Studies prove workers worse off under Work Choices

Issue 

The Howard government's Work Choices laws are not bringing about "a more flexible, simpler and fairer system of workplace relations for Australia", as the Howard government likes to argue, according to two recent damning research papers. The studies also disprove Canberra's claim that the laws have improved productivity, increased wages, balanced work and family life and reduced unemployment.

Researchers from the Women in Social and Economic Research unit at Curtin University in WA found that women are likely to be significantly disadvantaged in a system where primacy is given to individual bargaining. This was the main finding of their paper, Australian Workplace Agreements and Gender Equity.

Further, while some proponents of Work Choices have argued that women's position will improve under a system "more responsive to individual needs", evidence suggests that the biggest losers in the pre-Work Choices system of individual bargaining have been non-managerial female employees on individual contracts (AWAs).

The findings contradict claims by the Office of the Employment Advocate (OEA), the government agency responsible for collecting and promoting AWAs, that "most groups of non-managerial employees on AWAs ... had higher earnings than employees on federal CAs [collective agreements]".

The OEA has also claimed that "female employees on AWAs earned 32 per cent or more than counterparts on CAs", based on weekly wage rates, and that "female AWA employees earned 89 per cent of the male AWA employee hourly rate of pay" as compared to a female-male earnings ratio of 85% for employees on CAs (based on hourly wage rates).

The new studies suggest, among other things, that: "When the sample is restricted to non-managerial employees, the apparent earnings advantage accruing to women in 2002 was nearly half that claimed by the OEA. In 2002, women non-managerial employees on AWAs earned approximately 17.5 per cent more than women on federal CAs and not 32 per cent as reported by the OEA.

"Between 2002 and 2004 the gender wage gap amongst non-managerial employees on AWAs deteriorated by 19.6 percentage points to 79.6 per cent. By 2004, the gender ratio for CAs was 87.5 per cent, and 79.6 per cent for AWAs. In other words, female non-managerial employees on AWAs experienced a deterioration in their real wage, during this period, with absolute earnings (at current prices) falling over the period studied. This suggests that women are likely to see a further decline in their relative pay position over the next few years."

The authors noted that there is no provision in the new Australian Fair Pay and Conditions Standard obliging employers to offer similar employment conditions for employees doing the same work. Gender inequity may thus be reinforced by the concept of unequal pay for work of equal value.

David Peetz from Griffith University in Queensland in his paper Brave New Work Choices: What is the Story So Far?, released on February 13, found that the "Work Choices economic miracle has yet to materialise". According to Peetz, "There has clearly been a substantial loss of conditions of employment, particularly overtime pay and penalty rates, for many workers signing AWAs, as a direct result of Work Choices".

He goes on: "The minimum wage fixing arrangements established under Work Choices have led to a real wage decline for most award-reliant (low wage) workers, particularly in retail and hospitality, probably as a result of the loss of penalty rates in those industries.

"To date, there is no evidence that Work Choices has had any positive impact on labour productivity. In trend terms, labour productivity in the September 2006 quarter was only 1 per cent higher than it was in March 2004."

Both papers were highly critical of the OEA, which, they claim, consistently overstated the benefits and coverage of AWAs. Peetz, in particular, observed that some critical information (especially relating to the content of agreements) is being suppressed by government agencies.

Peetz stated that the unfair dismissal changes may be having a broader effect on workplace relations and might be leading to increased anxiety at the workplace. He also noted that there appears to be a widening inequality between the owners of capital and labour.

Further, while the long-term trend of a reduction in industrial disputes continued during the first six months of Work Choices, Peetz suggests it is possible that, because the restrictions on industrial action are now so severe, unions may decide to ignore the laws since it is almost impossible to adhere to them.

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