It doesn’t matter what the crisis, when it comes to the Morrison government the message is clear: you’re on your own.
As women across Australia lead historic mobilisations demanding government action on gendered violence week, the federal government encouraged women facing domestic abuse to raid their own superannuation accounts.
Calling superannuation withdrawal measures of up to $10,000 “an important last resort lifeline” for women experiencing domestic violence, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume later announced the policy would be reviewed following concerns from frontline workers about victim coercion.
Minister Hume now proposes to strengthen the “integrity” of the scheme with safeguards protecting the free withdrawal of funds. But additional steps for accessing women’s retirement funds do not change the policy’s message: survivors of abuse must fund their own crisis supports. All the while abusers roam free – an addition of intolerable insult to injury.
Safeguards may stop abusive partners forcing women to raid their retirement savings, but it’s not stopping the federal government. The early-release scheme is entirely consistent with the government’s clear established priorities: dismantling the superannuation system – rain, hail or shine.
Women marching for economic security and safety are not just ignored by the government. The Coalition’s anti-superannuation crusade to transform the system into an emergency personal bank account actively exploits women’s heightened COVID-era economic vulnerability.
Women worse off since COVID
In the initial COVID shutdowns, women experienced greater losses of jobs and hours. Against this backdrop of women’s desperation, the federal government introduced the superannuation early release scheme. Significantly, this was introduced two weeks before the introduction of the Coronavirus Supplement and the JobKeeper wage subsidy.
Between April and December 2020, 1.5 million women drew down their super, one-quarter of the entire female workforce. $14.9 billion was stripped from women’s already meagre retirement savings. Some 345,000 women completely emptied their accounts. Many more women aged under 20, and also those aged 36-55 (prime working years pre-retirement), withdrew from their superannuation compared to men.
In 2018, the Coalition announced domestic violence would be added to the list of early release “compassionate grounds”. Frontline domestic violence services voiced concern back then too. Now, pressured by intensifying calls for a proactive government addressing gendered violence, the Coalition suggests “safeguards”.
The federal government acknowledged heightened gendered violence risks during COVID. But it has still failed to give sufficient funding to the domestic violence sector, lift critical income supports for vulnerable women fleeing abuse, or introduce paid domestic violence leave into minimum labour laws. In fact, $1 million was cut from anti-domestic violence education programs in schools in the 2020 October Budget.
Early release scheme exacerbates disadvantage
Women already face systematic disadvantage in the superannuation system and have much lower retirement incomes: they retire with barely half the retirement savings of men. There urgently needs to be targeted reforms to prevent labour market inequalities that reduce women’s career earnings from being baked into the superannuation system as well.
Abolishing the $450 per month minimum threshold, closing the ‘motherhood gap’ by making super payable for all paid and unpaid care-related absences, and proceeding with the legislated increase in the superannuation guarantee (to 12 per cent) are all important to boosting women’s economic security and safety.
In the absence of real action on gendered workplace and domestic violence, the government’s superannuation early release scheme for domestic violence victims only exacerbates women’s economic insecurity.
Women desperate for incomes to survive are more reliant on abusive partners and low-wage casual jobs, more helpless to the threat of ‘handsy’ bosses and colleagues, and below-poverty welfare payments in the future. This latest policy only increases the risks of gendered violence over women’s lifetimes.
For women experiencing job loss, financial hardship or domestic violence, the message from the federal government is one we are getting sick of hearing: in a crisis, you’re on your own.
New research, released for International Women’s Day (8 March 2021), shows Australia’s recovery from the pandemic recession has widened the gender pay gap, as women’s jobs returned on a more part-time and casualised basis than for men.
The report, by the Centre for Future Work, warns that Australia’s gender pay gap could deteriorate even further in the wake of policies proposed by the Government for 2021: including the further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill; public sector pay caps for both federal and state employees; and a high-cost, inaccessible childcare system.
Key findings:
Women suffered disproportionate job losses when the COVID pandemic hit, and as the economy recovers are returning to jobs that are relatively more insecure.
Employment for women declined almost 8% between February and May 2020—over 2 percentage points worse than for men.
Women’s employment is still 0.9% lower than in January last year (around 53,000 less jobs), while male employment went up over that same period (by an additional 7,000 jobs).
Job-creation since May (the worst month of the COVID recession) has been heavily concentrated in casual and part-time jobs. From May through November, casual jobs made up over 60% of new jobs –and women filled 62% of those casual roles.
The disproportionate concentration of women in newly-created casual and part-time jobs is largely responsible for a significant widening of the gender pay gap after May.
Measuring the gender pay gap using total average earnings data (including both full-time and part-time workers, and bonuses and overtime as well as ordinary time wages) indicates that the gender pay gap is 31% across all jobs. That is a more dire, but more accurate, measure of the pay gap than other measures which include only full-time jobs.
Three major existing and proposed government policies could further widen pay inequality in 2021:
The further expansion of casual work and reduced pay for part-time workers, tabled in the omnibus industrial relations bill.
Public sector pay caps for both federal and state employees.
A high-cost, inaccessible childcare system.
“The gendered nature of the pandemic recession on Australia’s labour market has markedly worsened pay inequality,” said Alison Pennington, senior economist at the Centre for Future Work.
“Women lost jobs at a greater rate than men when the pandemic hit, and as the economy has recovered, are returning to fewer jobs offered on a more casualised basis. The gendered employment recovery is disproportionately leaving women with less hours, security and pay than men—a clear example of why a simple post-COVID “snap back” was never adequate for women.
“Women have been bearing the brunt of the COVID recession while governments have targeted stimulus spending in bloke-heavy industries, neglecting investment in industries that support women’s employment, including healthcare, education and social services. To stop further deterioration in pay inequality, targeted efforts to lift women’s work and earning opportunities is critical.
“Focused investment in women’s job creation, free childcare, and wage-boosting industrial relations policies are all within reach of governments at both federal and state levels.”
However, the BCA’s expressed concern for ‘the future of bargaining’ contradicts its support for the Government’s omnibus bill which will further undermine genuine bargaining and suppress already record-low wage growth.
“The Business Council of Australia celebrates the benefits of enterprise agreement (EA) coverage by comparing higher average wage outcomes obtained under EAs with other pay-setting methods. Ironically, this endorsement is offered in their support for the Government’s omnibus IR Bill which will result in an enterprise bargaining system involving less union representation and reduced scrutiny of sub-par EAs by the regulator,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.
“However, empirical data proves union representation is essential to achieving higher wage gains in EAs – the very advantage that the Business Council of Australia extolls.
“By weakening the ‘better off overall test’ (BOOT), watering down scrutiny and approval processes, and introducing 21-day approval deadlines, the government’s IR Bill will accelerate growth in non-union EAs. For the last 10 years, non-union EAs have delivered lower wage increases than union-covered EAs. Alarmingly, the majority of non-union EAs have not specified any wage increases at all.
“These sub-par EAs are what the business lobby want more of, but they will not ‘save’ enterprise bargaining. More non-union EAs will come at the expense of genuine collective bargaining, and would produce a decline in average wage increases for EA-covered workers.
“In fact, the BCA’s proposals would take the “bargaining” out of enterprise bargaining, and wage increases out of enterprise agreements.
“Do not be fooled by business lobbyist ‘complexity’ claims. The collapse of enterprise bargaining in the private sector is due to long-term structural factors including de-unionisation, employer resistance to genuine bargaining, full legal protection for free-riding, and failure of the Fair Work Act to support genuine bargaining in EA formation.
“The current EA system has produced a long-term decline in independent employee representation, especially in the private sector.
“Rebuilding collective bargaining and arresting wage stagnation will require a very different direction in reforming Australia’s IR laws, including the phase-out of non-union EAs, genuine review and approval processes, and multi-employer and sectoral bargaining.”
Key findings from Centre for Future Work research:
The bill proposes sweeping changes to labour laws which would see an acceleration of EAs written unilaterally by employers, without negotiation with a union. EAs will be exempt from the current Better Off Overall Test, subject to less scrutiny at the Fair Work Commission, and employers will have less stringent tests to ensure their proposed EAs are genuinely approved by their affected workers.
Key findings:
Wage increases under non-union EAs are consistently and significantly lower than in union EAs; on average one-percentage-point lower since 2010.
The majority of non-union EAs approved between 2006 and 2019 did not specify any wage increases at all, instead linking wage increases to non-legislated measures like CPI, minimum wage decisions by the Fair Work Commission, or employer discretion.
In addition to lower (or no) wage increases, the average duration of a non-union EA is longer than for union EAs, locking in inferior wage outcomes for longer periods of time.
The exemption for EAs to meet the Better Off Overall Test (BOOT), which shows whether employees would be better off under a proposed EA than under the relevant Award, is supposed to last for two years. But in reality, the terms of EAs negotiated under the BOOT exemption could stay in effect for many years, unless they are renegotiated or terminated.
While the overall share of workers covered by EAs will likely increase if these measures pass, a higher proportion of EAs will consist of sub-standard, lower-wage deals, which will see Australia’s current record-low wage growth get worse, not better.
“When the COVID-19 pandemic hit, wage growth slowed virtually to zero. The omnibus bill will lock in that wage stagnation, by further weakening the already-constrained ability of workers to negotiate genuine collective agreements,” said Alison Pennington, senior economist at the Australia Institute’s Centre for Future Work.
“Australia’s experience under WorkChoices, when similar policies were implemented, demonstrates that if the proposed bill is introduced both the number of non-union EAs will increase, and the share of EAs without any specified wage increases will grow.
“Non-union EAs deliver significantly worse wage outcomes that union-EAs, even with the BOOT in place. Removing the BOOT will open the floodgates for employers to rush the approval of EAs that undercut Award wages, further suppressing wages growth in 2021 and beyond.
“Any increase in the number of lower-wage, non-union EAs will reduce rather than lift the wages and conditions delivered through EAs overall, leaving Australian workers worse-off.”
In this short, accessible commentary, Senior Economist Alison Pennington outlines how the pandemic, the resulting recession and government COVID-era policies have increased risks to migrant workers’ financial security, and health and safety. Building more secure, inclusive labour markets can reduce risks that future major events don’t hit the most vulnerable hardest.
This commentary was prepared for presentation to the Migrant Workers Centre Conference, November 2020.
Migrant Workers & The COVID-19 Recession
by Alison Pennington, Senior Economist at Centre for Future Work
COVID infections continue to sweep Europe and the US while Australia celebrates multiple days without any cases of community transmission. But Australia’s public health success has not come without significant economic and social hardship for large sections of our community – especially migrant workers. Thousands of migrant workers were pulled off the job to stop the spread of COVID-19, and excluded from key government income support programs including JobSeeker and JobKeeper. Temporary migrant workers are still left without access to Medicare.
As the economy slowly recovers from recession, migrant workers will face even greater hardship in accessing decent jobs and incomes. The expiration of temporary work visas without supports to reconnect with new employers, and in jobs that pay enough, will expose migrant workers to more intense exploitation.
The federal government’s response to the unprecedented COVID-19 economic crisis has included big spending on tax cuts, subsidies and other business concessions as part of its “business-led recovery”. But there are many problems with how the government thinks about the economy, that will mean the economic crisis will be longer and more painful than it needs to be.
The pandemic has left deep cuts in the economy: two million people (15% of labour force) are either unemployed, working far fewer hours than normal, or have left the labour market all together since the March lockdowns; consumer spending has not fully recovered after lockdown restrictions were lifted and people prefer to save in preparation for harder times. Companies are focused on recovering or maintaining profits, cutting investments in their businesses, and cutting spending on employment and wages. Private investments have been decreasing for years and will not miraculously rebound during a recession. Trusting the private sector to lead our post-COVID economic recovery therefore is like hoping for a miracle.
Income tax cuts are mainly symbolic and do not have real and lasting impacts on boosting spending in the economy. In fact, normal pay rises are far more effective than tax cuts because the effect of wage growth is permanent and cumulative. The announced tax cuts are also unfairly designed to benefit high-income earners. 88 per cent of the combined permanent benefit of the tax cuts will go to highest-fifth of income earners whereas low- and middle-income earners will get only a one-time rebate of $1,080 at the next tax return.
Wage growth is expected to stay at 1.25 per cent in 2021 – enough only to match the slow rise in consumer prices. But a higher unemployment rate and continued increase in part-time and casual jobs will cut household incomes even more. If the government adopted measures to strengthen wages including higher minimum wages and stronger collective bargaining rights, our recovery would be on a better track.
Youth, women, migrant workers and long-term unemployed are in most need of targeted job-creation policies. But the federal government has presented no plan to create jobs for the millions of unemployed, underemployed and disenfranchised who want and need paid work. The JobMaker program provides a subsidy for 12 months to employers creating new jobs for young workers on unemployment payments. It is a short-sighted initiative that will not reach its intended claim of creating 450,000 jobs (Treasury estimate now 45,000). There is no guarantee young workers will maintain employment once the government stops paying for the subsidy. Without job protections, the program will encourage the “churning” of vulnerable young workers in low-wage, insecure jobs. It could also displace existing workers and discourage the hiring of others. Migrant workers have already experienced mass redundancies when employers chose to engage workers who qualified for the JobKeeper subsidy. Migrant worker displacement may occur under JobMaker.
Despite Australia’s macroeconomic weakness, the government intends to decrease spending by billions in cuts to the JobKeeper and Coronavirus Supplement payments in March 2021. The impacts on the jobs and incomes of low and middle-income workers will be disastrous. The real way to overcome the recession will be to restore the capacity of people to work, earn and be healthy, engaged members of a more inclusive Australian economy. This can be achieved only when the government commits to a long-term, ambitious vision for economic and social change, backed by substantial and sustained public spending. This vision should create more secure jobs, invest in climate-friendly industries, and strengthen and expand our public services like healthcare, education and skills.
Rather than wait for private sector investment, the federal and state governments can expand direct public sector employment now. They can also ensure all people residing in Australia are protected from poverty and insecurity now. Urgent measures should be taken immediately to address the pronounced risks to migrant workers’ financial security, and health and safety experienced during this crisis:
Expand JobSeeker and the Coronavirus Supplement coverage to excluded migrant workers. Reverse the punitive and economically counterintuitive cuts to the Coronavirus Supplement, and permanently restore the $550 per fortnight rate.
Expand JobKeeper coverage to all workers, and end the two-tiered wage subsidy scheme, returning the original $1,500 flat payment rate permanently.
Create a paid sick leave scheme available to all workers, regardless of their work status.
The pandemic has shone a light on the growing scourge of insecure work. Around half of all employment in Australia has one or more dimensions of precarity including casual, temporary, part-time insufficient-hours work, and self-employment. Precarious work contributed to the community spread of disease, such as in the private aged care system where widespread practices of multiple jobholding led to virus transmission between facilities.
We have worked together to eradicate COVID-19, and we can work together to eradicate insecure work. Working to build more secure labour markets for all is about reducing risks that major events don’t hit the most vulnerable hardest. Job creating investment, quality public education and skills systems, income supports for all, and extending minimum labour standards like Award wages and collective bargaining are critical to an inclusive post-COVID recovery. And by strengthening the collective efforts of workers to take action in their unions, we can put good jobs and incomes in the driving seat of Australia’s economic recovery.
A year-end review of the dramatic changes in Australia’s labour market in 2020 has confirmed that the worst economic impacts of the Covid-19 pandemic were felt by Australians in relatively low-paid, insecure jobs.
Key Findings:
Workers in casual jobs lost employment at a rate 8 times faster than those in permanent positions
Part-time workers suffered job losses 3 times worse than full-time workers
Young workers, women, and workers who do not work in offices also suffered disproportionate job losses during the initial shutdowns – and continue to experience much worse employment conditions
Worse yet, the report shows the rebound in employment that began in May has seen a historic surge in insecure jobs – which account for the vast majority of new jobs created since the economy began re-opening
“It is painfully ironic that the worst impacts of the pandemic were felt by those who could least afford to lose their work and income,” said Dr Jim Stanford, Director of the Centre for Future Work, and co-author of the report.
“Both on the way down, and on the way back up, this recession has reinforced the dominance of insecure work in Australia’s labour market.
“Precarious work strategies explain why the effects of the pandemic were so painfully unequal, and this new surge in insecure work makes Australians even more vulnerable to such shocks in the future.
“Covid-19 had a terrible impact on both the quantity and quality of work in 2020. Because Australia has been relatively successful in controlling the virus, the labour market could improve significantly in 2021, however, the rapid expansion of insecure work poses a major challenge to the stability and prosperity of Australian households,” Dr Stanford said.
Other findings of the report include:
Since May, over 400,000 casual jobs have been created (2200 per day, on average), accounting for over 60% of all new waged positions since the recovery started. That is the largest surge in casual employment in Australia’s history – contradicting business and government claims that uncertainty about casual employment rules are holding back hiring.
Workers over 35 years of age have regained all of the jobs lost in the pandemic, and then some. All remaining job losses are concentrated among workers under 35.
Office-based occupations (professionals, clerical workers, and most managers) have also regained pre-pandemic employment levels. But other occupations (especially community and personal services, sales workers, and labourers) continue to suffer major employment losses.
New labour laws proposed by the Commonwealth government would accelerate the surge in insecure work: liberalising the use of casual labour by employers, and allowing them to treat permanent part-time workers more like casuals.
In this extended commentary, Senior Economist Alison Pennington explains the main components of the IR Omnibus Bill, assesses their impacts on workers’ wages and labour protections, and offers some strategic analysis on how labour advocates can work towards addressing insecure work.
Scott Morrison’s Industrial Relations Laws Are a Kick in the Teeth for Australian Workers
By Alison Pennington
The Morrison government has proposed sweeping changes to Australian labor laws intended to cut wages, entrench precarious work, and cripple unions. The proposed changes would sweep away the remnants of collective bargaining and hand dictatorial power to bosses.
Just a few months ago, Australia’s Coalition government was singing the tune of compromise and cooperation with unions. Now they’ve thrown away the songbook and taken the gloves off. Scott Morrison is giving Australian workers and unions class war — just in time for Christmas.
Thanks to pandemic stimulus spending, 2020 was already a Christmas-bonus year for big business. With company profits up nearly 19 percent since 2019, they have already benefited to the tune of billions.
But it’s never enough. So, industrial relations minister Christian Porter has introduced the Industrial Relations (IR) Omnibus bill. It’s a withering pro-business offensive aimed at slashing wages and resetting work conditions to boost profitability in the long term.
The core of Porter and Morrison’s plan will grant employers the power to expand insecure work freely and to hijack enterprise bargaining. If it goes ahead, it will inflict a double wound on the working class, by degrading the Awards system (that sets minimum wages and conditions across industries) and by weakening what little remains of unions’ collective bargaining power.
Never Let a Crisis Go to Waste
The idea that workers’ economic security should be subordinated to business demands is archaic. It’s a form of employment that unions have fought bitterly since the nineteenth century, winning historic victories to curtail piece-work or at-home work, and to end the dictatorial control of gang masters over who did and did not work, and under what conditions.
Some fruits of that multigenerational battle still remain embedded in today’s standard employment relationship, which guarantees rights to ongoing work and basic entitlements. However, neoliberalism’s decades-long onslaught has weakened unions. As a result, all of these abuses have returned, sometimes in new packaging — as is the case with the “gig economy.”
An Uber Eats part-time worker. (Jack Taylor / Getty Images)
Today, 2.6 million Australian workers are defined as “casual.” This means that one in every four workers has no right to ongoing work, and no basic holiday or sick leave entitlements.
This is justified by the claim that casual workers receive “casual loadings” (extra pay) to compensate for forfeited conditions. But this is a myth. Far from being compensated for the value of lost entitlements, most casuals are in fact much worse off.
One third of all casuals receive no loadings at all, and most casuals are not paid more than permanent workers in the same jobs. In industries with high casual density, the premium is around 4-5 percent — far from the oft-cited figure of 25 percent.
Bosses love to praise the virtues of “flexibility,” claiming that casuals don’t want permanent work. But this mantra is also a lie — half of all casuals have worked regular shifts for one year or more.
Rather than simply allowing firms to employ a few extra workers on a seasonal basis, casual work is increasingly the way that Australian businesses meet their medium- and long-term labor needs. And, in the post-COVID era, they increasingly see casual labor as the foundation for boosting profits.
Accelerated Precarity
Two recent major court cases found that businesses which employ casuals on regular, stable, and predictable schedules are liable to pay leave entitlements. It was estimated that this would cost employers over $39 billion.
In response, business lobbyists unleashed campaigns to “resolve the definition issue” so as to avoid court-ordered repayments. This — as well as the growing importance of casual work to profits — explains why Morrison and Porter have made entrenching casual work the cornerstone of their IR Omnibus bill.
They want to define casual work in the broadest possible terms. Any job deemed casual by the employer will be, legally, a casual job. This means your job can look like a permanent job and smell like a permanent job — but employers will still be able to legally engage you as a casual and strip your legal entitlements at will. This is a body blow to the present system of legal protections.
The pandemic has highlightedthe dangersof insecure work. But for the Coalition and their business allies, it changed nothing. Even while frontline, often insecure workers risked their lives, the government was keen to increase the number of workers trapped in precarious, low-wage jobs.
First, the Coalition excluded over one million casuals from the JobKeeper wage subsidy. Then, they reduced the Coronavirus Supplement, hoping to force the unemployed and vulnerable into insecure work while making it cheaper for businesses to rehire workers. Next, Liberal treasurer Josh Frydenberg announced JobMaker — a payment that directly subsidizes new, insecure youth jobs that will allow bosses to sack existing, more expensive and older workers.
The JobKeeper subsidy is set to end in March, exactly when Porter’s sharpened wage-cutting tools are due to kick in. Employers will go on the offensive, recouping lost public subsidies by taking even more from their workers.
The bill’s supposed sweetener is a measure that will require employers to offer casuals permanent work if they have been employed for twelve months, with six months of continuous regular hours scheduling. Not only will it be easy for employers to vary hours and schedules to avoid meeting that high benchmark, they will also be allowed to refuse to make an offer on so-called “reasonable grounds.”
The government was sure to define “reasonable” in incredibly broad terms and to deny workers the right to appeal a decision through the Fair Work Commission (FWC). Got a problem with your employer’s decision? The Federal Court will hear your case — but only if you have a spare ten or twenty thousand dollars lying around.
Deregulating Permanent Work
Accelerating the growth of insecure work is also about cannibalizing protections for the permanent workforce, by making permanent jobs resemble casual ones. New so-called “part-time flexi” reforms will let bosses employ permanent part-time workers as though they were casuals.
Only sixteen hours will have to be paid according to normal permanent rates and entitlements, while an additional twenty-two hours (comprising a total work week of up to thirty-eight hours) will be free of overtime loading. With the stroke of a pen, this threatens to dissolve hard-won rights that deliver predictable and stable schedules for permanent part-time workers.
With a flexible twenty-two hours of ordinary-time labor up for grabs, employers will be able to work these “part-time” workers like full-timers on a regular basis — as supervisors and managers, for example. But they won’t have the security of regular hours or receive overtime compensation for being at the employer’s beck-and-call. The flexibility will be blissful — for bosses.
For all the Coalition rhetoric about “job creation,” this wholesale deregulation of working hours really means that bosses will be able to cheaply increase hours for existing workers in line with fluctuations in demand. That will free them from having to hire more people. It’s galling that the government would present the creation of a “part-time flexi” employment category as a solution to record-high and growing underemployment.
There’s no shortage of glossy marketing. For example, low-wage work will be expanded under the guise of “roads to permanency.” But when you cut through the spin, the Coalition’s agenda is to reduce the incomes of millions and to deny millions more decent jobs. During a recession, with labor-force utilization already low, they’re arming employers with powerful weapons to cut wages and conditions in the jobs that remain. These moves will generalize despair and desperation across the entire workforce.
Hijacking Collective Bargaining
Worst of all, the IR Omnibus bill contains a trifecta of changes to the laws governing enterprise agreement (EA) making. These changes will allow businesses to draw up workplace agreements by themselves more easily — that is, without a union. They will be allowed to undercut the minimum rates and conditions outlined in industry Awards with these nonunion agreements. Additional changes will let employers lock in wages stipulated by an enterprise agreement for eight years at a time.
This is nothing less than a hijacking of what’s left of collective bargaining. In fact, handing employers unilateral power over enterprise agreement wage-setting was the cornerstone of former Liberal PM John Howard’s infamous WorkChoices legislation.
The Coalition’s plan will allow employers to bypass the Better Off Overall Test (BOOT) for two years. As it is, the BOOT ensures that new agreements do not leave workers worse off than under minimum Award conditions. The suspension of the BOOT coincides with new measures that will weaken scrutiny of subpar nonunion agreements by the FWC, unions, and employees.
The move has been taken straight from the wish list of business lobbyists. It will open a floodgate of nonunion below-Award agreements that will permanently damage living standards.
There’s a precedent for this. Under Howard’s WorkChoices, the “No Disadvantage Test” was abolished and unions were denied the right to contest agreements, leading to an explosion of nonunion agreements. Between 2004 and 2009, the proportion of nonunion agreements approved in the private sector rose from 20 to 60 percent.
After 2009, when WorkChoices was partly rolled back, the number of dodgy agreements dramatically declined to pre-Howard levels. Why? Because as part of the Fair Work Act, the Better Off Overall Test was introduced.
Even so, the WorkChoices-era surge in nonunion, low-wage agreements had a lasting, negative impact on wage growth. “Zombie Enterprise Agreements” persisted for years. For example, Merivale, a Sydney hospitality empire, paid over three thousand staff up to 20 percent below Award wages on an expired nonunion EA set in 2007 for over ten years.
This is possible because EAs live on, sometimes for years, until they’re replaced or terminated — usually on request by unionized employees. Today, tens of thousands of workers are still languishing on Howard-era below-Award enterprise agreements.
Unfair Work
The FWC has the power to change and approve agreements so long as employees remain better off overall, compared to the relevant Award. On top of this, there already exists a relatively untested provision whereby the FWC may approve agreements with below-Award conditions in so-called “exceptional circumstances,” provided they meet the overall public interest.
A couple who both lost their jobs recently watch local news in their apartment. (John Moore / Getty Images)
The IR Omnibus bill will weaponize the “public interest test” governing this power, enabling business to push even further. The Coalition’s hand-picked business leaders in the FWC will surely oblige.
Australian business and their allies in the Coalition have dedicated enormous resources to crushing what remains of collective bargaining. Their goal is to corrode the infrastructure of the labor movement’s past victories.
This is why the Coalition also wants to introduce eight-year agreements on new projects valued at over $500 million or $250 million, if the project is of national significance. Existing laws mean that employers can only seek FWC approval on agreements for new projects (called “greenfields” agreements) after six months of bargaining with the relevant union.
However, if the BOOT is scrapped, employers could feasibly draw up greenfields agreements undercutting Award conditions for up to eight years, circumventing unions and simply hiring a new workforce under the new agreement.
Since Australia’s draconian anti-union laws prohibit industrial action at any time outside an EA bargaining period, eight-year agreements give employers the power to block strikes as well as to cut wages. There is also a political logic to it: it’s a cost and risk reduction strategy, guarding against any future joint campaigns that link unions with other elements of civil society. For example, unions will face crippling fines for striking at any time during the eight-year period to support campaigns against inappropriate development, or against new mining projects.
As if this weren’t enough, the Coalition is bolstering the power of the courts and the anti-union Australian Building and Construction Commission to inflict millions of dollars’ worth of fines on unions for activities which are entirely normal and legal in other democratic countries.
It couldn’t be clearer. Just as the Coalition’s 2020 budget gifted business with billions in subsidies, tax cuts, and other handouts, this, too, is a vast gift to capital, purchased at our expense.
A Common Enemy
The union movement has a good chance of stopping the BOOT changes in the Senate, where minor parties hold the balance of power. But everything else is up for grabs thanks to the Coalition’s Christmas “spirit of compromise.”
Insecure work is the enemy of unionization. Workers living in permanent precarity and intermittent poverty are less likely to join unions. Only 8 percent of union members are casuals. And when the bargaining power of unions declines, all workers suffer.
By expanding casual work, the IR Omnibus bill will strike the harshest and most comprehensive blow to wages and living standards in many years, both now and in the future. This is why the union movement must resist insecure work everywhere it rears its head.
We need unions that are willing to build power among existing, permanent workers who are in a better position to endure the risks of industrial action. It’s still harder and more expensive to sack permanent, more senior workers. But without a fight back, this will change too — the growth of precarity means that even secure workers are on increasingly unsteady ground.
Permanent conversion rights for casuals don’t work without workplace union power. Unions must unleash aggressive collective bargaining campaigns aimed at bringing all workers under the same agreement “roof” and into permanent work. This would have to include bringing contracted-out and labor-hire work back in-house.
Since the most precarious sectors of the workforce have lower union power and no access to collective bargaining, we also need a united union movement willing to mobilize all of our 1.5 million members, linking the pockets of union power in the private sector (including construction, ports, and logistics) to our largest public sector bases in health care, education, and social services. We must weave good jobs back into the fabric of Australia’s social contract — this means fighting for jobs that offer rights to ongoing employment and basic entitlements like holiday pay, sick leave, and superannuation.
Most importantly, reviving unions after years of decline will require determined efforts to rebuild a modern workers’ movement with deep support and social roots. This will mean working with climate action, anti-poverty, welfare rights, and other social justice and community organizations.
Unions and their allies have to push for working-class politics at every level of government, from local to federal, and build a broad coalition that will put decent jobs and economic democracy at the center of a progressive vision for Australia.
Public institutions like Medicare, public education, TAFEs, superannuation, and corporate taxation are widely popular. Australians broadly agree with the need to rebuild a domestic manufacturing sector and to refund the arts and tertiary education. The union movement could be the vehicle that makes these aspirations real.
This project can be popular. This year, the profit-hungry zealots of Australian business and the Coalition’s conservative apparatchiks told us that “we must learn to live with the virus.” But Australians overwhelmingly disagreed, and instead supported the subordination of short-term business interests to the public good. Despite a well-funded conservative campaign, large majorities overwhelmingly supported shutting down the economy to save lives.
Now we must protect ourselves against another virus that would irreparably damage the quality of workers’ lives in the name of higher corporate profits. That virus is insecure work. It’s lived among us too long — it’s high time we shut it down.
We have launched a search for the first Carmichael Fellow. Please see the below call for applications for further information. Applications close at midnight (AEDT) on Monday, 18 January. Thank you for your interest in the Carmichael Centre!
The newly formed Carmichael Centre will be established at the Australia Institute’s Centre for Future Work, in the name of legendary manufacturing unionist Laurie Carmichael, who passed away in 2018 at the age of 93.
Laurie Carmichael played a pivotal role in Australia’s union movement over several decades. He campaigned to protect the right to strike, negotiated shorter working hours, developed innovative workers’ education and training programs, helped to negotiate the Prices and Incomes Accords in the 1980s, served on several federal government boards and commissions under the Hawke and Keating governments, and opposed Australia’s involvement in the Vietnam War. He served in numerous leadership capacities during his career, including with the Amalgamated Engineering Union, the Amalgamated Metal Workers Union, and the Australian Council of Trade Unions.
The Carmichael Centre is being established with the support of Carmichael’s family, and with funding from two of the organisations which Carmichael led: the Australian Manufacturing Workers’ Union (AMWU, formed in 1995 through a merger that included successors to Carmichael’s former unions) and the Australian Council of Trade Unions (for which Carmichael served as Assistant Secretary from 1987 through 1993).
Among other activities, the new Carmichael Centre will:
Host a Distinguished Research Fellow position, who will conduct and publish research on themes related to Carmichael’s legacy, including: industrial relations, social policy, manufacturing and industry policy, vocational education, international labour solidarity and peace, and the impact of unions on social well-being.
Organise an annual lecture by a prominent labour speaker on Carmichael’s legacy.
Develop and publish an annotated on-line bibliography of Carmichael’s writings and other contributions.
The formation of the Carmichael Centre follows two years of discussions among unions and colleagues to plan an appropriate recognition of Carmichael’s influence and legacy. The Centre for Future Work is launching a public search for the first Distinguished Research Fellow, who will be appointed early in 2021.
“The Carmichael Centre will carry on Laurie Carmichael’s mission, based on his conviction that strong, innovative unions can help build a better society for all,” said Andrew Dettmer, National President of the AMWU
“Laurie Carmichael was a principled, innovative, progressive union leader who understood that workers need collective power to make economic, social and democratic progress. We are so glad his ideas will receive the continued attention and study they deserve, through the work of the Carmichael Centre,” said Sally McManus, National Secretary of the ACTU.
Carmichael is survived by his son, Laurie Carmichael Jr. “The values Dad fought for all his life are more important than ever: fairness, equality, democracy, and peace. I am deeply proud that his legacy lives on, including through the work of the Carmichael Centre,” Carmichael Jr. said.
“The Distinguished Research Fellow will make a very important contribution to progressive labour research in Australia. We are deeply honoured to host the Carmichael Centre, and to advance Laurie’s vision of a better, fairer world of work,” said Ben Oquist, Executive Director of the Australia Institute.
Alison Pennington, Senior Economist with the Centre for Future Work assisted The Australian Council of Trade Unions (ACTU) preparing the timely report Leaving Women Behind: The Real Cost of the COVID Recovery. The report documents the gendered impacts of the crisis and the federal government’s COVID-era policies, and outlines a public investment strategy to undo the damage of the crisis, and ensure women play an equal role in an inclusive economic recovery.
To mark the release of ACTU’s report, the Australian Trade Union Institute hosted a webinar with ACTU President Michele O’Neil, Centre for Future Work’s Alison Pennington, Karen Batt (CPSU VIC), Helen Gibbons (UWU) and Julia Fox (SDA). The session presented the main report findings and considered how they might support campaigns for a gender-inclusive recovery.
The full 38-page ACTU report is available below together with Alison’s presentation slides presented for the ATUI webinar.
