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Issue #1670      January 28, 2015

Anti-union wave coming

Imagine working weekends and night shifts without penalty rates, on a minimum wage that has been cut, with no access to unfair dismissal protection, and your union official no right of entry. Awards have been abolished, you are on an individual contract competing with an unrestricted influx of visa workers on $3 an hour for your job. This workers’ nightmare and employers’ paradise is not some figment of the imagination, but the goal of big business and its loyal servant Tony Abbott.

Photo: Anna Pha.

Towards these ends, the Abbott government has commissioned an inquiry by the Productivity Commission into the present workplace relations system. All of these long held protections, rights and benefits and many more are now on the table, up for grabs by employers.

PM Tony Abbott came to office with a plan to reshape Australia’s social and economic fabric in the interests of the big business. The Abbott government launched its attack on social security, Medicare, schools, universities, public servants and the public sector in its first budget in May 2014. Then in December, after extensive consultations with employer groups, the government then asked the Productivity Commission to carry out a review of the industrial relations framework.

On Friday January 23, the Commission released a set of five issues papers and called for submissions responding to the questions raised in them. While these papers are not a set of recommendations, the agenda is clear from their focus and the underlying assumptions made.

It asks “whether the current system is well suited to contemporary (and evolving) workplace needs for Australia in an increasingly globalised economy.” In other words are Australian labour costs low enough to compete on global markets?

The first issue paper states that the “government has requested the Commission to go beyond evaluating the current system to consider the type of system that might best suit the Australian community over the longer term.”

The main areas of focus for change to the actual system are the future of awards and their content such as penalty rates; the minimum wage; and the National Employment Standards (leave, etc). These three elements underpin the whole system in setting a “safety net” for workers lacking industrial muscle.

The Commission also considers “reforms” to different parts of the Fair Work Act such as unfair dismissal, enterprise bargaining and protected action.

Productivity Commission chairman Peter Harris described the inquiry as a “once-in-a-generation opportunity”. And that is exactly what it is for the big end of town.

Minimum wage

The PC raises the question of whether the setting of a minimum wage targets poverty and inequality or increases inequality by lowering employment in low income households! This latter concept is a rewording of the old capitalist myth that one person’s wage rise is another person’s job. A higher minimum wage benefits the workers and the economy as it results in higher demand for goods and services.

The Commission fears that an increase in the minimum wage “may also raise wages that are already above the minimum wage”! That alone shows the class position of the Commission and where it is coming from. Certainly not the working class.

The Commission is asking for submissions on questions ranging from; what is the rationale for a minimum wage, how effective is it, what would be the best process for setting a minimum wage and whether it should vary between states or regions. Clearly it is looking to a model that deregulates the setting of a minimum wage.

This is consistent with an underlying theme of deregulation and government plans for states to be able to set their own employment standards and compete for foreign investment by offering the cheapest labour. It also lays the basis for states or regions to be designated as investment zones.

The aim is to reduce labour costs to increase profits.

National Employment Standards

The Fair Work Act provides a set of minimum standards known as the National Employment Standards (NES). These include leave (annual, sick, carers, parental, etc), maximum hours of work, and termination and redundancy pay. Terms in awards, enterprise agreements and employment contracts cannot exclude or provide a lower entitlement than the NES.

The Commission indicates that it will examine the provisions within the NES, but not the NES itself as part of a safety net.

Award system and flexibility

The Commission notes that “modern awards still spell out minimum wages and conditions for a wide range of industries, occupations and skill levels”. (emphasis added) But for how much longer?

They underpin enterprise bargaining as a minimum standard.

The Commission notes that under the Act, “Modern awards must also include flexibility clauses, which allow an employer and an employee to create an individual flexibility arrangement (IFA) in which the parties agree to change (certain) award conditions if the employee is still better off.” It is known as the “better off overall test” or BOOT.

These individual flexibility clauses are presented as helping individual employees so they can for example have family friendly working conditions. They are in fact a form of individual contract open to abuse by employers.

They have been used by employers to rob casual workers of their legal entitlement to a 25 percent loading in lieu of leave and other entitlements permanent workers receive.

The Commission is looking for greater flexibility in wages and working conditions and increased usage of individual flexibility clauses. It bemoans the fact that more than 90 percent of employers do not have any in place, not even for a single employee.

It provides a number of options for comment. These include further consolidation and simplification of awards (gutting), changing how they are determined or just abolishing them and relying instead on the minimum wage and the National Employment Standards.

The Commission adds that the choice of option “depends on the appropriate role of awards in a decentralised WR system that emphasises enterprise bargaining and allows for individual arrangements.”

“Individual arrangements” is spin for individual contracts.

The Fair Work Act specifies that modern awards must take “into account” the need for additional remuneration for people working overtime, shift work, weekends, public holidays and at “unsocial, irregular or unpredictable hours”.

Paid overtime, shift allowances, penalty rates for weekend and night work, especially amongst low income workers in restaurants, hotels and retail could constitute up to 30 percent of their total wage. These workers could not survive without them.

Employers have been lobbying hard to get rid of penalty rates, in particular in the hospitality and retail sectors. As work that was once confined to week days has spread to weekends and around the clock, they eye the extra profits that could be made if they did not have to pay penalty rates.

The Commission points to the recent reduction in penalty rates for casuals working in restaurants on Sundays. Amongst the options posed is one to deregulate penalty rates and leave it to employers and their employees to determine! No mention of trade unions.


The Commission deals with issues at two levels. The first is the overall framework which provides a “safety net” for workers: essentially awards, National Employment Standards and the minimum wage, which have been dealt with in this article.

The second level is the specific mechanisms and regulations such as enterprise bargaining, protected industrial action, etc. These include industrial action, enterprise bargaining, secondary boycotts, alternative forms of employment, unfair dismissal, public sector workplace relations, sponsored foreign workers, right of entry, transfer of business, long service leave and international labour standards. (These to be covered in future issues of the Guardian.)

There is an underlying thread of deregulation and undermining of the collective. There are numerous references to relations between employers and individuals carefully avoiding the term “individual contracts” while discussing employment contracts with individuals.

Abbott has committed to taking the policies purporting to arise out of this inquiry and the trade union Royal Commission to the electorate following the next federal elections, due in 2016. The Coalition must be defeated.

It is vital that no time be wasted in informing the community and workers of the big business/Abbott agenda and building a united movement to defeat the government and such policies and to elect a government prepared to put people’s interests first.

Visit for copies of the issue papers and how to make a submission.

Part 2.

Next article – Editorial – The unions and superannuation

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