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Wednesday, 30 November 2005
Page: 20

Senator ALLISON (Leader of the Australian Democrats) (10:43 AM) —I would like to begin this speech on the Workplace Relations Amendment (Work Choices) Bill 2005 by quoting Pru Goward, the Human Rights and Equal Opportunity Commission’s Sex Discrimination Commissioner. At a committee hearing into this bill, she said:

A society is only as stable and strong as its most fragile.

The Democrats hold the view that, with the so-called Work Choices bill, the Liberal and National parties are assaulting the cultural, economic, social, institutional, legal, political and constitutional underpinnings of work arrangements in Australia. As a result, we believe we are destabilising Australian society.

The landmark Harvester case of 1907 instituted a basic wage for men and established an industrial relations system in recognition of the need to legislate the welfare of family over profits and productivity. Harvester placed the welfare of the family at the centre of social economic policy from the beginnings of Federation. Since then, the Australian industrial relations system has been built around a framework that provides a safety net for the most vulnerable and a balance between community standards and individual needs.

The need for such a system was articulated by the Australian Catholic Commission for Employment Relations. They said:

... some employees come to the job market disadvantaged and that, for them, the labour market will not satisfy their fundamental human needs. Their dignity requires appropriate intervention and protection. There is a need for a “safety net”, to use a contemporary term, to ameliorate some of the effects of an unrestrained labour market.

While there have been reforms to the industrial relations system over time—most recently in 1993 and 1996—the reforms have maintained the core framework centred around a safety net of pay and conditions to protect the vulnerable, and mechanisms to balance community expectations and individual circumstances. Yet this bill will undermine the foundations of Australia’s industrial relations system. It does this by abolishing the no disadvantage test and replacing it with five minimum standards, by effectively abolishing the award system, by taking away the wage-setting role of the AIRC and further reducing its role in other areas, by abolishing unfair dismissal protection and by unfairly and unnecessarily increasing the bargaining power of the employer.

The bill will set no maximum weekly hours, no entitlement to a stable income, no meaningful entitlement to overtime payments, no access to modern work and family standards, little or no job security for many Australians, no right to collective bargaining and no entitlement to penalty rates for working on public holidays. While it is unlikely that all Australians will be made worse off by these changes, we are convinced that it will erode conditions over time and prevent the widespread take-up of new community standards. More importantly, this bill will have a detrimental effect on vulnerable and disadvantaged employees and job seekers. For them, this bill is not fair; it is profoundly unfair. HREOC Sex Discrimination Commissioner Pru Goward told the committee that:

... the bill fails to adequately protect ... workers with disabilities, Indigenous people, people moving between welfare dependency and paid work, and those in low-paid wage jobs, for which there are many competitors and who consequently have little individual bargaining power.

She went on to argue that the capacity for more vulnerable employees to bargain effectively and to choose their employment arrangements will be nonexistent. For them, individual bargaining will be a case of ‘take it or leave it’. She said:

Allowing employers to make employment conditional on an employee taking up an AWA, for example, means that that choice of employment arrangements, especially for those on minimum wages, is extremely limited. The consequences are felt not only by workers but by their children and families. HREOC has serious concerns that, once an agreement is terminated, neither that agreement nor an award is in operation, with employees presumably to be covered only by the standard. This means that an employer can terminate an agreement unilaterally after the nominal expiry date of the agreement and that all employees covered by the agreement revert to the standard. This provides employers with a great deal of leverage over the terms and conditions of any new agreement.

Law professor Andrew Stewart argued that the way the bill is written actually points to ‘a calculated attempt by the government to destroy the award system and prevent it from functioning as any meaningful form of safety net’. Dr Jill Murray argued that the system is:

... designed to ensure that an as yet unknown number of workers have as their only legal minimum entitlements the terms and conditions set out in the Australian Fair Pay and Conditions Standard.

She called these jobs ‘the worst jobs’. Dr Murray rightly argues:

In any civilised society, it is a proper function of the law to ensure that at an absolute minimum, the worst jobs are ones which we are not ashamed to have in Australia. These should be jobs that we are comfortable seeing our fellow Australians doing and, if it comes to that, doing ourselves.

The Democrats would argue that, unless an economy is genuinely in dire straits—which Australia’s is not—economic reform is not more important than social cohesion. In any case, the preservation of social capital is crucial to economic and social success in the long run. Employment, wages and working conditions directly affect the standard of living and quality of life of individuals and families. It is of course important that labour market arrangements foster the efficient use of labour and promote participation in the work force. But they also need to recognise that labour is a distinctive input to production and that wider social objectives and relationships are involved, including relationships between work, leisure and family, providing safe workplaces and the role of workers in society at large.

I think the Minister for Employment and Workplace Relations, Kevin Andrews, needs to be reminded of the speech by Pope John Paul II, who argued that human rights must take precedence over the market. He said:

It would appear that, on the level of individual nations and of international relations, the free market is the most efficient instrument for utilizing resources and effectively responding to needs. But this is true only for those needs which are “solvent”, insofar as they are endowed with purchasing power, and for those resources which are “marketable”, insofar as they are capable of obtaining a satisfactory price. But there are many human needs which find no place on the market. It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied, and not to allow those burdened by such needs to perish. It is also necessary to help these needy people to acquire expertise, to enter the circle of exchange, and to develop their skills in order to make the best use of their capacities and resources. Even prior to the logic of a fair exchange of goods and the forms of justice appropriate to it, there exists something which is due to man because he is man, by reason of his lofty dignity. Inseparable from that required “something” is the possibility to survive and, at the same time, to make an active contribution to the common good of humanity.

The Democrats argue that it is important that we balance employee and employer rights. If employers had all the power then we would see in many cases a race to the bottom, where wages would be driven down, people would be forced to work longer for less and job security would be nonexistent. The social contract would move from cooperation to opposition and conflict.

The government argues that the Democrats, Labor, the Greens, academics, churches, welfare organisations, legal practitioners and the Human Rights and Equal Opportunity Commission are just scaremongering. Yet we have evidence from New Zealand, from the Victorian Kennett government and from the Western Australian Court government to suggest that reforms similar to those in the Work Choices bill will have a negative impact on disadvantaged Australians and on Australian society overall.

In 1991, the New Zealand National government at that time radically deregulated the industrial relations system, introducing its Employment Contracts Act. Although some of those reforms produced the desired outcome, it is now clear that the reforms did not produce the results hoped for by their advocates. By the end of the 1990s, New Zealand was a less equal society than ever before in terms of income distribution. It had a lower full-time participation rate, lower real wages and flatter productivity, with a diaspora of up to a quarter of its population—many of them in Australia—earning considerably higher rates of pay than they could at home.

The deregulation of the Western Australian industrial relations system during the Court government resulted in decreases in wages and increased inequality, and it saw certain groups of workers worse off—in particular, women fared badly relative to men and to other women in Australia. In February 1992, the WA gender pay gap was 22.5 per cent. By May 1995, it had widened to 27.8 per cent. The 2005 research paper by the Liquor, Hospitality and Miscellaneous Union which analysed the effect of workplace agreements in WA found that the Workplace Agreements Act of 1993 contained provisions which were significantly inferior to those in awards. It found that, under the act, standard full-time working hours increased from 38 to 40; the accepted minimum casual loading of 20 per cent was reduced to 15 per cent; junior rates applied up to the age of 21 years; and the accrual of unused sick leave was removed, as were penalty loadings for weekend and shift work.

The Western Australian Parliamentary Secretary for Agriculture and Forestry, Mr Anthony McRae, described the effects of the 1990s reforms on the industrial relations scene there. He said:

There is very clear research based evidence that will show and demonstrate ... that the process of establishing individual workplace contracts, with the removal of awards as an underpinning basis for fairness and standards across industry, creates circumstances in which there becomes a downward bidding in economic terms amongst enterprises and amongst employees. That is the inevitable and guaranteed outcome of what the national parliament is considering ... and you have Western Australia as a stark and failed example of that.

Similarly, in Victoria deregulation as a result of the Kennett reforms and the establishment of schedule 1 workers created a significant low-wage sector, particularly in small workplaces and in certain industries. Schedule 1A workers were nearly twice as likely to be low paid compared with employees on awards; 75 per cent were not paid penalty rates for working weekends; 65 per cent were not paid annual leave loadings; and only six per cent were paid shift allowances. Evidence from a Victorian IR task force found that workplace bargaining over entitlements was never achieved. Findings from the ACIRRT Victorian employers survey found that the trading off of entitlements was not reflected in an increase in minimum hourly pay rates.

This bill dismantles the safety net and other protections, and the government has offered no alternatives to protect the disadvantaged. Again, I quote from Sex Discrimination Commissioner, Ms Goward:

The HREOC does have grave concerns about the implications of dismantling or removing any significant planks of a social, legal or economic contract in Australia which—

as she correctly points out—

has evolved over 100 years and around which a variety of institutions, policies, cultures and government programs have grown up. Unless careful adjustments are made to surrounding institutions, laws and policies, inevitably that whole contract is challenged.

Not only has this not happened but the government, via the Work to Welfare bill, has stripped away the welfare safety net for widowed, separated and single parents and for people with disabilities. Not only will those groups of people be shifted off the pension and onto Newstart, which will result in between $29 and $106 a week less, but if they do not accept a job offer they will lose financial support for eight weeks. Many of these people will be forced into low-paid jobs with fewer conditions and less flexibility and security.

The government has publicly admitted that the young, the unskilled and those with little choice will have to take low-paid inflexible jobs to get a foot in the door. The government argues that four out of these 10 workers move onto other jobs. What about the other 60 per cent who are trapped in a vicious cycle of low-paid, unskilled work that provides no training, no security and no flexibility to balance family needs?

I put it to the government that the mark of a civilised, successful, First World liberal democracy is high living standards and equitably shared wealth, and an egalitarian society that respects and protects the working poor and the disadvantaged, and that has advanced working conditions. The Prime Minister has failed to provide any empirical economic evidence to support these changes. He has failed to provide genuine choice and he refuses to give a guarantee that no workers will be worse off, because he knows that poor, disadvantaged and powerless workers will be worse off. It is for these reasons that I and my Democrats colleagues cannot possibly support this bill.