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Thursday, 13 March 2008
Page: 1741


Mr MARLES (1:46 PM) —Having been at the coalface and having seen firsthand over a number of years now the unfair impacts that the Work Choices laws have had under the Howard government on so many working Australians, it is an utter joy to be standing here today speaking in support of the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. At the heart of the Howard government’s Work Choices legislation was the unfair legislated scheme of individual contracts, Australian workplace agreements, otherwise known as AWAs. At the heart of this bill is the removal of AWAs from the Australian industrial landscape. It is item 1 of the bill. In the midst of all the unfairness in the Work Choices legislation—the way in which it attacked the safety net of award terms and conditions, the way in which it provided an unbalanced set of laws for how employers and employees related to each other, the way in which it attacked trade unions and the way in which it abrogated our responsibility to have freedom of association and legislation in this country—at the end of the day the critical thing was that it sought to replace collective bargaining, in one form or another, as the cornerstone of our industrial relations system and replace it with a legislative scheme of individual contracts, Australian workplace agreements.

In the hierarchy of agreements, which is really the central piece of architecture in any industrial relations system, the Work Choices legislation placed AWAs right at the top. When a single worker tries to negotiate one on one with their employer, it is not rocket science to understand that they do so from a disadvantaged position of power. It is the employer who gets to say what the employee has to do, it is the employer who has the right to hire and fire, it is the employer who pays the wages of the employee—and for those reasons over the last 150 years employees have banded together, often through trade unions, to try and negotiate as a group and maximise their bargaining power. That simple idea is really at the heart of what is now understood internationally to be an international human right. It is at the heart of virtually every industrial relations system of every developed country in the world. It is at the heart of a range of ILO conventions to which Australia is a signatory and, in theory, we were obliged to uphold the terms of those conventions over the last 11 years. Of course, the ILO’s Committee of Experts said on a number of occasions that the industrial relations legislation of the Howard government in its various forms failed to meet the terms in those conventions. That meant that the legislation placed employers in an unprecedented position of power in relation to their workforce, an unprecedented position of power where they could ask their workers to do more work for less money.

It is important to understand the difference between that legislated scheme of individual contracts and a common-law scheme of individual contracts, because any notion that the reason that AWAs were put in place was to provide some incentive to employees to work harder, and that there would be reward for working harder, is absolute nonsense. Of course, throughout the entire history of industrial relations in this country employers have always had the right to reward extra effort on the part of an individual through common-law individual contracts. But the difference is this: throughout most of the life of our industrial relations system in this country, in every one of its terms a common-law individual contract must have been better than whatever the safety net, which has been the predominant industrial relations instrument in the workplace, was. Australian workplace agreements, on the other hand, were quite different to this. All they needed to do to become effective in law was to pass a fairness test measured against a handful of conditions, which often meant that in a workplace where there was a collective agreement in place and where there was an established set of collective conditions, measured against the fairness test an individual legislated AWA was able to provide a set of conditions which were in fact far worse than the collective standard in that workplace. As a result, even though it met the fairness test, it gave rise to a very unfair result. That needs to be seen as the reason why the Howard government put in place its system of AWAs. It was not about rewarding the effort of individuals; it was a legislated scheme, the purpose of which was absolutely about undermining collective standards of employment.

One has to say that, in that aim, this legislated scheme of AWAs was quite successful. That famous set of figures which was ascertained from the budget estimates process in May 2006 showed that, after the first month of operation, every AWA that had been registered cut at least one award condition and that 63 per cent of AWAs cut penalty rates, 64 per cent cut annual leave loadings, 52 per cent cut shift work provisions, 48 per cent cut at least one monetary allowance, 36 per cent cut declared public holidays—and the list goes on and on. Of course, having discovered how toxic that particular set of figures was, the Howard government made sure that the figures around AWAs were never released again.

To properly understand how unfair these Australian workplace agreements are, one can look at the ways in which laws govern the way we engage in contracts in other aspects of our lives. If you look at the commercial context—for example, the Trade Practices Act—you can point to the example of Victorian chicken farmers. They found themselves in a position of poor bargaining power in relation to a number of key chicken producers such as Steggles and Inghams. Because they felt they were unable to bargain fairly, one on one, with those chicken producers, they went to the ACCC and sought an authorisation to negotiate collectively with those chicken producers. In the ordinary course of events, that would be collusive conduct under the Trade Practices Act. But when the ACCC looked at that they said it was fair enough. The said that it is difficult to ask a single chicken farmer to negotiate, one on one, with a large chicken producer. So they authorised those chicken farmers to have the right to negotiate collectively with the chicken producers.

At the end of the day, under the Trade Practices Act, that represents a form of a collective bargaining right. Yet, under the legislated scheme of AWAs, under the John Howard legislation, you did not have any of that. The common law, which regulates the way in which we engage in normal contracts, contains notions of fairness and equality of bargaining power. Yet there is none of that in Australian workplace agreements. So you could have an employee who is earning $50,000 a year being asked to negotiate, one on one, with a multibillion-dollar employer. People might say that that happens indirectly throughout our lives—we buy a can of Coke from Coca-Cola and we engage in a mortgage with a large bank—and that is true. But in each of those situations there is the ability to shop around, and that happens in a competitive market. The most significant of those contracts, a mortgage, might consume 40 per cent or nowadays even 50 per cent of somebody’s income. But a contract of employment represents 100 per cent of somebody’s income. So we had a situation whereby the single most important contract that anybody will ever sign was regulated by a system of law which had no entrenched sense of fairness within it.

For that reason it is fair enough to make this claim: there was no other law in the land which placed one person so much at the mercy of another as John Howard’s system of Australian workplace agreements. AWAs were a stain on our law and they made this country an industrial pariah. That is why it is item 1 of this bill to get rid of AWAs. But we do not seek to do that overnight. There is a sensible transition process in which this will occur. The bill provides for the establishment of individual transitional employment agreements, which will be allowed to be entered into right up until the end of next year. This is not by any means shock treatment in ending AWAs overnight, in terms of their application—albeit new AWAs will not be able to be entered into once this bill becomes law. Rather, what we see with this bill is a gradual phasing out of Australian workplace agreements.

The bill provides for a number of other things. It provides for a fairness test—


Mr Hockey —I thought you got rid of it!


Mr MARLES —It provides for a proper fairness test and getting rid of the so-called fairness test that the last government had in place. It provides for a comprehensive no disadvantage test which will be measured against the relative instrument in the workplace, which is how it should be. It provides for proper handling of agreements so that they will only commence when the Workplace Authority Director has approved them, and there will be no unilateral termination of collective agreements on the part of an employer. The bill removes the insidious workplace relations fact sheet—Howard government propaganda which was put in the hands of employers, who were then obliged to distribute it to their entire workforce. Imagine this: we had a conservative government which was trying to stand for the idea of small government not intervening in people’s lives, yet it came up with a piece of legislation that put a piece of propaganda in the hands of employers and directed that they distribute it to every one of their employees. It is hard to think of a more interventionist piece of legislation, yet it characterises the whole attitude of the Howard government to industrial relations throughout its entire 11 years. It was the most interventionist government this country has ever seen.

This bill will get rid of that insidious piece of propaganda. The bill will also seek to begin the process of improving the safety net. We will have an award modernisation process, unlike the one the previous government had in place, which will seek to retain all the good things that are embraced in awards which have come from 100 years of learning. But it will also acknowledge that awards in their current form are cumbersome and complex. Every player in the industrial scene understands that. It will be about trying to make a modernised system of awards for the 21st century. This bill is only a start in dismantling the unfair Work Choices laws, and there is of course much more to come. But it does address the immediate issue and the worst aspect of the Howard government industrial laws, and that is the legislated scheme of Australian workplace agreements. When this bill is passed, it will remove a blight from Australia’s industrial landscape and the law books of this country. I commend this bill to the House.


The SPEAKER —Order! It being 2 pm, the debate is interrupted in accordance with standing order 97. The debate may be resumed at a later hour.