Bill Shorten’s labour agenda to give more clout to unions
An assessment of Labor’s policy commitments shows how the rules of engagment would be rewritten by Shorten as PM.
If Bill Shorten becomes prime minister, the rules of engagement between labour and capital in this country will be rewritten, diminishing the bargaining power of employers and enhancing the influence of unions and workers.
This is not employer hyperbole but a pragmatic assessment based on Labor’s policy commitments.
Even without factoring in the far-reaching workplace agenda promoted by ACTU secretary Sally McManus — which the opposition has deliberately not ruled out — the alternative government has already promised a raft of legislative changes that will move the policy pendulum towards unions and workers.
“The balance and power relationship in workplaces has to be redressed,’’ Labor workplace relations spokesman Brendan O’Connor tells Inquirer.
Shorten will scrap the Australian Building and Construction Commission and, unlike Julia Gillard, not replace it with an agency with weaker powers. There will be no stand-alone body to pursue unlawful conduct by the construction union, whose militant presence has been enhanced by its merger with the maritime union.
Labor is examining reviving the powers of the Road Safety Remuneration Tribunal, which set pay and conditions for truck drivers, scrapped with much fanfare by the Coalition, as either a separate agency or as a division of the Fair Work Commission.
The Registered Organisations Commission, which regulates governance of unions and some employer bodies, will likely go, with its powers split between the Fair Work Commission and the Australian Securities & Investments Commission.
Greater penalties will be imposed on employers for deliberate underpayment of wages, with maximum penalties potentially three times the amount ripped off workers. Labor will rewrite the definition of casual employment in a move primarily designed to stop employers deeming employees as casual workers for years rather than making them permanent.
The Fair Work Commission will be given back increased interventionist powers including greater powers to arbitrate long-running “intractable” disputes. The ability of companies to terminate enterprise agreements will be abolished and their capacity to lock out workers for lengthy periods will be reduced.
While the ALP has virtually ruled out supporting a controversial proposal to legislate significant increases in the minimum wage, O’Connor has signalled a Labor government would consider requiring the commission to give greater weight to the needs of low-paid workers when determining annual minimum wage increases. Penalty rate cuts by the commission would be reversed and workers would receive access to 10 days of paid domestic violence leave annually.
Labor says current low-paid bargaining laws allowing claims on multiple employers have been an “abject failure” and they will be rewritten. While Labor has not ruled out allowing wider industry bargaining, O’Connor says the ALP’s “priority” is the low-paid bargaining stream.
All of these proposals favour unions and workers, shifting the balance of laws actually written by the previous Labor government and already portrayed as too pro-union by the business community.
But Labor says reform is required to address the changing nature of work and aggressive employer tactics to “game” the system by engaging lawyers to use the laws to disadvantage unions and workers.
O’Connor says it has been a “terrible failure” of the government to talk only to employers and refuse to engage with unions.
“Unions have membership that I’m sure is lower than they would like but it’s still the largest social and economic movement in Australia by a country mile,’’ he says. “So, for example, it still has 50 times more members than the Liberal Party. To that extent, it’s the biggest social movement in Australia, representing more people than any other movement.
“They have got something to say and this government, rather than trying to attack working people every day, should be engaging and trying to find common interest. The difference between Labor and Liberal is we sit around the table with everybody and they don’t.”
He rejects the government charge that Labor in office would be captive to the union movement. Liberals point to Shorten’s former role as national secretary of the Australian Workers’ Union, O’Connor’s background as a union official and the fact his brother Michael O’Connor leads the newly amalgamated construction union.
“The record run of growth and job creation Australians have enjoyed under a Turnbull government, which has laid the foundation for future wages growth, would come to a screaming halt if Labor has the opportunity to unleash the ACTU’s devastating plans to wreck the economy,’’ says Workplace Minister Craig Laundy.
But O’Connor says “you can’t be pro-worker without being pro employer”, and Labor supports businesses being profitable as well as a strong economy.
“The only difference between us and the conservatives is we want workers to get their fair share whereas if it was left to Malcolm Turnbull and his Liberal mates, they would happily see wages continue to fall as they have been since he’s been Prime Minister, while profits continue to rise,’’ he says.
“You want to talk about Bill Shorten once representing working people. We now have a merchant banker who is Prime Minister, who puts all his money in the Cayman Islands and he wants to talk about looking after working people. Quite frankly, we don’t believe him, and we now think most Australians don’t either.”
Employers are opposed outright to some of Labor’s policy commitments, most notably the scrapping of the ABCC, and concerned by others, including greater arbitration powers for the Fair Work Commission, and the yet-to-be-finalised new definition of casual work.
But they claim to be more alarmed by the potential capacity of the ACTU and McManus, through the union movement’s “change the rules” campaign, to influence ALP policy.
“My members are telling me that they are increasingly worried that the ACTU new leadership’s prescription for industrial relations will become Labor Party policy,’’ says Australian Chamber of Commerce and Industry chief executive James Pearson.
“That’s a first-order question that small businesses across the country are asking of me. Are Sally’s policies going to be the policies of the next Labor government? This is a serious challenge for the opposition because it’s pretty clear that it’s the objective of the ACTU leadership to see their policies adopted by the alternative government of Australia.”
Echoing the arguments of construction unions, O’Connor says Labor wants the ABCC scrapped because the ALP believes in “one set of laws for workers in the country”. He says the ABCC — as exemplified by Nigel Hadgkiss, who was forced to resign as its head last year after breaking the law — is a political agency that does the bidding of conservative governments to attack unions.
“It doesn’t, for example, investigate improper behaviour by employers in unsafe workplaces, or deal with the underpayment or exploitation of working people. It breaches fundamental civil rights, it’s in breach of ILO conventions, it breaches international law. It is a dishonourable agency. It’s been led by a dishonourable man and it’s been oversighted by a dishonourable government.”
The ABCC has brought substantial numbers of legal actions against the construction union, resulting in significant financial penalties being imposed by the courts, and scathing judgments about the union’s unlawful conduct. O’Connor says, under Labor, work practices in the construction sector would be overseen by the Fair Work Commission, and employers could pursue right of entry breaches with the tribunal.
Laundy says Labor intends to “slavishly adopt the ACTU’s destructive policies because Shorten is beholden to militant unions, particularly the CFMEU”. “The ALP has accepted over $11 million in donations from the CFMEU since 2000-01,’’ he says.
Labor is examining the definition of casual work, and unions are pushing federal Labor to commit to two key changes to the Fair Work Act: a new “proper” definition of casual work, and the option for casual workers to convert to permanent positions after six months of regular work with one employer.
Under the union claim, employers would not be able to reasonably refuse a request by a casual to convert to permanency, a proposal rejected by the Fair Work Commission in July.
Australian Industry Group chief executive Innes Willox says a definition of casual employment that is based on an employee’s pattern of work, rather than the terms of their engagement, would cause enormous uncertainty and disruption for employers and employees.
“The jobs of tens of thousands of casuals would be at risk. Employers would be exposed to claims for annual leave and sick leave from employees who had been engaged as casuals and paid a casual loading,’’ he says.
McManus says employers are “scaremongering about each reasonable proposal that we have put forward and this fits that scaremongering pattern”.
“As a principle of basic fairness, people who are working fixed and continuous patterns of work should have the choice to be recognised as full-time or part-time employees if they want to be,’’ she tells Inquirer.
“We are seeing people who do not want to be casual workers being engaged on a fake casual basis for years at a time. But if a person is happy with their casual status and loading, they should be able to keep it.
“People should be able to make that choice for them and their families according to their circumstances — that’s pretty fair.”
O’Connor says Labor will consult further with unions and employers but primarily wants to change the definition to stop employers being able to employ workers as casual for years when they should have permanent status.
Labor has left open the idea of legislating to allow workers to strike in support of sector-wide pay claims, a proposal that Laundy and employers claim would kill jobs and business competitiveness.
“Industry-wide bargaining threatens to dramatically increase the level of industrial disputation to the levels seen in the 1970s, before enterprise bargaining,’’ Laundy says.
But former ACTU secretary Bill Kelty says the labour market “will never return to the 70s”, particularly given the shift to enterprise bargaining by the Keating government in 1993.
“These are the people who don’t understand the 70s, weren’t in the 70s and haven’t read a book about the history of the 70s,’’ Kelty says.
“The 70s will not occur again. The economy is structurally different. The wages system is exposed to the world. We do not have tariff protection to provide the buffer for money wage gains.
“We don’t have the silly leapfrogging award system.
“We got rid of that in the 90s. The award system was fundamentally altered in 1993.”
McManus says unions are “not abandoning enterprise bargaining”. “It should be a key part of a well-functioning system, but it can’t be the only collective bargaining option for working people,’’ she says.
“We want working people to be able to bargain across sectors if they choose to. Most people would not need to take industrial action to reach an agreement, but they should have the option of doing so as a last resort,’’ she says.
“We want an outbreak of pay rises, not an outbreak of strikes. Our aim is for a country that is prosperous and that shares the fruits of that prosperity fairly. It isn’t in anyone’s interest to damage our economy — we simply want to re-tune it so it runs better for everyone.”
Willox says allowing unions to bargain across entire industries, including giving unions the right to organise industry-wide industrial action, would inflict widespread damage on the Australian economy, on businesses and on workers.
“The ACTU’s idea of one-size- fits-all outcomes for industry are the fantasies of believers in a socialist utopia,’’ he says.
“Giving any oxygen to this ridiculous idea would destroy investment, leading to significant job losses, and it needs to be decisively ruled out.
O’Connor says the current laws allowing multi-employer bargaining have not worked. While he would have further discussions about proposed changes, he says Labor’s priority is to fix the current low-paid stream rather than increase the capacity for industry-wide bargaining more generally.
Labor and the unions are in agreement about removing the capacity for employers to terminate agreements and giving greater powers for the commission to arbitrate disputes.
But Australian Mines and Metals Association chief executive Steve Knott says if resource sector employers do not have the capacity to terminate agreements, “then the next option that will be under strong consideration will be to terminate the project”.
“One of the failings in Australia’s workplace relations system is that when the tide goes out, it is very difficult to enact what’s referred to in the industry as ‘brownfields agility’.
“This is the ability to adjust to changing commercial circumstances,’’ Knott says.
“In the ACTU’s view of the world, which doesn’t match reality, they always want to be making agreements at the top of the cycle and using that agreement as the base for the next round of negotiations.
“We need the flexibility in the system where if an agreement was made at the top end of the market and now proves unsustainable or unviable, that it can be reset.”
He says restoring the arbitration powers of the commission would be a “Trojan horse for returning the industrial relations club to the front and centre of Australian business enterprises”.
“We don’t want to see a situation where employers are routinely dealing with ambit claims designed only to bring about arbitration by an institution that is, at the apex of its influence, laden with ALP/union-affiliated appointments and where the majority of tribunal members have never run a business,’’ he says
O’Connor says “of course” he will be able to say no to unions if Shorten is in the Lodge.
“I say no to the unions every day on issues,” he says.
“If we don’t agree with something, if we don’t think it’s in the long-term interests of working people or our economy, of course we’ll stand up and say so.
“Unions have their campaign. They have got their issues, they have got their concerns and we have got ours. And while we have got a good working relationship, it doesn’t mean we’ll always agree. And when we don’t think it’s in the national interest or the economic interest, then of course we’re going to disagree.
“The difference between us and the current government is when we’re looking at significant reforms we’ll sit around the table with the employers and unions, whereas this government only sits with employers.”
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Labor’s labour promises
• Scrap the Australian Building and Construction Commission
• Revive the powers of the Road Safety Remuneration Tribunal
• Abolish the Registered Organisations Commission
• Higher penalties on employers for deliberate underpayment of wages
• New definition of casual employment
• Greater capacity or Fair Work Commission to arbitrate long-running “intractable” disputes
• Scrap the ability of companies to terminate enterprise agreements
• Reduce employer capacity to lock out workers for lengthy periods
• Potentially require the commission to give greater weight to the needs of low-paid workers when determining minimum wage increases
• Overhaul low-paid bargaining laws to allow claims on multiple employers
• Penalty rate cuts by the commission to be reversed
• Workers to receive 10 days paid domestic violence leave annually
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