There may be non-economic considerations

There may be non-economic considerations

5 August 2015

By Tim Lyons 

The highly anticipated and politically charged draft report of the Productivity Commission into workplace relations was released yesterday.

Produced under relatively new Commission chairman Peter Harris, the report is considerably more nuanced than you would have seen from former chair Gary Banks, who regularly attacked workplace regulation on principle, condemning it as a relic of the past.

The report explicitly rejects the line of the government and employers’ groups that the Rudd government’s Fair Work Act is an unworkable disaster, saying that the system is “not dysfunctional” and does not need replacement. It says that bad labour relations can be a function of bad management and not the law. Critically, the report says that, “contrary to perceptions”, the degree of flexibility and responsiveness of Australia’s labour market is good by global standards.

Australia has already had four comprehensive rewrites of workplace relations law in just over 20 years. The government and employers’ groups were hoping to use the PC report as a springboard for round five. This draft won’t let them do that. I suspect the workplace relations red-meat eaters in Cabinet and the Liberal party room will be disappointed.

The report does say that the system needs some “repairs”. And it’s here that the Commission starts to return to its historical habits on workplace relations: thinking about work as numbers on a spreadsheet, rather than a complicated and messy thing that involves people. At various points the draft report is breathtakingly naive about work and the relative power of workers and employers.

For example, there is a recommendation that it be made unlawful for workers to bargain about how contract staff, casual staff and independent contractors are engaged in their workplace. The practical effect would be to ban workers from bargaining about job security, which is often the core issue workers have. Given that 40% of Australians are in some form of non-standard work arrangement, it would mean workers are banned from bargaining about the way the labour market and jobs actually work in 2015.

But the real nasties in the draft report, and the things which will be a huge problem for the government, are about penalty rates, minimum wages and individual agreements.

The Commission endorses an expanded scope for individual contractual arrangements, with a longer life, wider scope and reduced safeguards. It also supports the use of “template” individual flexibility agreements – which unintentionally reveals the big lie that has always sat behind the employer push for individual contracts. The clue is in the self-contradiction: a template is not about the preferences or needs of the worker, but about avoiding or watering down the safety net to meet the employer’s interests.

A telling heading comes about 500 pages in, during the discussion of penalty rates. “There may also be non-economic considerations,” it reads. No kidding. Work is about people. As I recently heard a shop-floor union delegate say, “attacking weekend rates is a way of saying our lives don’t matter”.

The Commission recommends cuts to penalty and weekend rates (for service workers in particular); expanded individual agreements; watering down the better-off overall test for these and for collective bargaining; creating something called an “enterprise contract”, the terms of which are unilaterally set by employers; and cutting the real value and relative level of minimum wages for at least some workers.

This is an explicit prescription for more inequality.

It would be a bitter irony if Australia, with our history, went down this path at the same time as, in the US, the disastrous consequences of treating service workers as disposable have become so obvious that there is major momentum for huge increases in minimum wages and benefits.

It’s tempting to simply reach for the cheap “WorkChoices is back” line. Many in the union movement and the ALP have already started doing so. That’s almost certainly a mistake, because it lets the Commission, and the government and the chorus of employers’ organisations that will welcome this kind of approach, off the hook.

Yes, these sorts of recommendations have the same ideological pedigree as WorkChoices did. Reducing the real value of minimum wages and cutting penalty rates are all ideas that have been knocking around in the IR debate for decades.

But in important ways, this is worse. The mask has dropped. WorkChoices at least retained the pretence that it was about worker “choice” and that it applied to nearly everybody. Some of these recommendations are bad for everybody, but they are also about codifying in law a bifurcated labour market, where we leave some people behind as a matter of explicit policy: the young, new migrants, and those with lower skills. Moreover, it has nothing at all to do with “productivity”.

Instead, it’s highly political. For all the economic language around labour supply and skill levels in the draft report, there is a political and practical context which is clear from the Commission’s (and government’s) early spin that penalty rates for people like nurses and emergency workers won’t be touched.

Nurses, firefighters, cops and ambos are highly organised. Union density in these occupations is the highest of any, and these workers all enjoy massive reservoirs of public support and sympathy. Their unions have plenty of money, and have a long history of giving fatal beatings to state premiers silly enough to take them on. Carving out, for the minute at least, the groups of workers who might most effectively and immediately lead the opposition to these changes smells like rank politics.

But the lesson for workers is pretty clear, too: get organised, get a voice, and you get power. Workers in hospitality and small retail have been targeted because they aren’t organised to fight back.

If these recommendations survive in the final report and the government adopts them, the political proposition at the next election remains a pretty toxic one. They would be getting stuck into some vulnerable people’s rights at work and inviting everyone else to say, in effect, “Tha’s ok, I’m in the boat. Push off.”

But as the recent public reaction to way the hamburger chain Grill’d treated a young woman who simply wanted to be paid minimum award wages shows, the Australian public still bristles instinctively against unfairness. Asking people to vote to cut the wages and rights of their kids and grandkids (and vulnerable workers generally) won’t go down well.

And you’d have to be a pretty gullible nurse or firefighter to think that the campaign against penalty and weekend rates will stop at the first victory.

References

There may be non-economic considerations, The Monthly, 5 August 2015

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ALP, union message about WorkChoices a mistake, says former ACTU official

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