No Choices: Australia's Unions Confront Labor Law "Reform"

by Graham Matthews

On March 27, Australia’s new labor law, known as Work Choices, went into effect.

On March 31, Rhonda Walke, a medical receptionist in Sydney with more than 20 years employment at a small doctor’s office, was fired. Her offense: seeking to negotiate the terms of a new contract her employer sought to impose. Under Australia’s old labor rules, Walke would have been able to win reinstatement. Under Work Choices, because the doctor’s office employs fewer than 100 workers, she is out of luck — unfair dismissal provisions don’t apply.

“I had a job where I could walk to work and I wanted to talk to them about what the new terms would mean.” Walke told Workers Online, the official publication of Unions NSW, the labor council of the Australian state of New South Wales.

“I wanted to talk to the employer but I didn’t even get the opportunity. I was given the new conditions on Wednesday and, about 12:15 today (Thursday), I was sacked by the office manager.

“I feel I have been unfairly dismissed, because I have done nothing wrong. Why should all my conditions change, after 20 years, without any discussion?”

Passed through Parliament on December 2, 2005 and proclaimed as law on March 27, Work Choices is an amendment to the Workplace Relations Act (WRA), a package of industrial “reforms” passed by the Australian federal Liberal-National (conservative) Coalition government in 1996. Like Work Choices, that original package aimed at restricting workers’ rights and weakening the power of unions. It is part of the ongoing effort by Australian governments — Labor and Liberal — over the last 25 years, to increase profitability by lowering the cost of labor.

During its campaign for re-election in November 2004, the Coalition government failed to divulge its plans for a second-wave of industrial relations legislation. It fought the campaign mainly on the promise of keeping interest rates low, mixed with an emphasis on its support for the U.S.-led “war on terror.” It was only after the election, in which the Coalition received the unexpected windfall of control of both houses of Parliament — meaning that it could pass any legislation unamended — that it began to talk up the need for further industrial reform.

A History of “Reform”

Work Choices has delivered to big business much of the labor “flexibility” that it has sought for the last 10 years of Coalition government. In early 1996, prior to the election of the government of Prime Minister John Howard, the Australian Chamber of Commerce and Industry (ACCI) helped draft the Coalition’s industrial relations policy document, Better Pay for Better Work. This policy document, which argued for the elimination of unfair dismissal laws, the implementation of individual contracts and the scrapping of the Australian system of regulating conditions of work, was implemented in part in the passing of the Workplace Relations Act.

Before 1996, Australia relied heavily on a system of industrial “awards,” where the Australian Industrial Relations Commission (AIRC) established minimum conditions for specific industries on a range of wage and work rule issues. The 1996 Workplace Relations Act stripped back allowable matters in industrial awards to 20. It re-established the right of employers to sue unions for damages relating to solidarity actions (“secondary boycotts”), and restricted the right of union officials to enter workplaces. It also introduced Australian Workplace Agreements — individual contracts that could override industrial awards or company-wide collective bargaining agreements. The only stipulation was that the AWAs were required to satisfy a “no general disadvantage test,” whereby a worker who signed an agreement would not be made worse off overall than if still covered by the award. The WRA also introduced a range of fines that could be levied on unions that defied AIRC orders.

In their submission to a Senate inquiry into the implementation of the WRA held in May 1996, the ACCI gave a glowing endorsement to the bill, calling it “another step towards the sort of employment laws that ACCI has been arguing for.” However, the submission warned, “It is not the end of the process of reform. There will still be considerable ‘unfinished business.’”

The WRA was a compromise for Prime Minister John Howard’s Coalition government, which had been forced to omit some parts of the legislation in order obtain Senate passage. Subsequent Coalition attempts to amend the legislation to close loopholes were blocked in the upper house. With the Coalition victory in the 2004 federal election, this situation changed, and Work Choices was introduced.

In February 2005, the Business Council of Australia, the peak group representing the CEOs of the top 100 companies in Australia, released an “an action plan for reform of workplace relations to underpin economic growth, employment opportunities and rising prosperity.” The BCA’s plan outlined many of the features later incorporated into the Work Choices legislation, including the further “simplification” of awards — and ultimately their replacement with a set of (five) minimum conditions of employment; the abolition of the state industrial relations systems; and “improving the flexibility of agreement making,” including by the “application of a simpler” no-disadvantage test for the registering of AWAs.

Once the Work Choices legislation was actually written, the BCA and ACCI made lengthy submissions to the Senate Workplace Relations Committee inquiry into the bill. The ACCI said that it “supports the urgent passage of the Work Choices Bill by the Senate,” further arguing that “The Parliament/Australian government should withstand calls for further ‘protection’ of existing rights beyond what has been announced.” The BCA’s conclusions were virtually identical.

Workers Hit Hard

The Work Choices legislation entails a significant diminishment of the rights of both individual workers and unions. The legislation removes the right of workers employed in firms with less than 100 employees to seek redress for unfair dismissal. In firms of more than 100 members, the right remains, but an employer can still circumvent the protection by claiming that sackings were made for “operational reasons.”

Employers capitalized immediately on their newfound prerogatives. For example, shortly after Work Choices went into effect, Waylon Vaughan, a greenskeeper, was sacked on the spot by Windsor Turf Supplies after questioning the quality of turf sent to a customer. Mission Electrical sacked electrician Mark O’Neil from a development on the New South Wales south coast, replacing him with a television repairer to cut costs. The electrician had queried why payments were not being made into his redundancy fund as required under his agreement. “I guess they thought that made me a trouble maker,” he told Workers Online.

Employers are also using the new laws to fire sick and injured workers. Of nine workers sacked from Triangle Cables in Melbourne on March 28, six were receiving workers’ compensation payments. In Nanango Shire Council in rural Queensland, a librarian of 14 years, who was on sick leave, was sacked by way of a fax sent on the morning that the new laws came into operation.

Another key feature of Work Choices is the loosening of rules that govern employers offering workers AWAs. Under the previous system, any AWA had to meet the “no disadvantage test.” Under Work Choices, this provision was dropped. Now the only requirement is that agreements meet five minimum conditions — the federal minimum wage, an average work week of 38 hours, 10 days of sick leave per year, four weeks of annual holiday (although a worker can be pressured to “cash-out” two weeks of this) and the right to 12 months of unpaid parental leave on the birth of a child. Bonus payments for working weekends, overtime and unsociable shifts, along with a host of other conditions that Australian workers have won through struggle, may be lost at the stroke of a pen.

Theoretically, the signing of an AWA remains voluntary, and no worker may legally be sacked for refusing to sign one. However, workers employed in firms of less than 100 have little recourse, while new employees can be required to sign an individual contract as a condition of employment.

Employers have quickly exploited their new freedom to take away workers’ benefits. In May, Office of the Employment Advocate head Peter McIlwain revealed to a Senate Estimates Committee that every Australian Workplace Agreement (AWA) lodged under Work Choices has removed at least one protected award condition. McIlwain revealed that:

• annual leave loading — permitting unused vacation days to be carried over to subsequent years — has been erased in 64 percent of AWAs lodged under the new laws;
• bonus rates for overtime and unconventional work hours have disappeared in 63 percent;
• shift allowances — payments for working undesirable shifts — have been removed in 52 percent of AWAs;
• 16 percent of agreements have dropped all award conditions and replaced them with just the government’s five minimum conditions;
• 40 percent of the agreements have dropped government-recognized public holidays;
• more than one in five new workplace agreements (22 percent) contain no provision for pay increases over the life of the agreement.     

Work Choices will also work over time to erode the minimum wage. Until the introduction of Work Choices, the federal minimum wage was set annually by the AIRC, after hearing a submission from unions, government, employers, charities and other interested parties. Over the last 10 years, the AIRC has made determinations that have seen a slow but steady increase in the real value of the minimum wage. The AIRC has rejected arguments that a rising minimum wage will heighten unemployment.

Work Choices transfers authority to set the minimum wage to the so-called Australian Fair Pay Commission. The commission is to be staffed by economics “experts” whose brief is to measure the impact of any future increase of the minimum wage against productivity and the impact on unemployment. It does not need to take account of union or community submissions in making its determination. Although it is not due to meet until November, the commission has already released studies that show it is likely to make only a small, if any, increase to the minimum wage.

Dismantling Unions

Labor critics call Work Choices the most serious attack on organized labor in Australia in 100 years. While Work Choices does not make it illegal to join a union, it attempts to make unions so powerless as to make membership almost meaningless.

With Work Choices, unions can still negotiate an agreement on behalf of members, but non-members cannot join a strike action to support the agreement, or even vote to strike. Conversely, anyone can vote for, or strike to support, a non-union collective agreement.

Industrial action is still legal during a recognized bargaining period for a new collective agreement. However, the federal minister for industrial relations or the AIRC can suspend or terminate the bargaining period. Third parties claiming to be adversely affected by industrial actions may also apply to the AIRC for suspension or termination. The reasons for suspending or terminating a bargaining period include “significant damage to the economy” or that a union is engaging in pattern bargaining (where common conditions are being sought in two or more agreements by a union, using a similar “course of conduct,” such as strikes).

Strikes may only be authorized by secret ballot vote of union members in an election run by the Australian Electoral Commission (the government body that runs federal elections). This can take several days — and the union must pay 20 percent of the cost — giving the employer time to wear down the solidarity and strength of the union members. By contrast, to stage a lock-out, an employer is required only to give employees three days’ notice. No AEC ballot is required.

Work Choices restricts unions’ right of entry into the workplace. An employer can tell union officials where they can and cannot go in a workplace, and where to meet the union members, enabling the employer to hide unsafe areas from the union officials, or even to schedule union meetings in particular areas close to management, so as to intimidate workers.

A union official must give an employer 24 hours notice before entering a workplace — potentially allowing employers to clean up an accident site before inspection — as well as a detailed reason for entering a workplace, ending any confidentiality between a union member and union representative.

Unions can also be fined A$33,000 (nearly 25,000 U.S. dollars) for seeking to include “prohibited content” in a collective agreement. Speaking at the Australian Council of Trade Unions (ACTU)-organized demonstration against Work Choices last November, ACTU secretary Greg Combet explained, “It will be illegal to ask for workers to be protected against unfair dismissal when negotiating an agreement — and there’s a $33,000 fine just for asking. And there will be a $33,000 fine for asking for union involvement in a disputes settlement procedure … And a $33,000 fine for asking for anything else the government might like to ban.” Under the legislation, the minister can add to what is considered “prohibited content” at any time.

Selling Work Choices

The government has sold this far-reaching rollback of Australian labor rights as a vital change to enhance labor flexibility and spur economic growth.

“If we are to grow and prosper, we need to continue working together to implement fair, practical and sensible changes to our workplaces,” asserts the federal government’s official booklet explaining the new industrial relations system. “These changes need to provide more choice and flexibility for both employees and employers in their workplaces, so we can find better ways to reward effort, increase wages, and balance work and family life.”

In launching the booklet, Howard reinforced its message that “reform” was in the interests of workers as well as employers. “The reforms that are detailed today are the next step in the evolution of a more decentralized workplace relations system,” he said. “The reforms are major but not extreme. They are sensible and fair steps to further strengthen the Australian economy and bring forth the next wave of productivity improvement which will benefit all Australians.”

“Australia’s high living standards rely on the productivity of our workplaces,” Howard said. “Just as today’s prosperity has been built by Australians working smarter over the past decade, so we must unleash a new burst of productivity growth to secure our future prosperity.”

The idea that a strong economy, rather than guaranteed rights on the job, is the best way to protect workers’ interests has been Howard’s key justification for Work Choices. “The real guarantee of job security is national economic prosperity,” he argued in an August speech. “And the real measure of a workplace relations system is the contribution it makes to the enduring and future prosperity of the country.”

The business lobby has similarly appealed to broad economic justifications for Work Choices. “The changes in Work Choices are long overdue and will help overcome the serious flaws and bad regulation that have hampered the capacity of Australian businesses to grow, compete and employ,” claimed the Australian Chamber of Commerce and Industry (ACCI) in a December 2005 statement. In comments in 2006, the ACCI has refused to enter the debate about workers’ rights, and instead continues to stress the economic importance of continuing “reform.”

The Howard government has invested heavily in selling its message to the public. The federal government has spent in excess of $40 million of taxpayers’ money to sell Work Choices to the Australian people. The figure consisted of $33 million on advertisements (radio, television and newspaper), $6 million on a call center, and nearly $2 million on the booklet. Most of this spending was made before Work Choices became law, and has been roundly criticized in the Australian press for being, in effect, party-political advertisements for the Liberal Party, rather than an information campaign on behalf of the government.

The sales campaign notwithstanding, Work Choices remains deeply unpopular with working people. Poll after poll shows that people continue to be suspicious of Work Choices. Polls taken after large union and community protests have registered the largest rebuff for the government, to the extent that the federal opposition Labor Party has been forced to commit itself to both “tearing-up” the laws if elected, and abolishing AWAs — two key demands of the union movement.

The Union Campaign

The trade union campaign against Work Choices began in 2005. The first initiative was taken by a mass meeting of delegates held by the Victorian Trades Hall Council — the central labor body for the state of Victoria — on March 23, which called for a state-wide stoppage and mass protest for June 30 that year, the day before the Coalition gained control of the Senate. In spite of initial opposition from state labor council secretaries elsewhere, the ACTU agreed to a national week of action against the legislation, to run from June 27 to July 3.

Following a concerted campaign of pressure mounted by militant unionists, all state labor councils eventually joined in calling mass protests, with all except New South Wales organizing protest action or June 30. Unions NSW organized a series of televised meetings at over 200 locations across the state on July 1. Nationally, more than 300,000 workers rallied against Work Choices over the two days, largely in defiance of legal restrictions on the right to stop work.

The latter half of 2005 saw a series of calls for a renewed round of national stoppages and protests against the legislation, led by militant sections of the movement. The ACTU called a further national day of action against the legislation for November 15. Across the country, an estimated 600,000 workers participated in rallies, the largest workers’ protest turnout in Australian history. The largest rally took place in Melbourne (the capital of Victoria), where up to 250,000 workers and their supporters participated.

From the beginning of 2006, the ACTU campaign against Work Choices emphasized political action — particularly a campaign to convince voters in marginal Liberal seats not to re-elect the Coalition at the next election, due towards the end of 2007. The February 21 meeting of the ACTU’s industrial relations campaign committee rejected a proposal for a mass protest in the first half of 2006, with only the Victorian Trades Hall Council, the Australian Manufacturing Workers Union and the Construction, Forestry, Mining and Energy Union supporting such a call. After weeks of debate and sustained pressure from militant unionists, on March 7 the ACTU executive relented and did call for a national day of protest for June 28.

On June 28, 300,000 workers mobilized against Work Choices across the country. While significantly smaller than the November 15 rallies of 2005, part of the difference was accounted for by the fact that Work Choices was now law, giving employers the big stick of $4,800 fines to wave over workers’ heads should they participate in “illegal” strike actions, along with the fact that less work was put into the mobilizations by many trades and labor councils.

The ACTU’s next planned action against Work Choices will be a national protest on November 30. Many militant union leaders have called on the ACTU to ensure that the protest is accompanied by a strike, to send the message to all workers that they should attend, and to ensure “the ACTU doesn’t lose focus on what this campaign’s about,” as Western Australian assistant state secretary of the Maritime Union of Australia, Ian Bray, told Green Left Weekly on June 29.

“This is not an election campaign for the Labor Party; it’s about fighting for the very existence of our pay and conditions now under threat.”

Work Choices presents a significant challenge to the labor movement in Australia. Militant unionists are arguing that staging a few large demonstrations in support of a campaign aimed at lobbying the opposition Labor Party, and convincing voters in marginal Coalition seats to change their vote, is a start, but it will not be enough to win. They insist that industrial action must occur as well, with workers asserting their rights and power in the workplace, and refusing to accept the restraints imposed by Work Choices.

Graham Matthews writes for the Australian publication Green Left Weekly.