Reformation or Revisionism? The Rudd Industrial Relations Agenda

1. Reformation or Revisionism? The Rudd Industrial Relations Agenda Russell Lansbury Professor of Work & Organisational Studies, University of Sydney, Australia Address to the Annual Convention of the Industrial Relations Society of Western Australia, 2008

2. The Context of IR Reform in Australia • Major crises and uncertainties in the global economic and financial systems. • Long-term structural changes from ‘industrial’ to ‘knowledge based’ economies in OECD countries. • Significant changes in the nature of jobs available, skills required by the workforce and the contractual relationship at work. 1

3. Key Changes in Work and Worklife • The nature of skills at work is undergoing continuous and rapid change. • Investment in skills and knowledge is becoming more individualized and market-oriented (rather than provided solely by employers or governments). • The contractual relationships between the worker, work and employer is in flux (legal, psychological, social). • Working life is likely to be extended for a growing proportion of the population. 2

4. Changes in the Labour Market • The decline of permanent and full-time forms of employment. • Increased proportion of jobs which are causal, part-time and by fixed contract. • Increased rates of short and long-term periods of unemployment. • Increased average hours of work and very long working hours for a significant minority of both low and high paid sections of the workforce. 3

5. Long-term Trends in IR Systems • The decline of collective approaches to the regulation of work with the demise of unions. • Less emphasis on labour market institutions to regulate the workplace and resolve conflict. • More reliance on individualized contractual relationships between workers, work and employers. • More emphasis on individualized legal remedies rather than collectively negotiated outcomes. 4

6. The WorkChoices Revolution • The Howard government promoted the spread of individual employment contracts (AWAs) to replace awards and collective agreements. • WorkChoices was introduced in 2006 after the High Court allowed the Howard government to rely on the corporations power to directly regulate IR of constitutional corporations. • But the abolition of the No Disadvantage Test for AWAs and changes to unfair dismissal laws extending to firms with 100 employees or less proved to be electorally unpopular. 5

7. The Rudd Government’s Revisionism? • The Rudd Labor government was elected in late 2007 with an IR policy ‘Forward with Fairness’. • So far it has moved cautiously on IR issues with most of its major changes scheduled for introduction in 2010. • It has disallowed new AWAs from December 2007 and transferred existing AWAs to Individual Transitional Employment Agreements (ITEAs). • A No Disadvantage Test was re-introduced to replace the Howard government’s Fairness Test for new agreements. 6

8. The New IR Institutions • Fair Work Australia (FWA) will assume the responsibilities of existing institutions. • The AIRC’s primary responsibility is to achieve award modernisation. • The Australian Fair Pay Commission (AFPC) will continue to set minimum standards but its role will be reduced. • FWA will also encompass the Workplace Authority and Ombudsman. • The National Building and Construction Commission will be retained to 2010 but is under review. 7

9. Award Modernisation • Awards will continue to be the ‘safety net’ of minimum wages and conditions for a substantial proportion of the workforce. • They will also provide a baseline for collective agreements between employees, employers and unions. • New ‘modern’ federal awards will replace a myriad of existing state and federal awards. • The AIRC is due to complete the process of award modernisation by 1 January 2010. 8

10. Award Flexibility Clauses • These can be inserted into awards to vary the application of certain terms of the award to meet ‘the genuine individual needs of the employer and the individual employee’. • The terms which may be varied are: • Arrangements for when the work is performed. • Overtime rates. • Penalty rates. • Allowances. • Leave loading. 9

11. The National Employment Standards • Are intended to ‘provide employers with the flexibility and simplicity they need whilst ensuring employees’ key entitlements are protected’. • Ten minimum entitlements will apply to all employees from 1 January 2010. 10

12. Unfair Dismissal Laws • The details are yet to be announced. • But they are likely to exempt firms with 15 or less employees (i.e. genuine small businesses). • There will be a ‘fair dismissal code’ aimed at small businesses. • There will be provision for conciliation hearings and decisions but without legal representation for either side. 11

13. Concerns about Collective Agreements • CAs require a majority of employees in support – but how will this be monitored? • CAs must be undertaken in good faith by both parties – but how will this be determined in the case of disputes? • CAs can be concluded between the employer and employees without union involvement. Will unions be deliberately excluded? • FWA can only intervene if there is industrial action causing economic or significant harm to the parties – is this too restrictive? 12

14. Concerns about the Role of Fair Work Australia • Will this single, all-encompassing institution be unwieldy? • Will it be possible for FWA to provide all of its services in a ‘one stop shop’? • What can the FWA do to enforce ‘good faith bargaining’ and facilitate collective bargaining if one party will not cooperate? • Will the AIRC have a meaningful role in the new system? 13

15. Is Harmonisation a Realistic Goal? • The Howard government failed to achieve a unified IR system despite the High Court ruling enabling the Federal government to directly regulate IR in constitutional corporations. • Many state Labor governments are still reluctant to cede powers to the Federal government. • The most likely method is for Federal and State governments to enact identical legislation on specific issues, e.g. occupational health and safety. 14

16. Possible Modifications to Government Policy • ‘Drop-dead’ date for old IR agreements in 2012 so that workers cannot continue to be employed under expired AWAs and other agreements. • New rules to enforce bargaining in good faith by employers with unions where workers seek this – to avoid protracted ‘stand offs’ such as Telstra, Boeing and Cochlear. • Arbitration to be made more readily available where there is a breakdown or intractable wage negotiations between employers and unions. • Unions to be given advance warning if their members in a workplace indicate that they want to sign a non-union collective agreement. 15

17. Conclusions • The Rudd IR ‘revolution’ is likely to be incremental and focus on the areas of least resistance. • It is unlikely to relax restriction on unions’ right of entry to workplaces or unlawful industrial action. • It will not reinstate to the arbitration system and will continue to use the corporations power to regulate IR. • It will retain awards to set minimum standards but encourage collective bargaining (with or without unions). 16