The vicious overreach of the Coalition government is on display in the recently-announced Productivity Commission inquiry into workplace relations. The business press and many individual bosses have been complaining for years about the supposed evils of the Fair Work Act and claims that unions have too much power. They are continually egging on the Coalition to do something about this.
These complaints are quite unfounded—union membership, days lost to strike action, and wage growth are at or near historic lows. The legal powers of unions under the Fair Work Act remain tightly restricted.
The legacy of WorkChoices and the Your Rights at Work campaign remains toxic for the Coalition. They have been extremely cautious on industrial relations.
Their plan was for an inquiry to lay the groundwork for sweeping legislation in their second term. That plan isn’t going well. The Coalition delayed issuing the terms of reference for the Productivity Commission Inquiry amidst the wreckage of the 2014 budget.
In January, the Commission issued five discussion papers. It is at pains to appear impartial. Joe Hockey’s terms of reference carefully mentions “fair and equitable pay and conditions for employees”. But the Productivity Commission is no independent body. It is strongly committed to neo-liberal reform.
What do they want?
What is it that business wants on industrial relations? From the Inquiry papers, it looks like they are keenest to attack the standards that remain from industry-wide bargaining, despite the introduction of enterprise bargaining in 1993.
Many of these standards are a legacy of workers’ industrial strength in the 1960s and 1970s. For example, coal miners and wharfies won a 35-hour week in the 1970s. This is still reflected in the Awards for these industries. Although these industries are now covered by enterprise agreements, basic conditions in the Awards originally are central to the way that wages, hours and rosters are calculated.
Awards themselves reflect the principle that there should be minimum standards of employment in particular industries– a key protection for workers. Awards remain the basis of the “Better Off Overall Test” (BOOT). This requires that any enterprise agreement or individual agreement must leave an employee better off overall than they would be on the Award.
So any new stevedoring or coal mining company must base its EBA on a 35 hour week—or offer workers some other significant benefit. This puts restrictions on the ability of companies in direct competition with each other to undercut each other on labour costs.
Issues Paper two deals with these safety nets—Awards, the National Employment Standards (lower minimums that cut across industries, including the minimum wage) and penalty rates in various Awards. Its bias against all these standards is clear. It questions the rationale for the level of penalty rates and the minimum wage, with no mention of what a living wage might be.
Penalty rates are different in each Award and industry. Rather than being based on an economic calculation, they are a product of workplace struggles (for example, double-time-and-a-half on Sundays for wharfies). The Inquiry concedes there is some logic for night and evening rates, but claims that weekends have “lost their historically special character”.
Issues Paper three deals with enterprise bargaining. This repeats the earlier push to get rid of industry-wide standards. Specific questions are asked about the BOOT test and about preventing pattern bargaining, where unions seek the same enterprise agreement in negotiations with different employers. It indicates an interest in strengthening existing “productivity” requirements in agreements. It promotes Individual Flexibility Agreements, a limited form of individual contract.
The next issues paper deals with protections for individuals (such as bullying and unfair dismissal). The final paper includes a revealing section on competition law. Secondary boycotts—when workers take industrial action in solidarity with other workers, or for political reasons not related to their own working conditions—are prohibited in the Competition and Consumer Act. The inquiry quotes the Fair Work Building Inspectorate (the new ABCC) complaining that these prohibitions are “essentially ineffectual”, and asks whether they should be strengthened.
The paper then goes on to complain that collective bargaining itself is anti-competitive, and asks for proposals “to address concerns about misuse of market power exerted through collective bargaining”.
How do we respond?
This is a weak and flailing government. As it has become increasingly unpopular, business has started to panic that it might never get what it wants on industrial relations. But there remains the possibility that it could rehabilitate itself, and use the inquiry results to further rewrite workplace laws in the interests of the bosses. The inquiry must be branded with Hockey’s cigar-smoking face, and Abbott’s unfairness.
The most effective way to challenge this attack is to mobilise workers through demonstrations and strikes. That potential power is why they want to strengthen competition law to impose more restrictions on industrial action. The ACTU day of action on 4 March is a good start.
By Penny Howard