'We used to run this country,
and it wouldn't be a bad thing if we did again'

Dinner Address

Grace Collier

Here we are, in 2007, facing possible big changes to our system of Industrial Relations. I like to think of Industrial Relations as the ongoing argument between Unions and Management about who knows what is best for working people.

Never before in my memory, has there been such a focus on Industrial Relations in this country. Over the last six months the general community and the media have begun to explore the fundamentals of the rules of our employment systems.

As we sit on the cusp of a Federal Election, Industrial Relations stands as the big issue.

It is the one area where there is a huge difference between party policies;

Howard needs to keep Union income as small as possible and starve his opposition of funds.

Rudd needs to increase Union income and maximize his income.

 

Distinctive Features of Labor's IR Policy as Stated by them:

1. National System;

2. Collective Agreement making and democracy is at the core of the National System;

3. No AWAs;

4. Safety net for all workers;

5. Independent Umpire that is a 'one stop shop';

6. Protection for Workers from Unfair Dismissal.

 

Labor Promises a National System

Labor says all private sector business is to be under the National System, ending the confusion about sole traders, partnerships.

However, State Governments can choose to keep all public sector workers and local govt employees under the State Systems.

So, it is really not a National System at all.

We will still have the problem that our Health and Education workforces will be under the State Governments, treated differently to similar workers in the private sector.

Labor vows to abolish AWAs

Much has been said about this issue. I will only briefly touch on it as they have already been the subject of, in my view, too much examination;

What I will say, is that it appears when Business wishes to do something different with their employees, they move them onto AWAs when probably, a collective agreement directly with the staff is more appropriate and would be easier to achieve.

Labor says that AWAs will be replaced by common law contracts; that is like saying cars will be replaced by skateboards.

Unions hate AWAs for one reason and one reason only; simply, they are too much work. It is impossible to negotiate for or give advice to workers about documents on an individual basis. There is no way a union membership fee can cover the true commercial value of this advice and assistance. Quite simply, if all workers in the country were on AWAs then unions would have to turn into law firms and adopt the same charge out rates.

In my view, in most cases, a collective agreement directly with the staff is easier to achieve than AWAs and serves the employers purposes much better.

However, implementation of a collective agreement directly with the staff requires skills related to the organizing of labour, persuasiveness and political acumen, a resource not usually available to most employers.

Labor Promises a Safety net for all workers

Labor intends to ensure all Australian Employees are covered by 10 minimum legislated conditions plus another ten Industry specific conditions in Awards.

It is clear from the policy that there is an intent to make it easy for Unions create new Awards, after all, there is a clear stated desire to create new union collective agreements in unregulated industries, so why not new awards?

I would imagine that the new regulating body, FWA will identify industries with lower paid workers that have no awards and will divvy up these between unions to claim. Once Award coverage is in place, containing one of the minimum standards of consultation and representation, compulsory collective agreements with unions will follow.

Labor Promises an Independent Umpire that is a 'one stop shop'

Their system brings the bureaucracy of govt even closer to business. They will be located just around the corner and can pop in to business as they choose. They will have right of entry powers to do so and business will be required to cooperate.

Labor vows Protection for Workers from Unfair Dismissal

The policy prescribes a move away from any formal procedures or protocol in one sense but in the other sense the public servant that hears the matter has absolute power.

The entire matter of the dismissal will be heard at one conference, which can be held at any location, at any agreed venue. During the conference, the public servant can ask questions of the parties, but no formal submissions can be made and cross examination cannot occur, the employer and the employee must simply put their views and answer questions.

No formal hearing will be held because the agent hearing the matter must decide during the conference whether the dismissal was unfair. Additionally at the conclusion of the conference, orders must be issued. The decision will be made on the spot. Should the finding be that the dismissal was unfair; an order for re instatement will be issued, unless it is not in the interests of the business, in which compensation will be ordered.

Labor wants unfair dismissals to apply after 12 months of employment. This theory is based on the assumption that employees are robots with output that can be assessed in the first 12 months and that won't vary after that.

It is my experience that many employees have performance issues in the later stages of employment.

Labor's policy strays from the Liberal party fundamental that a small business owner can choose who they want working for them.

Labor intends to bring back the old double dipping scenario for employees; a system where employers are punished twice for the same matter.

In the instance where a dismissal could be unlawful, after the matter is heard through a FWA conference, regardless of the finding, the matter will be referred to the Unlawful Dismissal section of FWA and heard again. In this scenario, it is possible that the employer is ordered to reinstate through one forum and then fined in the other.

All of this constitutes a very big stick to wave at business. We will definitely have a return to the days where employers felt that it was too difficult to remove employees from their business.

Labor delivers for the Unions; Collective Agreement making and democracy is at the core of the National System;

This part of Labors policy is Kevin Rudd's payback for his elevation to the position of leader.

This part of the Labors policy is the most significant part; for the community and for Unions.

For the community, it reintroduces the Union Official as a regular part of life at a place of work. It will introduce the role of Unions into new industries, into small business that have never had to previously worry about unions.

For Unions, it will restore their financial health and relevance. For Unions, it means that they are through legislation, woven back into the fabric of every workplace.

Unions are low on asset and cash reserves and have declining incomes. There is a need to take urgent action to ensure their survival.

Income for unions' results from membership fees paid by employees employed in businesses around Australia.

Rudd must help the union movement survive; he simply has to. The ALP receives a fixed percentage of the yearly fees of every single union member of every affiliated union (most of them are). The more union members there are in Australia, the more money the ALP receives.

Every year, by a certain date all unions must report to the ALP their precise number of financial members and they must also enclose a cheque that reflects that number. In return, depending on the size of the figure on the cheque, the ALP allocates the union a number of seats on ALP conference floor. The bigger the cheque, the more seats are granted. The most prized possession of any union secretary is the number of seats they hold on ALP conference floor. Each seat has one vote allocated to it. A vote on ALP conference floor equals power. How else do you think Secretaries end up in safe seats? It is multiple payback for all the factional deals they have done along the way.

Once a union wins the legal right to force a business to 'bargain in good faith' with them, they are home and hosed. They cannot lose. Fair Work Australia will have the power to make orders to ensure that employers negotiate in good faith with unions and will have the power to 'end industrial action and determine a settlement between the parties..'. This means that all a union will have to do to raise a lucrative income stream from a business is to ensure that they demonstrate support for collective bargaining in the workplace, either through 'evidence of union membership, petitions or a secret ballot of employees.'

Fair Work Australia, will 'have discretion' to 'determine the level of support for collective bargaining amongst employees in a workplace'.

This means that if a union can prove that more than 50% of employees are members, the business owner will be forced to bargain in good faith with the union for a collective agreement.

Similarly, if more than 50% of employees sign a union organized petition, the business owner will be forced to bargain in good faith with the union for a collective agreement.

Finally, if more than 50% of employees who elect to cast a vote in a secret ballot vote the union in, the business owner will be forced to bargain in good faith with the union for a collective agreement. Unless Labor is planning to introduce compulsory voting, this means that even if only a small number of employees bother to vote, the business owner will be forced to bargain in good faith with the union for a collective agreement

Should the union have difficulty reaching an agreement with the employer, all they will have to do is send a letter to Fair Work Australia advising that they intend to take industrial action and Fair Work Australia will step in and determine a settlement, thereby forcing the employer into an agreement. This is compulsory arbitration.

This part of the Labor's policy contains the most shocking slap in the face for business owners, it reveals Labors view that a workplace consists only of employees. According to Labor, employers don't form part of the workplace.

The 'democracy in the workplace' only applies to employees. The employer does not get a vote or a say in whether they want to be locked into a relationship with a Union.

Labor's policy means that employers will be forced into collective agreements with Unions. Even small business, those in industries such as child care, cleaning and community services will be locked into collective multi employer agreements with unions.

Additionally, even if the employer is making an agreement directly with the staff, the Union, if requested by one employee, will have the right to be a signatory and be bound by the agreement. The employer will also have to negotiate and hold discussions with the Union. In other words, they are going to be involved anyway, so you might as well just make the agreement with them in the first place.

So why is this part of the policy crafted like this? Because Unions know that he who controls the labor has the power and the ability to use that power to extract income from the use of that labor.

This is the American Model of organized labor, the light on the hill the ACTU has been working towards for 20 years.

Collective agreements set out wages and conditions of employees, but also prescribe conditions and processes that weave the Union into the workplace, making the Union Official a permanent partner the business owner can never be rid of.

Typically in collective agreements, grievance procedure clauses mandate the involvement of the Union Official in everyday matters of concern to employees. Consultation clauses require business owners to discuss matters regarding change to business practices with the Union prior to making those changes. Introduction of new technology clauses prevent business owners from implementing new technology without consultation and agreement of the Union Official. Dispute clauses ensure that if a business owner tries to ignore the rights of the Union Official to have involvement in business decisions the Union can have the regulatory body, Fair Work Australia, issue orders that the employer comply. Training clauses mean that money from agreements is put into union training funds that the union controls.

For small business in industries that are not unionised, the most significant part of Labors document reads; 'Fair Work Australia may also facilitate multi employer collective bargaining for low paid employees or employees who have not historically had access to the benefits of collective bargaining, such as employees in the community services sector, cleaning and child care industries.'

These employees have not had access to collective bargains because not enough of them are union members and therefore unions cannot afford to negotiate for them.

There is only one reason that unions would bother engaging in the effort required to strike multi employer collective bargains for these workers; that is to collect some form of revenue. Despite Julia Gillard's denials that bargaining fees will be outlawed, Labor's policy has not been changed to reflect this. It is my view bargaining fees will be part of the new way forward.

Labor's policy talks about bringing democracy back into the workplace. Clearly their view of democracy is that if one party really wants to be in the relationship, then the other party should be compelled to be in the relationship too.

The issue here is; should the business owner get a say in whether they want to be locked into a relationship with a union? According to Work Choices, they do get a say and are able to decline entering into an agreement with a Union whether there employees want them to or not. Under Labor's proposed plan, the employer gets no say at all.

Protected Industrial Action

On this matter, Labor pretends to be tough, they talk a lot about when it is outlawed, but don't talk about when and how it is allowed.

The devil is in the detail and the application.

In my view, Labor will revert to a more flexible definition and approach to Industrial Action.

Unions will be required to be less specific about what they are doing and when, which makes it difficult for the employees.

By far the most powerful form of action is work bans.

Work bans can cripple a business, and you don't need people to go on strike. The beauty of work bans for unions is that members are more likely to comply as they will still be paid wages.

Work bans can be used by Unions to simply cut off income to a business; for example, a ban on handling money or collecting revenue, a ban on sending out invoices to customers, a ban on filling out the required forms so that a business can be paid by their clients.

Labor and the Construction Industry

Labors promise to keep the Industry Regulating Body until 2010 is meaningless. They will not have anything much to do as behavior that is defined as illegal now, will be legal under Labor.

At the moment, the unique nature of the way a construction project is structured means that a builder making an agreement with a Union to force the sub contractors on the project site to pay their employees according to the agreement is illegal. Labor defines an a construction project as a enterprise and therefore it will be legal for the Builder to make an agreement with the Union regarding the employment conditions of subcontractors staff.

Why HR Nicholls?

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