February 3rd 2007

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Articles from this issue:

COVER STORY: Is Malcolm Turnbull out of his depth?

EDITORIAL: Are we in for another interest rate hike?

CANBERRA OBSERVED: Why Howard Government could fall this year

THE ECONOMY: Qantas takeover bid - leave it to the market?

WORKPLACE RELATIONS: New laws exploit vulnerable employees

NATIONAL AFFAIRS: Sheik's outburst - more than once is enough!

RELIGIOUS FREEDOM: When truth is no defence

STRAWS IN THE WIND: Invisible premier / Victoria Agonistes / From log-rolling to White House / Another conspiracy? / Russian roulette / Media watch

SRI LANKA: Who are the terrorists in Sri Lanka?

CUBA: Mass-murderer Fidel Castro to die unpunished

EAST TIMOR: Alkatiri's right-hand man tried in East Timor

SCIENCE: Cull the human race - Australian scientist

No such thing as 'private' morality (letter)

Messiah status for Labor leaders (letter)

Major doctrinal errors in Nativity film (letter)

Word engineering (letter)


BOOKS: JACKA VC: Australian hero, by Robert Macklin

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New laws exploit vulnerable employees

by Tim Cannon

News Weekly, February 3, 2007
The Howard Government's Work Choices legislation has isolated individuals in the workplace and put them at a disadvantage when bargaining with powerful employers, argues Tim Cannon, a former union organiser.

Since the passing of the Work Choices amendment to the federal Workplace Relations Act, the controversial legislation has rarely been absent from the headlines.

While many employers have approached the changes cautiously, it is worthwhile noting the response of the labour movement. After languishing in a period characterised by muted public hostility and member disillusionment, it would appear that the labour movement has rediscovered its cause.

This re-invigoration was clearly evident in last September's Queensland state election, won by the incumbent Beattie Labor Government. Although its campaign was not based directly on its response to the Work Choices legislation, the Queensland Labor Party benefited greatly from a new vitality among its constituency. Labor supporters turned out in force on polling day, demonstrating the widely recognised need for a serious assessment of the Work Choices reforms, and their likely impact on workers.

Unions (such as the Australian Workers' Union) have recorded increased membership since the legislation came into effect, and are turning once again to grassroots, community-based activism - a welcome move away from the bureaucratic politicking with which they have been associated of late.

Member-driven community initiatives such as in Deakin, in Melbourne's east, are drawing workers together on the basis of a common concern for employees' rights at work, both immediately and in the long-term.

A collective response outside the workplace is hardly surprising, given that the chief threat posed by Work Choices is that it isolates the individual in the workplace.

It does so in two ways: first, by the introduction of Australian Workplace Agreements (AWAs), individual contracts between employers and employees intended to replace awards and collectively-negotiated Enterprise Bargain Agreements (EBAs); and, second, by explicitly prohibiting in such agreements any provisions relating to the role unions might play in the workplace.

Advocates of AWAs praise their ability to reconcile the interests of both the employer and individual employee with maximum efficiency, and with minimum interference from external parties. As long as they contain the five minimum conditions as set out by the Australian Fair Pay Commission (relating to a minimum wage, annual leave, personal/carer's leave, parental leave and maximum ordinary hours of work) and they steer clear of the prohibited content (discussed below), AWAs can theoretically be tailored to the needs of employers and employees through a process of agreement-by-agreement negotiation.

However the reality is markedly different. Although either party to an AWA may contribute to its contents, AWAs are often drafted by consultants at the request (and expense) of employers, without employee consultation. In this way, AWAs are far more likely to represent the interests of employers.

Furthermore, by isolating employees from one another, and forcing them to negotiate their individual entitlements directly with management, the legislation establishes a bargaining relationship which in many cases heavily favours the employer.

This is particularly so in the case of low-skilled workers, who are typically at the lower end of the wage scale. For such workers, the prospect of approaching management can simply be too nerve-wracking. And given that, as low-skilled employees, they are easily replaceable, the fear of being sacked, or of attracting unnecessary scrutiny from managers is enough to deter them from "rocking the boat".

Often it is simply the case that managers, with their experience and training, are more adept in the art of negotiation, especially in a one-on-one situation. In any case, the opportunities for employers to exploit employee weaknesses in the bargaining process are real.

Such instances of exploitation will undoubtedly be in the minority. Yet, legally sanctioned as they are, even in the minority they are unacceptable.


Advocates of the reforms cite, as a safeguard against exploitation, the right of workers to appoint a bargaining agent, usually a legal consultant or union official. However, high consultancy fees prevent most workers from access to consultants; and, for unions, the prospect of negotiating contracts one at a time is highly impractical and beyond the resources of even the most well-financed organisations.

References to unions have also been explicitly excluded from AWAs, such references falling under the blanket of "prohibited content" (the guidelines for which can be found at www.oea.gov.au, the official website for the Office of the Employment Advocate).

Union right of entry cannot be stipulated in an agreement; an AWA cannot "directly or indirectly encourage other persons bound by the agreement to become or remain a member of an industrial association"; neither can AWAs "directly or indirectly discourage other persons bound by the agreement to not become or not remain a member of an industrial association" (writer's emphasis added.) Yet AWAs can, it would seem, discourage employees from joining or remaining in a union.

These and other restrictions reflect an intention by the government to curtail union influence in the workplace. Certainly such an intention is well justified in some cases, with heavy-handed unions paying the price for heavy-handed actions past and present. But for vulnerable employees who depend on collective representation to maintain and improve their plight in the workplace, such a position is untenable.

Emergency food

The Anglican Church's welfare arm, Anglicare, released a report in September entitled 2006 State of the Family - Life on a Low Income, revealing that two million Australians are reliant on emergency food and financial relief just to survive, and suggesting that for such Australians, Work Choices offers cold comfort indeed.

Evidence available at this early stage suggests that employees are at a distinct disadvantage at the bargaining table, and changes to their entitlements reflect this.

Employment Advocate Peter McIlwain reported to a Senate Estimates Committee last year (May 29, 2006) on his office's survey of the contents of new AWAs.

The results indicated a trend to the detriment of employees, including the following: all AWAs submitted to his office for review excluded at least one condition protected under the relevant award; 16 per cent of AWAs excluded all relevant protected award conditions; 22 per cent did not stipulate a pay increase for employees during the life of the agreement; leave loading was abolished in 64 per cent of AWAs; 63 per cent abolished penalty rates; and 52 per cent abolished shiftwork loadings.

At this early stage, is there really cause for alarm? The uptake of AWAs to this point has been relatively slow but steady, with one million AWAs now in place, 117,000 of which have been signed since Work Choices came into effect.

Still, many employers seem happy to sit back and monitor the effects of the legislation on employers and employees alike before embracing the new legislation. Indeed, many will no doubt wait until the next federal election before deciding how to best take advantage of the "flexibility" which Work Choices affords them.

Meanwhile several commentators, such as the Sydney Morning Herald's Ross Gittins, have suggested that there are sufficient control mechanisms at play which should mediate any serious ill-effects of the legislation on employees. Australia's healthy welfare system, as well as the operation of "corporate conscience" - each of these plays a role in safeguarding employees from the drastic effects which the doomsayers predict.

More importantly, campaigns led by state Labor governments (whose members have reported fielding hundreds of thousands of complaints and requests for assistance in response to the Work Choices legislation) have been instrumental in mitigating the impact of the reforms.

The question remains: what will be the repercussions for workers where a state Liberal government is elected?

The Federal Government has set a precedent with the Work Choices legislation which forges a new direction for workplace relations in this country. The government makes no bones about its agenda of making the Australian labour market competitive on a global scale by allowing employers greater flexibility in the way they employ and manage the Australian workforce.

Certainly, it has demonstrated a willingness to fine-tune such legislation where it explicitly places employees at a disadvantage, evident in recent amendments preventing the coercion of employees into cashing out sick leave and annual leave.

Nevertheless the Federal Government has been unwavering in its overall aims. To this point, one of the chief safeguards against employee exploitation has been a protective stance on the part of state Labor governments.

What if such governments were to be replaced by Liberal governments? The outcome for employees is unlikely to be one of increased security and bargaining power. Just how much harder their current entitlements might be squeezed remains to be seen.

- Tim Cannon is a former union organiser for the Shop Distributive and Allied Employees' Association (SDA).

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