Commission the power to make awards in relation to the type
of employment such as full time employment, casual employment, regular
part-time employment and shift work. Section 89A(4) provides that this
power does not include the power to limit the number or proportion of
employees that an employer may employ in a particular type of employment
or the power to set maximum or minimum hours of work for regular part
time employment.
5.6 The Workplace Relations Bill will remove the provisions contained
in awards regulating the minimum number of hours to be worked. The Government
claims that this will benefit those employees who, for family or other
reasons, cannot complete the minimum number and who must therefore stay
within the casual work-force or remain unemployed. The Government maintains
that this process will be a boon for many workers who for reasons such
as family responsibilities are either unable or who do not wish to work
full-time.
5.7 Similarly, the Bill will remove maximum hours requirements from awards
for regular part-time work. The Government claims that this will 'provide
the possibility of developing agreed part-time hours arrangements at any
level below specified full-time hours'. [5]
5.8 The provisions deregulating part-time work were considered by employer
groups to be constructive and necessary for increasing labour market
flexibility. There were two aspects to this: firstly, restrictions on
the maximum and minimum number of hours for regular part-time employees;
and secondly, the removal of limitations on the proportion of employees
that an employer may engage for part-time work.
5.9 Employer groups noted that part-time work is particularly important
for people with family responsibilities and to other groups, such as
students or people nearing retirement. Restrictions on minimum hours
can be onerous for both employers and employees because it may place
constraints on the circumstances in which an employer may employ a part-time
worker. Removal of the restrictions would enable many more people to
be employed on a permanent part-time basis, rather than as casuals,
as is the case under the current legislation.
5.10 The Australian Hotels Association noted that the very high number
of casuals in the hospitality industry was partly due to the inflexibility
of requirements for an employee to be considered a permanent part-time
employee. While many casuals work the same amount of hours, over the same
shifts each week, they are ineligible for permanency status because their
working conditions do not come within the definition of permanent part-time
and are therefore ineligible to receive the benefits of permanent employment.
[6]
5.11 Restriction on the proportion of part-time and casual workers in
any award sector similarly constrain the ability of employers to have
a more flexible work-force and prevent the expansion of part-time work
in that sector. As proposed by ACCI: 'this is inconsistent with the clear
demand for part-time work amongst female employees with family responsibilities'.
[7]
5.12 The Queensland Chamber of Commerce and Industry, however did suggest
that there ought to be set minimum hours of work for part-time workers:
Senator Murphy: Madam Chair, can I just ask one further
question with regard to QCCI's view on the setting of hours of work
for part-time employees. Do you believe that there ought to be set
minimum hours of work?
Mr Muir: - Yes, I do. [8]
5.13 Evidence was presented by unions, academics and community groups
which suggested that far from providing greater opportunities to those
seeking part time employment, they could be significantly disadvantaged.
5.14 A number of submissions and witnesses maintained that regularity
of hours was far more important for ensuring access to the workforce
for those with family responsibilities than removing possible award
limitations on the ratio of part-time employees.
5.15 Many of the submissions dealing with this issue stated that the
ultimate result of removing maximum and minimum hours, combined with the
removal of award regulation of rostering arrangements, would be a lack
of certainty and predicability of working conditions for part-time employees.
[9] Independent consultant researcher,
Ms Sara Charlesworth, concluded in her submission that:
… in many instances employer interests in achieving flexibility
in hours arrangements do not necessarily coincide with employee interests,
particularly for women and other workers with family responsibilities,
and … the proposal to prevent the Australian Industrial Relations
Commission from setting minimum hours for part-time employees will lead
to the virtual casualisation of the workforce. [10]
5.16 In addition, there was a good deal of evidence which argued that
this form of deregulation was likely to prove a disincentive for part-time
employment rather than an incentive. Strong representations were made
to the Committee by unions, individual workers and community groups that
the current award provisions were introduced to prevent employees from
being exploited by employers who call staff in to work and then do not
give them sufficient hours to make it worthwhile. The removal of minimum
hours of work could result in some employees spending more time and money
on getting to work than they receive from the employment. [11]
No employees complained about restrictions.
5.17 Furthermore, there was not a large amount of evidence which suggested
that limits in the numbers of workers in each category of employment
or the hours that part-time employees could work (either maximum or
minimum) constrained employment in these categories of employment. In
particular the claim that these restrictions have produced casual employment
growing at the expense of part-time employment is not supported by the
facts. Recent trends show that over the past 8 years, there has been
strong growth in both regular part-time and casual employment. Between
August 1988 and August 1995, permanent part-time employment grew from
357,600 to 607,100; an increase of 69.8 %. For the same period, casual
part-time employment grew from 771,700 to 1,170,600 a growth rate of
51.7% (See Cat No 6310.0 and 6202.0). A comparison of these growth rates
is not consistent with part-time employment being unduly constrained
because of Commission regulation or the suggestion that the growth in
part time employment has been predominantly casual in nature.
Conclusion
5.18 The majority of the Committee concludes that there is no reason
to remove the Commission's power to establish minimum and maximum hours
for these workers. The majority of the Committee forms the view that
there is much evidence to consider that there is substantial disadvantage
to workers from deregulating hours in the manner proposed.
5.19 The majority of the Committee does not accept that the existing
power of the Commission to regulate these matters has constrained these
types of employment. In particular, the available evidence does not
support the proposition that the setting of minimum or maximum hours
has had the effect of promoting casual employment over part-time employment
as has been claimed.
5.20 The majority of the Committee also notes that the Government's
proposal to remove limits on the proportion of employees in particular
categories of employment seems inconsistent with the Government's stated
desire to promote part time employment over casual employment given
that these limits are often framed to have this effect.
5.21 Finally, the majority of the Committee believes that the view
that minimum hours are a barrier to those with family responsibilities
entering the workforce is contrary to the evidence before the Committee.
In this regard the majority of the Committee accepts the view that regulation
of hours by the Commission provides some safeguard as to the regularity
of hours worked by having the power to set minimum and maximum hours
for this work.
5.22 The majority of the Committee considers that the Australian Industrial
Relations Commission should retain the power to make an award dealing
with part-time employment, including being able to set maximum and minimum
hours of work. The majority of the Committee is also of the view that
the Commission should have the power to set limits in relation to the
number of employees in particular types of employment.
5.23 The majority of the Committee therefore recommends that these
proposals (proposed subsection 89A(4)) should not be implemented, and
that the Commission should retain the power to make an award setting
maximum and minimum hours of part-time work.
5.24 Labor members of the Committee recommend that proposals to
abolish the Commission's power to set limits in relation to employees
in particular types of employment should not be implemented.
5.25 The Government members of the Committee disagree with the conclusion
and oppose the recommendation.
5.26 The Australian Democrats member of the Committee agrees with
this analysis but has made additional recommendations in his Supplementary
Report.
WOMEN
5.27 Evidence was given to the Committee by a number of groups representing
the interests of women including Women for Workplace Justice, the Working
Women's Centre (Hobart, Sydney and Darwin), the Women's Electoral Lobby,
Women Lawyers Association of NSW, the Federation of Business and Professional
Women, the National Pay Equity Coalition, the National Women's Justice
Coalition, and the Women's Committee of the Australian Metal Workers'
Union. [12]
5.28 In expressing their concerns to the Committee about the Workplace
Relations Bill, these groups noted that equality of pay and conditions
for women has never come as a natural evolutionary process or as a market-based
process; any achievements so far made have only come through strong
and persistent agitation by women's representative groups. They also
noted that some industries have both a very high proportion of women
and a high level of part-time or casual work (for example, hospitality,
nursing, and finance sectors).
5.29 The three major concerns expressed by women's groups were:
- that the removal of Commission's powers to ensure equal remuneration
in over-award payments would result in further inequalities in pay
and conditions for women;
- that the proposed arrangements for workplace bargaining would disadvantage
women; and
- that deregulation of part-time work, and in particular the removal
of minimum and maximum hours, would disadvantage women who form the
bulk of this sector of the work-force.
5.30 There is a continuing wages gap between men and women, particularly
in the area of over-awards provisions. Across the total economy in 1992,
women received 84.5% of the total wage received by men. The enactment
of Division 2 of Part VIA of the Industrial Relations Act, which is
to be repealed by the Bill, was aimed at providing a means of redressing
this gap.
5.31 In arguing against this repeal, Ms Dorothy Catts, representing
the Women's Lawyers Association, stated:
It is our respectful submission that, in order to provide fair and
equitable wages and conditions to women workers, it is essential that
the proposed abolition of division 2 of part VIA and the repeal of the
various schedules in support of that division be abandoned and that
the Australian Industrial Relations Commission continue to exercise
its full range of award making powers. [13]
5.32 Many women are already in disadvantaged positions in the labour
force for a number of reasons. They may be young, or single parents with
little experience in bargaining, or unaware of their basic entitlements.
They may come from cultures which do not place great value on the need
for or ability of women to work. More often women are employed in low
skilled occupations and in industries which lack access to training and
a career structure. According to the NSW Women's Working Centre, 'such
workers do not have the kind of bargaining power that you need to obtain
industrial justice'. [14]
5.33 The establishment of provisions for AWAs will necessitate many
employees having to individually negotiate their own agreements with
their employers, because, for instance, of employers making entering
into an AWA a condition of employment, or even for obtaining a pay increase.
5.34 Even in the absence of AWAs, the effect of the so called 'simplification'
process will be to remove from the basic award, all those conditions other
than the 18 allowable matters which means that many standard conditions
will have to be 'renegotiated and rewon by often powerless people'. [15]
5.35 Finally, the deregulation of part-time hours (in effect, a casualisation
of part-time employment) will have a disproportionate effect on women.
This is so, simply because many more women work part-time than do men
and because casual workers have fewer entitlements than permanent workers.
In particular, casual workers are not eligible for parental leave. This
fact could result in an increased public sector burden of female dependence
on welfare benefits.
5.36 Given these conclusions, the majority of the Committee recommends
that:
- the provisions allowing the Commission to regulate remuneration
to remove discrimination be maintained;
- the recommendations made in Chapter 4 relating to agreements
be adopted;
- that provisions similar to the existing provisions be inserted
into the Agreements Schedules that recognises the special interests
of women; and
- that the Majority Committee's recommendations in relation to
the powers of the Commission concerning part-time work be adopted.
5.37 Government members of the Committee disagree with the above conclusions
and oppose the recommendations.
WORK AND FAMILY RESPONSIBILITIES
5.38 The Government has stated that through its proposed legislation,
people will be able to better integrate work and family responsibilities.
The Principal Object of the Bill includes a reference to 'assisting
employees to balance their work and family responsibilities effectively
through the development of mutually beneficial work practices with employers'.
5.39 The substantive provisions of the Bill which the Government claims
provide for this assistance are:
- changes to promote permanent part-time work and reduce reliance
on casual work;
- the provision of a minimum condition of no less than 12 days personal/carer's
leave with pay each year to underpin certified agreements and AWAs
;
- no less than 52 weeks of parental leave or adoption leave without
pay after 12 months continuous service; and
- equal pay for work of equal value without discrimination on the
grounds of sex.
5.40 Employer groups supported this view. As expressed by the Australian
Chamber of Commerce and Industry in its submission:
The Bill will, by promoting more flexible and facilitative awards which
give greater scope for individual employer/employee agreement on workplace
arrangements, give greater scope for employer and employee to introduce
different arrangements, which may cater for work and family needs. [16]
5.41 However, a number of witness who opposed these changes argued that,
not only did the Bill fail to provide support for workers with family
responsibilities, existing projections would actually be weakened. [17]
The ACTU stated that the provisions most likely to make it more difficult
for workers to balance employment and family responsibilities were:
- removing provisions guaranteeing part-time workers' minimum and
maximum hours;
- stripping the Commission of any ability to reject agreements on
the grounds that they disadvantage workers with family responsibilities;
- removing requirements for consultation and information, especially
in relation to women, young people and workers whose first language
is not English; and
- repealing the current requirement for an annual report on developments
in enterprise bargaining. [18]
5.42 According to the ACTU, the removal of award regulation of maximum
and minimum hours of employment erodes the distinction between permanent
part-time employment and casual employment. This undermines part-time
workers' the guarantees of a certain amount of employment which in turn,
erodes their income security. Loss of income security is certain to detract
from the ability of employees to adequately deal with family responsibilities.
[19] In addition, loss of predicability
of hours will have a considerable impact on the ability of employees with
young children to obtain and retain child-care.
5.43 The Human Rights and Equal Opportunity Commission expressed grave
concern in its submission that the Bill would 'undermine its stated intention
of better integrating work and family, and will exacerbate further the
problems faced particularly by women and people with disabilities, who
are already concentrated in areas where there is inadequate award coverage,
as casual and contract workers as well as outworkers, and have little
capacity to have their industrial rights enforced'. [20]
Conclusions
5.44 While industrial relations has traditionally focused on work,
there is a growing recognition that ensuring an appropriate balance
between work and family life is an important goal both for the purposes
of adding to an employee's well-being and for achieving efficiency and
productivity. A holistic approach to industrial regulation that takes
into account family responsibilities is of considerable value.
5.45 In other sections, we have considered the efficacy of proposals
which the Government states will assist in striking an appropriate balance
between work and family. Many of those, in our view, will cause problems
not only for employees at work, but also for attempting to balance family
commitments. In our view, restricting the powers of the Commission to
arbitrate in relation to wages and conditions of employment, and allowing
agreements to be made which can undermine those wages and conditions
a real prospect of putting pressure on the ability of workers to meet
their family responsibilities.
5.46 The majority of the Committee therefore recommends that the
Senate adopt the recommendations outlined in Chapter 4.
5.47 The Australian Democrats member of the Committee supports this
recommendation but has made additional comments in his Supplementary
Report.
5.48 Government members of the Committee disagree with the above
conclusions and oppose the recommendations.
EMPLOYEES FROM NON-ENGLISH SPEAKING BACKGROUNDS
5.49 The Committee took oral evidence from a number of organisations
representing people of a non-English speaking background; the Ethnic Communities
Council of Victoria, Asian Women at Work (NSW), the Association of Non-English
Speaking Women of Australia (NSW), the Multicultural Communities Council
of SA and the Federation of Ethnic Communities Council of Australia. [21]
5.50 Non English speaking background workers are a diverse group but
they share certain characteristics within the labour force: they are
over-represented in poorly paid positions, have higher unemployment
levels, have higher rates of occupational injury, are under-represented
in workplace representation, are disproportionately affected by workplace
restructuring, and have less access to vocationally based training.
These factors, often combined with lack of proficiency in English, place
them in a vulnerable position in negotiations related to enterprise
bargaining, particularly as individuals.
5.51 While the Workplace Relations Bill seems to assume that all employees
have all the skills required to properly individually negotiate their
terms and conditions of employment, people from non-English speaking
backgrounds may often be in a position where they do not understand
the rules for bargaining, let alone feel they are able to use the rules
to ensure they are treated fairly.
5.52 In speaking of the difficulties faced by people from non-English
countries, Ms Carstens, who represented Asian Women at Work, noted that
there are some 1.1 million migrant women in Australia. While many are
unskilled, those who do come to Australia with skills must often work
in unskilled jobs because they lack proficiency in English. Migrant women
are concentrated in particular industries: manufacturing industry, community
services and the wholesale retail trade. Over the last decade there has
been a decline in work-force participation rates for migrant women and
a concomitant increase in their unemployment levels. [22]
Conclusions
5.53 Should the Bill be enacted, a number of changes will detrimentally
affect workers of a non-English speaking background. The first and most
important change is the promotion of individual bargaining through AWAs.
Migrant workers strongly believe that, where their English is poor, they
will not have an equality of bargaining power. [23]
The second change is the removal of award conditions outside the 18 matters,
and in particular, entitlements such as training and the employer's obligation
to consult over changes at the workplace, both of which are essential
for non-English speaking workers. Third, the removal of the requirement
for the Commission to consider whether potentially disadvantaged employees'
interests have been sufficiently taken into account in the bargaining
process is of particular concern for these people.
5.54 As has been indicated elsewhere, we see little merit in the proposals.
The impact of these on people from non-English speaking backgrounds
emphasise the need to adopt the recommendations elsewhere that deal
with these matters.
5.55 The majority of the Committee therefore reaffirms the recommendations
previously made in Chapter Four concerning these matters.
5.56 The Government members of the Committee disagree with the conclusion
and oppose the recommendation.
YOUNG PEOPLE
5.57 A number of witness have suggested that young people may also be
disadvantaged by having to negotiate individual workplace agreements with
employers, because they generally lack negotiation skills and the general
experience that comes with maturity.,. A witness from the Labor Council
of NSW stated: 'Quite simply, the bargaining position is not equal between
an employer and a young and inexperienced worker'. [24]
Another witness elaborated: '[young people] do not have negotiating skills.
They also have neither self-confidence nor verbal skills and can very
easily be intimidated by an interview situation. The employer has all
the bargaining power'. [25]
5.58 The general view that young people would be disadvantaged by the
Workplace Relations Bill was supported by quite a number of witnesses
including the Victorian Automobile Chamber of Commerce, the Victorian
Trades Hall Council, and the Goulburn Valley Trades and Labor Council.
Conclusion.
5.59 Given the difficulties which many young people will face in individual
bargaining, the majority of the Committee concludes that that the proposed
changes could disadvantage young people further. It is imperative for
these people that the protections proposed in Chapter 4 of this Report
be adopted. In particular, the majority of the Committee opposes
the Bill's removal of the requirement that the Commission consider the
interests of young people in approving agreements and recommends that
this requirement be retained.
5.60 Government members of the Committee disagree with the above
conclusions and oppose the recommendation.
Youth Employment and Junior Rates of Pay
5.61 The amendments to the Industrial Relations Act made by the 1993
Reform Act requires a triennial review of awards to eliminate a wide
range of discrimination, including that based on age (see section 150A).
Junior rates describe the arrangements whereby a discounted wage is
paid to employees below the age of 21, or in some awards below 18. The
Bill repeals the requirement to remove junior rates of pay by continuing
indefinitely its exemption from discrimination based on age.
5.62 While supporters of junior rates accept that they are a clear
form of discrimination on the basis of age (which is otherwise seen
as inappropriate), it is argued that the consequences of ending the
discrimination are so great that allowing the discrimination to continue
is in the public interest. It is suggested, by those supporting this
aspect of the Bill, that providing young people with job opportunities
is of greater importance than ensuring that all people performing the
same job at the same level, are paid the same wage regardless of their
age. Junior rates in low skilled occupations are to be viewed as an
acceptable form of discrimination.
5.63 Most of those proposing the maintenance of junior rates argue that
their removal will lead to a significant worsening of youth unemployment;
adopting the classical market analysis associated with wages and employment.
A number of supporters of this proposal referred to the inherent characteristics
of young people that made their employment prospects even more sensitive
to wage changes. This, it is argued, is primarily because employers, if
faced with a choice of employing an 18 year old or a 38 year old on the
same level of pay, will generally employ the older person even if their
ability to perform the mechanics of the job are equal. ACCI elaborated:
'[A]ge based rates are simply a proxy for the lack of competitiveness
that young people have in the labour market, for reasons of lack of skill,
experience and maturity'. [26]
5.64 The ACTU submission cites research by Gregory and Duncan on the
employment effects of the series of Equal Pay cases of the AIRC which
did not find any subsequent increase in the level of female unemployment.
In fact, female employment participation rate has increased continuously
since, clearly indicating the impact of other factors. [27]
The ACTU suggests that dire predictions of the effect of the replacement
of junior rates with competency based arrangements are equally misplaced.
[28]
5.65 It is probable that there would be some effect on the level of
youth employment. Precisely what that effect would be is less clear.
5.66 The Economic Planning Advisory Commission's (EPAC) paper Future
Labour Market Issues for Australia stated that: '… numerous empirical
studies have found that the youth-adult wage differential significantly
affects the demand for youth labour …' but notes that '… increased
productivity can offset higher wages so that a high productivity, high
wage country can compete with low wage, low productivity countries'. [29]
5.67 The primary alternative to junior rates is rates of pay determined
by skill and competency. The process of moving to competency based wage
systems has not been an easy one. In the Junior Rates Test Case Decision
(20 December 1995), the Australian Industrial Relations Commission endorsed
the Australian Vocational Training System (AVTS) Trainee Wage Guidelines.
The Guidelines provide for the reform of trainee wages to meet the requirements
of the AVTS principally by introducing competency based trainee wages,
and were agreed to by the ACCI, ACTU and Commonwealth, State and Territory
Governments.
5.68 Supporters of the Workplace Relations Bill claim that the move away
from the system whereby wages are determined by age (junior rates), to
competency based wages has not been successful. As stated by ACCI: 'It
should be noted that despite all our attempts we have not been able to
find satisfactory competency based replacements for existing age based
junior rates'. [30]
5.69 The submission from the Department of Industrial Relations notes
that
…the across the board introduction of wages based only on skill
and competency could substantially increase the wages of youth in
low-skilled jobs. This is because in these jobs juniors are likely
to reach full competency (and qualify for adult rates) after a short
period in the workplace [in the retail, food and hospitality industries]…
5.70 The Australian Retailers Association's submission strongly supported
the retention of junior rates and claimed that a continued move to introduce
competency based rates in the retailing sector 'would be disastrous for
both existing and potential young retail employees'. [32]
However, in oral evidence the ARA accepted that the industry had agreed
to a different wages system which did not offend the prohibition on discrimination
required by the Act. [33]
5.71 Despite ACCI's seemingly blanket assertion of the irreplaceability
of junior rates, their submission listed an impressive number of areas
in which AVTS guidelines are being introduced into existing traineeships
and apprenticeships, including in such industries as communications,
banking and insurance, and food processing.
5.72 Opponents of retaining junior rates support the continued move
to competency based wages without discrimination by age and point to
the use of similar arguments against the introduction of equal pay for
women, in the 1960s and 1970s. At the time it was argued that employers,
faced with paying women at the same rate as men, would usually chose
to employ men, thereby hurting women's employment prospects.
5.73 While employer groups argued for the retention of junior rates based
on the assertion that they assist in providing employment opportunities
for youth, the Human Rights and Equal Opportunity Commission stated that
the exception for junior rates should be discontinued, or at the very
least be limited by a sunset clause, and accompanied by a strategy to
transfer to competency based rates. [34]
The issue of junior rates of pay is discussed further in Chapter 6 (Training
and Skill Formation).
5.74 The Youth Affairs Council of South Australia's submission discussed
the historical development of youth wages including the assumption that
all young people face lower living costs than adults [35].
The Council stated that:
Young people consistently express the view that they have a right to
equal treatment in the workplace. Reform of the industrial relations
system must mean a forward step for young workers - not a backward step
to reinforce the blatant discrimination and exploitation of the past.
Currently the industrial relations system is on a course to set wages
according to a scale of competencies - a mechanism some describe as
complex and unworkable. The Government simply says it's too hard to
implement, therefore the current structure of junior awards will stay.
If so, the Government cannot realistically expect young people to support
its legislation, particularly, if other areas of change put their interests
in an even more vulnerable position in the labour market [36].
Conclusions
5.75 The debate on junior rates of pay and the effect on employment
is not new. Despite this it has not to date been satisfactorily resolved.
The development of the Training Wage system is the first serious attempt
to explicitly recognise the factors that apparently make youth employment
vulnerable.
5.76 Logically, if such a system can identify the relative competencies
of young people, it should allow for wage differentials that reflect
relative inexperience and maturity without suffering from the capricious
discrimination inherent in the system of aged based rates.
5.77 While some employers have indicated that there remain significant
problems in relation to the development of such a system in particular
industries, the majority of the Committee notes the relative short time
that this approach has been tested and we also note that significant
progress has been made in some areas.
5.78 Given the importance of ensuring that the issue of employment
does not simply become an excuse to continue discrimination, the majority
of the Committee feels that the development of a competency based system
must be allowed to continue. This can only really occur in the context
of a prohibition on aged-based discrimination.
5.79 Given all of the above, the majority of the Committee recommends
that the Governments proposed exemption of junior rates from the requirement
to ensure awards are not discriminatory be rejected.
5.80 The Australian Democrats member of the Committee supports these
conclusions and recommendations but has made additional recommendations
in his Supplementary Report.
5.81 Government members of the Committee disagree with the above
conclusions and oppose the recommendations.
EMPLOYEES IN PARTICULAR INDUSTRIES
5.82 Most sectors in Australia have comprehensive awards and in evidence
to the Committee a number of organisations and individuals discussed
the complications that would arise if their awards were stripped back
to only 18 matters as proposed by the Bill. Three sectors, nursing,
pastoral, and remote (including Aboriginal), have been chosen to illustrate
the difficulties of this proposal.
Nurses
5.83 In evidence to the Committee, the Australian Nursing Federation
stated that it believed that if the system of AWAs, or an enterprise-based
system of CAs was introduced, the 'short-term result would be a requirement
to divert scarce resources from patient care to accommodate these changes
and in the long-term lead to a more exploitative and uncertain industrial
climate in the nation's health industry'. [37]
The Federation expressed concern that having different individuals on
different AWAs, or groups of nurses on different CAs, would create different
'classes' of nurses who in reality performed the same work. The Federation
also noted that a significant detrimental effect of the abolition of the
paid rates award would be the removal of the existing national classification
of career structure for nurses.
5.84 Importantly, the Federation concluded that the magnitude of the
changes proposed in the Bill would reach much further in the health sector
than just the relationship between employer and employee. It would be
felt by everyone in terms of quality of health care afforded by nurses.
[38]
Pastoral Industries
5.85 The pastoral industry includes many workers in rural Australia:
shearers, shedhands, woolpressers, shearers' cooks, station hands and
station cooks. The work in these professions is characterised by its
intermittent nature, high turn-over of employers, long travelling distances,
long periods away from home, and different work environments with every
new job. The current Pastoral Industry Award takes into account these
employment conditions and provides a set of entitlements which compensate
for the itinerant and irregular nature of the work.
5.86 When the award is compared with the 18 allowable matters only
eight are relevant. Of the other 10, eight are absolutely irrelevant,
and two are debatable. Of the many provisions in the Pastoral Award,
some are absolutely essential, such as living and working conditions,
provision of cooks and 'found rates'.
5.87 According to the Australian Workers Union, both AWAs and CAs will
not operate effectively in their context. The Union concludes that 'a
situation therefore arises whereby the pastoral industry will be governed
by the work practices and conditions of the strongest industrial force
from time to time and [thus] may return the industry to the confrontational
and violent days of the past'. [39]
Remote Area and Aboriginal Employees
5.88 In the Northern Territory there are no separate Territory awards
in operation. Most employees in the Territory are covered by Federal
common rule awards.
5.89 According to the North Australian Workers Union Branch of the Australian
Liquor, Hospitality and Miscellaneous Workers Union (ALHMWU), the Territory
has had a long history of exploitation of employees. As indicated by statistics
and other information on unfair dismissals, unscrupulous employment practices,
underpayment of wages, and inadequate managerial skills, the Territory
lags well behind the other States of Australia in terms of more enlightened
employment practices. Employment in the Territory is characterised by
'captive' employees in remote regions who can more easily be exploited
because of lack of mobility. [40]
5.90 In its submission, the Branch argued strongly that the commercial
environment usually suited to labour market deregulation did not exist
in the Territory and that the type of reform proposed in the Bill, was
entirely inappropriate.
5.91 In addition to general concerns raised, the following were said
to cause problems in remote areas:
- the repeal of paid rates awards, particularly in Aboriginal employment,
and replacement with minimum rates and agreements would damage working
relationships and 'may well create havoc';
- the introduction of AWAs may be near impossible in Aboriginal areas
where English literacy is low;
- access to the Employment Advocate would be minimal or impossible;
- restrictions to union right of entry would only exacerbate problems
for employees already experiencing difficult employment conditions;
- lack of clarity as to whether 'amenities' is an allowable matter;
and
- the lack of reference to Aboriginal ceremonial leave which is a very
important aspect of Aboriginal awards. [41]
5.92 The Northern Territory Branch of the Public Sector Group of the
Community and Public Sector Union also argued that there were many terms
and conditions in awards which specifically related to employment in remote
localities and which took into account the traditional customs and responsibilities
of Aboriginal people. [42]
5.93 As with particular entitlements in other sectors, remote area
provisions and special Aboriginal entitlements in awards have been won
only through persistent and deliberate union negotiation and from arbitrated
decisions of the Commission. These advances will be lost without individual
employer consent to their continuation through agreements.
Conclusion
5.94 The problems associated with these industries highlight the
difficulties with the Bill identified in Chapter 4. They underscore
the importance of adopting the Committee's recommendations made in that
Chapter, especially with respect to a comprehensive award system and
equitable arrangements to facilitate bargaining on a proper basis.
5.95 Government members of the Committee disagree with the above
conclusion.
INDEPENDENT CONTRACTORS
5.96 The Workplace Relations Bill will repeal any Federal Court jurisdiction
over review of contracts for services (section 127A). This move is supported
by the peak employer group Australian Chamber of Commerce and Industry
(ACCI) which stated that an appropriate remedy for these matters already
exists under the Trade Practices Act 1974 and other State legislation.
Other employers argued that this regulation was not appropriate to these
contractors. [43]
5.97 In contrast, the Metal Trades Industry Association endorsed the
New South Wales system which, it is generally agreed, provides the best
protection in Australia for individual contractors against unconscionable
conduct. [44]
5.98 The ACTU submission rejected claims that individual contractors
were always small businesses and noted that there is an increasing trend
towards the use of quasi-independent contractors. The distinction between
employees and these contractors, the ACTU suggests, is a technical one
often used at the employer's initiative in order to avoid the legal obligations
attached to a more direct employment relationship. The repeal of the Court's
ability to review unfair contracts covering independent contractors would
encourage arrangements designed to allow payment at less than award rates.
[45]
5.99 The Ethnic Communities Council of Victoria had similar concerns:
We have had some very bad experiences in this state with independent
contractors. Many school cleaners have from time immemorial been born
overseas. Many of these people have been forced to set up companies
and re-tender for jobs in the name of a corporate body with the same
school. The reason behind this is obvious. It obviously saves money
for the school and the department. Unfortunately, however, it deprives
them of many rights and entitlements, including health entitlements
and the like. [46]
5.100 The Victorian Trades Hall Council also opposed the removal of independent
contractor provisions on the basis that they are an important instrument
for maintaining minimum standards for contractors. The advocacy group,
Lawyers for Industrial Justice, recommended that independent contractor
provisions should be upgraded not removed. [47]
5.101 Both the Queensland and Victorian Branches of the Transport Workers
Union gave detailed information on the problems faced by workers forced
to become independent contractors in the courier and long distance transport
industries. The Victorian submission concluded that the repeal of section
127A and the failure to provide any means for enterprise bargaining for
sub-contractors would result in both increased inequality and instances
of unfairness and unconscionable conduct by prime contractors, and increased
industrial disputation in the absence of any forum for the resolution
of disputes. [48]
Conclusions.
5.102 The overwhelming nature of the evidence was that there was an
unfairness associated with denying from contractors some measure of
protection where they, by nature of their activity, are analogous to
the position of employees. The majority of the Committee notes very
little comment in relation to this point from employer groups. No evidence
was put which demonstrated any real difficulties with this jurisdiction.
5.103 The majority of the Committee is satisfied that the provisions
of the Trade Practices Act are not an adequate alternate remedy especially
given the processes of that Act.
5.104 The majority of the Committee recommends that the current
provisions of the Industrial Relations Act allowing for the review of
harsh or just contracts remain.
5.105 The Australian Democrats member of the Committee supports
this analysis but has made additional recommendations in his Supplementary
Report.
5.106 Government members of the Committee disagree with the above
conclusions and oppose the recommendations.
SMALL BUSINESS
Effects on Small Business
5.107 Although the impact of the Bill on small business is a specific
term of reference, the Committee considers that the small amount of
evidence it heard, especially from small business people themselves,
makes drawing any firm conclusions difficult. The Committee did hear
from number of organisations representing small business in each State
and Territory; however, it is difficult to know exactly how representative
such organisations are. A lot of evidence presented to the Committee
is therefore of an anecdotal nature or based on surveys of small business.
5.108 Many witnesses mentioned the importance of small business to
employment growth, and commented specially on how, as they saw it, the
Bill would - or would not - help small business.
5.109 A number of witnesses saw small business as relatively happy with
the award system (not clamouring for its wholesale abolition). This was
because many small business people often have neither the time, the skills
nor the inclination to engage in workplace bargaining. The Western Australian
Council of Retail Associations gave evidence that a number of their members
had made workplace agreements (assuming that these were in compliance
with the legislation) only to find later on that they actually were in
breach of the award. [49]. [50]
For instance, Dr Roy Green from the University of Newcastle, stated that
all the survey evidence indicated that small business was particularly
interested in maintaining the award 'level playing field', allowing the
business to concentrate and compete on other matters, such as customer
service and product innovation [51].
This proposition was supported by other witnesses. [52]
5.110 Others suggested that co-operative workplace relations were especially
important in small business, and to the extent that Bill will tempt
employers to bargain down wages rather than seek more positive ways
to improve productivity, this would tend to destroy trust and co-operation.
5.111 They referred to the only comprehensive survey material relating
to these issues, a 1992 survey of small business attitudes to industrial
relations by Professor Joe Isaac and others. [53]
Professor Isaac assessed both his own survey and previous information
from the Australian Workplace Industrial Relations survey (1991), and
made the following conclusions.
- The vast majority of firms [that is, small business survey respondents]
prefer or are not opposed to being covered by awards.
- Enterprise bargaining is not seen by a substantial majority as a
favoured arrangement.
- A small minority - around 15 per cent - of [respondent] firms expressed
preference for individual contracts; but it is not clear what the
basis of their preference is and it could not be attributed to difficulties
with AIRC processes or with unions. In most relevant respects they
have similar industrial relations characteristics to those who were
also dissatisfied with their present arrangements but preferred industry
or enterprise awards.
- The existing system is not perceived as obstructing efficiency and
productivity improvements.
- Nearly four fifths of [respondent] firms pay over-award amounts,
and in about half of these, all employees receive over-award payments.
The main reasons for such payments relate to employee merit and award
rate being too low. These payments are made almost entirely without
union participation.
- Although affecting only a very small minority of firms, the issue
of penalty rates and flexible working hours comes through as the only
notable issue raised about the existing award system.
- The two surveys do not provide a case for a radical change in the
present institutional arrangements in order to promote better industrial
relations or improved productivity performance. [54]
5.112 However, in evidence, the Australian Chamber of Commerce and Industry
questioned some of these survey conclusions, pointing out (among other
things) that respondents' answers might well be different now that the
present Bill is on the table. [55] There
was no evidence before the Committee either way.
5.113 Of course, organisations (union or employer) do not necessarily
represent the views of all of their members. For example, the Committee
received a submission from Alert Printing which indicated that despite
encouragement from the Printings Industries Association of Australia to
make a submission supporting the Bill, the employer indicated that 'I
do not support their (ie the PIA) views' and that 'I was perfectly happy
with the previous award system administered by the Industrial Relations
Commission' and 'I do not support individual workplace agreements', I
do not support collective bargaining' and 'I do not support the breaking
up of large unions into numerous small unions who will then involve themselves
in endless demarcation disputes'. [56]
5.114 A number of submissions in favour of the new bargaining arrangements
argued that for small business the low take-up of enterprise agreements
under the existing law is at least partly caused by the uninvited involvement
of unions. No evidence was put that substantiated this assertion.
5.115 A number of witnesses accepted that small business people may
value having an award system, since it makes it unnecessary to individually
negotiate with all their employees. In this context, award simplification
was proffered as being of value by making the award system even easier
for small business people.
Senator Murray: … Did they [small business], by and large,
support or not support the award system?
Ms Tacy: Again, there are mixed views coming through from the
small business area. From the research in here, I think that they would
support the award system on the basis of it being made more flexible.
[57]
5.116 However, it was usually unclear exactly what was meant by award
'simplification'. For example, did it mean streamlining bureaucratic procedures;
or expediting the existing statutory duties of the Australian Industrial
Relations Commission to make awards simpler and more flexible, [58]
or (as the Bill does) limiting the range of matters that can be the subject
of an award, or limiting the range of possible conditions under any particular
matter.
5.117 In general, 'award simplification' as a catchcry had the same
vagueness as 'flexibility' and 'reform' discussed earlier, and in many
of the Bill's opponents it aroused the same fear that it is simply a
code for bargaining down wages and conditions.
5.118 The Western Australian Council of Retail Associations expressed
the view that a majority of small business people preferred to remain
with awards and could not afford the additional time or expense which
individual bargaining would entail.
The government of Western Australia has changed the workplace industrial
relations profile. The workplace amendments legislation has, in our
view, not had much impact within that very small business sector.
As stated by Mr McCarthy earlier, really there is a preference by
those people in the majority to remain within the scope of awards
because of the complexities and other things that they fear would
arise in engaging in workplace agreements.
We suggest that to minimise the confusion that exists there be a
preference to maintain the ongoing conduct of business through award
safety nets with flexibility arrangements included in those awards
to enable individual employer-employee agreements on issues such as
hours of work and entitlements that predominantly do not impose an
onerous level of administration on small business operators.
The opinion of the Council is that an underlying safety net award is
a necessary element in any legislation. [59]
Conclusion
5.119 The majority of the Committee believes that there is no evidence
to support the view that the proposed changes to the Industrial Relations
Act will assist small business. The most comprehensive analysis that
the Committee has before it is that of Emeritus Professor Isaac which
seems to suggest that there is little need for the changes from the
perspective of small business.
5.120 Specifically, the majority of the Committee notes that evidence
from small business groups indicated that small business employers preferred
the award system (though with some simplification). The award system
is believed to give small business certainty, to remove wage costs from
competition and to remove the prospect of time-consuming, costly and
possibly counter-productive negotiations with their employees.
5.121 The majority of the Committee also recognises the concerns small
business have expressed about the existing unfair dismissal system.
The majority of the Committee notes, however, that there was no real
evidence as to whether the changes proposed by the Bill would actually
meet those concerns.
5.122 The Australian Democrats member of the Committee disagrees
with this conclusion and has made recommendations in his Supplementary
Report.
5.123 The Government members of the Committee disagree with the
conclusion and oppose the recommendation.
Footnotes
[1] See for example, Submission 1016, Department
of Industrial Relations, pp. 168-173.
[2] Evidence, p. E 710
[3] The Bill protects equal `pay' for work
of equal value, but does not protect equal `remuneration', a broader
concept including both pay and conditions.
[4] Submission No. 923, pp. 5-6, Human Rights
& Equal Opportunity Commission.
[5] Submission 1016, p. 184, Department of
Industrial Relations.
[6] Submission No. 1027, Executive Summary,
Australian Hotels Association.
[7] Submission No. 905, p. 36, ACCI.
[8] Evidence, p. E 1025.
[9] Submission No. 367, p. 30, SDA
[10] Submission No. 531, pp. 1-2, Ms Sara
Charlesworth, Consultant Researcher.
[11] Evidence, p. E 755, for example.
[12] For references to their submissions
see Appendix II and for reference to their oral evidence see Appendix
III.
[13] Evidence, p. E 725.
[14] Evidence, p. E 726.
[15] Evidence, p. E 728.
[16] Submission No. 905, p. 27, ACCI.
[17] Submission No. 1017, Overview p. 3,
ACTU.
[18] Submission No. 1017, Overview p. 4,
ACTU.
[19] Submission No. 1017, p. 55, ACTU.
[20] Submission No. 923, p. 6, Human Rights
& Equal Opportunity Commission.
[21] Evidence, p. E 745 - 752, 1705-1716,
Submission No's 918 & 1163, 1304 & 1330.
[22] Evidence, p. E 746.
[23] Evidence, p. E 748.
[24] Evidence, p. E 805.
[25] Evidence, p. E 161.
[26] Submission No. 905, p.17, Australian
Chamber of Commerce and Industry.
[27] Submission No. 1017, p. 165, Australian
Council of Trade Unions.
[28] Submission No. 1017, p. 166, Australian
Council of Trade Unions.
[29] Economic Planning and Advisory Commission,
Future Labour Market Issues of Australia, Commission paper No.
12, Canberra July 1996, p. 17.
[30] Submission No. 905, p. 18, Australian
Chamber of Commerce and Industry.
[31] Submission No. 1016, pp. 202-203, Department
of Industrial Relations.
[32] Submission No. 512, p. 5, Australian
Retailers Association.
[33] Evidence, p. E 2134.
[34] Submission No. 923, p. 14, Human Rights
and Equal Opportunity Commission.
[35] Submission No. 1392, pp. 5-6, Youth
Affairs Council of South Australia.
[36] Submission No. 1392, p. 7, Youth Affairs
Council of South Australia.
[37] Evidence, p. E 128.
[38] Evidence, p. E 129.
[39] Submission No. 1232, p. 8, Australian
Workers Union.
[40] Evidence, p. E 1266-1293, Submission
No. 571.
[41] Submission No. 571, see also Submissions
1196, 372 & 373.
[42] Submission No. 1342, Northern Territory
Branch CPSU.
[43] Submission No. 1126, p. 26, Victorian
Employers' Chamber of Commerce & Industry.
[44] Evidence, p. E787.
[45] Submission No. 1017, Overview p. 2,
ACTU.
[46] Evidence, p. E230.
[47] Evidence, p. E 814.
[48] Submission Nos 319 & 498.
[49] Evidence, p. E1393.
[50] This was associated with their concern
about the fact that the Employment Advocate will have no power to check
Australian Workplace Agreements for compliance with the law.
[51] Evidence, p. E 625.
[52] Evidence, p. E 1779.
[53] Isaac J.E. and others, A Survey of
Small Business and Industrial Relations, Industrial Relations Research
Series no. 7, University of Melbourne, May 1993. `Small' business was
defined as firms employing up to 50 people.
[54] Isaac J.E., Small Business and Industrial
Relations: Some Policy Issues, Industrial Relations Research Series
no. 8, University of Melbourne, July 1993, pp xiii-xiv
[55] Evidence, p E. 78 (Mr R. Hamilton).
[56] Submission No. 1379, p. 2, Alert Printing.
[57] Evidence, p. E 28.
[58] Industrial Relations Act 1988,
section 113A, section 150A
[59] Evidence, pp. E 1392-1393.