Image Description: Prime Minister Scott Morrison at the National Press Club



By Lily Andrew

Scott Morrison used his appearance at the National Press Club on the 26th of May to announce his vision for economic recovery.  A core component is centred around changing the industrial relations system to facilitate greater job growth and simplify the system for both employees and employers.  However, anyone who has followed Coalition industrial relations (IR) policy over the years would have a degree of apprehension towards a process that could be seen to wedge unions and pursue a more neoliberal set of IR policies.  Here is why.

Employment Relations 101

In UWA’s introductory employment relations unit, EMPL1101, the first concept you learn about the employment relationship is Fox’s Taxonomy.  This taxonomy is used to categorise the different sets of values and beliefs held regarding how the employment relationship operates.  Unitarism holds the assumption that the employment relationship is harmonious, and that employees and employers share common interests. Pluralism acknowledges that employers and employees have different interests which means that there is always a potential for conflict to occur.  Under pluralism, conflict is seen as legitimate, and should be accommodated via appropriate substantial and procedural processes.  The role of unions under this taxonomy depends on which category is applied.  Because unitarism doesn’t see conflict in the employment relationship, unions are seen as irrelevant and disruptive organisations that interfere with the naturally cooperative nature of the employment relationship.  Pluralism accepts the role of unions as necessary to promote the interests of employees by challenging management.  Pluralism also acknowledges that Unions must also seek to compromise where possible.

It would come as no surprise that since at least 1996, Coalition governments have continued to pursue a unitarist agenda in terms of IR policy.

Howard’s Work Choices Eroded Employee Rights

Almost the entirety of the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices) deliberately worked to erode employee rights in the workplace and increase management’s ability to unilaterally make decisions regarding wages and working conditions.

Prioritising individual contracts

Work Choices promoted the increased use of Australian Workplace Agreements (AWAs).  Prior to Work Choices, AWAs were typically unpopular forms of employment contracts because employers had to follow the ‘No Disadvantage Test’ which ensured the agreement left employees no worse off than they would have been if they were covered by the relevant award.  Work Choices got rid of the ‘No Disadvantage Test’, meaning employers no longer had to use the minimum conditions set out in the award.  Furthermore, Work Choices enshrined that AWAs prevailed over any other employment contract (such as contracts that result from a collective agreement) and that AWAs could be used to trade away compulsory conditions such as penalty rates, rest breaks, and loadings for overtime, amongst others.  Work Choices allowed for the acceptance of an individual contract to be contingent on the continuation of employment. Being placed on an individual contract had implications for not only employee rights in the workplace, but also the ability for labour to collectivise and bargain for better conditions.

Reduced Minimum Standards and Rights

Work Choices replaced the ‘No Disadvantage Test’ with the Fair Pay and Conditions Standard—a far lower minimum standard of conditions that no longer factored in the relevant awards that were previously used to set minimum conditions for agreements. Unfair dismissal laws were also greatly relaxed.  The legislation authorised businesses with 100 employees or less access to exemptions previously only applicable to employers with 15 or less employees. Subsequently, the relevant employees lost their right to any unfair dismissal remedies.  The Howard government also introduced measures that allowed employers with a greater number of employees to terminate employment on the grounds of ‘operational reasons’ without unfair dismissal repercussions.  This was seen in action when Cowra Abattoir terminated the employment of 29 workers and then proceeded to rehire 20 others on what amounted to a $180 a week reduction of wages.  Additionally, the role of setting wages was transferred to a new body that was legislatively required to keep them low.

Weakening Union Power

Work Choices created more legislative requirements that made it difficult for unions to be effective organisations.  This was demonstrated through the introduction of secret balloting, restrictions on the right of entry into the workplace and an increased capacity to prosecute unions for unprotected industrial action.  Under the original legislation union officials would have only been able to enter the workplace at the expressed permission of the employer, however that was changed, and instead the union official had to be granted a permit.  The legislation removed trade union facilitation clauses from awards, limiting the role of unions in facilitating dispute resolution.  Union officials were denied access to current and potential union members in the workplace.

An Uneasy Relationship with Industrial Relations

While the current Coalition government has been reluctant to pursue industrial relations reform since the repeal of Work Choices and introduction of the Rudd Government’s Fair Work Act 2009, it has over the last seven years pursued policies and expressed beliefs that are detrimental to workers’ rights and conditions at work.

In 2019, Finance Minister Mathias Cormann admitted that the flexible nature and overall downward trend of wages growth is a “deliberate design feature of our economic architecture.”  At the same time, employee’s share of total income nears a fifty-year low, wages growth has remained stagnant for years, and in 2019 the level of household debt to income passed 190%.  Ironically, back in 2014, Employment Minister Eric Abetz warned that there was a “risk in seeing…a wage explosion” if employers don’t stop ‘caving’ to unions.

The Coalition has continually argued that removing market constraints leads to better conditions for workers.  Market constraints like what you may ask? Let’s take penalty rates, which were cut in 2017 by the Fair Work Commission (FWC) under the pretence that slashing rates would lead to more jobs: new analysis released this year confirms what was found last year—cuts to penalty rates made absolutely no impact on increasing employment and wages in hospitality and retail, the sectors where the cuts occurred.

In 2014, the establishment of a Royal Commission into Trade Union Governance and Corruption was established under the Abbot Government.  As of March 2016, only one conviction was attained, while five other union officials either had their charges dropped or were found not guilty.  Furthermore, the largest financial fine ordered from the Commission totalled $1.4 million, notably, this figure is absolutely dwarfed by the $100 million breach by 7-Eleven or the $665 million per year of unpaid wages by ‘phoenix corporations’, or even the $721 million in incorrect debt notices unlawfully issued by the Federal Government to over 370,000 vulnerable people, which now must be refunded.

In 2016 the Liberals took the country to a double dissolution election over the failure of the ABCC legislation to pass the senate after two attempts.  The legislation was introduced to create a new body to regulate the Construction Forestry Maritime Mining And Energy Union (CFMMEU).

The Australian Building and Construction Commission stops:

  • Claims to ensure a safe number of employees are on worksites. At the time this Bill was being debated, five construction workers were killed in their workplace over a five-week period.
  • Claims to ensure labour hire workers are paid the same wage as other workers.
  • Going to the FWC to determine disputes.

The government argued that the legislation should be passed in the name of productivity, however, research demonstrates that the ABCC has no noticeable effect on productivity in the construction industry.  Additionally, when the ABCC was instituted during the Howard years, it was condemned for breaching international labour law, which Australia is obligated to follow. The ABCC that exists today is no different.

Just last year, Minister for Industrial Relations Christian Porter was quoted saying that “it is a false view in my observation—that the IR system is a perpetual contest between employers and employees,” while in the same breath referring to the peak union body in the country as the “radical ACTU.”  If Christian Porter considers the advocacy by employee representatives calling for better wages and more secure work as “radical,” then perhaps there also exists a perpetual contest between workers and a Coalition government.

This year, the government tried to pass the Ensuring Integrity Bill, which would have further eroded workers’ rights in the workplace.  Not only did it breach Australia’s obligations to international labour and human rights law, but its impact on Australian workers would have done nothing more than minimising their opportunities to bargain collectively for better wages and working conditions.

Returning to Scott Morrison’s press club speech, he explains that in 2020 the industrial relations system is broken because unions seek marginal benefits and employers avoid risk by not hiring. I think it would be remiss not to point out that ‘marginal benefits’ include occupational health and safety arrangements and wages.

“[Neutering unions] isn’t this Government’s policy and never has been.”

The Coalition has a well-documented history of union-bashing, reducing employee power in the workplace and facilitating the rise of insecure and casual work.  Ideological views on how the employment relationship should function are deeply embedded on both sides of politics—it would be naive to assume they will go away any time soon.

Lily has read far too much of a 1095-page Labour and Employment Law textbook over the last 12 weeks to not write this. 

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