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Issue #1672      February 11, 2015

Excluding unions

Anti-union wave coming Part 3

See Part 1 and Part 2.

The Productivity Commission has been commissioned by the Coalition government to carry out an assessment of Australia’s workplace relations framework. Productivity Commission chairman Peter Harris described the inquiry as a “once-in-a-generation opportunity”. On January 23, the Commission handed down five issues papers seeking submissions as part of the process towards presenting the government with its final recommendations by November 30, 2015.

The issues papers make dense reading, mostly raising proposals that have come from employer bodies in earlier consultations. Every so often there is a token reference to workers or their representative bodies and the need for fairness, etc. The Commission avoids making direct recommendations, but its spin and questions send strong signals as to what is on the agenda.

Part 1 and Part 2 of this series covered penalty rates, the minimum wage, the National Employment Standards, modern awards, unfair dismissal, anti-bullying provisions – all of which are up for grabs. Part 2 also raised the question of individual flexibility arrangements (IFAs) (fancy language for individual contracts) along with the application of the “better off overall test” (BOOT), raising the need for greater flexibility.

Bypassing the system

The Commission also raises IFAs from a different angle. It notes that it is possible to make common law agreements outside of the Fair Work Act (FWA) system, although they would still have to meet certain legislated requirements such as the National Employment Standards.

“To the extent that [employers and individual employees] are able to negotiate their own employment terms and conditions, employment contracts have some potentially desirable features. They provide flexibility for the employer and employee to craft arrangements that suit them specifically, and without third party involvement,” the Commission says. (Emphasis added)

“While the FWA prohibits various terms from inclusion in enterprise agreements, some terms may instead be established via employment contracts. Such contracts are less constrained than IFAs made under enterprise agreements, and are not beholden to the … flexibility clause of an enterprise agreement.”

The reference to “without third party involvement” is spin for “non-union”. The Commission points out that if statutory employment law narrows its reach the common law gains significance and vice versa. It asks, “whether there should be greater (or lesser) reliance on individual arrangements, and why should this be so.”

Reading between the lines the Commission seems to be raising a new model whereby the government shrinks the safety net and workers can try to expand it through individual, non-union individual agreements under common law.

Industrial action

One of the most important issues raised by the Commission is industrial action. Without the ability to organise and take united industrial action, workers are powerless in the face of employers’ demands. Already the legal right to take industrial action has been seriously restricted in Australia. Breaches of the law can incur tens of thousands of dollars for individual unionists and hundreds of thousands or even millions of dollars in fines and damages for trade unions.

“As typically measured (days lost per 1,000 workers), industrial action is now very uncommon … In part, this is likely to reflect changes in WR arrangements, such as the emergence of enterprise bargaining processes where industrial action is only protected once the negotiation of a new agreement has commenced. Changes in industry structure, increased competitive pressures on businesses and lower rates of union membership may also have contributed to lower rates of industrial action.”

Add to that the fear of hefty penalties and a trade union movement which has not only been weakened in the level of organisation but also ideologically, this situation is not surprising.

The Commission (add employers and government) are clearly not satisfied with this. It seeks suggestions on how to expand the definition of what constitutes industrial action, what arrangements “might practically avoid industrial disputes”, the “adequacy of enforcement arrangements for disputes”, the role of the Fair Work Commission (arbitration powers?), and so on.

It also looks at the secondary boycotts legislation under the Competition and Consumer Act, and raises questions about the “misuse of power” and unions behaving as cartels as if unions were competing corporations.

Strangely, for a body seeking to change the framework, the Commission constantly refers to changes to the Fair Work Act and its main institutions, not their replacement with a different structure. This suggests that the government’s intention is to retain the names of bodies and the Act that Labor brought in, while completely removing what few protections workers and unions have left.

Submissions are due by March 13. For more details see

Next article – Allseas Group’s Nazi-honouring vessel “must be banned”

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