WorkChoices: the shape of things to come

1
WorkChoicesthe shape of things to come

• Chris Briggs John Buchanan
• Workplace Research Centre
• The University of Sydney
• May 2006

2
Introduction

• Australian model of IR traditionally unique
• current reform proposals keep that tradition
• more than Thatcher, Reagan and NZ Nationals
  proposed
• Shape of Things to Come our best projections
  BUT mould could be broken by events, campaigns
  choices

3
Overview

• Philosophy
• Dimensions of change
• Projections
• Key variables to watch
• Conclusion

4
Philosophy

• Paradox at the heart of WorkChoices
• Rhetoric of increased freedom
• Reality of increased prescriptions and
  prohibitions
• What is going on?

5
Two types of liberalism

• Individual/market v social/pluralistic
• gt Governments provide frameworks which
  nurture
• - individual freedom or
• social power-sharing
• Example French Canadians and 1776
• Implications for employment law
• Market liberals confine social groups
• Social liberals confine individual contracts

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The evolution of employment law

• Feudal relations replaced by freedom of
  contract (eg freeborn Englishmen)
• Freedom of contract ruthless in suppression of
  combinations of workers
• Labour law emerged out of statutory protection
  for unions
• In Australia this evolved into system of
  Conciliation and Arbitration
• WorkChoice part of deeper policy shift

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Missing pieces of the policy jigsaw

• Entrepreneurial workers and the Independent
  Contractor Act
• vision freedom of choiceespecially for
  employers
• strategy privilege form over substance
• specifics
• limit labour laws capacity to respond to
  change
• codify preferred common law principles
• simplify enforcement
• Workchoices confining and reconfiguring
  labour law

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WorkChoices Overview

• Dimensions
• Shrinking Labour Law nurturing a US style low
  pay sector
• Unifying Labour Law same number of systems, more
  complexity
• Tilting Labour Law regulating unions, empowering
  employers
• AIRC reconfigured union policing agency, dispute
  settlement outsourced

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Increasing procedural rights by shrinking
substantive rights

• Five statutory minimum standards
• Wages, annual leave, personal/ carers leave,
  parental leave, 38 hrs
• Seven rights must be explicitly excluded
• - pub hols, rest breaks, bonus pay, annual leave
  loading, allowances, penalty rates,
  shift/over-time loadings
• Exclude unfair dismissals standards where lt 100
  employees

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Unitary IR system same number of systems, more
complexity

• corporations power doesnt cover 15 25 of
  workers
• makes federal employment a sub-branch of
  corporations law
• potential gains over-rated Productivity
  Commission

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Tilting bargaining power regulating unions,
extending employer power

• limits on union industrial action profound
• prohibition during life of EAs
• AIRC increased capacity to suspend protected
  action
• Power for effected third parties to suspend
  protection
• Secret ballots to make legitimate action
  cumbersome
• employers industrial action options the most
  advanced in OECD
• only required to give three days notice of
  lockouts, no questions asked.
• gaining rights to conduct boycotts and bargain
  collectively within Trades Practices law
• Fed Govt moving the deny unions such rights

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AIRC reconfigured union policing agency,
dispute settlement outsourced

• from regulating the labour market, to regulating
  unions
• fair pay commission to set limits on SNAs
• private mediation arrangements being nurtured
• What is the essence of the changes?

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Employment law in Conservative Liberal Australia
Nurturing Entrepreneurial Workers
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Labour Law the Current State of Play

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Labour Law How it Will Change

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Projections

• Approach comparative history
• Within the OECD
• Within Australasia
• Key finding reconfiguring of wages and hours
  nexus
• Longer term implication deepening inequality

17
NZ Supermarkets Change in Real Hourly Rates
(), 1987-97
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De-Regulating Victorian Awards Penalties
Allowances

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WA Contract Cleaning

• Local employers initially preserved wage
  standards
• Worked well until an outsider won market share by
  cutting wages
• All others forced to follow suite
• gt under conditions of competition standards set
  by morally least reputable agent. J S Mill

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Projected Change to IR Regulation

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How/Why Will Low-Pay Jobs Grow?

• Single rate AWAs to replace awards
• Low-Pay contractors e.g. cleaning, security
  guards
• Stagnation of minimum rates
• Product Market Competition in a Deregulated
  Labour Market trickle becomes a flood
• Welfare-to-Work Generating Labour Supply for
  Low-Pay Jobs

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Low-Pay Australia, UK, USA (mid 1990s)
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De-Regulating Victorian Awards Proportion of
Low-Pay Jobs (lt10.50 p.h.)

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Social/Community Impacts

• Fragmented Hours End of Common Time
• Work/Family Balance, Family Relationships
  Quality of Parenting
• Work-Life Balance Community Participation
• Welfare Dependency, Poverty Social Exclusion
• Social Gradient increased inequality poor
  quality work lower life expectancy higher
  rates of morbidity

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Key labour market problems set to worsen

• Sustainable labour productivity growth
• skill shortages
• Labour supply shortages as population ages
• Work-life balance

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Participation Rates Women in Aust. Vs OECD ()
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Into the Quagmire New Risks Costs for
Employers

• Federal/State systems
• New regulatory complexities e.g. contractors/
  employees
• Dismissals claims to be re-routed, onus of proof
  reversed, costs jurisdiction
• Disputes fewer but harder to settle more
  costly for some employers
• Bloated Act (Stewart) about to be super-sized

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Breaking the Mould

• What Will the Economy Do?
• What will the Bosses Do?
• Will Small Businesses Incorporate?

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Breaking the Mould

• What will the Free-Riders Do?
• What will State/Local Governments Do?
• What will the Voters do?

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Summary

• Grasp philosophy
• Shift from pluralistic to market liberalism
• gt retreat of labour law and rise of
  commercial notions of work
• Four dimensions
• Shrinking, uniting and tilting labour law,
  Commission redefined
• Key variables to watch
• The economy
• Employer strategy
• Small business employment forms
• Free riders
• State/local govts
• Voters

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Conclusion

• Proposals are unprecedented
• Profoundly pro-business
• Are likely to worsen not solve key problems
• Skills shortages, work-life balance and
  productivity the key challenges
• More is yet to come
• Independent Contractor Act