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Aggrevating anxiety: the Howard Government's disengagement from international labor standards: speech to Australian Labour Law Association, Sydney.



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ROBERT MCCLELLAND MP SHADOW MINISTER FOR FOREIGN AFFAIRS

Speech to Australian Labour Law Association Sydney University Law School 7 March 2007

AGGREVATING ANXIETY: THE HOWARD GOVERNMENT’S DISENGAGMENT FROM INTERNATIONAL LABOR STANDARDS

Introduction

The pressures of globalisation are a reality - impacting on developed and

developing nations alike. Opening up the Australian economy has

unquestionably elevated our nation’s total wealth. Some have done

exceedingly well in the new global environment but there have also been

many left behind.

For this reason there remains considerable resistance to globalisation.

The Australian Government’s Work Choices Legislation has aggravated

the considerable uncertainty and insecurity about competing in a global

economy that already existed in the community. This risks creating

opposition to the further opening of the Australian economy in the future.

Opening the global economy - many left behind

The ACTU President Sharan Burrow has reflected the views of the

broader Australian Trade Union movement in recognising and welcoming

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the growth of the global economy but cautioned about those left behind.

On 3rd November 2006 Ms Burrow said:

“We welcome the growth in the global economy but we cannot

leave behind the more than 2 billion people living on less than $US

2 a day, 187 million unemployed people - with 80 million of them

young people, around 2.2 million people dying at or from work

every year. The corporate world is not contributing enough to the

growth that we care about - decent work everywhere”.i

The broader Australian community is acutely aware of the risks of

globalisation to their job security and the impact on their family life.

Indeed it has been stated that “Australians remain protectionist both

culturally and economically”.ii

Failure to address the fear of globalisation in the general population will

continue to provide opportunities for political, social, cultural and

community disengagement. Economist Danny Roderick has warned:

“The greatest risk of all [is] that the cumulative consequences of

“globalisation” will be the solidifying of a new set of class

divisions between those who prosper in the globalised economy

and those who do not, between those who share its values and

those who would rather not, and between those who can diversify

away its risks and those who cannot”.iii

Those who are benefiting from the global economy clearly have an

interest in minimising the victims of globalisation. The “One Nation”

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phenomenon in Australia shows how economic and social disengagement

can be manipulated for political purposes.

Work Choices laws have exacerbated insecurity

The short sightedness of the Government’s industrial relations strategy is

that it has aggravated the sense of insecurity among the most vulnerable

in Australia. This has happened because the Government has taken away

a proper and effective safety net, has engaged in persistent attacks on

organisations of employees, reducing the security obtained through

collective bargaining, removing the supervision provided by the

Australian Industrial Relations Commission and by reducing coverage of

unfair dismissal protections.

Of concern for many Australian workers is the fact that established

industrial conditions have been stripped away with the gutting of

industrial awards. This has required workers to renegotiate the terms and

conditions of their employment in the absence of a comprehensive safety

net of minimum community standards. This renegotiation may not

disadvantage those with particular skills that are highly marketable.

However, for those in more vulnerable occupations they are effectively

stripped down to five iv undergarments and sent out to battle the forces of

globalisation.

Community opposition to globalisation

The broad opposition within the Australian community to economic

openness is reflected in a 2003 survey. To the question:

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• “Opening up Australia’s economy to foreign competition has a bad

effect on job security in the country” - 49% agreed but 23% were

unsure;

• “Large international companies are doing more and more damage

to local businesses in Australia” - 75% agreed, but 16% were

unsure;

• “Australia should limit the import of foreign products in order to

protect its national economy” - 65% agreed, 19% unsure; and

• “Australia should use tariffs to protect its industry - 52% agreed,

25% uncommitted.v

In removing established industrial protections for Australian workers the

Government has clearly ignored broader community concerns about the

effects of globalisation on their job security and working lives.

International responses to growing inequality

In 1996 the OECD declared that countries should not engage in

international trade without some adherence to minimum labour law

standards including freedom of association and the effective recognition

of the right to collective bargaining.vi The reasoning of the OECD was

that companies should not gain an advantage over others by outright

dereliction of such core standards of employment.

More recently the International Labour Office analysed global

employment trends and concluded:

“It is essential that periods of high growth be better used to

generate more decent and productive jobs”.

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Accordingly, the ILO adopted “full, productive and decent employment”

as a new target within the Millennium Development Goals in 2007vii.

In other words the ILO recognised that, like climate change, the harshest

effects of globalisation will only be managed by international

engagement. In that respect the Howard Government’s disengagement

from the International community is very concerning.

Australia’s disengagement from the ILO

One of the first acts of the Howard Government was to abolish the Labor

attaché position to the International Labour Organisation. Curiously,

after being vacant for 10 years, the position was reinstated in July 2006.

The question was legitimately raised whether the appointment of the

Australian Government’s representative to the ILO’s Governing Council

was more about defending the Government’s industrial laws rather than

promoting workers’ rights.viii

Compared to the former Labor Government, which ratified 14 ILO

conventions between 1983 and 1996, the Howard Government has

ratified just two. One of those is obviously desirable - The Convention

Concerning the Prohibition and Immediate Action for the Elimination of

the Worst Forms of Child Labour.ix

The other that has been ratified is Convention 155 - Occupational Health

and Safety 1981. It has been suggested that perhaps the ratification of the

OH&S Convention had more to do with the Federal Government’s desire

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to increasingly take away state government responsibility in the area of

occupational health and safety.

Among those treaties that the former Labor Government was preparing

for ratification were a number that protected basic rights of workers and

working families, including:

• C119 Guarding of Machinery, 1963;

• C120 Hygiene in Commerce and Offices, 1964;

• C129 Labour Inspection (Agriculture), 1969;

• C139 Occupational Cancer, 1974;

• C140 Paid Education Leave, 1974;

• C 149 Nursing Personnel, 1977;

• C 162 Asbestos, 1986;

• C 164 Health Protection and Medical Care;

• C 167 Safety and Health in Construction; and

• C 170 Chemicals, 1990.

These treaties focus largely on safety matters and the workplace

environment and therefore did not impact on the industrial power

balance. It is regrettable that they have not been considered worthy of

ratification by the coalition government.

Coalition Government’s breach of ILO Conventions

Since 1997 every report by the ILO’s Committee of Experts regarding

Australia’s compliance with Convention 98 (Right to Organise and

Collective Bargaining) has noted that Australia’s Federal labour laws do

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not comply with that convention or Convention 87 (Freedom of

Association and Protection of Right to Organise).

On four occasions Australia has been called to account before the

Conference Committee on the Application of Standards in relation to our

failure to comply with Convention 98. This process is reserved for the

worst breaches and indicates the seriousness with which the global

community views our non-compliance with these important standards.

A report by the ILO Committee of Experts on the Application of

Conventions and Recommendations, in 2005, set out detailed findings

against the Howard Government’s workplace relations laws (note: this

was pre-Work Choices). The report, in respect to Convention 98,

expressed serious concerns about Australia’s laws, including the

following:

• By permitting the requirement for prospective employees to sign an

AWA as a condition of employment the law fails to provide

adequate protection against anti-union discrimination at the point

of recruitment;

• By permitting improvements in employment conditions to be

conditional upon an employee signing an AWA, the law fails to

provide adequate protection against anti-union discrimination

during the course of employment;

• The lack of availability of protected industrial action in support of

multiple business agreements means that employees are not

adequately protected “against discrimination for negotiating a

collective agreement at whatever level they deem appropriate and

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that employers and workers organisations have a free choice as to

the level at which they wish to negotiate collectively”;

• The priority given to an AWA over a subsequent collective

agreement, even where the latter contains better wages and

conditions, discriminates against employees who have signed an

AWA prior to joining a union as they will be unable to benefit

from the agreement negotiated by the union until the AWA

expires;

• Allowing employers to insist on negotiating a non union

agreement, even where there are union members in the workplace,

denies employees the right to union representation in negotiations;

• The more stringent requirements for approval of multiple employer

agreements, including that they be in the public interest, is a

violation of the principle of autonomy of the parties;

• The three year period of operation of “greenfields” agreements

where the employer chooses the bargaining partner, is too long;

• Requirements that link financial support from Government for

universities to provision for AWAs are obstacles to collective

bargaining and not in conformity with the Convention.x

Report due on Work Choices amendments

The Committee of Experts on the Application of Conventions and

Recommendations is shortly to report on whether the Work Choices

legislation offends ILO Conventions. The report should be available later

this month and its findings will be instructive about how far the Howard

Government has strayed from its international obligations.

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In the meantime, informed commentators have suggested that the Work

Choices legislation further compounds Australia’s longstanding failure to

comply with its obligations under ILO Conventions 87, 98 and 158.xi

Ironically, this further breach of our international obligations is despite

one of the objects of Work Choices amendments being “to give effect to

Australian’s international obligations in relation to labour standards.” It is

likely the Work Choices amendments will be found to be in breach of the

important Conventions in at least the following respects:

• The promotion of AWAs which prevail over awards and other

agreements suggests that union free arrangements are preferred

over those achieved through collective bargaining. The focus on

individual negotiation in Work Choices is particularly significant in

the context where safety net conditions have been paired back to

only five statutory minima;

• Protected industrial action during bargaining has been further

restricted. For example, the onus of proof is placed on employees

to prove that they weren’t engaged in prohibited conduct such as,

for instance, in respect to safety issues;

• There is no protection for strikes in multi-employer or industry

collective bargaining or pattern bargaining. This imposes a heavy

administrative burden on the trade union movement. Again,

officials and individual employees also face substantial risk if they

fail to discharge the onus of proof to establish that they are not

engaged in prohibited forms of bargaining;

• Under new “employer greenfields agreements” employers can

unilaterally set terms and conditions of employment in new

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undertakings thereby circumventing any form of bargaining -

collective or otherwise.

• The range of prohibited items in agreements and awards has

expanded and is substantially directed against trade union activity.

The prohibition items are: any restriction on labour hire, remedies

for unfair dismissal, prohibition of AWAs, mandatory union

involvement in dispute resolution, trade union training leave,

bargaining fees or paid union meetings;

• The reduction in scope for unfair dismissals will reduce the role of

trade unions in representing the interests of employees facing the

prospects of losing their jobs. Most significantly the removal of

the right to claim unfair dismissal in circumstances of alleged

operational requirements has significantly diminished the effective

role these remedies can play in mitigation against the harshest

effects of globalisation; and

• Under Work Choices, union rights of entry into workplaces has

been more strictly controlled and limited. This reduces the ability

of unions to monitor the lawful payment of wages and the

adequacy of conditions of employment. It will also limit the ability

of trade union officials to inspect workplaces in respect to potential

occupational health and safety breaches.

Overturning of the 1984 Termination, Change and Redundancy cases

The Work Choices legislation has fundamentally overturned a 20 year

regime designed to protect the entitlements of employees in

circumstances where their jobs were abolished due to economic

circumstances or the introduction of technological change. The principles

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developed in the 1984 Termination Change and Redundancy cases

underpinned much of the co-operative reform that occurred in the 1980s

and 1990s.

The fact that a remedy for unfair dismissal is no longer available in

circumstances where a reason for dismissal includes operational

requirements can only diminish the preparedness of workers to cooperate

in the introduction workplace changes. In the recent case of Village

Cinemas Australia Pty Ltd, xii the full bench of the Australian Industrial

Relations Commission noted that the Work Choices amendments further

departed from ILO Convention 158 in respect to termination for

operational reasons.xiii

Significantly, employees now face the burden of proving an employer’s

alleged operational requirements are a sham or contrived. The Australian

Industrial Relations Commission has noted that it will be rare if ever that

an employee will be in a position to discharge that onus of proof. For

instance, in Azwar Koya v Port Phillip City Council xiv (13 June 2006),

Deputy President St Ives said “an employee’s ability to produce evidence

to successfully challenge the claim that a genuine operational reason was

among the reasons for termination will be beyond most employees’

capabilities and resources”.

Role of organised labour in achieving reform has been ignored

There is no doubt that the opening up of the Australian economy to

international competition has put significant additional pressure on

employers to improve methods of production. For the best part of two

decades employers have been implementing more efficient organisational

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structures and new technologies. Much has been achieved and, as a

result, Australia is in the 16th year of sustained economic growth. The co-operative role of the trade union movement in establishing the

foundations for that reform and sustained growth cannot be overlooked.

During the periods of the Accord, in the 1980s through to the early 1990s,

the trade union movement agreed to a regime that required ongoing and

significant reform. Significantly, in order to obtain a wage increase, it

was necessary to convince the Australian Industrial Relations

Commission that an increase was justified on the basis of relevant

productivity offsets. Initially those offsets related to reforming restrictive

work practices. Increasingly workplace reforms became sophisticated in

terms of requiring evidence about the introduction of new technologies or

improved methods of work. Increasingly the efficiencies placed

additional pressures on employees to assume greater responsibility and to

achieve greater output of work.

These reforms unquestionably were in the national interest and it has

been remarkably short-sighted to overlook the role that organised labour

played in facilitating these dramatic changes. Unions by and large

recognised that, in many ways, management and employees were in the

same boat facing an interdependent challenge of mutual survival in the

turbulent sea of international competition.

Conclusion

The Howard Government’s agenda of undermining the role of organised

labour in the workplace, contrary to ILO standards, is incredibly short

sighted and counter productive. Similarly, the Government’s failure to

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promote fair international standards domestically and abroad must

undermine the efforts being made in a number of developed countries to

lift terms and conditions of employment around the globe.

The short sightedness of the Government in undermining the protection

of Australian employees risks losing their cooperation and preparedness

to embrace further change and reform of work practices which is

necessary to maintain globally competitive industries.

At the level of broader community the inherent fear that already exists

will be exacerbated by the perception that the Federal Government has

now placed many Australian workers in an international downward spiral

of diminishing terms and conditions of employment - a globalised race to

the bottom.

The potential loss of community support for further opening of the

Australian economy to international competition is unquestionably at

risk. That risk has been significantly aggravated by the Government’s

ham fisted, unfair and internationally irresponsible approach to industrial

relations.

[ends]

i ACTU Media Release 3 November 2006 “A new international union body to tackle corporate greed and unfair globalisation”. ii

Australian Social Attitudes: The First Report, UNSW Press 2005, Shaun Wilson, Gabrielle Mehgher, Rachael Gibson, David Denemark and Mark Weston. iii Roderick D (1997) “Has Globalisation Gone too Far”, California Management Review, (39)(3): 29-53 refer to in Wilson and Ors op cit at p255. iv

(38 hours per week, annual leave, personal leave, parental leave, minimum wage)

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v Wilson and Ors table 14.1 op cit at p243. vi OECD, Trade, Employment and Labour Standards: a Study of Core Workers’ Rights and International Trade, 1996. vii

International Labour Office - Global Employment Trends Brief - January 2007. viii Sydney Morning Herald - Friday 28th July 2006 “Architect of Workplace Law given Geneva Post, David Humphries p9. ix

Convention 182. x Summary of major findings of the 2005 report of the ILO Committee of Experts on the Application of Convention and Recommendation - Right to Organise and Collective Bargaining Convention, 9949 (No.98) (Ratification: 1973) see also summary “Howard’s Australia - A Serial Offender at the ILO, ACTU, 393 Swanston Street, Melbourne 3000). xi

See for instance Joe Isaac “Reforming Australian Industrial Relations” The 21st Foenander Lecture 28 August 2006 pp21023. xii [2007] AIRCFB 35

xiii The Commission said: “ It can readily be seen that the pre-reform Act more closely approximated the Termination of Employment Convention than does the Act in its present form.”

xiv PR973045 [2006] AIRC 350