Morrison’s call for workplace peace in our time

Can employers and unions put down their guns, as Scott Morrison asks?

Scott Morrison addressing the National Press Club in Canberra on Tuesday. Picture: AAP

When Sally McManus was elected ACTU secretary in March 2017, Scott Morrison was treasurer. But it would be three years before they spoke for the first time, a conversation driven by the COVID-19 crisis and the need for new rules of political engagement.

The fact the Prime Minister and the leader of the nation’s union movement — representing 1.5 million workers — had never conversed, let alone had any sort of working relationship, before the pandemic might seem bizarre to leaders of other developed ­nations where governments and unions work together, despite their political differences.

For decades, conservatives and unions in Australia have been in combat. Spooked by the ghouls of Work Choices, the Liberals retreated from any attempt at genuine “reform” of the industrial relations system during the Abbott and Turnbull eras, instead fixating on ways to weaken, even destroy, the unions. Before the federal election last year, the ACTU spent millions of dollars trying to get Bill Shorten elected, with a campaign its own review found was not well understood beyond unions and was ­focused on policy prescriptions rather than voters’ concerns.

Now, let’s fast-forward from what Mc­Manus calls their “sur­real” mobile phone call in March to this week, when Morrison revealed he wants employers and unions to “put their weapons down” and try to find a new consensus on industrial relations.

The reception to his announcement, in some quarters, has been overblown. Morrison is not promising a modern Accord or even a so-called compact. He is proposing unions and employers engage in negotiations, overseen by the government, in five designated areas of industrial relations policy.

ACTU leader Sally McManus. Picture: Jane Dempster

Agreement is a publicly stated aspiration, but the Coalition will forge ahead with proposed legislation if a deal cannot be brokered.

Where this is unconventional is that a modern Liberal government has decided to invite unions, not just employers, inside the tent to try to break the deadlock over workplace relations.

“The peculiar thing about this week has been (being in) a major developed economy where it is seen as some kind of astonishing thing that a government would talk to unions and employers,” former ACTU assistant secretary Tim Lyons tells Inquirer.

“This happens in every other major OECD country regardless of the party that is in government. I think it speaks to the anti-union line that we have had from the ­Coalition for 35 to 40 years. The last Coalition government to have a serious conversation with the trade union movement was Fraser.

“It’s a kind of uniquely Australian disease where you just don’t accept the legitimacy of organised labour. I think that got brought home this week when (the reaction was) ‘Oh my god, the Liberals will talk to the union movement’. It’s remarkable.”

Critical to the new dialogue has been the working relationship forged between McManus and ­Attorney-General and Industrial Relations Minister Christian Porter after she told him unions were prepared to work co-­operatively with the government and business as the country sought to combat the COVID-19 shockwaves.

One outcome has been the groundbreaking agreements to make changes to awards. Mc­Manus, who recently held talks with Morrison at Kirribilli House in Sydney, says: “As we contemplate the enormous challenge of rebuilding Australia’s economy, it has become clear that there is no going back to business as usual.”

An important step to getting unions to the bargaining table was the government’s decision to kill off the union-restricting Ensuring Integrity bill which, if passed, would make it easier to ban officials and deregister unions. The government had previously failed to get the bill through the Senate and had left open the possibility it would push ahead once the economy recovered. Union leaders remained concerned and needed a firm commitment that it was dead.

Morrison’s subsequent public confirmation at the National Press Club on Wednesday annoyed some Liberal backbenchers but the concession was important to getting unions on board.

Porter is setting working groups focused on award simplification and enterprise agreements, as well as conditions for cas­uals and fixed-term employees. A further two working groups will ex­amine compliance (read wage theft) and greenfields agreements covering new enterprises.

The Morrison government is well advanced on proposed legislation for the last two topics.

A bill criminalising serious forms of wage theft has been drafted, and the government is examining banning directors from boards of those companies that underpay workers. Companies ripping off workers could be stopped from employing migrant workers and required to display a notice ­admitting underpayments.

A key point of the looming discussions will be where the bar is set for criminalisation of wage theft. Before the pandemic, Porter was publicly critical of employer excuses that large wage under­payments by some of the country’s biggest companies were the fault of the workplace system’s complexity. But unions are concerned the Coalition will set the bar too high. Of course, that would still leave employers unhappy.

“The current hefty civil penalties are appropriate,” says Australian Industry Group chief executive Innes Willox. “Exposing employers to criminal penalties for underpayments, including imprisonment, would risk discouraging investment and employment. This would be particularly difficult at this time when we need to do the opposite and encourage investment and employment.”

On greenfield agreements, the government has expressed support for new deals that lock in pay rates and prevent legal industrial action for the life of projects.

Extending agreements for the life of a project is desired by major companies such as BHP and Chevron, which do not want to be hit with claims after a four-year ­period when unions would be in a strong bargaining position midway through a massive project.

On awards and enterprise agreements, McManus expresses sympathy for some employer complaints about the bargaining system, ­acknowledging that business concerns about delays in ­approving agreements have merit.

Asked about the Fair Work Act’s “better off overall” test, and the requirement for each worker to be better off than the award, McManus says the principle that bargaining is about improving on the safety net is a good one.

“Having said that, employers have been worried that measuring that just holds up the whole bargaining process (and that concern) does have some merits,” she told ABC radio.

“I can understand if everyone has reached agreement, and you have got to wait a long time for that agreement to be approved, then that is something that in business’s mind will think: ‘Well, that’s not very efficient, and that’s getting in the way of us doing things.’ So we do have some sympathy for that position.”

But Willox insists the enterprise agreement system is in need of major repair. “In the 1990s, ­enterprise bargaining delivered major productivity improvements to employers and generous wage increases to employees,” he says.

“Win-win outcomes were ­common, and when agreements were reached, the Australian Industrial Relations Commission (now the Fair Work Commission) approved the agreements quickly with a minimum of fuss, paperwork or technicalities.

“The system has become a minefield of technicalities, delays and frustrations. It is little wonder that so many employers and employees have given up on enterprise bargaining.”

Porter declares there is a need to improve an ­enterprise bargaining process that he calls excruciating and the “most complicated, confusing process that I’ve ever seen as a lawyer”.

However, employers pushing for the replacement of the BOOT with a lesser test should not interpret the comments by McManus as a positive. Unions are likely to resist any attempt to change, or even tweak, the BOOT.

On awards, Porter says the tourism and hospitality sectors, which have been hard hit by COVID-19, employ a high number of casual workers and have a “clunky” award with 61 adult ­classifications, each with 14 potential hourly rates.

“If we all agree that creates an environment that’s really hard for businesses to grow their business, and we desperately need those businesses to grow and employ, then it makes sense to sit down in a room and try to work out how you might simplify that particular award because those industries are in such severe distress,” he says.

Willox says Australia is the only country in the world with an award system. And despite numerous reviews and award modern­isations, it remains overly complex. Thousands of federal and state awards have been reduced down to 122, and workplace legal experts argue the issue is not complexity but under-investment by big companies in compliance.

But Willox says there is room for improvement. “There are standard clauses in awards that could be readily removed from awards because the subject areas are already mainly dealt with in the Fair Work Act,” he says. “Possible examples are: annual leave, personal/carer’s leave, redundancy pay, notice of termination, con­sultation, dispute resolution, flexibility agreements, and requests for flexible work arrangements.”

McManus is deeply sceptical about the employers’ claims and warns unions will not accept employers seeking to exploit concessions made during the pandemic.

“It would be dangerous for ­employers to conflate changes that have been necessary in the COVID-19 crisis, where whole ­industries have been shut down, and what is needed post-COVID-19,” she tells Inquirer.

“Pandemic responses cannot be permanent changes or an ­excuse to argue for permanent changes. That would be detrimental to working people. We don’t ­accept that. That would be crazy.”

On casuals, Porter is looking at increasing the ability of casuals to convert to permanent employment as an olive branch to ­unions ­as he seeks to establish a new definition of casual employment and protect companies from significant back-pay claims flowing from recent Federal Court rulings.

But employers and unions will be required to substantiate their competing claims, including analysis by AI Group that employers are exposed to up to $8bn in back-pay claims following the court judgments.

“Many of the parties who are likely to be invited to sit around the tables will naturally bring with them their own research and data to validate their claims about the best ways to fix the various problems we are hoping to find solutions to over the coming months,” Porter says.

“It is very important that we include experts from both Treasury and Finance in our secretariat to stress-test those claims and help us develop a clear evidence base that negotiations and policy development can proceed on.

“Fundamentally, we want to try to measure any potential changes in terms of their effect on job growth because that is the central task facing the government.”