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Your IR War (how we get and keep our jobs) primer

G'day. Many Webdiarists want to know the detail of what the nation is arguing about over John Howard's IR revolution. He hasn't given us detail yet, but the Parliamentary Library has pulled together the background, what's on the table so far, and who is playing how. For more, go to Workplace Relations. Let's add the twists and turns through comments.

Workplace relations reforms: a chronology of business, community and Government responses


The Government plans to repeal the Workplace Relations Act (WR Act) either in part or in full, replacing key sections of it with either new or minimal prescriptions, possibly introducing ancillary legislation to the WR Act. The chronology outlined in the table below dates from the federal election of 9 October 2004. However, the background to the Government’s IR proposals, in 2005, derive from its legislative agenda since 1996.

The major change to the Australian labour law of the Coalition Government was the Workplace Relations and Other Legislation Amendment Act 1996 (WROLA Act). The Act, inter alia, introduced Australian Workplace Agreements (individual employment agreements) as a bargaining outcome; reduced the content of industrial awards to 20 allowable matters and permitted traditional arbitration in respect of the 20 allowable matters only, or in certain circumstances when enterprise bargaining failed, usually between a union and an employer. Bargaining required agreements to pass a No Disadvantage Test based on a relevant or other ‘designated’ award. The WROLA Act passed with support of the Australian Democrats and their insistence on 176 amendments.

The period since 1996, however, could be characterised as being of limited success in respect of subsequent legislation. Three key issues have been behind the legislation since WROLA. These have been:

1. unfair dismissal, and particularly the attempt to exempt small business from the WROLA provisions on termination of employment: Workplace Relations Amendment Bill 1997, and its successors.

2. a re-write of all of the provisions of the WR Act via the Workplace Relations Legislation Amendment (More Jobs, Better Pay) Bill 1999 (MOJO Bill) following the 1998 federal election and back toward the original intent of WROLA before Democrat amendments. The MOJO Bill was opposed by non-government senators and ultimately lapsed at the 2001 federal election. The schedules of the WROLA Bill were introduced as separate bills, more or less covering the subject matter of the relevant MOJO schedule over the 39th and 40th Parliaments. Some of these passed the Parliament: Workplace Relations Amendment (Genuine Bargaining) Act 2002; others did not: Workplace Relations Amendment (Award Simplification) Bill 2002, and also the small business exemption bill/s: Workplace Relations Amendment (Fair Dismissal) Bill 2004. Over the period of the 38th to 40th Parliaments, 14 bills were rejected by the Senate, including three which would pass subsequently and five bills which were rejected twice; 17 bills became Acts, including three which were rejected earlier and 22 bills lapsed [see Workplace Relations Legislation: Bills Passed, Rejected or Lapsed, 38th—40th Parliaments (1996–2004)].

3. the Australian Industrial Relations Commission’s (AIRC) role in setting the safety net of wages and employment conditions has been the third area of contention. The AIRC’s role of setting safety net awards is specified under the WR Act (section 88B). The Government and employers believed that minimum wages have been set too high, evident in criticism of AIRC decisions which did not adequately countenance the view that high minimum wages cause unemployment. An attempt to correct this tendency was made via the Workplace Relations Amendment (Protecting the Low Paid) Bill 2003. This Bill failed to pass the Senate.

However, with a Coalition majority in the Senate from 1 July 2005, previous obstacles to workplace relations reform are likely to be overcome or substantially lessened. The Government plans to introduce amending legislation in late 2005 or perhaps in 2006, which should expand federal jurisdictional coverage of employers and employees most probably at the expense of State industrial relations (IR) jurisdictions. It would not be surprising to find that the legislation takes the form of separate bills, due to the difficulties of over-riding state industrial law.

Though there is no bill/s, an outline of the new IR scheme was made by the Prime Minister in a statement to Parliament on 26 May 2005 (cited below). The Minister for Employment and Workplace Relations, the Hon Kevin Andrews, had earlier canvassed the form that the new legislation would take.

Key points of the PM’s address are provided below:

Employment Advocate

Australian Workplace Agreements and Certified Agreements will in future be filed with the Office of the Employment Advocate without any reference to the Australian Industrial Relations Commission and will be ‘approved on lodgement with the Office of the Employment Advocate’. It is likely that a consequence will be less or no independent audit of the contents of agreements. In any case, the current No Disadvantage Test (NDT) which compares provisions of AWAs and CAs against relevant or designated award provisions is to be discarded. A new NDT will be based on 5 minimum employment conditions, a wage rate and four minimum conditions is to be stipulated in legislation. According to PM Howard:

Currently workplace agreements are assessed against a test which is unduly complex and which acts as a hindrance to agreement making. For this reason, the Government will introduce a new Australian Fair Pay and Conditions Standard. This new Standard will be the test for all agreements. It will make it easier for employers and their employees to compare any agreement against this new safety net of fair pay and conditions.

Australian Fair Pay Commission

A new Australian Fair Pay Commission, will set a new minimum wage and junior, training and disability wages, award classification wages and casual loadings, i.e. wages above and below the minimum wage. However:

No worker can have their relevant award classification rate lowered.

Awards to be reviewed by Task Group

A special Task Group will be set up to review existing awards and award classification structures with the aim of rationalising them. The Task Group will attempt to complete its work within 12 months. Matters such as: jury service, notice of termination, long service leave and superannuation will be removed from awards. However, as the proposed NDT does not include provisions such as penalty rates, awards can effectively be by-passed by agreements at one dollar above the Australian Fair Pay Standard. It is not clear whether employers will be able to take industrial action against employees in making AWAs (as is currently the case).

Australian Industrial Relations Commission

The institution of the Australian Industrial Relations Commission is to be maintained while its key functions will be directed to other institutions. Devoid of responsibility for collective agreements, no role in setting minimum wages and employment conditions and many fewer unfair dismissal cases to consider (see below) the AIRC will focus on resolving ‘legitimate’ interstate industrial disputes (which are likely to be stipulated as illegal), as well as the further simplification of awards, presumably under direction from the Taskforce. The Government may move the resolution of ‘illegitimate’ industrial disputes to the court system.

Unfair dismissal

The Government will extend the number of employees which give employers exemption from unfair dismissal claims from 20 to 100. For those employers above the 100 employee limit, employees will not be able to take unfair dismissal action until they have been employed for six months. Further detail of the proposals will clarify as to whether applications for a remedy against an unfair dismissal are to commence in a court, or before the AIRC as is currently the case that is, where the employee worked in a business with more than 100 employees. The current prohibitions against unlawful termination (on the grounds of trade union membership, pregnancy, gender and so-on) are to remain although the onus of proof may be altered.

Powers to be referred from the States

At the 3rd June 2005 Council of Australian Government’s meeting, the States (other than Victoria) were invited by the PM to refer their powers on workplace relations to the Commonwealth.

In the absence of referrals by the States, the Government will move towards a national system by relying on the Corporations power in the Constitution.

All States refused the Commonwealth offer, and battle lines are being drawn over a hostile take-over State labour law by the Commonwealth.

Other proposed legislation

The PM forecast other legislation, including legislation stalled in the Senate, to:

* protect the status of independent contractors and support the right of people to make a choice about their working arrangements

*ensure the rule of law is restored to the building and construction industry

*restore the exemption for small business from making redundancy payments

*establish the Australian Safety and Compensation Council to oversee implementation of national occupational health and safety standards and pursue a national approach to workers’ compensation, and

* remove barriers to the take up of school based apprenticeships and part-time apprenticeships

* provide stronger laws in relation to industrial action (including secret ballots)

* establish a single right of entry regime, and

* ban pattern bargaining, which is the pursuit of common claims by employers or unions across an industry.

Note that seven Bills dealing with these matters, for example, small business redundancy exemption, permitted entry into workplaces and the prohibition of union bargaining fees (and others) are currently before the Parliament. For more detail on these see: Bills Amending the Workplace Relations Act 1996 (41st Parliament).

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re: Your IR War (how we get and keep our jobs) primer

Been fooling around on the old BBC news site and found a couple more stories on Immigration to Australia. I'm just wondering how the introduction of up to 20,000 skilled migrants will affect the current political, social and workplace landscape?

The first one does a comparison of pricing and 'lifestyles'. Apparently only hairdressers will be worse off....

"Wages in many of the trades and professions hit by labour shortages in Australia are higher there than they are in the UK:

Bricklayers earn an average of £21,113 a year in the UK compared with £29,551, according to the US-based international wage comparison website Salaryexpert.com.

Motor mechanics earn about £25,869 in the UK compared with their Australian counterparts on £30,128.

Carpenters in Australia earn an average £24,980 - nearly £5,000 more than they would in the UK.

Accountants take home an average £38,956 compared with £34,138 in the UK.

Chefs could be better off in Australia too, earning about £3,500 more than the average UK wage for their profession of £27,536.

Nurses choosing to emigrate could enjoy an extra £8,000 a year. The average registered nurse in Australia takes home £37,110, compared with £29,070 in the UK.

Hairdressers are among the few professionals who would have to take a pay cut, with average earnings in Australia at £17,495, compared with the UK's £19,225. "

The second link states that Australia is trying to tempt up to 3,000 junior doctors.

Where would these 3,000 go? Into city or country hospitals? Out into the proverbial bush?

What do other Webdiarists feel?

re: Your IR War (how we get and keep our jobs) primer

As a small business owner (two low skill employees) I would like to ask Mr Howard this:

Will the new IR laws allow me to advertise for the two positions (while the current employees are still working) and offer the applicants AWAs with no weekend penalties and two weeks of annual leave cashed out? When these conditions are accepted by two new potential employees can I sack the exiting two employees without notice or redundency payment?

I have emailed this to JWH and requested that the local Member ask the question in Parliament but have had no response - I wonder why!

re: Your IR War (how we get and keep our jobs) primer

John Howard must really wonder about the dills that make up his front bench. To back up the ineffectual Kevin Andrews he now has this from Ian Macfarlane:

"We've got to ensure that industrial relations reform continues so we have the labour prices of New Zealand. They reformed their industrial relations system a decade ago. We're already a decade behind the New Zealanders. There is no resting."

All the spin and whitewashing in the world can never cover the fact that the vast bulk of "labour prices" are in fact the wages paid to engaged labour. Everything is a function of that component. That spin has of course begun. The ever-anonymous "spokesperson" has opined that "the term 'labour prices' could refer to 'a whole range of extraneous employment costs like hours lost through stopworks'."

Well, that clears it up then. No "stop works" from now on? No time to put company offers to the workforce and have them deliberated and voted on? No strikes at all? Of course it's all bunkum. Wages are the single largest determinant of "labour prices"

Must remember to ask clients about their average "stop work" time before tendering my labour price.

Out of the mouths of …dills.

re: Your IR War (how we get and keep our jobs) primer

As a defence against claims that his IR changes are designed to lower pay and conditions for workers, John Howard has claimed that real wages have increased by an average 14% since he won office.

However, there is some doubt that he is being entirely accurate:

"The Prime Minister has used the line often in interviews and speeches. But 14 per cent is a rubbery figure says University of Sydney research fellow Steve Jackson.

STEVE JACKSON: That figure's very much distorted by movements in the top end of the wage distribution, that is, the well-off people in Australia are earning a lot more. The people in the middle and down the bottom are sort of treading water over the last six to eight years.

BRENDAN TREMBATH: When you say the well-off people, how well-off is well-off?

STEVE JACKSON: Well you're talking about the 90 percentile and above, so the top 10 per cent of earners, double digit increases in real wages since 1998."

re: Your IR War (how we get and keep our jobs) primer

With regards to job cuts at Holden the PM said "We'll be providing some additional assistance over and above the normal assistance that occurs when people are made redundant."

Over and above the normal assistance that occurs when people are made redundant - pity the employees of small business (over 90% of all workers) who will get no "normal" assistance after the new IR reforms are in place.

re: Your IR War (how we get and keep our jobs) primer

Federal Court of Australia
Finance Sector Union of Australia v Commonwealth Bank of Australia
[2005] FCA 796


1. The present proceeding is about a scheme by one of Australia’s largest corporations, Commonwealth Bank of Australia (‘CBA’), to establish individual and unregulated contracts of employment in part of its business. CBA’s scheme, which is essentially an industrial regulation avoidance scheme, possesses an ingenuity that is reminiscent of the tax avoidance schemes of the 1970s. The question arising in the proceeding is whether, notwithstanding the ingenuity, the scheme was unlawful.

Read the entire judgement here.

re: Your IR War (how we get and keep our jobs) primer

"Striking The Balance, Women, Men, Work and Family"

I remember Margo when this very subject was to be the "bar-b-q stopper" of Howard's "Tampa term."

Having never made the esky let alone the barbie during that term, it must be somewhere in the new IR legislation. You know, probably where workers get to trade annual leave for "more" pay. Or maybe where workers get to work weekends at normal time so as to have barbies during the week without the crowd?

Either way, at least if workers work these "flexible" hours and trade away benefits for "more" pay they will be able to afford the gas so as to have a barbie to stop.

Don't know about the family though. Not enough time to have one or see it - if you manage to afford one.

re: Your IR War (how we get and keep our jobs) primer

This email came from the Human Rights and Equal Opportunity Commission.

"Join Sex Discrimination Commissioner Pru Goward for:
A community forum on paid work and family responsibilities.

This forum is organised as part of a series of consultations the Commissioner is holding around the country to take feedback on the issues raised in Striking the Balance: Women, men, work and family Discussion Paper 2005. These consultations, in conjunction with written submissions, will be used to inform the final paper to be released in 2006.

You are encouraged to participate in these discussions to present your opinions, experience and priorities."

Date: Wednesday 7 September 2005
Time: 6.00 – 8.00pm
Location: Main Hall, Parramatta Town Hall
182 Church Street Mall, Parramatta

Parking is available in the council car park
accessible off Civic Place.
Trains and buses are located in Darcy Street, a 5 minute walk to the Town Hall.

RSVP: Erin Fish on 02 9284 9757

The "Striking The Balance, Women, Men, Work and Family" discussion paper is here.

re: Your IR War (how we get and keep our jobs) primer

Apprentices now the target:
From the Sydney Morning Herald (Extract)
By Mike Seccombe and Matt Wade
September 21, 2005

"Control over wages and conditions for almost 400,000 apprentices and trainees will be handed to a new national body and rules governing the length of apprenticeships scrapped under sweeping changes announced by the Federal Government.

"Unions and state governments condemned the plans yesterday as a recipe for cutting pay and entitlements."


"Mr Howard advocated the changes to address Australia's skills shortage, saying the various state industrial relations systems were too inflexible and a barrier to "skills development". He argued that too many young people were going to university and taking subjects that did not suit them. "A 20 per cent dropout rate in the first year of university tells us something is going wrong."

But figures from the National Centre for Vocational Education Research show the dropout rate for apprentices and trainees is far higher. Almost 140,000 apprentices and trainees withdrew in the March quarter, more than the number who completed their training (138,500). Apprentice and trainee cancellations and withdrawals rose by 12 per cent in the year to March 2005 and are more than 60 per cent higher than in the year to March 2001."

More of the agenda? A short term fix with dangerous long term consequences?

re: Your IR War (how we get and keep our jobs) primer

Family First calls for inquiry into penalty rates

Under the Government's workplace changes, employers would not be required to pay penalty rates (overtime and shift allowances).

In considering whether the Government should allow employers the option of paying penalty rates, it is important to remember that they were the first paid work/family initiative.

They were introduced to discourage employers from requiring workers to work antisocial hours and to promote an eight-hour day.

The question is whether penalty rates are still achieving their original purpose and what affect they are having today.

I believe the Government's decision to overhaul the country's industrial relations system provides the ideal opportunity to establish an independent inquiry to examine these issues and to consider alternative ways that we can achieve - in the 21st century - what those before us intended to achieve.

It is important to retain the ideal behind the eight-hour day and to examine new ideas and new ways to achieve a proper paid work and family balance. Penalty rates were introduced to enable workers to achieve a balance between paid work and rest, paid work and family responsibilities and paid work and community life.

Since then, the market has corrupted this idea. In parts of some industries, overtime has become a means of compensating for low rates of pay, especially for unskilled workers. On the other hand, for some highly capitalised industries, depreciation costs may well be as significant as the wages bill. And overtime is affecting the ability of some small businesses to expand, which is a great concern.

I am sure that people such as cleaners who rely heavily on penalty rates to earn a decent wage, will welcome recent suggestions that workers' existing benefits will be protected. However, that protection will not be extended to people who become cleaners or change jobs after the new system is introduced.

And small employers who have to ask family members to work longer than they would like, or have to work longer hours themselves because of penalty rates, may not find the prospect of having employees on different conditions an ideal solution.

I suspect my call for a review of the current system will not excite employer organisations or unions. Nobody likes inquiries when they don't know the outcome. The system is broke. And going backwards after 100 years is not my idea of progress.

It is in the interests of families, the community, small employers and workers that we try seriously in the 21st century to achieve the work/family balance which our forebears prized so greatly.

The Australian Industrial Relations Commission would be the obvious body to conduct such an inquiry as it has the expertise and could begin work immediately.

My suggested terms of reference would be:
1. How effective are penalty rates (shift allowances and overtime) in achieving their original purpose (ie: enabling workers to achieve a balance between paid work and family life and participate in their communities by discouraging employers from requiring workers to work anti-social hours and to promote an eight-hour day)?

2 Are there any employers who are unable to afford to operate for as long as they would like because of having to pay shift allowances? If so, what sort of employers? In what industries? How are they affected?

3 Has overtime become a means for employers to compensate workers for low pay? If so, what sort of workers and in what industries?

4 If penalty rates are not sufficiently effective in achieving their original purpose, what other measures could be adopted to achieve this objective today?

5. If the payment of penalty rates was not mandatory, how could you compensate those workers who rely on overtime as an essential part of their take home pay?

For media inquiries phone Family First Chief of Staff Felicity Dargan on 0409 550 446

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