Coalition sells out supporters

About 50,000 businesses, mostly small, in the conservative heartland have spent time and money with consultants to help manage change.

A key to this is flexibility - working outside the 40-hour 8.30am to 5pm, Monday to Friday work week, with commensurate security and opportunity to work longer and earn more.

This means significantly altering or getting rid of the effect of penalty rates with the workers' consent.

Half a million workers on AWAs and probably as many again on WorkChoices CWAs have seized that opportunity to negotiate mutually acceptable rates. The Fairness Test now takes that choice away: the core assumption and rationale for workplace change has been thrown out the window.

The new fairness test may be half-workable for maybe 80 per cent of new business proposing to change the penalty rate effect using AWAs. However, a quirk of how these tests are constructed is that a majority of those businesses that already have AWAs will fail the test.

This will be punitive because it is retrospective. On Friday, May 5, these 50,000 small businesses were advised that as of midnight two days later, all their new AWAs would be subject to a fairness test. It was as though they had suddenly all been discovered rorting the system.

There were no details available and the penny hasn't dropped yet as to how it will apply to the 5,000 to 10,000 new AWAs that have been created each week since May 7.

The fairness test will be far less flexible than the old No Disadvantage Test. It will be months before we see the first results when the vast majority of businesses discover that, except in isolated circumstances, new employees will have to be paid at a higher rate than their existing workers.

You can hardly pay one new employee at a higher rate than existing employees, and the Fairness Test legislation says you can't dismiss the new, higher-paid, employee, so you would have to increase everyone's pay as a matter of commercial practicality.

Workplace Relations Minister Joe Hockey says the new worker's “fairness test”rate will be back-paid to commencement. This means that, to keep faith with the workforce, the employer will have to back pay everyone or deal with a riot. This is the unintended, retrospective effect on a core Coalition constituency.

Unless Howard amends the legislation, particularly for businesses with AWAs already lodged, it will be politically disastrous.

Everyone, as with Latham's betrayal, will notice that the Coalition has sold out its own supporters for cheap (unattainable) votes elsewhere.