The Guardian • Issue #1948

WorkChoice MARK II – PART 3

Direct assault on wages and conditions

  • by Anna Pha
  • The Guardian
  • Issue #1948

While the Coalition’s industrial relations omnibus bill looks very different to the Howard government’s notorious WorkChoices, in effect, it has the same aims. It sets out to render minimum rates in awards meaningless; slash wages and working conditions; boost employers’ profits; and increase the powers of employers at the expense of trade unions and workers.

Worse off overall

At present, before the Fair Work Commission (FWC) can approve an enterprise agreement, it must apply the better off overall test (BOOT). The agreement must be better off overall than the relevant modern award. This test, along with the ten statutory National Employment Standards (NES) and modern awards, is a critical part of the minimum “safety net” for workers. As pointed out in the Guardian #1946, the bill also sets out to undermine the NES.

The bill targets twelve industry awards under which workers may be worse off. These awards include some that had previously been subjected to penalty rate cuts – hospitality, retail, restaurant, fast food, and pharmacy.

The FWC must be satisfied that it is appropriate and “take into account all the circumstances,” emphasising the view of the parties, the “likely effect” of approving or not approving the agreement, the impact of COVID-19, and the extent of employee support based on the outcome of the vote. The sting in the tail is a provision that “the approval of the agreement would not be contrary to the public interest.”

What is in the public interest? That is a class question. In the eyes of the government and business it is the interests of capitalists and maximising profits. From a working-class perspective, it is workers’ living standards and working conditions. The FWC, commonly and inaccurately referred to as the “independent” umpire, has a tendency to put profits first. This is defended using the erroneous capitalist myth that boosting profits creates jobs.

Permanent changes

In addition, the Bill proposes permanent changes permitting the Fair Work Commission to certify an agreement even if the agreement leaves employees worse off compared with the relevant award, and employees are unrepresented. Under this section, the FWC is required to give “substantial weight” to the views of employers and employees. In practice, employers carry more weight. Where workers are unrepresented they will be at the complete mercy of employers.

Non-union workers are far worse off in respect to wages, working conditions and rights. Only fourteen per cent (one in seven) of workers belong to a trade union. (ABS August 2020)

The undermining of the BOOT and national employment standards (NES) (See “Guardian” #1946), along with measures designed to facilitate non-union agreements, opens the floodgates to non-union agreements that do not meet the minimum standards of awards.

Profits first

Industrial Relations Minister Christian Porter attempts to defend the undercutting of award minima is necessary to give employers “the flexibility to create jobs and grow their businesses.”

What it will do is grow their profits! Wages and working conditions will take a hit as employers will have similar arbitrary powers to those granted during the pandemic. These provisions are a throwback to the Howard government’s reforms.

The Howard government abolished Labor’s No Disadvantage Test and denied trade unions the right to contest non-union agreements. The proportion of non-union agreements in the private sector then rose from twenty to sixty per cent. (Future Work Centre)

There is a two-year sunset clause to this provision, but that is deceptive. It is no secret that agreements continue in operation until replaced or terminated at the request of an employer or union.

Employers are hardly likely to request a termination of an enterprise agreement if the wages and conditions are frozen in time at below award and NES standards. On their part, unrepresented workers (non-union) are hardly in a strong position to do so. Workers covered by these agreements could remain on below award standards for years, long past the pandemic and its economic impact. In fact, there are still thousands of workers stuck on below-award, non-union enterprise agreements from the Howard days.

Employer flexibility

The section on flexible work directions applies to the same targeted twelve modern awards mentioned above. Part-time workers who agree to do any additional hours are no longer paid at overtime rates for those hours, unless the time worked goes beyond normal hours of a full-time worker. This will turn permanent workers into de facto casuals in respect to the additional hours. For this section to apply, the part-time worker’s permanent hours must be at least sixteen per week.

For example, a permanent employee on twenty hours per week could be expected to work thirty-eight hours without the overtime loading for the additional eighteen hours. At present, the loading is a legal requirement in awards. In other words, they could end up working the same hours as a permanent full-time worker on an ongoing basis without overtime rates.

In addition, their additional hours would be flexible for the employer and uncertain.

This provision is described in the bill’s Memorandum of Understanding (MOU) as: “giving employers confidence to offer part-time employment and additional hours to employees, promoting flexibility and efficiency.”

What it does is cut wages and create a reserve of labour that can be employed for up to twenty-two additional hours at will.

One organiser in the construction industry told the “Guardian” that “individual flexibility clauses have been used in agreements as a mean to reintroduce individual workplace agreements.” This adds another dimension to “flexibility.”

“Flexibility” here is spin for: further casualising the workforce, giving employers more power, and cutting wages and working conditions.

Tap on the wrist

Wage theft has become the business model of the 21st century with many companies lifting billions of dollars out of the pockets of workers. This has been the result of government policies, laws designed to facilitate theft, loss of trade union rights and failure of government agencies to enforce legal minimum standards. This Bill will only further entrench wage theft.

On the surface, it looks as though the government is tackling the question of wage theft. The bill inserts a new criminal offence of “dishonestly engaging in a systematic pattern of underpaying one or more employees.” But the bill goes on to set almost impossibly high bars before a conviction can be obtained.

For example, the offence requires a systematic pattern, dishonesty and a subjective requirement of being knowingly dishonest. The offence will not apply where the employer believes that there was no underpayment even if that belief is unreasonable or unfounded.

It must be dishonest according to the standards of ordinary people, and “known by the defendant [employer] to be dishonest according to the standards of ordinary people.”

This is one for the lawyers!

The bill criminalises underpayment of wages and increases penalties for underpayment, but only for large corporations, not small ones. It includes an option that is based on the value of the underpayment (where it is larger than the relevant civil penalty) but this additional penalty is only payable to the Commonwealth! Not the short-changed workers.

Proceedings for an offence can only be commenced by the Fair Work Ombudsman, Australian Building and Construction Commission, or Director of Public Prosecutions. A trade union cannot take an employer to court.

The bill’s emphasis is on rectifying the underpayment, not penalising the offenders.

Overrides stronger state laws

A number of states have far stronger legislation than Porter’s bill. Their laws are far stronger than the provisions of the bill which would override those of the states. The state laws also offer greater clarity regarding requirements for a conviction.

Take for example the Victorian legislation which is due to come into force in the middle of the year. It states: “The employer must have exercised due diligence before the alleged offence.”

“…. evidence that the employer failed to comply with the requirements of a regulator is evidence that the employer had not taken all reasonable steps in exercising due diligence and therefore it is unlikely the defence will be made out on the balance of probabilities.”

It establishes a Victorian Wage Inspectorate which will have strong powers including the right to enter premises to obtain information, seize evidence, and apply for and execute search warrants. It will also target employers who falsify wage records or dishonestly fail to keep records in a bid to hide wage theft.

Kill the Bill!

To sum up: the bill attempts to further the employers’ demands to reduce wages and working conditions to boost profits; give them greater arbitrary powers; and further casualise and de-unionise the workforce.

The workforce and trade union movement took a massive hit during the Howard years and has not fully recovered since. Trade union membership plummeted; thousands of workers lost penalty rates; saw their wages and working conditions eroded; and faced precarious employment.

This cannot be allowed to happen again.

Start organising NOW to defeat the bill. Join your trade union. Distribute copies of the Guardian. More copies are available from the CPA. Share the articles on social media. Build solidarity with community organisations.

Kill the Bill or face a return to the master-servant relationship of the 19th Century.

Parts 1 & 2 appeared in Guardian issues #1946 & #1947.

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