WORKPLACE REFORM IN AUSTRALIA: LOOKING FORWARD UNDER LABOR?

By Russell Lansbury*

Worksite, and its predecessor Union Issues, has played a significant role in the debate over workplace and industrial relations reform in Australia. Union Issues was born at a time when the Accord was pivotal to the success of the Hawke Labor government. In 1988, a new federal Industrial Relations Act was introduced and award restructuring commenced. This was a period of considerable optimism about a more inclusive approach to workplace reform, but the Business Council of Australia was also beginning its campaign to press for enterprise bargaining and seeking to reduce the influence of trade unions in the workplace.

The past two decades witnessed considerable workplace reform in Australia, but the means by which changes were introduced varied considerably. Terms such as ‘high commitment', ‘high involvement' and ‘high performance' work systems entered the language of employment relations to denote new approaches by management which emphasized the importance of teams, multi-skilling and employee involvement to achieving high levels of quality and productivity. Yet surveys indicated that employees in Australia did not, in general, feel that they were consulted on key issues which affected them at work. Furthermore many workers reported that they felt over-worked, highly stressed and had little job security. One of the most interesting aspects of workplace reform in Australia in the past two decades has been the relationship between changes at the macro or institutional level and the micro or enterprise level. Workplace issues have been central to the economic and political debate in Australia and both major political parties have claimed to have superior credentials in achieving both macro and micro economic reforms.

Between 1983 and 1996 the Labor government (under Hawke and Keating) sought to achieve change through a formal Accord with the union movement. Under the Accord, the government began a process of labour market reform which included the decentralisation of the employment relations system. During the early 1990s, the Labor government introduced greater flexibility in the labour market by permitting non-union agreements in the workplace. This was a controversial move which paved the way for more radical changes during the latter part of the 1990s, after Labor lost office.

Following its election in 1996, the conservative Liberal-National Party coalition government, under John Howard, pursued a more ‘hard line' policy on labour market reform and relationships with the union movement became turbulent. Under the coalition government, workplace change was driven more by the unilateral actions of employers rather than through collaboration with the unions, and the government has supported the growth of individual rather than collective arrangements for workplace change. Now that the Howard government has been defeated what are the prospects for a more worker and union-friendly process of workplace reform?

The unpopularity of the Work Choices Act was widely regarded as a major factor in the defeat of the Howard government in November 2007. The new Prime Minister, Kevin Rudd pledged that his new Labor government would implement a 'fair and balanced' industrial relations policy which it entitled Forward with Fairness.

The workplace reforms of the Rudd government have been generally welcomed by the union movement and have not drawn strong opposition from the mainstream employers' organizations. However, the proposed reforms do not represent a return to the Accord era when the ACTU exercised significant influence in the policy-making process. Indeed, the Rudd government has provided employers with ample opportunities to be involved in drafting the new legislation through consultative committees representing both large and small business groups. Unions are likely to continue to find it difficult to organise non-unionised workplaces and sectors and that opportunities to undertake industrial action will be severely limited. Employers wishing to maintain a non-union workplace will encounter few legal obstacles. Where employers seek to offer only common law individual contracts, they will be able to do so even after AWAs have lapsed. Furthermore, the ‘modernised award system' will provide only basic industry-specific minimum standards. Hence, the new system will retain many aspects of the reforms introduced by the Howard government. The most significant change will be the restoration of an unfair dismissal jurisdiction, the gradual elimination of statutory individual agreements (AWAs), a strong ‘no disadvantage test' for all agreements and a simplified award system with an enhanced safety net for employees, embodied in a basic set of minimum standards. The new system will continue to encourage enterprise flexibility agreements, albeit with greater protection for individual workers.

One of the key questions for the future of workplace reform under the Rudd government is whether there will be a growth in unionized collective bargaining versus a continuing trend to more individual employment contracts. This is a key concern to the union movement given the decline of union density to around 20 per cent of the workforce. Furthermore, almost 40 per cent of the workforce in Australia is currently on individual rather than collective employment agreements. Common law contracts are likely to remain popular with employers. For employees earning less than $100,000 per year, the contracts must provide wages and conditions which are ‘better off overall' than the ten minimum national employment standards and the ten conditions in the relevant award (where there is one). For employees earning $100,000 or more (including guaranteed overtime and allowances), the award minimum will not apply to their individual employment contract.

Under the new labour laws, it will be left to employees to determine whether they wish to collectively bargain with their employers. Employees of single enterprise will be able to choose whether to engage in collective bargaining with or without a trade union. Employers are likely to favour non-union collective agreements, especially where trade union membership is either low or non-existent. Hence, the number of non-union collective agreements is likely to increase, especially once individual workplace agreements (AWAs) have been abolished. As Professor Ron McCallum has pointed out, non-union collective agreement making does not operate in law in any other OECD country apart from Australia. Unions are therefore likely to find their role as a bargaining agent keenly contested in some areas of the economy. This was stated quite openly by Kevin Rudd and his Deputy, Julia Gillard, during the 2007 election campaign when they stated in their August announcement that: ‘Labor has made it clear that, under our proposed system, a union does not have an automatic right to be involved in collective bargaining … Consistent with that choice, in non-unionised enterprises, an employer and its employees will be free to collectively bargain together where they choose to do so and this will result in a genuine non-union collective agreement that has no union input at all' (Rudd and Gillard, 2007: 13).

Despite the fact that the Rudd Labor government won the recent federal election with a promise to reform labour law, there are a number of issues on which both parties are now in agreement. These include the concept of a national industrial relations system, enterprise-level bargaining, a broader scope for individual agreement making and the role of awards as primarily providing a safety-net of wages and working conditions and a base from which further bargaining can occur.

Workplace reform is likely to continue within a more worker-friendly environment under the Rudd government, which will provide a floor of minimum rights and protection against unfair dismissal for most employees, but this will be within a largely neo-liberal legal and economic framework, the basis of which was established by previous governments. Industrial relations will regain some of the institutional features of the former award-making system (with Fair Work Australia) but there will be a reduced role for unions. There will be greater continuity with the Howard government's policies than either a return to the Hawke/Keating era or a radical change to the now well-established trend towards individual employment arrangements at the enterprise level.

* Russell Lansbury, Work and Organisational Studies, University of Sydney, Australia

Published 3 April 2008.

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