Reformation or Revisionism? The Rudd Industrial Relations Agenda Russell Lansbury Professor of Work & Organisational Studies, University of Sydney, Australia Address to the Annual Convention of the Industrial Relations Society of Western Australia, 2008

The Context of IR Reform in Australia 1  Major crises and uncertainties in the global economic and financial systems.  Long-term structural changes from ‘industrial’ to ‘knowledge based’ economies in OECD countries.  Significant changes in the nature of jobs available, skills required by the workforce and the contractual relationship at work.

Key Changes in Work and Worklife  The nature of skills at work is undergoing continuous and rapid change.  Investment in skills and knowledge is becoming more individualized and market-oriented (rather than provided solely by employers or governments).  The contractual relationships between the worker, work and employer is in flux (legal, psychological, social).  Working life is likely to be extended for a growing proportion of the population. 2

Changes in the Labour Market  The decline of permanent and full-time forms of employment.  Increased proportion of jobs which are causal, part- time and by fixed contract.  Increased rates of short and long-term periods of unemployment.  Increased average hours of work and very long working hours for a significant minority of both low and high paid sections of the workforce. 3

Long-term Trends in IR Systems  The decline of collective approaches to the regulation of work with the demise of unions.  Less emphasis on labour market institutions to regulate the workplace and resolve conflict.  More reliance on individualized contractual relationships between workers, work and employers.  More emphasis on individualized legal remedies rather than collectively negotiated outcomes. 4

The WorkChoices Revolution  The Howard government promoted the spread of individual employment contracts (AWAs) to replace awards and collective agreements.  WorkChoices was introduced in 2006 after the High Court allowed the Howard government to rely on the corporations power to directly regulate IR of constitutional corporations.  But the abolition of the No Disadvantage Test for AWAs and changes to unfair dismissal laws extending to firms with 100 employees or less proved to be electorally unpopular. 5

The Rudd Government’s Revisionism?  The Rudd Labor government was elected in late 2007 with an IR policy ‘Forward with Fairness’.  So far it has moved cautiously on IR issues with most of its major changes scheduled for introduction in  It has disallowed new AWAs from December 2007 and transferred existing AWAs to Individual Transitional Employment Agreements (ITEAs).  A No Disadvantage Test was re-introduced to replace the Howard government’s Fairness Test for new agreements. 6

The New IR Institutions  Fair Work Australia (FWA) will assume the responsibilities of existing institutions.  The AIRC’s primary responsibility is to achieve award modernisation.  The Australian Fair Pay Commission (AFPC) will continue to set minimum standards but its role will be reduced.  FWA will also encompass the Workplace Authority and Ombudsman.  The National Building and Construction Commission will be retained to 2010 but is under review. 7

Award Modernisation  Awards will continue to be the ‘safety net’ of minimum wages and conditions for a substantial proportion of the workforce.  They will also provide a baseline for collective agreements between employees, employers and unions.  New ‘modern’ federal awards will replace a myriad of existing state and federal awards.  The AIRC is due to complete the process of award modernisation by 1 January

Award Flexibility Clauses  These can be inserted into awards to vary the application of certain terms of the award to meet ‘the genuine individual needs of the employer and the individual employee’.  The terms which may be varied are:  Arrangements for when the work is performed.  Overtime rates.  Penalty rates.  Allowances.  Leave loading. 9

The National Employment Standards  Are intended to ‘provide employers with the flexibility and simplicity they need whilst ensuring employees’ key entitlements are protected’.  Ten minimum entitlements will apply to all employees from 1 January

Unfair Dismissal Laws  The details are yet to be announced.  But they are likely to exempt firms with 15 or less employees (i.e. genuine small businesses).  There will be a ‘fair dismissal code’ aimed at small businesses.  There will be provision for conciliation hearings and decisions but without legal representation for either side. 11

Concerns about Collective Agreements  CAs require a majority of employees in support – but how will this be monitored?  CAs must be undertaken in good faith by both parties – but how will this be determined in the case of disputes?  CAs can be concluded between the employer and employees without union involvement. Will unions be deliberately excluded?  FWA can only intervene if there is industrial action causing economic or significant harm to the parties – is this too restrictive? 12

Concerns about the Role of Fair Work Australia  Will this single, all-encompassing institution be unwieldy?  Will it be possible for FWA to provide all of its services in a ‘one stop shop’?  What can the FWA do to enforce ‘good faith bargaining’ and facilitate collective bargaining if one party will not cooperate?  Will the AIRC have a meaningful role in the new system? 13

Is Harmonisation a Realistic Goal?  The Howard government failed to achieve a unified IR system despite the High Court ruling enabling the Federal government to directly regulate IR in constitutional corporations.  Many state Labor governments are still reluctant to cede powers to the Federal government.  The most likely method is for Federal and State governments to enact identical legislation on specific issues, e.g. occupational health and safety. 14

Possible Modifications to Government Policy  ‘Drop-dead’ date for old IR agreements in 2012 so that workers cannot continue to be employed under expired AWAs and other agreements.  New rules to enforce bargaining in good faith by employers with unions where workers seek this – to avoid protracted ‘stand offs’ such as Telstra, Boeing and Cochlear.  Arbitration to be made more readily available where there is a breakdown or intractable wage negotiations between employers and unions.  Unions to be given advance warning if their members in a workplace indicate that they want to sign a non-union collective agreement. 15

Conclusions  The Rudd IR ‘revolution’ is likely to be incremental and focus on the areas of least resistance.  It is unlikely to relax restriction on unions’ right of entry to workplaces or unlawful industrial action.  It will not reinstate to the arbitration system and will continue to use the corporations power to regulate IR.  It will retain awards to set minimum standards but encourage collective bargaining (with or without unions). 16