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Issue #1682      April 29, 2015

Hands off penalty rates

Workers’ Rights Campaign


PM Tony Abbott and his union-bashing team have promised their employer mates a life without unions in deregulated workplaces where they can drive down wages and conditions to levels found in low income countries. Towards these ends Treasurer Joe Hockey has commissioned a review of the Fair Work Act by the Productivity Commission, a body notorious for its pro-corporate, neo-liberal policies. The following are some of the measures the Commission* is considering:

1. Abolish penalty rates

Employers are lobbying hard for penalty rates on weekend and night work, long hours of overtime and other unsocial or dangerous working conditions to be removed. For some workers, such as those on low incomes in retail, restaurants and hotels, penalty rates can constitute up to 30 percent of their total, still very low wage. Without these penalty rates these workers could not meet their commitments. Penalty rates are compensation for the negative social, health and other impacts these conditions have on workers. They are designed to discourage employers from unnecessary night and weekend work.

One of the options being considered by the Commission is to deregulate penalty rates and leave it to employees and employers to determine. No mention of union involvement!

The CPA strongly opposes any deregulation or reduction in penalty rates. In particular, it opposes the sale of penalty rates for a general wage rise as recently occurred in the retail sector in South Australia. The wage rise will be completely eroded by inflation in the following years and workers will have lost their penalty rates and be at the mercy of their bosses to work all hours, all conditions, with no compensation.

2. Reduce the minimum wage

The Commission queries the concept of a national minimum wage and how it is determined, and opposes any increase because “it may also raise wages that are already above the minimum wage”! It is looking for a model that allows for variations, possibly on the basis of different states or regions. It even raises the question of its effectiveness and the need for it. It asks whether setting of a minimum wage targets poverty and inequality or increases them by lowering employment in low income households!

The CPA totally rejects any reduction in the minimum wage and calls for an immediate increase.

3. National Employment Standards (NES)

The NES are a set of minimum standards under the Fair Work Act, which include leave provisions, maximum hours of work and termination and redundancy pay. They set a floor for terms in awards and enterprise agreements. The Commission has indicated it will retain a set of NES, but examine its contents. If awards are abolished it may pick up some of their provisions.

The CPA strongly rejects any reduction in or loss of existing entitlements and supports the setting of national standards based on workers’ rights and an adequate living wage.

4. Gut awards

The Commission points out that modern awards (already gutted under the Howard government) “still” spell out minimum wages and conditions for a wide range of industries, occupations and skill levels which underpin enterprise bargaining as a minimum standard. It raises the question of further restricting their contents or completely abolishing them and relying on the NES and the minimum wage.

The CPA strongly opposes the gutting or abolition of awards and decentralisation of determination of wages and working conditions. It supports the restoration of awards as a centralised and comprehensive system of minimum wages and conditions that apply across an industry or occupation.

5. Individual contracts

Apart from reducing the minimum wages and conditions that underpin enterprise bargaining, the Commission is looking for greater “flexibility” in wages and working conditions through the use of individual “flexibility” clauses. It is looking at removing present limits in the trading-off of award and NES provisions in individual flexibility clauses. This opens up the opportunity for an employer to virtually ignore an enterprise agreement and dictate to new employees their wages and conditions. Individual flexibility opens the way to become a means for returning to individual contracts by another name.

The Commission talks in terms of employers and their employees crafting arrangements “without third party involvement” – “third party” is a reference to trade unions. It is considering greater reliance on common law contracts as against statutory contracts under industrial relations legislation.

6. Outlaw industrial action

Without the ability to organise and take united industrial action workers are powerless in the face of employers’ demands. Hence the attention given by the Commission to severely curb trade union rights to organise, struggle and defend workers’ interests.

Legal industrial action is presently limited to the bargaining period for a new enterprise agreement and even then there are severe restrictions on it. Industrial action is at historically low levels, yet the employers are not satisfied and are seeking even further restrictions and higher fines and penalties. It is looking at what measures might “practically avoid industrial disputes”.

7. Application of competition law

Sections 45D & E Competition and Consumer Act (CCA) already outlaw secondary boycotts. The Commission asks if there are grounds to widen the capacity of the CCA to “address concerns about misuse of market power exerted through collective bargaining by employees and employer groups.” Workers uniting in a union to bargain would be equated with corporations (eg banks) operating as a cartel to fix prices. In the case of workers it would be “colluding” to determine the price of labour! If such changes were made to the CCA workers and unions could face millions of dollars in fines for collective bargaining, pattern bargaining across workplaces and an industry.

Allan Fels, former head of the Australian Competition and Consumer Commission, is quoted as saying: “Competition policy and industrial relations policies have headed in opposite directions for over 100 years. Competition policy has sought to strike down anticompetitive arrangements in product markets. Industrial relations policy has encouraged collective bargaining and union monopoly.”

8. Life without unions

One of the main themes is to prevent trade unions from playing any role; to exclude them from workplaces by such means as denying right of entry, non-union agreements and individual contracts. Of course the attacks will not stop there. Abbott has plans to far outdo the Howard government’s WorkChoices. The Business Council of Australia, the big financial institutions and mining corporations are in the driving seat.

The Commission is due to report in early July with its recommendations. Readers are encouraged to respond to it. The government is planning to implement its legislative changes after the federal elections in 2016. It is imperative that it be defeated along with the above employer agenda. The CPA has made worker’s rights its top campaign priority for 2015.

* The Commission issued five issues papers in January 2015, on which the above is based. See

For more information see Guardian articles on “Anti-union wave coming” in issues #1670 (28-01-2015); #1671 04-02-15); and #1672 (11-02-2015).

Next article – Editorial – Capitalism and health – a conflict of interest

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