Back to All News

Award modernisation - what’s going on?

This piece was first published yesterday by Larvatus Prodeo.

Massive upheaval is occurring to Australia’s standard employment conditions and minimum wages, with little to no understanding or public attention.
The ‘award modernisation’ process currently underway in the AIRC, following a request from the Workplace Relations Minister, Julia Gillard, will impact on all Australian workers … either directly through loss of conditions or indirectly through lowering the base from which agreements can be made.

While the Rudd Government likes to compare its IR policy with Work Choices (…so it can say things are slightly better than they might have been), a better way of evaluating their policy is to look at the industrial relations system that existed in Australia before the aberration of Work Choices. On this test the Government is failing to provide adequate protection for workers.

Surprisingly, when it comes to stripping awards, this ALP Government is going further than Howard and Reith were able to (before the Coalition had the numbers in the Senate) in reducing award conditions and fundamentally changing the nature of the award system.

The award system, while not perfect, provided a comprehensive safety net of wages and conditions which for a century underpinned the rights of workers and preserved the relative equity of Australian society.

The term ‘modernisation’ hides the reality of a reduced safety net, continuing AWAs by another name (ITEAs) … and the politicisation of our minimum standards of work.

The key changes being made to the award system by the ALP government are:

  • Reducing the number of conditions in awards to 10 (awards often have up to 30 conditions);
  • Reducing the number of awards;
  • Introducing a ‘flexibility clause’ into all awards;
  • Ensuring the AIRC will only be able to alter awards in accordance with a request from the Minister, or at four yearly reviews; and
  • Removing the ability of the AIRC to hear and determine cases on appropriate award conditions.

The reduction in the numbers of awards and the number of conditions in each award will lead inevitably to a reduced safety net, with some workers not only losing actual conditions but also having their safety net conditions watered down. There is no other result possible – some workers will lose conditions, including take home pay.

The ‘flexibility clauses’ which are mandatory in all awards (and collective agreements) effectively create an ‘AWA-Lite’. They will allow employers to enter into individual agreements to alter certain award matters, including penalty rates, overtime rates and allowances. We have been told that these agreements will be subject to an overall no-disadvantage test, although there is no word yet on how this will be enforced.

This is a worrying development for a couple of crucial reasons.

Firstly, award workers are by definition low-paid and face significant barriers to participating in fair bargaining (…that is why they are award workers and not on another form of agreement). These clauses operate like AWAs for these workers, and given that they can affect penalty and overtime rates, they can potentially lead to even less take-home pay.

While Work Choices AWAs received the most attention, AWAs existed before Work Choices, and used a similar no-disadvantage test as that in the proposed flexibility clauses. Prior to Work Choices, AWAs weren’t used very much across most of Australia, but we picked up more in my home state of WA after the Court Government’s state-based individual workplace contracts were overturned.

The evidence shows that these pre-Work Choices AWAs also led to reduced conditions and take home pay for workers.

Secondly, individual agreements undermine the safety net. Can we really continue to call it a safety net when key conditions can be bargained away?

There are serious questions of fairness about these clauses and how they will work. Most of the conditions Australian workers enjoy in the workplaces today came about through the award system – annual leave, sick leave, carers leave, parental leave, penalty rates, overtime rates, termination and redundancy rights and pay … and more recently, rights to flexible hours on return to work after maternity leave.

The value of the AIRC determining contemporary community standards though award ‘test cases’ lay with the open, transparent and independent way in which they were processed, with stakeholders able to bring application for changes that were then evaluated by the Commission.

Awards will now become static instruments. However, our workplaces and our society will remain changing, dynamic systems, far from static. We need to ensure there is sufficient ability in the new system to respond to changing circumstances.

From what we can gather from the ALP’s policy, new modern awards will only be able to be changed by Fair Work Australia following a request from the Minister or at 4 yearly reviews.

This process politicises our minimum conditions. Do we have faith that federal governments will respond appropriately to changes in workplace and our labour market into the future?

The continued lack of paid maternity leave suggests Governments are not particularly willing to adopt new standards in workplace conditions even when there is significant support for a new measure.

There can be no question that our awards need to be updated. Many awards do not reflect contemporary work practices or standards, and the award system languished in the decade under Howard. However, there is a huge difference between genuinely updating awards to reflect modern workplaces … and stripping conditions out of the safety net.

The process being undertaken by the AIRC is also of grave concern. It is a huge task to re-create a new award system – yet insufficient time is being given to this task. In the rush to simplify awards by 2010 to appease big business, the Government is leaving workers behind.

In the end we have an ALP Government accepting in large part the fundamental ideological shift made by the Howard Government to abandon conciliation and arbitration along with the role of worker and employer representatives in that system.

The ALP is not “ripping up” Work Choices or even significantly rolling it back – rather this Government is explicitly accepting the basic architecture of the Howard plan, including the trashing of the award system.

It will be interesting to see how much longer Australian workers and their unions continue to put up with it…

Back to All News