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A fairer balance between industrial relations and the economy: address to the National Press Club, [Barton, ACT]: 13 September 2006.



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A Fairer Balance Between Industrial Relations and the Economy ACTU 13 September 2006

A speech by Greg Combet, ACTU Secretary, to the National Press Club outlines how the Howard Government is losing the debate over its IR laws and failing to address the real economic challenges facing Australia.

A Fairer Balance Between Industrial Relations and the Economy

Greg Combet, ACTU Secretary Address to the National Press Club, 13 September 2006

The Howard Government is losing the debate over the new industrial relations laws not only because the laws are unfair. It is also losing because it has been dishonest. It has failed to argue a case for the changes, choosing instead to try to deceive people about the effect of the laws, and the motivation for them.

Here are some of the facts about the new IR laws.

The Government's new IR laws

Millions of people employed in businesses with less than one hundred staff have lost protection against unfair dismissal. And as a consequence, they can be sacked arbitrarily without any opportunity for independent review or redress.

Workers in businesses with more than one hundred staff can also be unfairly sacked provided their employer cites operational reasons for doing so. And those same operational reasons can be and have already been used to sack people and offer them their job back on inferior terms and there are a couple of people who've come all the way from Cowra today, one of whom was one of the meat workers' delegates at the Cowra Abattoir and it's exactly what happened to them. Sacked, twenty offered a job back, thirty percent pay cut.

In addition, the laws of course have changed the way in which minimum wages are set in Australia and now the wages of more than 1.5 million people who depend upon minimum award pay increases, they've effectively been frozen and their ability to keep up with rising prices and interest rates is now in the hands of this rather opaque and I think unaccountable institution called the Fair Pay Commission.

Now this organisation touted that it was going to consult with minimum wage workers in the new approach by going out into the community and talking to them about their experience of life. When it came down to it they outsourced that role to a public relations firm.

In addition, the laws of course have made very significant changes to the safety net that has operated in work places for many years. The award safety net of pay and employment conditions has been usurped by only five minimum standards. This puts overtime pay, penalty rates, annual leave loading, public holidays, allowances, career structures, the right to training, regular pay increases and a host of other employment rights up for grabs. And it's the law of the jungle, if you don't have the bargaining power to hold onto those things, you may well lose them. They're no longer guaranteed.

Collective bargaining has been deliberately undermined in the laws in favour of John Howard's individual employment contracts. The so-called AWAs, Australian Workplace Agreements.

Now these things allow business to unilaterally determine people's pay and employment conditions and deny people a say. There are some people here today who've been employed by a contractor to the Defence Department and the contractor's been re-let to a new organisation, Serco Sodexho. Some of those people have worked for many, many years in the Defence Department including entrusted positions. Positions which require them or oblige them not to disclose the nature of some of their work. The new contractor has come in and said if you want to keep your job now that we're taking over, you better sign this AWA, one of John Howard's contracts and along the way you better cop a ten percent pay cut. Three to five thousand dollars a year less for people who have loyally and respectfully with dignity gone about doing their work in a responsible way, that is how they are treated under the laws and that is precisely how the individual contracts work.

There's no pay increase in those AWAs for five years other than what is provided for by the Fair Pay Commission. They are denied the right to have a say and to bargain. A specific and graphic example here in Canberra of how the laws are affecting many people.

When these sort of problems arise of course the laws make sure that the Industrial Relations Commission has no power to deal with them. It can't guarantee a fair go for everyone any more. There's no where to go to resolve disputes. We've had disputes recently, particularly in Melbourne at two large employers, where delegates have been targeted for either redundancy or dismissal. Ordinarily a dispute over such a situation might be able to go to the Industrial Relations Commission for mediation and hopefully arbitration to resolve it, to test the motivations of the employer and to ensure that fairness is delivered to the employees and the employers.

Under the new laws, there's no alternative other than what was done in both of the cases that come to mind at Amcore and at Boeing where the employees could see the injustice of what had been done and they had no alternative other than to take unlawful industrial action and put themselves and their savings and the Union at considerable risk.

Union representation is directly attacked by the laws. Even the making of a claim on behalf of workers for unfair dismissal to be included in a collectively bargained agreement or an AWA, even making a claim that the employer not sack someone unfairly is unlawful under the new laws and we can be fined up to thirty-three thousand dollars for making such a claim and the employer can be fined up to thirty-three thousand dollars if they agree to it.

Other things treated in this way are if we seek a role for a Union to represent employees in a dispute settlement procedure, that's illegal. Thirty-three thousand dollar fine.

If we ask for the right for employees to attend a training course in health and

safety or anything else, literacy, numeracy, you name it. If that course is run by a Union, it is unlawful for us to ask for the right for employees to attend such a course and we can be fined up to thirty-three thousand dollars.

Union activity in the building industry I think has been effectively criminalised. To gather evidence of an offence, and it's not too difficult to offend the laws, the Government can now haul people in for a secret interrogation. They can be imprisoned for contempt for up to six months if they don't attend the interrogation, if they don't answer questions, or provide documents, they can similarly be imprisoned or if they disclose the content of the questioning to others including their family, they face the same risk.

There is no right to silence under the building and construction industry laws for workers, no protection from self-incrimination. This is treatment akin to alleged terrorists and it's a breach of human rights and democratic principle and what's the justification for it?

There is none.

The labour market shake up has also been complemented by abuse of the Government's guest worker visa programme. Temporary migration visas are being issued without sufficient opportunity being afforded to Australian citizens or residents for the positions which are available. In some cases, foreign workers, guest workers are exploited and paid substantially less than Australians and are accommodated in unacceptable circumstances.

Overall these laws have gone too far and I think every fair minded Australian person would agree. They have handed too much power to employers to yield over employees.

The laws put downward pressure on the take home pay of many people, particularly the low paid and this in truth is a key element of the economic rationale behind the laws, a rationale that the Government doesn't want to talk about.

The threat of the sack in combination with the power to impose individual contracts is enabling the systematic intimidation of many employees to accept the dictate of the employer and I cited the practical example a moment ago of the employees in the Defence contracting position.

I recognise, and I've dealt with many people in the business community over a long period of time now. I now there are many good people in the business community who share very similar values to those that I'll talk about shortly. And I know that many employers respect and value their employees. And I know that many of them will not be motivated to use these new powers.

But the pressure in a competitive market position brings about behaviour to drive down costs and that dynamic is already taking hold as a consequence of the new laws. You might be the nicest person as an employer but if your competitors are using the laws to drive down their costs, their unit costs, then you may well be compelled to do the same.

The Government's own office of Employment Advocate has surveyed AWAs since the new laws came in, surveyed the individual contracts and this is the evidence they gave to a Senate Committee. Every AWA, the Office of Employment Advocate examined (excuse me) removes at least one key award condition and almost one in five of the AWAs eliminate all award conditions. Two-thirds of the AWAs remove penalty rates and the same number get rid of annual leave loading. More than half abolish shift penalty rates. A third cut overtime pay and more than

forty percent remove the public holiday entitlements the Government promised would be protected by law.

As to the Government's argument that AWAs generate higher pay, this has all been sort by workers and employers in a free situation of choice leading to higher pay and productivity, the Office of Employment Advocate of course reported that a fifth - over a fifth of these new individual contracts do not provide for any pay increase at all. And of course these agreements, many of them run for up to five years.

Now we know and we never claimed, that the sky is not falling in, a refrain that we hear from the Prime Minister quite frequently. The sky's not falling in. The IR laws are doing their work. But the IR laws are hurting many people. We never claimed the sky would fall in. We're not fools but we know that changes like this will hurt many people and the longer these laws are in place, the more people will suffer as a consequence and they need to be properly argued and justified.

People's concerns are being borne out by their experience. It is indisputable that people are being unfairly sacked and we have brought many cases to public light. 1.5 million people, it is indisputable that their pay is effectively frozen at this point in time. One and a half million people and their independents. People are being told if they don't sign the contract they won't get the job. That is a policy in the Prime Minister's Department and Kevin Andrews' Department. You cannot get a position there unless you sign an individual contract.

Some employers are indisputably targeting Union activists. AWAs are indisputably removing overtime pay, penalties and public holidays. We have one hundred and seven workers in Western Australia from the building and construction sector who face fines of up to twenty-eight thousand eight hundred dollars each for taking industrial action where they have no alternative in their view and I support them, where they took industrial action to defend a delegate, a Union delegate, who had been sacked. And ultimately in resolution of that dispute months ago we got the issue heard in a private arbitration and it was found the delegate was unfairly dismissed and arrangements were made to rectify it. Months later the Government's Agency comes in and serves writs on a hundred and seven people who now face fines. An action that we don't believe the construction contractor involved supports.

ABS figures recently showed that increases in average weekly earnings for workers have fallen to their lowest level for seven years and some economic commentators have attributed this to the new laws and in particular the loss of penalty rates.

That is some of the reality for working families under the laws.

But rather than accept that, accept any evidence of the injustice of its laws, the Government has waged a smear campaign against the ACTU and worse, against people who are ordinary working people who have appeared on our TV ads. It has been asserted that we have mis-represented the position.

I want to say something to you very clearly here today. We have mis-represented nothing. Nothing. And we stand by our TV ads and we stand by the people who had the courage to get up and appear in those ads.

I expect the Government, as pressure increases in coming months will likely intensify their smear campaign and I ask people to consider something. Just bear in mind a few things about the performance of this Government which I think has a disreputable history.

It lied about refugees throwing their children overboard.

It took the country to war over weapons of mass destruction that did not exist.

It makes the incredible claim that it knew nothing about AWB payouts to Saddam Hussein despite repeated top level warnings into the Prime Minister's office.

And it spent 55 Million dollars of our money on patently deceitful ads to promote their IR laws.

In the last election campaign it made misleading claims about interest rates. Claims that we now know were of grave concern to Ian MacFarlane, the Governor of the Reserve Bank, who only in recent days has indicated what he thought about those allegations.

I'd like people to carefully consider the form of the players in this debate. People should not be conned by the Government and we will not be intimidated by the Government.

Union values and beliefs

Our campaign against these laws is going to grow and intensify because our opposition to the IR laws is not confined to the specific elements of the IR legislation. Our opposition is far more fundamental.

We have got different values, different beliefs and we've got a more positive vision, not only for industrial relations but for the economy and the Australian society. Unions do not want to go down the US road of widening inequality, working poor, social dysfunction. We're opposed to the entrenchment of even more power and wealth at the top of the tree. We are opposed to the increasing alienation of people from the decisions which effect them in their workplace and in their livelihoods.

We're fighting for a more fair and just society, one where the benefits of economic prosperity are more fairly shared. We are fighting to ensure that people have reasonable rights to mitigate the abuse of power by big business and we are fighting for democratic rights and principles to improve the quality of Australian democracy. We believe and we assert that economic prosperity can be achieved in harmony with decent employment rights and the observance of democratic principles. We do not accept that economic competitiveness can only be achieved at the expense of people's rights at work.

And this I think gets to the heart of the debate about the Government's IR laws. If the Government had the decency and the honesty and the courage to argue its case it would surely assert that the employment rights it has abolished are not economically sustainable. That is effectively what they are saying. It would assert that business must be awarded the freedom to adjust to competitive pressure, unencumbered by Unions, collective bargaining, obligations to treat people fairly, or by minimum pay and employment conditions established by independent institutions. Effectively the Government is saying we cannot afford this in the Australian economy, these things must go.

By allowing business to take penalty rates off people with little bargaining power on low pay, like cleaners and shop assistants, the Government seems to believe that we are on the way to developing a truly productive and internationally competitive economy.

Well, I think that is an insipid defeatist vision for Australia and its people. It's a vision the Labor movement rejects. Australian people know it is garbage. The laws

are bad policy and they are going to hurt people the longer they are in.

The Rights at Work campaign

Unions are not simply opposed to the IR laws. We have a positive alternative. We want laws based on strong Australian values. We would seek to have the following features in any alternative industrial relations system brought in with the labour movement support.

Firstly a decent safety net of pay and employment conditions in awards or legislation that is able to be adjusted to take account of community standards. One that ensures that the low paid in particular earn a fair share of the benefits of prosperity.

Over and above the safety net, we support the right for people to collectively bargain. A system of collective bargaining in which all parties are obliged to negotiate in good faith.

Thirdly, we believe that people must be protected against unfair individual contracts and we support Kim Beazley's commitment to abolish Australian workplace agreements.

We believe there must be an independent tribunal to maintain and improve the award safety net, to oversee the bargaining system and to guarantee fair treatment and protection against unfair dismissal. A practical system. We never argued that the unfair dismissal laws that we had were the ideal circumstance. But you must ensure that people have a guarantee to be treated fairly.

We also believe that ensuring Australian employees can exercise their right to Union representation, the membership and representation must be respected in the law.

And we want to see the elimination of discrimination and artificial arrangements that exclude workers from protection of the IR system -- things such as dodgy corporate re-structuring, the siphoning off of funds and sham independent contracting arrangements. People should have the protection of the system available to them.

Those principles are the principles that the Union movement believe should be a blueprint for a future Labor Party policy.

IR Policy Development

I believe those principles are more important to Australians than questions about which constitutional head of power might be used to legislate them or the jurisdiction in which those rights are delivered.

The Judgment of the High Court in the constitutional case against the IR laws that was brought by the State Governments and Unions New South Wales and the Australian Workers Union is expected later this year. It's important to bear in mind that that High Court case is not a test of the fairness of the IR laws. That verdict we believe is already in. Rather, the case in the High Court and the Judgment will define the extent to which the Australian Government has the power to legislate using the corporations head of power of the constitution. Now if the High Court interprets that power narrowly, the Government's IR laws and its attack on the rights of Australian workers will be in tatters and that is our desired objective and that is why in the labour movement we support the challenge to the laws in the High Court.

However, if the High Court interprets that power widely the Commonwealth will have been granted broad powers to legislate national industrial relations laws and this will have significant implications for the development of Union and Labor Party

policy. In such circumstances, speaking within the Union movement, I will ask the Unions to support the use by a future Labor Government of all of the constitutional power available to it to repeal the Governments' laws and legislate a decent IR system based upon the principles that I articulated.

Now that will be a significant decision if it is taken. We will discuss it at our ACTU Congress in about six weeks' time. But I am keen as an ACTU leader, to use all of the available powers to establish a fair system for Australian workers and their employers and if the business community wants to have a say in the development of such a system, which it should in my opinion, but if it wants to have a say, it would be well advised to break with the partisan advocacy of the Liberals' attack on working people and Unions. The ACTU in particular is not interested in talking to Liberal Party stooges who parade as business representatives.

I think, I think the economic circumstances demand greater responsibility and imagination from the business leadership, at least those who are in public advocacy. Less partisanship and better long term thinking and in particular, business and big business has a responsibility to recognise that Australia is a democracy and that we must as a society adhere to democratic rights and principles and internationally respected labour rights.

Democratic societies do not hold secret interrogations of workers who go on strike to defend a sacked Union delegate or who hold a stop work meeting.

That feature of the laws alone, should alert people to the fact that there is something seriously wrong at the moment in this country.

Genuinely free and democratic societies appeal to what is best in people. They respect one another. They encourage people to care for each other and to strive for higher standards of co-operation and a sense of community. Democracies respect the right of working people to freely associate and organise in trade unions and they champion the right of working people to collectively bargain.

With big business support the Government has repudiated these values and repudiated these rights and what sort of society would it be if they win? Who is going to fight for justice? For people who are victims of companies like James Hardie, if not the labour movement? Who would fight to lift the living standards of the low paid? Who would fight to improve health and safety at work? Who would fight to build retirement savings for working people? Who would fight to recover people's entitlements following a company collapse? Who will guarantee a fair go for Australian working people?

I'm not going to leave it in the hands of big business or the Liberal Party. We are going to fight for those rights.

One of the giants of the twentieth century, in my opinion, Franklin D. Roosevelt, knew that to avoid a repeat of the economic and political failures that had contributed to the Great Depression, it was critical that the new deal in the US delivered rights for working people and many of those rights survive in US law today that he introduced. He knew that introducing rights for working people would improve the quality of US democracy and if we want to defend and improve the quality of Australian democracy, that recognition is needed here and now.

Australia is the only advanced economy where an employer can make a collective agreement with the Union and the very next minute turn around to the employees, repudiate its contractual commitment and require employees to agree to

substantially inferior conditions in individual contracts. It's the only country where that can occur. It's the only country in the developed world where an employer is not required to negotiate with a representative Union. Where the law mandates an employer to say this, I don't care if you represent all of my employees, I am not going to talk to you and I'll demand that your members sign individual contracts in terms dictated solely by me.

And that's what operates under these laws and there are other people here today, two representatives from a small operation in Adelaide, Radio Rentals, where there is a dispute, where the employer targeted the Union activists, sacked three of them recently and subsequently has locked the employees out for one month. Their sin has been to seek a collective agreement negotiated with their employer. Two of them have come up from Adelaide today because this is exactly what is happening to them. Their employer is saying "Sign this or get out, we will not negotiate with you or your Union".

Collective Bargaining Policy

That is why one essential remedy to the injustice at the heart of these IR laws is the enactment of an enforceable right for people to collectively bargain.

The ACTU has been working for some months now on a new model for collective bargaining in Australian workplaces. A delegation of senior officials, many of whom are also here today, visited North America, the UK and Europe to investigate the way in which those countries give effect to their international collective bargaining obligations. They actually do something about it.

Earlier today, we launched the delegation's findings and the policy suggestions they recommend for Australia and this will be the centrepiece, this report and the proposed model we are putting forward of the policy to be considered at the ACTU Congress next month.

The model for collective bargaining rights that we are suggesting represents an entirely new approach for Australia. One which not only respects workers rights, but which promotes co-operation, not division, and which promotes productivity and teamwork in workplaces. It is a new approach because it puts workers at the centre of decision making about the form of agreement that they will have. The report argues for a policy that removes the right of employers to unilaterally dictate the form of agreement their workers will have. It argues instead in favour of a system where an employee, a Union, or the employees themselves will have equal rights to initiate a collective bargaining process. Collective agreements will be possible between a Union and an employer or directly between employers and employees. But Union members as is appropriate should have the right to representation at all times.

Now within that framework there are two key elements of the proposal that we are advancing.

Firstly, that we argue - we argue that the law must oblige all parties to bargain with each other in good faith. To collectively bargain in good faith and it empowers the Industrial Relations Commission to help make that happen if help is needed.

Secondly, we argue that workers themselves must have a say when there is a contest about whether there should be a collective agreement. For example, when an employer refuses to bargain collectively and insists on individual contracts, we believe that the majority view of the employees themselves should determine the issue - give people a democratic say. If a majority of workers express their support for a collective agreement, then it is our proposal that the Industrial Relations Commission must ensure that good faith bargaining ensues and that the

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employees' decision is respected. And if it is not, then as a last resort we advocate that the Commission should be able to arbitrate to resolve intractable disputes.

Now that proposal, good faith collective bargaining, between an employer, a Union and employees, and the right for a majority of workers to decide what form of agreement should be negotiated by them or on their behalf, these things are fundamental democratic principles in our opinion and they are the foundation of the proposals that we are advancing. We want to give people a say in their own workplace, just as it is fair to elect a Government by majority, we believe it is fair for a majority of employees to democratically decide what form of agreement should apply to them.

Now the Government has already declared its opposition to our ideas, not surprisingly. They want to maintain an employer monopoly on the form of bargaining that takes place.

Kevin Andrews, the Workplace Minister, says that good faith collective bargaining means compulsory Unionism. I haven't worked out exactly how that could be. I just think it's so stupid and ridiculous that it is unworthy of a response.

John Howard says that individuals will be denied their right to an individual contract if that's what they want. This is misleading and it is wrong. Collective agreements on our proposal would certainly bind all employees. But there would be nothing to stop an employee and an employer agreeing to an improvement or some sensible flexibility which does not undercut the collective agreement and common law arrangements such as that have always been available and we support their continuing use.

Of course in the real industrial world, the Government always opposes flexibility for individuals when it matters. It supports it for employers but not for working people. Unions have been seeking for example, the right for some time now, for a woman to return to part-time work after a period of maternity leave but we have been opposed every step of the way by the Government for that sort of flexibility on an individual basis.

Kim Beazley's policy statement in recent days in support of collective bargaining and in support of the views of the majority of workers, means that there is now a very clear policy difference developing between Labor and the Coalition on industrial relations and we are very pleased to see it. This argument will get down to John Howard's individual contracts and Kim Beazley's collective bargaining. And individual contracts have never been a path to economy wide productivity and growth. New Zealand in the 1990s was proof enough of that for those of you that are familiar with it or not familiar with it, people were pushed onto individual contracts in exactly the same way and productivity fell relative to Australia and what was going on here at the time, we had engaged upon the path to decentralised enterprise bargaining on a collective basis and productivity grew significantly and it has been the basis in a significant way of the sustained economic growth we have had.

As a nation I think it's imperative that we ultimately resolve these industrial relations issues in an appropriate way and with a decent outcome for working people in this country because we need to get onto the real economic issues that are not being addressed. The path to improved productivity and prosperity is not going to be through John Howard's IR obsession. It will involve dealing with the real economic challenges facing this country.

Australia's Economic Future

After more than a decade of Coalition Government we are experiencing an

unprecedented skills shortage; significant infrastructure blockages; a collapsing manufacturing base -- and there's no one at the national level driving the debate about innovation and productivity.

These issues should be at the forefront of national political debate and yet they are in John Howard's blind spot and are now Labor's opportunity.

The sustained boom we've experienced for fourteen years has provided a unique opportunity to tackle long term economic capacity constraints that we now face, but it's been completely squandered, the opportunity is being lost. The Government has been content to rely heavily upon household debt and consumption as the key driver of economic growth and that has been the main driver for the large part of the current business cycle that we've been experiencing and it is the source of interest rate sensitivity in the electorate and it cannot continue. Growth is already slowing.

The challenge now is to identify the new drivers of economic growth and to tackle the serious capacity constraints on growth and productivity and the first constraint on growth that has to be tackled is the skills shortage. It requires a substantial investment in education and training. The Government has overseen a decline in the proportion of GDP which is dedicated to education and skill development. Its priority, unbelievably in post secondary education is to compel institutions to offer individual contracts, otherwise they'll lose their funding. That's the Government's priority and it will not fix the skills shortage and neither will the Government's unpopular and abused guest worker visa programme. A major boost in genuine trades apprenticeships is needed. We need to continue to improve on Year 12 completion rates and at a tertiary level places - more places are needed in engineering and acquired science disciplines.

I think we've got to consider a major scholarship programme in particular to ensure that young people, who've got the ambition, the capacity, the intellect and the drive to contribute to the country, who want to get ahead that they have the opportunity to get tertiary places in the areas where they are needed and they achieve some financial support for doing so. They cannot - we cannot as a society, afford to have a disincentive such as is now there through the HECS scheme for people to get into University and contribute. I would never have got to University had it not been for the Whitlam Government. But we are now prohibiting people getting access to tertiary education and it's not good enough.

A second constraint to growth is the lack of national leadership I think in infrastructure investment. There is no nation building plan. And no strategy for funding one either. The resources boom is fueling huge fiscal surpluses but they are not contributing to public or private investment in our economic and social infrastructure. Our transport systems, our communications systems. Communication strategy is all about privatising Telstra and I agree with Ken Davidson who wrote in The Age a couple of weeks ago and who's here today, it is economic lunacy. They're looking to sell the thing at any price that they can get. We've got a massive need for investment in childcare capacity in hospitals and schools. Now with increasing globalization and WTO regulation of what Governments can and cannot do to assist private business, infrastructure becomes even more important as a major determinant of competitiveness.

All Australian Governments should be identifying priorities for infrastructure investment in a co-operative Federal framework. Now many of the States have been investing heavily and we recognise that but national leadership is lacking on this and this is an important opportunity that Kim Beazley and Labor is taking up.

A third constraint on growth is the failure of Government to drive innovation and a strategy is needed to restore double digit growth in particular to business investment in research and development for the next decade and this is going to

be vital for manufacturing. It is not good enough to have one workplace after another close down and there to be no effective strategy to try and ensure the improving competitiveness of Australian manufacturing. In the decade to the mid 1990s business investment in manufacturing R&D grew in real terms by ten and a half percent a year. Since then, under the Howard Government growth has slumped to only two percent a year. Reversing that trend is crucial. It's the key to improving manufacturing competitiveness. It's how we get the higher skill, higher wage jobs and how we reposition Australian manufacturing higher up the value added chain. But rather than meet this imperative, the Government is preoccupied with a Free Trade Agreement with China. An agreement with potentially devastating implications for manufacturing employment in Australia.

Now the State and Territory Labor Governments along with industry and Unions are currently developing a manufacturing industry policy and plan. That is something that needs to be engaged or with which the Federal Government also needs to be engaged. We need a co-operative bipartisan approach to tackle these issues and to provide some optimistic hope, some hope for people in the manufacturing industry. But what ultimately is the Government doing to prepare Australia to effectively compete and to prosper potentially from an FTA with China? The answer, the only one I can come up with is the new IR laws. That is to allow business to compete by driving down labour costs. And cutting the wages and conditions of Australian workers will not protect people from competition with China, India or Asia or anywhere else. We could never go low enough. We must chart an alternative economic path by investing in skills in education, in infrastructure and innovation and that returns me to my essential argument.

Conclusion

There is a better way forward for this country to go.

A way which can get the balance right between workers' rights and the economic imperatives that the country faces. A way which addresses the real economic issues and at the same time respects the basic Australian value of a fair go. A way which will treat people with respect and dignity and which will nourish the democracy rather than undermine it.

These values define the labour movement. They're what we believe in. We will campaign for them for as long as it takes and we always have. In a practical sense we are going to keep our TV ads on air, we will defend people in their work places. We will mobilise hundreds of thousands of people in the streets. We're going to fill the MCG on the 30th of November so get yourselves there.

We're going to broadcast across the country, into clubs and pubs and community halls to take our message everywhere. We will campaign in marginal seats and we are going to stand up for people's rights and we will articulate a more positive vision for this country and I am confident that when we do all of those things we are going to win the support of the Australian people and bring about positive change.

Thank you.

[Applause]

CHAIR: Thank you very much Greg Combet. As usual we have our period of questions which start today with David Humphries.

QUESTION: David Humphries from the Sydney Morning Herald Mr Combet. You

applauded Kim Beazley's pledge to do away with AWAs but your own announcement seems to imply that AWAs would remain an option of your own version of work choices in the future. Does that suggest that Unions don't think that Kim Beazley's going to get a chance to make good his pledge?

GREG COMBET: No well if that's been any impression I'm glad to dispell it because it's completely wrong. We completely support the abolition of AWAs and that's our policy position. We support Kim Beazley's announcement that that's what he will do. What I was trying to point to was that there has always been the flexibility and capacity in the workplace and in the industrial relations system in this country for employees, individually, and employers to agree on certain things and to have particular flexibility but it's always subject to the statutory rights that they have, to representation that women for example are not discriminated against by paying money to men who perform the same work for the same value. There's got to be protections against such things and we obviously support the continuation of same. But there's always been the capacity subject to the safety net, the standards that apply in the workplace for people to do something a bit better. We've negotiated - I've negotiated myself many arrangements where in a collective framework there is a transparent, an accountable and reviewable mechanism for individuals to be rewarded for their performance. And it's the system that operates at the ACTU I can assure you, but it is collectively negotiated.

CHAIR: Laura Tingle.

QUESTION: Laura Tingle from The Financial Review Mr Combet. You've given a very detailed outline of the plans for collective bargaining today in the documents you've released in contrast to Mr Beazley who gave a fairly sketchy impression on the Channel 9 News on Friday night down the Bulletin from Brocky. There's also a bit of a difference it appears to me between the policy outlined by Mr Beazley and what you've outlined here today on collective bargaining. He's talked about a simple majority vote in a workplace. And you've talked about a system where an employer, a Union, or the employees themselves will have equal rights to initiate a collective bargaining process. Given that you're saying that the right to be represented means that you only need to have member in a workplace, could you just explain what rights a Union would have to initiate a collective bargaining process and how that is slightly different to a simple majority as being portrayed by Mr Beazley?

GREG COMBET: Yes. Well I think that might be based upon a slight misinterpretation of what Mr Beazley has put, but you know he will represent his view about that. We are not putting and I don't understand Mr Beazley to be putting a position such as it obtains in North America where before a collective bargaining process can take place, there's a necessity to establish that a majority of workers in that workplace want the collective agreement. What we are putting is that, a much, I suppose more flexible approach to it, that the law provide that employers and employees and Unions can voluntarily enter into collective bargaining at any time. The responsibility that they have to each other is to collectively negotiate in good faith. And if they strike a problem in that regard, then the Industrial Relations Commission can help. That is not a system where the right to collectively bargain is predicated upon a majority decision of the employees. It's a system where any party can enter into collective bargaining negotiation at any time. Where we are getting the problem though and where we anticipate the culture has changed over the last fifteen years in the workplace is that some employers take the stance that they refuse to collectively bargain, they refuse to respect what their employees would like to do, they refuse to respect the representation of the Union and they insist on individual contracts being signed and it's only in those circumstances where you need a circuit breaker and it is precisely in those circumstances that our proposals says the circuit breaker should be the majority view of the employees and that is as I understand also Mr

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Beazley's announcement last week.

CHAIR: Question from Adrian Rollins.

QUESTION: Mr Combet, Adrian Rollins from The Australian Financial Review. I was wondering if on the issue of labour mobility, a number of Pacific Island nations have indicated their desire to be able to have their citizens work in Australia, not necessarily in skilled occupations, but a range of occupations. Given the importance of some of those repatriated funds to those economies. Just wondering what, what is the ACTU's view of that, of that possibility?

GREG COMBET: We are not opposed as a matter of principle of course to any migration scheme or guest worker scheme to use that sort of vernacular and I mean to be, I think the ACTU and the Union movement and the labour movement more broadly - you know if you know your history, we were one of the most vocal advocates in the post-War period of the migration programme and we welcome it. We support it and we support the continuation of it. We support people coming in where we have skills shortages in a contemporary context, under the temporary visa programme, the Section 457 visa programme that the Immigration Department administers. The problem has broadly been this. It is not administered very well and there is insufficient obligation on employers who are wishing to bring in people who are applying for visas, there is insufficient obligation on them to see if there are Australian residents available to perform the work and beyond that there is insufficient regulation to ensure that people receive, when they do come in on a visa, equal pay. And those principles permeate our approach to the entire issue and I don't think they should be controversial ones. We're basically saying if there are positions available, Australians should have the opportunity to apply for them. If there are no positions available in particular where we have skills shortages, then there is certainly a case subject to the payment of appropriate pay and employment conditions for people. And I see the issue of South Pacific labour mobility in that context as well.

CHAIR: Samantha Maiden.

QUESTION: Samantha Maiden from The Australian Mr Combet. You said in your speech that, that the principles of, of an improved safety net are more important than the constitutional head of power used to legislate and implement them or the jurisdiction in which they're delivered. Now I assume that's code for the debate over whether at the ACTU Congress you should go for a return to the State and Federal system or purely the Federal system. Can you just explore that issue a little bit more for us and when you look at the issue of the five minimum standards, what sort of things would you like to expand that too? Would it for example include the issue that you raised of allowing women the right to return to a part-time job after, after having a child?

GREG COMBET: Well I think it's a fair bit that we'll continue that policy position. But I won't speculate about the additional employment standards that we might seek to be legislated because that'll be an issue for our Congress to further discuss. But I think it's uncontroversial to say we're obviously going to look to expand the list of legislated minima to the extent that that continues. On the jurisdictional question, I see a continuing role for State IR systems as well as a Federal system, but if the High Court does interpret the corporations power widely there are clearly wide powers for a future Labor Government not only to repeal the Federal - the Howard Government's IR laws, but to put in place something different. And we don't want to go back to the past. You know in a broad sense. We want to ensure there's a system that's a decent system based upon the principles I described that looks to the future and affords people the rights that they need in a modern economic environment. And I don't say that likely. These things, we have been discussing rather thoroughly in the Union movement about our approach. I want to ensure that there's a good debate at the ACTU Congress

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that leads to the development of a good policy but the proposition that I personally and the other ACTU officers will support will be that we do use, we do support the use by a future Labor Government of any power that it is available to it to put those principles into place and that will obviously have implications for the respective role and coverage of national IR laws and State IR laws. But I in fact support the State IR systems. They've provided a very good level of protection for people over many years. Many in the business community support the State industrial relations systems too and we've got to get the balance right I think between the various jurisdictions. That's a debate that is you know, that will be had and I think will be had in a responsible way, which will lead to, I think, a positive outcome.

CHAIR: Michael Brissenden.

QUESTION: Michael Brissenden from The 7.30 Report. Mr Combet, clearly IR's going to be a big campaign issue perhaps the defining campaign issue of this next campaign and I just wonder if you see this as some others do, as a test for the traditional relationship between the labour movement and the Labor Party and should the Labor Party lose this election, what sort of impact will that have on the relationship? Will there have to be changes?

GREG COMBET: Well I don't see it as being a test in some form. The values that I was describing are values that are held, I think, widely through the Labor Party and through the Union movement and many, many others in the community. It's the fact that we hold those values that leads to the unity that I think has been on display during the course of this campaign. There is a tremendous degree of commonality of view about not only what we need to achieve, about what is wrong with the current laws but where we want to go and I only see there being a very strong unifying outcome as a consequence of the campaign that we're running and I'm perhaps not the best judge, but I think the fact that we have been campaigning over these issues over the last eighteen months has been one of the contributing factors to Labor being in a better position on a two party preferred basis and I watched with interest Bob McMullen on the TV the other night making the observation that I thought was quite an accurate one that for the better part of the last six months, Labor has been ahead on two party preferred terms. It doesn't get much credit for it. I mean Kim Beazley has made many announcements consistent with the types of values, principles and policies that was outlining, particularly on economic issues and I think those things are resonating. I see a strong position emerging and for that reason I don't countenance Labor losing the next Federal election.

CHAIR: Ken Davidson.

QUESTION: Ken Davidon, The Age. I'd like to ask you a question about employers. Is there...

GREG COMBET:I'm not qualified to answer that Ken.

QUESTION CONT'D:Well, perhaps think of it as an easy question. Is there any sign that employers understand that with this legislation that labour productivity will decline and that necessary structural change in this country will probably be slowed down, and secondly, particularly small employers, do they realise that this will increase the uncertainty in terms of their business operations because hitherto, at least they didn't have to worry about what their competitors were paying their staff so that they could focus on the other side of the business?

GREG COMBET: Well I'm certainly not the best qualified to answer but I'll have a go at it because I meet a lot of business people. On the latter point, it's an important one. In areas of the economy that are, are largely labour cost businesses like contract cleaning and contract security, contract catering, child

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care, a number of others, where labour cost is the essential unit of cost that those businesses deal with, for many years I think there was a great degree of commonality of view between Unions and business in those sectors that there needed to be an effective and comprehensive safety net that people were entitled to have a modest and reasonable increase come through the national wage case from time to time but that all moved up at the same time and in particular that the business community in those sectors where they're competing with each other on labour costs, that they had the same cost structure to deal with and the abolition of that system and the invoking of AWAs that need satisfy only five minimum standards, has started the competitive pressure in those sectors of the economy that lead exactly to the circumstances I described with Sodexho Serco a moment ago, that is tenders come in, they are labour - fundamentally labour cost businesses, it only takes one rat bag contractor to put the tender in on the basis of John Howard's five minimum standards and abolish overtime pay, public holidays, annual leave loading, penalty rates for shift work etc. etc., and you put a tender in on that sort of price, you're likely to win it. And as a consequence for other people to keep their jobs, contractors to keep their business, there's a drive to the bottom and that's the feature of how the economy operates in many sectors and that's the inherent unfairness of the laws. It does not drive productivity, it drives labour costs down, living standards down and in some cases improves the margins of those businesses. That's well understood and I speak to many business people in that sector who recognise that and they don't necessarily like what they are being forced to do by John Howard's new laws. At a wider macro-economic level, I don't think that there's any credible position that's yet emerged about the likely effects of the IR laws in the short to medium term. I mean John Howard is asserting that it's already led to employment growth. That's a ridiculous claim in my opinion, four months in or so to the laws. You know other things are driving the economy as I think everyone appreciates. There's nothing really to say at this point in time, that there's any substantive influence on, on productivity. We're only four months into the laws and I don't think there will be. I think individual contract arrangements are labour cost cutting arrangements fundamentally. The mining industry would have a different view. It would say that ten or fifteen years ago when it brought in individual contracts, it did so for some specific reasons, but they were confined to the industrial circumstances in the north west of the country in particular where there were some restrictive arrangements, I'll acknowledge it - which we needed to address and perhaps we should have addressed earlier in the Union movement. But that's a long time ago. A long time ago. We now negotiate where we do negotiate collective agreements that address productivity issues. So I think as time goes on people will recognise these dynamics further. I think they will recognise that having a collective bargaining structure will be more economically beneficial. That is does generate better co-operation in a workplace which does contribute to productivity and having a system where, where you know, people are on lower wages, where there is a decent safety net and where all employees and employers periodically move up together is a far better one for the community.

CHAIR: Misha Shubert.

QUESTION: Mr Combet, Misha Shubert from The Age. You've had your fair share of metaphoric punch ups with the Office of Workplace Services since its role was beefed up with the introduction of the Work Choices [indistinct]...

GREG COMBET: I don't reckon they won any.

QUESTION CONT'D: So my question is two part. Were you comfortable when Kim Beazley referred to the public servants who work for that agency, some of whom I presume are Union members as snivelling little liars in the Parliament in the last session? And secondly, under your re-drawing of the architecture for a new industrial relations system, do you see any role for some form of Government watchdog that would back the work of the Unions in a return to, a stronger arbitration regime?

GREG COMBET: Yep. Well on the first point I'm not going to criticise Kim Beazley. He has been supportive of us and he's been supportive of people. He's been down to that Radio Rentals' site in Adelaide. He's been to all of the industrial disputes where he's seen people being treated unfairly under the new laws and I support him and I would under no circumstances criticise him for whatever language he's used in the hurley burley of Parliament. As to the particular people working the office of Workplace Services. Many of them have been there for a long period of time. Union officials have interfaced with them over the years in their role as industrial inspectors and we respect the work that they have done. However, what's happened in that Office of Workplace Services is that it has been politicized, an operative associated with the Government has been put in at the top of it and it is performing a political role and the standard of the work that was performed and that was leaked by the Government we assume to the Daily Telegraph to try and attack the integrity of the people appearing in our TV ads and attack the ACTU, I think was a disgrace, frankly. And you've only got to take the Cowra Abattoir example, you know, the Prime Minister himself declared that there was nothing shonky going on up there after the Office of Workplace Services went and declared everything [indistinct], you can sack people and offer them their jobs back with a pay cut and there's nothing untoward. Well, I tell you, have a look at the Administrator's report now that the company's gone into collapse and just see what contributing factors there might have been to that business going down. It makes interesting reading. And John Howard keeps lining himself up with these employers all the time. He opposes workers in every single situation. I mean we can't be wrong every time can we? You know but there he is every time advocating for business. On the side of the employer against the Unions and against the employees on every single occasion. You know, so, we have respect for the work that's historically been done by many of those people and I've met with some of their representatives recently to talk the issues through but we are very concerned about the politicization of the organisation and the way in which it's being used by the Government. As to the future position, yes we support the role of an independent and properly operating, transparently operating organisation to investigate potential and alleged breaches of the industrial relations laws and we would like to see such a thing reconstituted.

CHAIR: We have a group of secondary students here today from Naden Catholic College at Geraldton in Western Australia and we decided to give them the last question today and they've determined that it will be asked by Kate Thompson.

GREG COMBET: These are the hardest questions.

QUESTION: Kate Thompson and I'm from Naden Catholic College in [indistinct] in WA. My question is many of your predecessors have gone on to political careers.

GREG COMBET: Oh! Yeah.

QUESTION CONT'D: Do you have similar plans for the future and if you do what do you think you can bring to that field?

GREG COMBET: No - no I don't. And but if you saw - I was on tele recently and asked this question many times and I don't rule that out you know in the medium to longer term and I don't see why I should rule it out or rule it in but in the immediate future I'm very committed to what I'm doing. I believe in what I'm doing. I'm proud to have the opportunity that I do in my position. A lot of people I feel are depending upon me and my colleagues at the ACTU and I'm not going to let any of them down...

[Applause]

Not that going into Parliament is necessarily letting them down.

[Laughter]

I don't mean to do that, however, I'm going to stay where I am for the foreseeable future because that's where I think you know I would like to make my contribution.

END * *

More Information

Download Mr Combet's speech here

ACTU Launches New Vision For Workplaces Based On Collective Bargaining:

z Media Release

z A Fair Go at Work - Media Brief

z A Fair Go at Work - 9 page summary

z A Fair Go at Work - Full Report

This page can be found at: http://www.actu.asn.au/work_rights/news/1158118720_12780.html