The gap between work and choices
From Griffith REVIEW Edition 15: Divided Nation
© Copyright Griffith University & the author.
Written by David Peetz
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David Peetz's biography and other articles by this writer
On the grass outside an abattoir on the Western Plains of New South Wales, in the dark, cool air, a few workers are forming the late-night shift of a picket. Some journalists are hanging around, talking to them.
It is less than a week after the federal government's new industrial relations legislation, known as "WorkChoices", has taken effect. The men are outside the Cowra abattoir, not inside, because they have received termination notices. Twenty-nine have been sacked from their jobs – for "operational reasons". And they have been offered re-employment. To be precise, an unidentified twenty of them will be offered re-employment – if they go back to work for substantially less than what they had been earning before the new law came into force. The drop in pay is typically around $180 a week, nearly a quarter of their wage. For some shift workers, it is as much as $300 a week. The men are angry. Some do not know how they will meet their mortgage repayments on the lower rate of pay.
What is happening at Cowra on this April night in Cowra tells us much about the WorkChoices legislation. For one thing, it shows us how much easier it is for employers to dismiss employees.
I MET BRAD AT A LOCAL MEETING that had been organised by a Brisbane community group to talk about WorkChoices. He was an EFTPOS technician – well-dressed, tall and quietly spoken. He told how his workplace life had been getting harder. He had been harassed, mainly by his supervisor. Eventually he lodged a complaint. A top manager came to Brisbane, met with Brad, his supervisor and others, sorted it out and went away. Mission accomplished. Except it wasn't. The harassment started again. And it got worse. So Brad lodged another complaint, to someone else at the top. On his first day of holidays, Brad got an SMS from his general manager, asking for his home address; he was told they had some important "confidential documents" to send him. When he got back, there was a registered letter waiting for him. It said that he had been made redundant with the offer of a few weeks' redundancy pay.
His firm had more than a hundred employees. But Brad had been dismissed for "operational reasons" – just like the Cowra workers. And under this provision, even if you have been unfairly and capriciously targeted for dismissal – whether you have been singled out because you ask too many questions or do not share the corporate culture – the reason you were selected for redundancy is "irrelevant". An operational reason – that is, something of a technical, economic or structural nature – does not have to be the main reason why you lost your job. It just has to be part of the reason.
COWRA ALSO ILLUSTRATES HOW WORKCHOICES can be used to cut pay and conditions. I do not wish to overstate the problems with WorkChoices. Whatever the negatives WorkChoices holds for Australian workers, exaggerating them only serves to disempower the already weakened, making it harder to move forward. That said, there are many examples of cuts in pay and conditions – particularly through the use of AWAs – that have become widely known.
In Sydney, within days of WorkChoices taking effect, Amber Oswald, a sixteen-year-old casual working in a juice bar, was put on to an AWA that cut her weekly pay from $97 to $65. Her boss told the media: "If they don't want to sign, they can leave ... It's not about what's fair, it's [about] what's right – right for the company." Amber was able to challenge it through her union because the AWA had not been offered properly – she had not actually seen it before she was put on it. But after winning her case for back pay, she was taken off her Sunday shift which had attracted double-time rates. One day, a few months later, she was told not to come in the next day because the store was closed – for "rebranding".
Therein lies the problem for many casual workers. In theory, workers are still protected from "unlawful termination" if they are sacked for refusing to sign an AWA. It is expensive – a case will cost upwards of $30,000 to run through the federal court – so if you are not wealthy or in a union, it is at best a threat. But for casuals, if you do not sign you can just find that your rosters are changed, your hours are cut back until it is barely worth coming in to work any more.
At retailer Spotlight, new employees were offered AWAs that abolished penalty rates, overtime rates, rest breaks, incentive-based payments and bonuses, annual leave loading and public holidays. For those who worked Thursday nights and Saturdays, this would cost $90 a week. In return, they received an increase in their base hourly rate of pay of two cents an hour. That was OK, said Spotlight management, because that is just "the starting point ... Our store managers negotiate the rates with the staff depending on the skill of the person and market forces." But if the starting point for "negotiations" is $90 a week less, then most workers are going to be hard pressed to get near what they would have been automatically entitled to under the old system.
Workers at a Melbourne call centre operated for Lufthansa were told to sign AWAs which cut their base pay by between 3 and 10 per cent, and reduced penalty rates and loadings. To allegedly offset this, the agreement provided a complex bonus scheme in which, to get the full bonus (at management's discretion), workers had to achieve 110 percent of the performance targets and not take more than one day of sick or carer's leave. The Equal Opportunity Commission of Victoria said that there was "considerable potential for the proposed performance bonus scheme ... to discriminate against employees who need to utilise their leave entitlements because they experience personal illness and/or have parental or carer responsibilities."
The examples mount. Yet the advocates of WorkChoices tell us that it is bringing higher wages: real wages (that is, the purchasing power of your wage after allowing for price rises) have risen by 16 per cent since 1996. But that is barely the long-term growth rate in real wages anyway. Most of the increase has been obtained by managers and professionals with the top 10 per cent of incomes. For the median worker or the low paid, real wages have increased at barely 0.4 per cent a year in recent years.
Most recently, in the first six months of WorkChoices, average real wages (measured by the wage price index) fell by 0.6 per cent. At the same time, in Queensland and Western Australia, there are major labour shortages. Employers are offering huge wages to get people to work in the resources sector. Yet, on average, real wages fell. It would be surprising if this situation continued, but nonetheless it is remarkable that this should have been the case in an economy with the tightest labour market in three decades. Something strange is going on, especially in the part of the labour market where workers do not have strong bargaining power. In part, this is because the protections that used to exist for those signing AWAs are no longer there. Under the old system, agreements were meant to leave employees no worse off than they would be under the award. If you lost your penalty rates or another entitlement, you were meant to be compensated – most probably through an increase in the base hourly rate of pay. Now you can lose any or all award conditions and not receive a cent in compensation.
The trouble is that it is hard to know what is happening in that less prosperous part of the labour market, because the government does not publish data letting us see into it properly. We know that average real wages fell most markedly in retailing and hospitality – where penalty rates are most at risk – in the first six months of WorkChoices. But that does not tell us the specifics of AWAs in those industries. We know that, before WorkChoices, wage increases under AWAs nationally were typically only 2 to 2.5 per cent – barely half the 4 to 4.5 per cent that workers obtained under union collective agreements. But nothing has been, or will be, published about wage increases under WorkChoices AWAs – except that 22 per cent of WorkChoices AWAs provide for no wage increase during the whole period of the AWA, which may last up to five years.
This glimpse came when the Employment Advocate, Peter McIlwain, answered questions asked by the Senate Estimates committee last year. His office had examined a sample of 250 AWAs registered in the first month after WorkChoices took effect. It also showed that just over half had abolished overtime pay. This was interesting because it meant that overtime was being abolished much faster than previously. A further one-third of AWAs reduced overtime pay. This meant that, in total, 82 per cent of AWAs either reduced or abolished overtime pay. The story was no better for other conditions of employment. Most AWAs abolished penalty rates, shift loadings and annual leave loading – all representing notable acceleration of the pre-WorkChoices patterns. Large proportions also abolished rest breaks, public holiday pay and allowances.
All these disappearing conditions, government commercials told us in 2005, were "protected by law".
These numbers only tell a small part of the story. They do not tell us about the differences between industries where workers are strong and where they are not. After all, AWAs are also used extensively in mining, where there is a severe labour shortage, and those AWAs – like the collective agreements they try to outbid – are very generous.
Yet, instead of publishing more detailed information, the government is now publishing no information at all. The Employment Advocate developed concerns that he had not expressed before about technique and interpretation. This decision to stop publication was one he came to entirely of his own accord, without input from the minister – nothing to do with the bad publicity generated by these statistics or how embarrassing they might have been to the cause of promoting AWAs or the government.
The Office of the Employment Advocate knows that it faces abolition if there is a change of government.
WHEN THE COWRA ABATTOIR WORKERS WERE SACKED, they had few options. The most effective industrial weapon – going on strike – is impossible to implement if you have already been sacked. They could not seek reinstatement from the industrial tribunal because they had been sacked for "operational" reasons, and under WorkChoices that disqualified any claim for reinstatement, no matter how unjust, harsh or unreasonable the dismissal. But they, and their union, had one major weapon at their disposal: the media. Within hours, press and TV camera operators were outside the abattoir. The workers' plight was beamed into homes across the country.
The minister realised he faced a problem. This was just one of several cases in the national media of workers being sacked or abused under the new laws. He went on television to say that some employers, like the Cowra abattoir, had "jumped the gun". It seemed "quite possible" that the employer there had acted "contrary to the provisions of the law itself". The Office of Workplace Services (OWS) was told to investigate and speak to the company. The unions negotiated with management. Under media and political pressure, the company reinstated the workers. The Minister was triumphant: "This shows that the law works."
Except that the company had not broken the law at all in sacking the workers as it did. An OWS report to the minister eight weeks later cleared it of wrongdoing. Fortunately, through judicious use of the media, the workers had got their jobs back for the time being.
As with Cowra, much of the battle over WorkChoices is fought out in this symbolic domain. For the unions, the ability to mobilise media and create images of workers being disadvantaged has become a key tool in preventing employers from exploiting opportunities the law now gives them. No doubt many employers have decided that the cost to their reputation of adopting an aggressive approach would not, at the moment, be worth it. At least, that is the case for unionised workers who have the resources of a political savvy union movement behind them. Those who do not belong to a union, lacking media access, remain largely invisible and more easily exploitable.