Ripping up Work Choices or tearing at the edges?

March 15, 2008

Labor's new Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008, tabled in federal parliament on February 13, will most likely come in to effect early April. The bill is the first in a raft of legislation to be introduced to parliament and is promoted by the federal government as the first step in the dismantling of Work Choices.

However, the new bill will not reverse many of the unfair laws introduced as part of Work Choices. In a February 13 speech to parliament, Julia Gillard, Labor's workplace relations minister, emphasised that the bill will abolish all Australian Workplace Agreements (AWAs) and "rid Australia of all statutory individual agreements". However, this is only half of the story.

Andrew Stewart, law professor at Adelaide University, confirmed that AWA's can continue indefinitely under this new legislation. He told Green Left Weekly that under the transitional bill, employers cannot offer or enter into new AWAs from the date the new legislation comes into effect. However, any existing AWAs could still run their course.

"Even though they [AWAs] have to have an end date, it is a nominal end date only. In practical terms this means that once an agreement reaches the expiry date it keeps going, it just becomes easier to terminate. AWAs can be unilaterally terminated, but some older AWAs that are still in existence can only be terminated by the Industrial Relations Commission".

Stewart added that many people on AWAs are not union members and are unaware of their rights, including their ability to terminate the contract and enter into a collective agreement.

Many employers have used statutory individual contracts (such as AWAs) to restrict unions from entering workplaces and reduce union influence. In a submission to the Senate inquiry on the transitional bill, mining giant Rio Tinto welcomed the legislation on the basis that it will not fundamentally alter the status quo and would allow contracts to continue well beyond 2013. Only 8% of Rio Tinto's work force is on union agreements — 22% are on AWAs and 55% are on common law contracts.

According to Stewart, AWAs can override collective agreements in the new legislation. "If a collective agreement is voted up at a workplace, employees who are still covered by an AWA, even if it's expired, cannot be bound by that collective agreement", he said.

The new bill will also make it possible to offer wage raises via common law agreements in order to leave expired AWAs in place for years.

Stewart told GLW that the federal government's new IR policy was essentially built on a series of compromises that the ALP decided to make in the lead-up to the election. "Labor was aware of the community backlash [as a result of] Work Choices but was concerned not to look anti-business, so they essentially committed to these transitional arrangements in order to placate major business groups — especially the mining industry."

Common law agreements will play an increasingly important role. Common law individual contracts have been used by some epmployers to lure workers out of unions by initially offering higher wages for signing individual contracts, which were generally accompanied by trade-offs in conditions. Common law agreements can be made in writing or verbally.

"There will be a greater capacity to enter into common law agreements that vary the operation of award provisions when the new award system takes effect in 2010 in ways that are not possible now", Stewart told GLW. "Labor is saying to business — we will abolish statuary individual agreements after 2010, but on the other hand we will give you greater flexibility in terms of what you can do with common law contracts."

Labor's plans for award "modernisation" are to take effect by 2010. While some minimum standards will exist, there will be ample space for individual agreements through the introduction of "flexibility" clauses into awards.

Stewart explained, "There is no doubt that there is a significant qualification to the abolition of AWAs [through flexibility clauses]. Labor is going to give business the capacity to do through common law agreements what they could previously only do through AWAs. Past experience tells us that if those flexibility provisions are included they will be used predominately by employers for the benefit of their business. But there will also be benefits for some workers such as flexible work hours arrangements that suit their particular needs."

The Australian Industry Group, representing 10,000 employers, has given Labor's bill the thumbs up. A February 13 AAP reported quoted the Ai Group's Heather Ridout as commenting that although bosses "would have preferred to keep AWAs as an employment option", the new bill's "Award Modernisation Request" to the Industrial Relations Commission "clarifies that the award modernisation process is not to be used by unions to increase the scope of awards or achieve general improvements in minimum standards … we are pleased that industry's concerns have been addressed."

"An enormous number of people in the labour movement are not happy about this, even some people in government are not happy about it and would like to take a different view on transitional arrangements. Even the chair of the Senate committee, Senator Gavin Marshall, has been quoted as wondering if the transitional period is too long", Steward commented.

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