Why most workers will lose under

Wednesday, November 13, 1991

By Peter Boyle

On October 30, the federal Industrial Relations Commission approved the enterprise bargaining system it rejected last April. The decision, which approves a cut-down Accord Mark VI as a covert Accord VII, was welcomed by the ACTU, the Hawke government, the Confederation of Australia Industry, the Business Council of Australia and the Metal Trades Industry Association. This extraordinary unanimity in the industrial relations club is based on the common expectation that workers will lose wages, conditions and jobs under the new system.

The ACTU and the Hawke government are happy with the arrangement because it revives the Accord as a wage-cutting tool, providing big business with a reason to approve Labor's continuation in government while also leaving the way open for a minority of well-placed workers to make some wage gains through productivity agreements.

The decision recognises the reality that Accord VI style enterprise bargaining is already operating, but that most deals are falling well short of the Accord VI claims on wages and conditions.

It enables Labor and the ACTU to maintain their wage cutting deal while deflecting much of the anger generated by it onto an anonymous "market". For their part, most employers are confident that enterprise bargaining will not lead to a generalised wage breakout while the economy is in recession. In fact, enterprise bargaining provides them with another means of bringing the pressure of high unemployment to bear on wages and working conditions.

The federal opposition has denounced the new wages system on the grounds that it doesn't offer "true enterprise bargaining", which according to shadow industrial relations minister John Howard must include the right of "voluntary enterprise agreements", i.e. Greiner-style "agreements" forced on individual workers.

Under the new arrangement, the federal IRC will allow unions and employers to make enterprise agreements subject to no wage ceiling. It will consider ratifying such agreements and including them in awards, but will not arbitrate on their contents. Ratification will be given only under certain conditions:

l Any wage rises must be based on "actual implementation of efficiency measures designed to effect real gains in productivity". In most cases this means no wage rises without further trade-offs.

l Agreements must be for a fixed term, during which no other increases will be allowed unless decided by the IRC in future national wage cases.

l Agreements must be made with all unions in an enterprise, or section of an enterprise, acting as a single bargaining unit.

l Agreements must not reduce workers' ordinary-time earnings, IRC-determined standard hours of work, annual leave or long service entitlements. However, overtime and penalty rates may be reduced.

While these conditions appear to protect basic wages and working conditions, enterprise agreements need not be registered with the IRC as awards. Under common law, employers are already able to enforce agreements with unions. In recent judgments, the courts have imposed higher penalties on unions than provided for under the federal Industrial Relations Act.

Already, according to a study released in June by the Australian Bureau of Statistics, the proportion of workers covered by awards has shrunk from 85% in May 1985 to 80% in May 1990. In the same period, private sector award coverage shrank from 78.7% to 72.4%.

The employers' main method of cutting most real wages while allowing increases to some will now be to prevent general increases through national wage hearings. The ACTU says it will present a national wage claim some time next year, but the IRC says such a claim would be considered on its merits.

There will be no more indexation of wages to inflation (not even the partial indexation that has operated for most of the Accord era) and any gains by traditional pace-setters, like the metal industry, will not be allowed to flow to other industries. It is only on this basis that the long-delayed metal industry agreement has been submitted to the IRC for ratification.

Among union officials there is little opposition to the new system. Some see it as a return to collective bargaining, with the additional legal protection offered by centralised wage fixing. But this ignores the fact that agreements confined to an enterprise by enterprise basis severely restrict collectivity. Hence, stronger sections of the workforce will gain while weaker sections are left to do the best they can.

ACTU officials also appeal to the supposed "national interest", arguing that enterprise agreements will enable Australian industries to be more productive and thus internationally competitive. But since decisions about production are made by a tiny minority acting in its own interests, most workers are not in a position to increase productivity except at their own expense.

As more enterprise deals are negotiated, all sorts of bizarre definitions of productivity and efficiency are being used to disguise the might-is-right principle. In many cases, enterprise bargaining is further alienating workers from deals between their bosses and their union officials.

While the ACTU officials were quick to claim victory after the IRC decision, most workers can look forward only to more drawn out negotiations over trade-offs, such as longer hours, loss of penalty rates, etc. Meanwhile, wages will continue to be eroded by inflation, which is still real even if it is low for the moment.

Federal public servants may have reason to be particularly unhappy with the new decision, since the IRC ruled that workers covered by "paid rates" awards will not be granted rises on the basis of comparisons with "market rates", unless the full bench agrees there are special circumstances. n

Issue