Australian industrial relations: no easy solutions

But Labor has also adopted a number of policies to reflect the increasingly competitive nature of the economy, so eliminating any return to the pre-1996 industrial relations landscape.

Re-affirmed on September 17, 2008 by Labor’s Julia Gillard at the National Press Club, this included maintaining protected action which means that industrial action (only after a secret ballot) can only be carried out in times of wage bargaining, although employers have the right to lockout workers during a period of industrial action.

While areas of wage negotiation could “include matters like salary sacrifice arrangements, health insurance, child care and payroll deductions of union dues for union members”, they excluded “matters that are properly the prerogative of management - like decisions about closing an unprofitable plant or using a preferred supplier”. Employees who participated in any unprotected legal action would be subject to a “mandatory minimum deduction of four hours’ pay”, and employers would no longer be able to pay strike pay.

Labor also maintained the Australian Building and Construction Commission until 2010, established to investigate industrial conduct in the heavily unionised building sector.

AWAs, signed before 2008 legislation abolished them, were also allowed to fuflfil their five-year maximum terms.

As for unfair dismissal provisions for small business, though Labor again indicated that this would apply to companies with less than 15 workers compared to the Howard government’s figure of 100, this would only apply to workers employed for more than 12 months with employers only needing to give one verbal warning. Any violation by an employer would give an employee unfairly dismissed compensation of up to a maximum six months pay.

But even legislation that guarantees the right of workers to join unions to forge collective agreements does not necessarily ensure anything. One has only to note the United States which upholds a right to collective bargaining yet has a much lower minimum wage, lower trade union membership (12.5 per cent in 2006), and just a quarter of American workers receiving paid vacation time in 2006 with another 33 per cent getting just one week.

So while Labor has upheld important minimum award conditions, good luck to Labor’s bid to help employees in child care, community work, security and cleaning. While a union or bargaining representative will be able to apply to bargain with a specified list of employers (such as with small cleaning companies), there can be no protected industrial action and Fair Work Australia will only make a binding determination if both parties agree.

Most important for many battlers - unable to benefit from strong trade union representation - is the extent that Australians will support a decent minimum wage and award system to which all other enterprise agreements and contract work can be measured against.

Fortunately, given that Australia has one of the highest levels of workers on minimum award wages in the developed world (about 20 per cent by May 2004), the recently formed Fair Pay Commission, (first pay decision in 2006) has upheld annual increases to ensure that Australia’s minimum wage remains decent after being 58 per cent of the federal minimum wage in 2005 compared to 45 per cent in Britain and 34 per cent in the USA. Such annual increases will help the many Australians who relied on award wages as of 2006, including about 43 per cent of workers in accommodation, restaurants and cafes, 21 per cent in retail, and 14.5 per cent in property and business services.

Such a trend cannot however be taken for granted. In recent decades, the debate about wages has moved from the need to maintain high wages in the 1950s and 1960s at a time when Australian industry had tariff protection, to the need to link wage rises to productivity improvements and inflation targets.

What if the debate moves towards a demand for much lower minimum wages in order for Australia to attract important investment in this increasingly competitive economic environment? Though abhorrent to many, such a need has already been suggested by Tony Abbott at a Quadrant-IPA dinner in October 2007 when he argued it is hardly unjust for a government to promote a 10 per cent fall in wages if that was to cause employment to grow by 10 per cent.