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Sunday Agenda -

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Sunday Agenda

6 September 2009

Debate: ACTU Secretary Jeff Lawrence.

Chief Executive, Australian Federation of Employers and Industries, Garry Brack.

Moderator: Helen Dalley

Helen Dalley: The Industrial Relations Commission released details this week of 39 new awards, the
first part of the Rudd Government's plan to streamline thousands of them into just 130 new national
awards. The only problem is that some workers look like being worse off despite government
assurances to the contrary and employers' costs look likely to increase. Here to discuss this
explosive issue is Garry Brack, Chief Executive of the Australian Federation of Employers and
Industries, who's with me in Sydney, and ACTU Secretary, Jeff Lawrence who joins us from Melbourne.

Jeff Lawrence, if I can ask you first why are you displeased with the Industrial Relations
Commission's release of new awards?

Jeff Lawrence: Well, because there are some instances where people appear to be worse off as a
result of this process and whilst we've understood that this process would take place we've always
known it would be a difficult process but we've been absolutely determined, and we remain
determined, to make sure that people are not disadvantaged as a result of the process.

Helen Dalley: Okay. Well, the awards might be changing but what specific evidence do you have so
far of actual pay and conditions potentially being reduced?

Jeff Lawrence: Well, of course these awards haven't come into operation as yet. They're linked to
the National Employment Standards which operate from 1 January next year, but we know that the
Commission has now published a whole range of draft awards and it's also dealt with the transition
provisions this week as well. So, it would appear that there may be some issues that need to be
dealt with. Now, in order to deal with that the government has provided for what are called 'take
home pay orders' that will be able to be utilised. But unions will be seeking to make sure by
whatever means we can that people are not disadvantaged. And of course over and above the awards
are collective agreements and so ultimately there's also the scope for people to bargain and to
deal with any issues of disadvantage through collective bargaining.

Helen Dalley: All right. But you're saying that you don't want any worker disadvantaged. Your
colleagues at the Services Union and the Australian Workers' Union, Paul Howes, he has been very
forceful about already some workers under his jurisdiction will be potentially 75% worse off in the
offshore oil and gas workers.

Jeff Lawrence: And there have been other instances, Helen, that have arisen in relation to the
finance sector for example which is one of the areas where the Deputy Prime Minister acted and
amended her requests and asked Fair Work Australia to look at this again. So, look I think in the
end it is an important process; it's a complex process. What we're doing here is reducing over 2500
awards into about 130 awards and there are always going to be hiccups in the process but I think
it's important that it's completed. But unions of course will fight to ensure that their members
and workers generally are not disadvantaged.

Helen Dalley: But Mr Lawrence what I'm asking you is do you know yet who is going to be

Jeff Lawrence: Well, we can identify potential areas of disadvantage as a result of the awards that
the Commissioner has published. Whether that actually happens will depend upon further
consideration by the Commission as the process goes forward.

Helen Dalley: All right. Minister Julia Gillard repeated the government's election promise in June
last year when she said that what we're guaranteeing is that every employee in the country will
have the benefit of our 10 national employment standards and importantly she said we're
guaranteeing that nothing can strip those standards away. Now, are you worried the government will
back away from that promise, is already backing away?

Jeff Lawrence: No, no. The 10 national employment standards can't be traded off. Very importantly
of course they can't be undermined by Australian workplace agreements, by individual contracts. And
this is the real difference in this process. Notwithstanding the difficulties of it in the end
we'll have a safety net composed of the National Employment Standards and the modernized awards and
ultimately there'll be a safety net which will be easier to understand, easier for employers to
comply and easier to enforce. And so ultimately I think that's going to be a good thing. It'll be
the basis of a system on top of which will sit collective bargaining.

Helen Dalley: All right. Garry Brack, if I can bring you in here. Now, what has been employer's
reaction specifically to this area of award modernization?

Garry Brack: Well, we know it's a difficult process. The Federal Commissioner's job has been to try
and condense all of these things, as you said thousands of awards of coming down to 130.

Helen Dalley: And state based awards coming down to national awards too.

Garry Brack: Yes, federal awards and state awards coming down to 130. There'll still be stated
based awards as well, at least for the time being. But what we know already is that in many of
those awards there are increased costs for employers; wages are going up, penalty rate conditions
might have got much more difficult.

Helen Dalley: So, let's just take that apart. You're saying that in some of these new awards pay
and conditions have actually increased. Whereabouts?

Garry Brack: Absolutely. Take an example the clerical award which is going to be a new modern
federal award, it applies right across Australia, but they've picked up the Queensland wage scale
and wage rates and applied that in other places. That means those wages are going to be higher than
in New South Wales currently, higher than in various other states. They'll have different penalty
rates say in the retail sector; higher penalty rates that will operate in a number of states.
They've picked up the Victorian penalty rate regime. Now a pretty difficult job for the Commission
because it's been given a request from the minister that says no reductions in wages or benefits
for employees, no increased costs for employers. Well, the fact is that in very few cases employees
may be disadvantaged, but in many cases employers are going to be disadvantaged.

Helen Dalley: Well, how else are employers going to be disadvantage? You mentioned just one in
clerical workers and some retail workers.

Garry Brack: Clerical and retail, they're pretty important areas. Security for example, I think
their wage rates are going to go up fairly substantially, so you've got those sort of things
applying across a whole range of awards. The Commission I think fairly says well if we're going to
have a single award how do we do that by condensing what might be literally hundreds of awards that
currently exist? So, yes, there's a problem. But in many of these issues, such as the penalty rate
question, historically there would've been test cases debating those issues and coming up with a
new standard. Well, we haven't had that. It's been a very truncated process; very difficult to try
and deal effectively with the issues. The Federal Commission's got no time at all to do it
adequately. I think the fly in the ointment is the fact that the federal government says it's all
got to be done by 1 January next year even though now we've got another six months grace before
those awards start to operate.

Helen Dalley: Jeff Lawrence, can I have your response to that idea that some pay and conditions
will actually increase under the new awards?

Jeff Lawrence: Look, what we've had here is quite a scurrilous campaign that's been mounted by a
range of employer organizations. It's quite misleading to give the impression that there are a
whole range of cost increases here way out of proportion . . .

Helen Dalley: Well, he has just said in the retail industry and also some clerical workers, are you
denying that that's the case?

Jeff Lawrence: Well, no, it's clearly the case that where there's been a national standard set the
Commission needs to look at what that standard is. In lots of industries, lots of awards we have
different standards that have grown up because of history. We need to get to a national position.
But what hasn't been said here by Garry is that there is actually a five years transition period to
phase those changes in and the Commission's made that clear in its decision in the last week or so.
And what we've had actually is some reductions in conditions of employment that will operate pretty
much straight away, but any benefits, significant benefits, are going to be phased in over five
years. So the employers have really been quite misleading in that whole campaign.

Helen Dalley: All right, Garry your response.

Garry Brack: Look, having a five year phase in period for various increases in costs does not take
away the fact that the increases in costs are there. It just means you've got longer to work out
that you're going broke. If we had them operate on the 1 January or 1 July next year . . .

Helen Dalley: Yes, but then you don't have to pay them necessarily from 1 January next year.

Garry Brack: Not instantly, but it's a question of time, isn't it? If you get to a change in
penalty rates even though it's over a period of time the fact is when they are fully operational
you then find you can't function effectively as a business. So the phase in is not helpful except
that it puts off the evil day.

Helen Dalley: All right. Jeff Lawrence, if I can ask you, earlier this week the Commission warned
that it could not meet the government's request that neither workers nor bosses would be worse off
due to the process. How would you therefore describe the process? Does it make a mockery of the
promises that were made by the government?

Jeff Lawrence: Well, I'm not here to speak on behalf of the government. All I can say is that on
behalf of the unions . . .

Helen Dalley: I'm wondering if you're going to criticise the government at all like some of your
unions have been.

Jeff Lawrence: Well, clearly where the government has intervened in this process in a way which has
disadvantaged workers we have criticized the government and we'll continue to criticize anybody or
any process which disadvantage workers. But nevertheless I think the point really is that the
employers supposedly supported this process. But what we have is a campaign against the process.
Why is that? Well, I think the real reason is that we've got a whole range of employers who in fact
really don't support awards, really don't support the fact that there should be a comprehensive
safety net, who want to go back to WorkChoices. That's actually the basis of a range of this
agitation that's taking place.

Helen Dalley: All right. Well, let's get Garry's response.

Garry Brack: Let me just close on this basis. If you're in outback New South Wales or Queensland,
et cetera, you are already paying close to the existing award provisions. If the increases that are
coming in in these awards are going to apply to you, and they do, then you're going to find it much
more difficult to operate. So we'll see very negative effects from all of that. It's not a question
of a negative campaign, it's simply us saying there was a promise we wouldn't experience increased
costs but we're going to.

Helen Dalley: All right. So, you're not just against the whole idea of awards?

Garry Brack: We've been strong supporters of awards for a long time. There's going to be
simplification but . . .

Jeff Lawrence: Well, that's just not right.

Garry Brack: But the end result.

Jeff Lawrence: That's not right, Garry.

Garry Brack: Jeff, you don't know what you're talking about. The fact is we're going experience
increases in costs and that was something that was a breach of promise.

Helen Dalley: Jeff, quickly a response?

Jeff Lawrence: Well, look I think really what is behind this campaign is in fact opposition to the
existence and the strengthening of the safety net. It is a difficult process, unions will fight to
ensure that workers are not disadvantaged and we'll do that through a combination of talking to the
government, arguing in the Commission, and ultimately collective bargaining. So in the end as a
result of the process workers will be better off because there'll be a stronger safety net that's
there and they can participate in collective bargaining and that will lead to overall improvements
as well.

Helen Dalley: All right. I just do want to move on very briefly to a big issue, I know, but Garry
Brack do you agree with other employer groups who say the new unfair dismissal laws could actually
blow out, balloon out claims to something like 10,000, whereas the minister says that's not
nonsense, since July there's only been something like 1233 unfair dismissal claims and 417 have
already been resolved?

Garry Brack: Go back to 1993 Laurie Brereton did it then and we experienced those sort of numbers.
The big risk is that that could certainly happen. Now, we're only just starting to see a resurgence
in the number of claims. So, yes, the possibility is quite clearly there.

Helen Dalley: Okay. Jeff, just very briefly on that do you think unfair dismissal is going to be
another fighting ground really for you?

Jeff Lawrence: Well, look, I think there's a system that will be in place that provides for
probation periods, that provides for a much more simplified system. And again what we have here is
actually a restoration of a right that was taken away by WorkChoices. So of course workers and
unions are going to use that right, but I'm sure it'll be a workable system that'll provide for a
streamlined process, and most importantly will provide a remedy for unfair dismissal for workers.

Helen Dalley: All right. We do have to leave it there. Garry Brack and Jeff Lawrence, thanks so
much for joining us.

Garry Brack: Thank you.

Jeff Lawrence: Thank you.