If things go pear-shaped politically, there is no memorable name for critics to latch onto.
Labor, which relishes a fight on industrial turf, has supplied one. It calls the proposal “Morrison’s pay cut” in a claim the government rejects.
Pharmacy assistants could lose $6000 a year, personal carers $11,000 and retail workers $5500, the Opposition asserts.
That would be a lot of money for Alex Muir, who has already had a bad year.
First, she missed out on JobKeeper when it was announced in March, falling just two weeks short of the year’s casual employment requirement.
Then, when the criteria was relaxed months later, the pub where she had worked in North Sydney offered her a chance to go back to work, but only if she took on more than she could manage alongside her studies.
So Muir went to work at a grocery store, where she does a shift or two a week to get by while applying for more jobs and receiving JobSeeker.
“It’s been an interesting year. I can’t say I’ve loved it,” says Muir, who splits the rent on a Sydney apartment with her mum, who works seven days a week between two jobs to make her contribution. “I haven’t saved any money.”
Attorney-General Christian Porter, who is also industrial relations minister, is adamant people like Muir would not lose a cent under the government’s plan.
“Untrue, incorrect, doesn’t happen and wouldn’t happen in the future,” he replied to Labor’s wage cut estimates in the last Question Time of the year.
What’s in the government’s industrial overhaul?
- Defines casual employment to cover any worker offered irregular shifts and paid a loading, even if their employment later turns into more stable work.
- Opportunity for casuals working regular shifts to become part-time or full-time after a year.
- Laws apply retrospectively to override court judgments giving misclassified casuals access to historical annual leave and long service leave, estimated to be worth as much as $39 billion.
- New criminal penalties for wage theft, with up to four years in jail and $1.1 million in fines for individuals.
- Big companies will be up for fines of $5.5 million or three times the benefit gained from serious underpayment cases, whichever is larger, even if the underpayment is not criminal.
- A new pay advice service for small business from the Fair Work Ombudsman, with employers shielded from prosecution if the advice is wrong.
Big construction agreements
- For projects over $500 million, or $250 million with the minister’s approval, agreements will go for twice their normal length, up to eight years.
- Stops strikes or changes while the project, like mines or infrastructure works, are underway.
- Industrial commission can approve enterprise agreements that leave workers worse off by overriding the better off overall test (BOOT) if employees agree and it believes the business needs it.
- Streamlined approval process with relaxed requirements to consider the agreements’ effects and a 21-day time limit for the commission to check agreements.
- Part-timers in food, accommodation and retail to be allowed to take on more hours above a 16-hour threshold without overtime.
- JobKeeper flexibilities about duties and locations of work to continue for two more years.
- Industrial commission to create loaded rates rolling up penalty rates and allowances into single, higher hourly wages the retail, restaurant, club and retail industries above by March.
At the heart of the dispute are changes to the better off overall test, which the national industrial tribunal, the Fair Work Commission, uses to determine if it should approve an enterprise agreement agreed between staff and their employer.
Today about 38 per cent of the workforce or about 4 million people are employed under enterprise agreements of various kinds, down from about 43 per cent in 2010.
The test, loathed by business groups for holding up agreements, will stay but the government has adopted an employer proposal for the commission to be allowed to override it where it is in the “public interest” for two years.
That fuzzy test means the commission should look at the circumstances of the business and its workers’ views, and the impact of the coronavirus pandemic, the law says.
Porter forcefully points out that businesses like the supermarket employing Alex have done well during the pandemic and could not cut wages. Using the new section at all would be very rare, he argues.
But Australian Council of Trade Unions secretary Sally McManus paints a dire picture of how the overhauled bargaining system might play out for a worker with a greedy boss.
“They could come to her and the workers there, and let’s just say there are 15 of them, and say listen, you know, times are tough for us. We want to have this agreement. It’s really simple. You’re going to receive less money on the weekend. The vote is going to be in two days time. If you don’t vote for it, you’ll probably lose your shifts anyway. You have the vote and under this law, the employer’s done nothing wrong.”
That process is enabled by a host of changes streamlining how enterprise agreements are approved, McManus says. Rigid timelines before voting are being relaxed, businesses will have to give less specific information to workers, unions will only be able to intervene to challenge deals they did not negotiate in “exceptional circumstances” and the Fair Work Commission will have a 21-day deadline to assess agreements.
There is broad agreement across politics on the principle that bargaining should be faster and simpler. Former Labor prime minister Paul Keating, whose government created the enterprise agreement system, predicted in 1993 that “over time … for most employees and most businesses, wages and conditions of work would be determined by agreements worked out by the employer, the employees and their union”.
On the main, that has not happened in the private sector. The number of enterprise agreements has been trending downwards for years and is one likely factor contributing to Australia’s stagnant wages.
One problem is that the process of enterprise bargaining is wrapped up in the question of who has the power in the industrial world.
Many businesses blame the technicalities of the process and the ”better off overall test”, which they say forces the Fair Work Commission to consider all manner of arcana, like loadings for employees working in cool rooms the business does not have or ever plan to build. Overall business groups have been pleased with the government’s overhaul, calling it a sensible, measured improvement.
Bunnings walked away from its enterprise agreement plans in March after a year of trying to get them approved, despite having the major industry union’s support.
“This never-ending cycle of review and bargaining isn’t productive for business and isn’t great for our team and it’s tied us up in knots,” the company’s managing director Mike Schneider said at the time. Now, he says, the new laws should make it easier for companies to bargain with their workers.
Other companies including Kmart and McDonalds have also faced delayed approval processes.
Josh Cullinan, secretary of the activist Retail and Fast Food Workers’ Union, says if companies offered more than fractional pay increases over the award, they would not have run into problems with the better off overall test. “It’s always going to be a fine line” if companies insist on low pay rises, he says.
And there can be a point to checking unorthodox shift patterns to see if the pay agreement passes muster: The Herald and The Age found in 2016 deals between unions and big chain operators were benefiting workers on regular hours but dudding others doing more irregular hours out of hundreds of millions of dollars.
Paul Keating did not respond to requests for an interview, but a key difference between his day and the present is that unions had membership nearing 40 per cent of the workforce, rather than about 14 per cent now, and a much broader right to strike.
Unions could force companies to agree to enterprise agreements through industrial muscle alone. Now, technicalities are one of the few weapons some unions have left to stall agreements they do not like.
The government’s reform will pluck arrows out of the unions’ quiver, but its effect is much broader than that and not all the changes run in the same direction.
It creates a new category of part-timers in accommodation, retail and food who will have 16 hours guaranteed work a week but be allowed to take on additional shifts without the overtime that it would usually attract.
Penalties for underpayment will go up to $5.5 million or three times the benefit big companies gained from their failure, whichever is higher. There will be up to four years jail for individuals who systematically and dishonestly steal from their workers as the government moves to criminalise the worst cases.
Should the government’s changes to the better off overall test melt away, as it has signalled this week, the fight will turn to casuals.
There the government has effectively reversed court decisions that found workers who were classified as casuals but did regular hours long-term were actually part-time or full-time workers, entitled to potentially billions in backpay for lost annual and long-service leave.
But in return, it has also given all casuals a right to convert to permanent jobs if they work regular hours for six months and have been in the job for a year. For supermarket worker Muir she isn’t sure whether she would take that up. Her casual loading matters to her, but now that she is done studying, more security could be good too, she says.
The unions are pleased with the underpayment changes and angry at the casual rules but communication lines remain open: Porter and McManus met this week in Canberra for a forthright conversation.
Even amid the industrial fight, there has been collaboration.
Almost a year to the day after One Nation leader Pauline Hanson torpedoed the government’s Ensuring Integrity Bill, the government got the hammer blow to the Construction, Forestry, Maritime, Mining and Energy Union it wanted through other means.
Labor waved through the government’s bill letting unions, most obviously the CFMMEU, split up with almost total silence from the ACTU.
The union had torn itself apart over John Setka, the Victorian construction secretary, who was forced out of the Labor party after being convicted of harassing his wife via text last year and started a brawl with the union’s manufacturing and mining divisions. Both are now likely to leave the merged union, leaving the construction union more exposed but still powerful.
It would have been unthinkable this time last year.
Whether even the pandemic is enough to change the rest of the government’s fortunes on industrial relations remains to be seen.
Either way, there won’t be wasted mousepads.
Nick Bonyhady is industrial relations reporter for The Sydney Morning Herald and The Age, based between Sydney and Parliament House in Canberra.