A significant victory:
Unions win backpay for privatisation losses

Former workers for the Greater Dandenong Council are not the only ones 
who are jubilant this week. In a landmark victory in the Federal Court the 
40 workers were awarded back pay for cuts to their wages which occurred 
when the company Silver Circle, contracted to take over the Council's work 
of home care for the aged and infirm. In so doing Silver Circle cut the 
number of employees from 78 to 40 and slashed conditions.

The company will reinstate the conditions formerly provided by the Council 
for its workers.

The decision has major ramifications for workers adversely affected by 
privatisation. Thousands of workers who have been employed in privatised 
organisations may now be able to take action to recover back pay lost in 
the transition to employment by private firms.

The Council workers' case was led by the Australian Services Union (ASU). 
The union's Victorian Branch Secretary, Mr Darrel Cochrane, said this week 
that about 6,000 workers affected by the contracting out of government 
services since 1994 would now be entitled to take legal action to retrieve 
losses in earnings.

A number of class actions by workers have already been organised.

In another case, the Federal Court ruled that workers in a centre for 
answering Telstra calls were covered by the same awards and agreements as 
Telstra workers.

In these and other cases the Federal Court has ruled that where there is a 
"substantial identity" between the work done for the former and new 
employers, the pre-existing awards for government employees apply when they 
are transferred to newly-formed enterprises as part of the privatisation 
process.

In addition to the issue of backpay for former government workers, the 
decisions have the potential to make the acquisition of government 
enterprises by private firms much less attractive.

For many firms, the potential for cuts in workers' pay and conditions has 
to date been one of the most attractive aspects of the sale or contracting 
out of government operations.

Of course, firms who saw the privatisation process as a nice little earner 
are not likely to take the court decisions lying down.

They have already received advice as to how the Workplace Relations Act 
might be used to prevent the application of existing awards after 
government business have been transferred to the private sector.

However, in the meantime the ASU and other unions are organising to lodge 
claims for backpay against many companies who have taken over government 
businesses, including P&O, Berkeley Challenge and Serco.