New IR system to enshrine 'flexibility' and 'productivity'


A key aspect of PM Kevin Rudd's IR agenda is the creation of a national industrial relations system that would cover all private sector employees.

Work Choices, introduced by the Howard government in March 2006, relied on using the corporations' power given to the Commonwealth in the Australian constitution, to allow it to cover all employees working for incorporated businesses (around 85% of the private sector workforce). By bullying or bribing state governments to agree to refer their IR powers to the Commonwealth, the new federal Labor government wants to create a universal national system.

The reason for the government's haste in wanting to bulldoze through its new system is clear. As federal IR Minister Julia Gillard told Sky News on January 24, "our new industrial relations system [will be] focused on building productivity".

In the lead-up to its election win in November, Labor promised to "tear up" Work Choices. More honestly, it might have said that it proposed to tinker with Work Choices — to cut some of the most draconian aspects such as AWAs (Australian Workplace Agreements) and the abolition of unfair dismissal provisions, while refining and extending other aspects.

The creation of a new national industrial relations system is a central part of the government's strategy to advance big business's agenda. As Rudd himself told journalists on January 28, "Well the key request I have got from the business community, all throughout 2007 is, they want a national system for the private economy. And pardon me for being old fashioned but my commitment to them in the election period was to do that."

What's wrong with a national IR system?

In and of itself, working people need have no opposition to a national IR system. In terms of our rights at work, it doesn't matter whether they are enshrined in state or federal law — so long as they are as strong as they should be. But the government's proposal is not just about cutting a little bit of red tape.

The proposal is to extend the new federal IR system to all private sector workers (and ultimately public sector as well). The hallmarks of this new system are "flexibility" and "productivity". Rudd wants to smash industry-wide (pattern) bargaining, contain wage increases to productivity only (as measured at the enterprise level) and mandate "flexibility" clauses in all awards and collective agreements. The "flexibility" clause would allow bosses (with the consent of an individual employee) to roll all overtime and penalty payments into an average annualised salary; "exempt" the employee from specific award conditions; or change their normal hours of work (supposedly to allow time for picking the kids up from school).

Award restructure

What the Howard government tried to achieve through AWAs, the Rudd government brings back under the guise of a mandatory "flexibility" clause to be inserted into all awards and collective agreements from 2010. So much for its promise to "tear-up" Work Choices.

Along with the creation of a national IR system, the government also wants to "modernise" and "simplify" awards. It wants allowable conditions in awards reduced to 10 general categories (covering minimum wages, maximum hours, leave entitlements, superannuation, termination and redundancy requirements, dispute resolution procedures and "flexibility"). It will mandate the Australian Industrial Relations Commission (AIRC) to review all existing awards over 2008-09, wanting it to both strip other matters from existing awards, as well as amalgamate awards where possible.

The AIRC's award restructuring is part of a plan to reduce awards to the status of (threadbare) safety nets. Any increases above minimum wages or conditions would have to be negotiated through a collective agreement (at the enterprise level) or on the basis of individual negotiation between boss and worker — "flexibility" indeed.

Referral of IR powers

Rudd wants the states to refer their IR powers to the federal government, to allow it to make any and all legislation affecting workers' rights. In 1997, the Victorian state government under Liberal Premier Jeff Kennett did just that for the Howard administration. The result gutted the Victorian system of awards, severely limiting the conditions of workers who were unable to secure coverage under the federal system. It also meant that Victorian public sector workers, unlike public employees in all other states, were covered by Work Choices from 2006, the provisions of which the Brumby Labor government in Victoria used to dock the pay of the state's nurses in October.

A NSW government proposal, released in a report titled Working Together: Inquiry into Options for a New National Industrial Relations System on January 25, argues for an alternative means to harmonise the state and federal IR systems. Rather than referring their IR powers to the federal government (and leaving the state open to any Work Choices II the next time a Coalition government is elected federally), the report argues that states should simply introduce mirror legislation to the federal government, harmonising their IR systems, while retaining state control.

While this proposal sounds safer, it doesn't offer a much better deal. Allowing the states to maintain formal control over their IR systems might provide some protection to some workers the next time a Coalition government is elected, but not most.

A genuinely fair industrial relations system would maintain awards, and not just as a bare-minimum safety net. Awards should provide a fair minimum set of wages and conditions for workers in all industries. They should also be regularly adjusted to ensure that gains made in strong workplaces or industries flow on to all workers.

Only a system, that guarantees decent wages and conditions to all workers, regardless of their "productivity", could really be said to be "fair". Labor's plan to restructure awards and create a national IR system moves in the opposite direction.