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Laborís IR policy creates a dangerous apartheid

By Felicity McMahon - posted Monday, 3 September 2007

Labor’s plan to replace individual contracts with collective awards for those earning under $100,000 destroys choice and the opportunity to negotiate better pay and conditions.

After months of moaning about the woes of WorkChoices, Kevin Rudd has finally unveiled the ALP’s alternative Workplace Relations policy. Labor’s Workplace Relations policy will replace individual contracts and AWAs with collective awards for those earning less than $100,000. Only individuals earning more than $100,000 will be able to choose individual contracts, although those contracts will be still subject to Labor’s 10 minimum standards (something of a furphy, given the fact that nine of these “standards” are already enshrined in legislation and the tenth, about information at work, is a euphemism for providing propaganda about union membership).

The media analysis of Labor’s policy has been far from adequate. Dominating most of the editorials, articles and stories is concern for employers, for whom the flexibility of AWAs and WorkChoices is a benefit and for whom Labor’s IR policy will strike a devastating blow.


But absent from this analysis is any discussion of the fact that employees will lose the ability to choose an individual contract or a non-union agreement, and therefore miss out on the benefits that AWAs and WorkChoices can bring them.

By imposing a $100,000 barrier to determine who can access individual common law contracts, Labor’s policy creates a dangerous apartheid. It divides people into two classes: those who have choice and those who do not.

Under the current system an employee can elect to be governed either by an Australian Workplace Agreement or by a collective agreement. AWAs are regularly used by employers to provide incentives to employees and to reward those who are high performers and are particularly productive. They are a powerful tool by which an employee can ensure that their skills and successes are monitored and rewarded by the employer.

Telstra uses AWAs for more than 18,000 of its total workforce of 47,840 people to do exactly that. “Telstra uses AWAs to recognise individual performance and productivity”, stated Telstra spokeswoman Sarah McKinnon (quoted in the Australian Financial Review, August 30, 2007). Telstra offers employees the choice of either accepting an AWA or the applicable collective agreement.

But Labor’s Workplace Relations Policy will remove that choice. Non-union individual agreements will be entirely beyond the reach of any individual earning less than $100,000.

This will include the vast majority of young professionals starting a career after graduating from university. Under the status quo, these individuals have the power to negotiate excellent pay and conditions for themselves, particularly in the face of a skills shortage. Labor’s plan would deny them that choice.


It will also include older Australians making a career change and older women re-entering the workforce having seen their children grow up and move out of the house. These people have a considerable skills base, real-world experience, and the guts to stand up for themselves and negotiate better rewards for their contributions to their employer’s business.
Moreover, the impact on employees who have already negotiated a non-union or individual agreement will be an offensive assault on freedom of choice. After the expiration of the token transitional period Labor has outlined, your agreement will cease to be valid - even though both you and your employer want it to continue. So much for freedom of contract.

Worse still, having had your individual contract arbitrarily ended by the Labor Party, your new arrangement with your employer will be determined by a collective agreement negotiated by other people in your firm and possibly by a union of which you may have actively chosen not to be a member.

Having consciously pursued individual negotiations with your employer, executing an AWA or a common law contract thereafter, Labor will force you to accept a collectively negotiated agreement

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About the Author

Felicity McMahon is a graduate of the University of Technology, Sydney, with a degree in Business and a First Class Honours Degree in Law.

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