Termination—bosses going for the ‘nuclear option’

Train drivers, coal miners, university staff, power workers and ice cream makers—just some of the workers who have fallen foul of a new employers’ tactic, cancelling enterprise bargaining agreements.

The implications of losing an EBA and being pushed back on to the underlying award are horrendous. The AMWU estimates that workers at Streets’ factory in the Sydney suburb of Minto face a pay cut of up to 46 per cent.

At Murdoch University in Perth, professional staff redundancy pay could fall by up to 80 per cent and parental leave could become unpaid.

It’s not surprising that use of section 225 of the Fair Work Act has become known in industrial relations circles as the nuclear option.

There are two ways an EBA can be cancelled—while it’s in force, by mutual agreement, or once it’s gone past its nominal expiry date (but is still in force) by order of the Fair Work Commission.

It’s this second provision that has suddenly moved into sharp focus.

Shadow Employment Minister Brendan O’Connor estimates EBA terminations have more than trebled, from 156 in 2014 to 517 in 2016.

Under section 225, the legal bar for an employer to get an EBA cancelled is very low. The commission simply has to accept that the employer’s need for productivity increases is so great that it overrides workers’ rights to the gains made through bargaining.

Why have terminations increased now when Labor’s Fair Work Act has been in force since 2009?

The end of the mining boom saw mining and mining-related companies casting around for ways to slash costs.

They didn’t initially get their way. An application for an EBA termination by Tahmoor Coal in 2010 was rejected by a commissioner because it would unfairly tilt the balance of power against workers while enterprise negotiations were under way.

That changed sharply in 2015 when the full bench of the commission approved an application for termination during bargaining by freight train company Aurizon.

Aurizon was privatised by the Queensland Labor government in 2010. In order to quell union concerns the government inserted new clauses in their Enterprise Agreements, including a ban on forced redundancies.

The commissioners argued these and other work practices were, “clearly inefficient and out of step with the needs of a flexible and productive enterprise”.

No wonder lawyers Corrs Chambers Westgarth advised employers: “With the spectre of employee conditions reverting to the underlying modern award, unions and employees will face increased pressure to agree to the terms offered by employers for replacement enterprise agreements.”

Flow on effect

The signal has not been lost on a growing number of bosses.

In 2016, at Griffin Coal in Collie, WA, the employers won the termination of the agreement covering maintenancy workers, members of the AMWU. Workers were forced onto an inferior shift pattern, moved from a 42-hour to a 49-hour week and had their base pay cut by more than 40 per cent. To try to regain an EBA, they volunteered a 20 per cent pay cut and reductions to travel allowances and super—but Griffin always wanted more.

The flow-on has now been felt at Murdoch, Streets, AGL at Loy Yang in the Latrobe Valley, and more.

So how should the movement respond?

The ACTU has launched a summer boycott campaign against Streets. Socialists should support the boycott. But we also need to recognise that boycotts are difficult to enforce—and that they are impossible to impose in the case of employers like AGL or Murdoch.

What is needed is industrial action, to make arrogant employers retreat and others think twice. It’s an approach that can win support. In the case of Murdoch, the NTEU branch committees at RMIT University and the University of Melbourne carried motions calling for a national day of action, including industrial action.

At Griffin, while the maintenance workers were being cruelly abused, production workers covered by the CFMEU worked on under an EBA.

If they had stopped work in solidarity, recognising that a defeat for the AMWU would inevitably translate into a defeat for them, Griffin could have been pulled up short.

But solidarity action means defiance of the Fair Work Act.

ACTU secretary Sally McManus enthused workers around the country when she said bad laws needed to be broken. But so far, her words have not been turned into action.

Instead, workers at Streets and elsewhere risk being reduced to props in the ACTU’s “Change the Rules” campaign, which is designed to help Labor win the next election in the hope it will amend the Fair Work Act.

Workers whose conditions are being cut, or are under threat, can’t wait that long. McManus should follow example of the NSW weekday union rally on November 16 and call the action that we so desperately need.

By David Glanz


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