The report they don’t want a row about

Thursday, 4 October 2007 

The controversy over the report on the impact of Workchoices released by the University of Sydney’s Workplace Research Centre is strange because there was a much more damning report on the government’s IR reforms by the same group a few weeks earlier that was virtually ignored by both parties.

The latest report is certainly embarrassing and it is no wonder that Hockey and Costello felt the need to attack the authors. It is an authoritative 110 page review of Australian work practices since the introduction of Workchoices in 2006 based on a sample of over 8,300 employees. It shows that AWAs are mostly used in the lower paid section of the work-force and contrary to how the government motivated them, around half involve no negotiation between the employer and employees. So it is not surprising that the study found low-skilled employees on AWAs were on a $100 a week less than those on collective agreements.

Yet the use of AWAs remains relatively low. AWAs have been around since 1996, and before Workchoices came along, covered less than 4.5% of employees. Even after more than a year after Workchoices began encouraging greater take-up of AWAs, the report estimates they still make up only 6% of employee contracts. Contrary to that implied by union advertising, over half of employees (55%) that go on to an AWA since Workchoices was introduced, have done so through changing jobs rather than being made to by an existing employers. This raises the question, given AWAs allow employers to pay less, why have they been so reluctant to use them?

Partly the answer is in the report itself, they didn’t need to. The report describes a decisive shift underway in employment contracts from union collective agreements to either non-unionised collective agreements or individual and award contracts. Several times in the report, however, the authors noted how striking it was that the employers preferred moving employees to individual and award contracts rather than AWAs (by over two times). In fact award contracts, the most popular destination (for employers) of less skilled workers, paid even lower than AWAs both on an hourly rate and per week.

In other words, even before Howard tried to make AWAs more popular with Workchoices, employers already had plenty of ways of moving employees off higher union collective agreements to less generous contracts. This mainly reflects the steady decline of the unions, which now cover only 20% of the Australian work-force. That was why, in a much more telling survey of employers’ attitudes just prior to Workchoices being introduced, released by the same group a few weeks ago, it found little need for further IR reforms. Over 80% of workplaces had no union, only 3% of employers reported any industrial action and a striking 96% of Australian employers were satisfied with the industrial scene and saw no need to change IR laws at the time.

This puts the real light on Howard’s IR laws. It is not so much an attack on the unions, but an irrelevance to employers given the collapse of the unions that has already occurred. The latest report noted that over the last twenty years it seemed as each IR change was introduced it was based on less and less research on what was actually happening in the workplace. This is because as time goes on such legislation is less about industrial reform than politics – and so is the opposition to it.

As one of the authors noted, the row about Workchoices is not about industrial relations but just a means of brand identification for both parties. For Howard, Workchoices is how a government with a Senate majority it didn’t need, tried to fill the gap in its chronic policy vacuum. The current report may suggest the legislation has been vindictive to those who can least afford it, but at least the fuss makes the government look like it stands for something. But the preceding one showed that Workchoices, the government’s only idea for the last three years, is like the government itself, superfluous.

Posted by The Piping Shrike on Thursday, 4 October 2007.

Filed under Key posts, Tactics

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