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Exposing the building industry star chamber

Speeches in Parliament
Rachel Siewert 29 Nov 2005

I rise today to speak against the passing into law of the Workplace Relations Amendment (Work Choices) Bill 2005 and to recommend that it be thrown out. This legislation is flawed. It is full of unintended consequences and loopholes. It is all bad, and it has no redeeming features. As I said, I do not think we should support it. This legislation fails the government's own test of fairness, simplicity and choice. The bill has unfair consequences for many in our society. It makes the industrial relations system in this country far more complex and removes choice for hundreds of thousands of Australian workers.

The clear intention of this bill is to lower the minimum wage, to put downward pressure on wages for many other Australians and to remove their capacity to bargain effectively. It hands greater powers to employers, undermines unions and collective bargaining, has significant implications for safety and will impact most profoundly on the already vulnerable in our society. It also contravenes a number of international conventions to which Australia is a signatory. The Greens believe this is ideologically driven reform that has reckless disregard for the impacts on our community.

The manner in which this legislation has been unduly rushed is breathtaking, especially given its far-reaching implications for the daily lives of millions of Australian workers and their families. There has not been sufficient public scrutiny of this complex legislation, despite the government's claims, thus limiting the opportunity for detailed analysis and submissions. Given the number of contradictions, loopholes and unintended consequences that emerged during the short time the bill was before the Senate Employment, Workplace Relations and Education Legislation Committee, the only logical conclusion that we can draw is that the drafting of this complex legislation was also rushed through on an irresponsible timetable. It is certain there are as yet undiscovered flaws in this legislation.

While it is our belief that this legislation is fundamentally flawed and should be rewritten, should the government continue to blindly pursue it then there are a large number of amendments required to address the flaws, loopholes and unintended consequences discovered to date. We will be tabling some amendments.

However, I reiterate that amendments cannot make a flawed piece of legislation anywhere near satisfactory, but they may address some of the more disastrous consequences.

The bill is based on a number of premises, some of which are related to productivity and the skills shortage. Yet the case that the changes are required to increase productivity has not been made. There are indications that there may be short-term productivity gains but that these will be far outweighed by the longer term negative impacts. There is no hard evidence to suggest that productivity will increase under these reforms, with the Department of Employment and Workplace Relations relying on dubious economic modelling and ignoring relevant international studies presented to the Senate committee that has evidence to the contrary. The current skills shortage is supposedly another incentive for this legislation. However, the bill specifically addresses only a small amount of the areas needed to be addressed in relation to the skills crisis facing this country. Those currently addressed are school based apprenticeships, and there have been some piecemeal comments on vocational training and education. Shorter and more uncertain employment will potentially exacerbate existing skills shortages. There is an ongoing underinvestment in training and declining on-the-job training in this country. Changing career structures and increasing workplace insecurity mean that personal investments in education and training are more uncertain and are likely to deliver reduced returns.

Other changes under the welfare to work legislation make it more difficult to get training and to study. This bill is an attack on wages and, specifically, on unions-and particularly on the capacity of unions to represent workers and their ability to effectively bargain. It reduces their right of entry. This is ideologically driven change. This legislation will impact most significantly on the vulnerable in our society, particularly those already in lowly paid jobs, those with disabilities, Indigenous people, people moving from welfare to work-or, as I prefer to call it, welfare to 'no work choices'-women, outworkers and those in casual and temporary work. This legislation is likely to lead to the development of a permanent class of working poor in Australia. The gender pay gap will increase, as it did during the period of so-called reforms in Western Australia during the 1990s. As women are more likely to be in part-time and casual employment, they will also suffer more from the removal of allowances and penalty rates.

Young people entering the work force are disadvantaged by their lack of skills and experience, and they are less able to bargain and negotiate, as was clearly shown in the research I tabled in the chamber not long ago. Young people bargaining from a position of less power are willing to accept lower conditions and perhaps to trade away existing protections, and that will ultimately drive down conditions for everyone. Disadvantaged young people already on the outer are likely to be further marginalised, and existing problems will be made worse.

There was no consideration in the committee, or elsewhere, given to the likely impact on Indigenous Australians, who already face high unemployment and ongoing discrimination in the work force. The impacts of this legislation on the vulnerable and the disadvantaged need to be taken into consideration in the context of the combined impacts of Work Choices and Welfare to Work. In the real world, this will put people on welfare looking to enter the work force in the unenviable position of being obliged to take any work that they are offered. Unscrupulous employers will be able to use the threat of an automatic eight-week suspension to force them into unfair individual agreements with below-award conditions.

I also would like to consider the impact this legislation is likely to have on working families. Rather than improve the work-family balance, as claimed, many more families will find it harder to find family time as it becomes more difficult to negotiate working hours and the pressure to work unsocial hours increases. People will end up working longer, less family-friendly hours without the consolation of overtime or penalty rates to make up for the family time they lose, thus allowing annual leave, weekends and other conditions to be negotiated away for higher wages in a climate of increasing job insecurity and tightening wages. That places under threat work conditions on which family arrangements, such as child care, holidays and parenting time are planned and managed.
Working mothers and family carers are less able to be flexible in their work hours and will be strongly disadvantaged by measures that encourage unsociable hours and allow employers to alter working hours at will.

Previous parental leave provisions, including a right to return to work on a part-time basis, have been lost. This legislation explicitly excludes parental leave provisions for people in same-sex relationships, in contradiction with the many rules within the Workplace Relations Act 1996 that require nondiscrimination on the grounds of sexual preference, and in contradiction with the antiterror legislation that is just about to come before this chamber. There has been no family impact statement made available by the government, and they have indicated they have no intention of providing one. I think the reasons for this are probably fairly obvious. I am glad that Unions New South Wales have done one. The results are not pretty.

The removal of 'fairness' as a criterion for setting the minimum wage, and a focus on purely economic criteria such as unemployment rates, will force the Australian Fair Pay Commission, the AFPC, to take an extremely cautious approach to increasing the income of the lowest paid workers. One would have to conclude that naming it the Fair Pay Commission is a cynical exercise in spin-doctoring, given that there is absolutely nothing that compels it to be fair. I put it to the chamber that either fairness should be added as a criterion for the Fair Pay Commission to take into consideration or the word 'fair' should be dropped from the title of what would be better known as the Australian Pay Commission.

The minimum wage is bound to drop under this act, as it did in Western Australia during the 1990s, by up to $50, when similar, though less harsh, legislation was introduced. The same thing has happened in New Zealand. There is no evidence to support the claim that pushing down the minimum wage will create more jobs; to the contrary, a 40 per cent increase in the minimum wage in the UK actually corresponded to an increase in employment.

Eliminating overtime and penalty rates will not increase employment but will in fact have the opposite effect, leading to longer and less sociable hours for potentially fewer existing employees. Higher hourly rates for overtime will no longer be an incentive to employers to manage their workloads or to hire more staff when demand increases. Workers currently in areas of skills shortages, with a good bargaining position, are unlikely to suffer an immediate drop in wages; however, they will become more vulnerable to future decreases when the economy inevitably slows down. In some industries it is likely competition will lead to a bidding war driving down wages, as experienced in Western Australia in, for example, the cleaning and security industries. The overall impact will be increasing wage dispersion, with the gap between those at the top and those at the bottom ever widening.

Using the minimum wage rate as an economic tool means that the lowest paid in our society bear a disproportionate burden of economic management. The minimum wage rate would have to drop substantially to have a noticeable impact on unemployment, which would then have the unintended effect of making unemployment benefits more attractive. Unemployment benefits would then be driven down. It would be a race to the bottom and there would certainly be the development of a class of working poor.

The definition of 'standard working hours' as an average of 38 hours per week taken over an entire year does not comply with community expectations and leaves significant room for abuse and manipulation. The standard working week should be built around a community standard of 38 daylight hours Monday to Friday, and appropriate compensation should be offered for those working unsociable hours.

I have mentioned in the chamber a number of times before that I am deeply concerned about the implications for safety in this legislation. I believe inadequate attention has been paid to occupational health and safety implications, with a failure to adequately acknowledge the role that collective bargaining plays in ensuring safe workplaces. Public safety is a major concern, as under the act industrial action is only permitted where workers can demonstrate immediate threats to their own personal safety. Concern for the safety of others, such as patients, schoolchildren or the general public, does not constitute valid grounds for action.

In the past, health and safety education and the negotiation of best practice has been taken on largely by unions, who are effectively excluded under this and other acts. The combination of decreasing work force skills and experience, greater work force turnover and increasing unsociable hours is likely to have severe implications for health and safety. The impact on the economy of time lost to health and safety problems versus time lost to industrial action is 20 to one. The minor gains this act may have in reducing the already lower number of hours lost to industrial action will be overwhelmed by the potential occupational health and safety costs.

This bill claims to encourage bargaining in the workplace. However, there are a number of provisions which work against this and actively discourage it. You cannot bargain effectively in a situation where there is demonstrably unequal power. This is a nonsense. Loss of the no disadvantage test is a disincentive to bargain, especially when employers can unilaterally terminate the bargaining period at any point, with the result that the worker falls back on the five minimum conditions-which are really four.

If you cannot reach agreement, there is no capacity to enter into arbitration to resolve the deadlock. Employers can manipulate the process to contrive a situation where they can end the bargaining process. There is a mandatory requirement for the AIRC to suspend a union's bargaining period once the employer has gone to the AIRC, which will enable an employer to contrive a situation to force an end to industrial dispute, hence further reducing employees' ability to negotiate. Workers can be forced back to work by the AIRC when they are not being paid. The way the legislation currently stands, your boss could stop paying you and lock you out and then the AIRC could force you to return to work for no pay.

Tell me how it is bargaining or not duress when an employer can require an employee to make an AWA as part of a condition of employment? How does it aid bargaining when AWAs are not even overviewed by the Office of the Employment Advocate anymore? Employers can get the benefit of a non-compliant AWA as soon as it is lodged. Employers can ignore the rules for AWAs and still have them operating.

The essential service provision in the legislation allows the minister to halt bargaining and require workers to go back to work, but the definition of 'essential service' is discretionary. Employer greenfield agreements effectively allow employers to unilaterally declare workplace pay and conditions for a new venture without bargaining with anybody. The definition of a new business venture or undertaking is so broad as to encourage employers to quickly move out of existing arrangements by restructuring.

[Debate interrupted.


Second Reading Speech Resumed]

Senator SIEWERT (Western Australia) (5.36 p.m.)-As I was saying, what incentive is there to bargain when an employer can ignore provisions requiring genuine advice and consultation in making, varying and ending agreements? The Workplace Relations Amendment (Work Choices) Bill 2005 will not encourage employers and employees to bargain to boost workplace productivity or to help balance work and family commitments; in fact, it will undermine such bargaining.

This legislation conveys unprecedented executive powers to the Minister for Employment and Workplace Relations to make determinations, to intervene in workplace agreements and disputes and to alter the act through regulation. This level of executive power is incompatible with the proclaimed spirit of the legislation of encouraging flexible bargaining and may act as a disincentive to employers and employees entering into discussions that may be limited or overridden by the minister.

A number of items are left to the minister's discretion-in fact, there are 196 references to the regulations. The minister can amend or veto outcomes of the Fair Pay Commission. The minister can unilaterally add prohibited items which restrict the ability of parties to freely negotiate workplace conditions, reducing the flexibility of both parties to come to an agreement to increase productivity and improve the work and family balance. The minister can declare particular enterprises essential services, thereby restricting bargaining periods and the possibility of industrial action and allowing the minister to force workers back to work.

In conclusion, the Workplace Relations Amendment (Work Choices) Bill 2005 will lower minimum wages and the wages of Australian workers, undermine workplace rights and conditions, deliver flexibility to employers at the cost of employees, add unnecessary levels of complexity to the regulation of industrial relations that will disadvantage smaller businesses, create additional problems for those trying to balance work and family, disadvantage those already marginalised in our society-including women, young people, Indigenous Australians, those with disabilities, the lowly paid and those in part-time or casual work. It will widen existing disparity in wages, entrench inequalities and create an underclass of working poor. It will not boost workplace productivity but will undermine it by favouring short-term, low-paid work that discourages investment in employee training.

This is badly flawed legislation with a raft of serious intended and unintended consequences that will impact on the daily lives of most Australians. This legislation is being pushed through with unnecessary haste when, in reality, there is an urgent need for more time to properly assess and evaluate its impacts. The best approach would be to abandon this bill and start again. Failing that, a number of major amendments are required to address the major flaws in the legislation and improve a range of unintended and perverse effects.

It is the considered opinion of the Australian Greens that enacting this legislation will have widespread deleterious effects on the Australian way of life and will ultimately undermine productivity and innovation and foment an undercurrent of workplace unrest. I am trying to be polite by referring to the 'unintended consequences' of this bill, such as the impacts on outworkers. 'Unintended consequences' is what we might consider the legislative equivalent of the well-known US military euphemisms 'collateral damage' or 'friendly fire'. In reality, the government is putting its foot to the floor on this legislation. It is legislating with reckless abandon and it will be no surprise if working families get crushed between the wheels of this workplace juggernaut.

That is your family impact statement for you.

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