As workers battled through the final days of a disastrous year, the federal government launched the Fair Work Act (Supporting Australia’s Jobs and Economic Recovery) Bill on 9 December. The proposed law is a grab bag of attacks on workers’ wages, conditions and legal protections—all of which, despite the bill’s title, have been on employers’ wish lists since well before the pandemic.
To appreciate what workers are up against, it’s important to understand the lines of debate in the ruling class and the approach of the union movement’s leaders. This is in addition to being aware of the substance of the various attacks lined up by the government. In brief they include:
1. Allowing employers to undercut the minimum conditions contained in industry awards, (including wages, breaks, penalty rates and other conditions). The government is proposing a two-year period where businesses affected by COVID can implement enterprise agreements with their workforce even if these agreements don’t meet the “Better Off Overall Test”, or BOOT.
The BOOT is meant to ensure that workers are better off than the legal minimums in the awards. Scrapping the BOOT was one of the key attacks in John Howard’s much-hated WorkChoices attacks in 2005.
2. Another danger is that the government and the ACTU will open up a path for employers to undercut legal minimums so long as a union is involved in the negotiations, bypassing the BOOT. This was the business model of the conservative Shop Distributive and Allied union for decades, but was wound back after recent legal cases – resulting in hundreds of thousands of workers getting entitlements like penalty rates for the first time.
Reviving this disgraceful strategy, of unions trading off minimum conditions in return for a seat at the table, was reportedly agreed between the ACTU and the Business Council of Australia during negotiations in September. It’s not part of the government’s bill, but might re-emerge as part of the negotiations.
3. Other attacks which will make it easier for employers to get substandard agreements approved. These include:
Legislating that the FWC must ordinarily approve any enterprise agreement within 21 days. This will put pressure on the FWC to just wave agreements through rather than thoroughly researching every clause to make sure that legal minimums aren’t being undermined.
Reducing the amount of information that must be given to workers ahead of new enterprise agreements being voted on.
Reducing the ability of unions to oppose enterprise agreements where they haven’t been part of negotiations—even if these agreements undercut award minimums.
4. The Omnibus Bill reverses legal gains for casual workers. Recent Federal Court decisions have established that if workers on a regular roster (e.g. 12-hour shifts for the whole year), they are not casual. The government’s package would roll this back, giving greater emphasis to whether the employer describes the role as casual. Workers on a regular roster could apply to be converted to ongoing, but wouldn’t be able to enforce this “right” at Fair Work.
5. The bill would undermine efforts to crack down on wage theft—creating a federal offence of wage theft, but setting impossibly high hurdles to proving a charge. This would override recent state legislation in Queensland and Victoria which is more worker-friendly. To be found guilty, employers must not only be “dishonest according to the standards of ordinary people” (the standard applied in the Victorian legislation), but also must be “known by the defendant to be dishonest”—a very high bar to hit in court.
6. Attacks overtime pay for part timers. This is an award condition which is often undermined or ignored. The government’s bill would scrap it entirely in many awards—making part time work effectively casual, but without the casual loading.
The unveiling of these attacks has been accompanied by a vigorous debate among the business elite and their political servants about exactly how far and how fast they can move to trash workers’ conditions. Unfortunately, there is little sign of the similar debate we need in the union movement.
The relationship between ACTU secretary Sally McManus and Christian Porter, the government’s chief headkicker on industrial relations, should set off alarm bells. The ACTU has also maintained a close collaboration over the past year with the Shop, Distributive and Allied Employees Association (SDA, the main union for retail workers), which for decades has traded away workers’ wages and conditions in return for a place at the negotiating table. This concessionary approach is one path to the ruling class achieving much of its agenda and is a disastrous strategy for workers.
“Team Australia fires a blank on workplace reform”, fumed the Australian Financial Review editorial the day after the government released its package of legal reforms, denouncing the government for “lowest-common denominator tinkering” with Australia’s “industrial relations rigidities”. The AFR argued that “Australia must use the pandemic ... as a burning platform to force through hard decisions not taken during two decades of boom-era complacency”.
The editorial suggested using the shock of last year’s recession to push through a wave of attacks on workers. It noted the precedents of the early 1980s recession, which “paved the way for the Hawke government’s real wage cuts” and the early 1990s recession, which was followed by Paul Keating’s “productivity-driven enterprise bargaining system”. Those attacks (by Labor governments) dismembered the legal framework that had allowed workers to win better wages and conditions through industry-wide industrial campaigns and substituted a more fragmented system of enterprise bargaining—in which gains by industrially strong groups of workers didn’t flow to those with less power.
Much to the AFR’s disappointment, the union movement still has a place in Australia’s workplace laws, for instance through the Fair Work Commission. For now, this is not under significant threat: rather, the government's main attack is against the protections that surround the legal minimums (including wages and conditions such as penalty rates and breaks), which are enshrined in Australia’s 122 industrial awards. These minimum standards can be varied or built on through enterprise agreements, but only if the Fair Work Commission certifies that the overall package passes the BOOT—i.e., workers have to be “better off overall” than the minimum conditions in the awards. Scrapping this protection entirely was one of the central components of the Coalition’s 2005 WorkChoices laws.
The Liberals remain haunted by the backlash against those laws, which sparked the biggest working-class demonstrations in Australian history and resulted in the Howard government being thrown out of office. Nevertheless, the Coalition gave the trade union movement something like to a near-death experience at the end of 2019, when the vote to approve the “Ensuring Integrity Bill” tied in the Senate. “Ensuring Integrity” would have allowed government-appointed administrators to take control of union operations, a disaster for any idea of unions being independent organisations of workers.
With the next federal election on the horizon, however, the Liberals have trimmed their sails. Early in the pandemic, it looked like the government was going for the jugular. In April 2020, Porter announced that he had changed a regulation so that employers would have to give only one day’s notice of an employee ballot to ram through any change to enterprise agreements. Wages, penalty rates and any other rights above the legal minimums in the award could potentially be gutted by a ballot called by the employer with just one day’s notice.
“The legal terrain of workers’ rights in Australia has been transformed, literally at the stroke of a pen”, I wrote in Red Flag at the time. “In board rooms all over Australia this week, war rooms will be hard at work drawing up wish lists, drafting clauses and planning the fear campaign and legal backup.”
I was wrong. In fact, only a few dozen companies used this new provision—none of them major employers. There was doubt about whether changes rushed through on a day’s notice would have met the threshold in the Fair Work Act that any changes to an enterprise agreement must be “genuinely agreed” by the workers. The day before a Federal Court challenge by the CFMMEU, the government reversed course, changing the notice period for a ballot back to seven days.
The obvious conclusion is that this serious attack was a big stick in the government’s carrot and stick approach to extracting concessions from Australia’s union movement. The stick was duly followed by the carrot: five months of round-table discussions involving unions and business groups. Though there was no consensus, the government claims that these discussions informed the attacks now contained in the new bill.
One question hanging over the package is how much of it is an ambit claim (something you demand, with the expectation that you will have to compromise). The most significant attack in the government’s December package is a two-year exemption from the BOOT for employers who claim to be suffering from the economic effects of the pandemic. This measure was apparently added at the last minute and wasn’t part of the round-table discussions.
Within a day of the package being unveiled, after a bit of huffing and puffing from Labor and the unions, Porter and much of the Coalition backbench signalled that they were prepared to back down. A year or so out from the next election, it seems that the government has little appetite for a major stoush on this issue.
So if the two-year BOOT holiday is most likely an ambit claim, what is the government trying to achieve? There are indications that it is angling to reopen a tried and tested path to getting around the BOOT: cutting a deal with a friendly union leadership prepared to sell out members’ conditions for a seat at the negotiating table.
This concessionary approach was the business model of the SDA for decades. A slightly higher base rate for wages was supposed to compensate for the scrapping of penalty rates, and for overtime rates being scrapped for part-time employees working outside their agreed hours.
The model was seriously undermined following a 2016 legal challenge by Duncan Hart, a trolley collector at Coles and member of Socialist Alternative, and a legal team organised by Josh Cullinan, at that time an industrial officer with the National Tertiary Education Union and now the secretary of the Retail and Fast Food Workers Union (RAFFWU). Hart vs Coles and continued legal activism from the RAFFWU has prompted the Fair Work Commission to apply the BOOT as it was legislated—in other words, to ensure that each worker is better off.
As a result, hundreds of thousands of workers, in retail and beyond, received penalty rates for the first time. Businesses have been pushing hard to scale back the implementation of the BOOT ever since. In this they have been vigorously supported by the SDA and, it seems, by the ACTU.
The only significant breach in the confidentiality that was meant to surround the five months of discussions over industrial relations changes came in mid-September, when there was a spectacular public blow-up over an attempt to revive the SDA’s favoured model of getting around the BOOT. The ACTU and the Business Council of Australia reportedly cooked up a deal that would allow the Fair Work Commission to approve an enterprise agreement even if it didn’t pass the BOOT—as long as a union agreed to this undercutting of the supposed legal minimums.
This would have been a revival of the SDA’s concessionary business model: wage cuts for workers in return for the union hierarchy securing a place at the table. The Master Builders Association (MBA) and several other employer groups publicly denounced the deal, because only companies that dealt with a union would be able to undercut the BOOT: the MBA wanted these concessions without reference to any union.
Another worry was the silence about this controversy from Australia’s unions. While a string of employer groups backed the MBA’s strident anti-union stance, there were crickets from the unions, only the RAFFWU and the CFMMEU’s construction division publicly denouncing this proposed SDA/ACTU sell-out of workers’ conditions.
There hasn’t been any further public discussion on this disgraceful deal, but it seems likely that some version of it will be on the table in the lobbying and wheeling and dealing that will be the main union response to the government’s current attacks.
The problem is not just one rogue union: the SDA is the confident, brazen front of a much deeper malaise in Australia’s union movement. The class-collaborationist attitude of our union leaders was best summed up by Sally McManus’ comment in her National Press Club speech on 2 December: “The union movement has had its national role returned to where it should always have been—as a widely accepted part of Australia’s civil society, and a trusted social partner for Governments and businesses”.
Being a “trusted social partner” of a government intent on winding back union power means giving concessions. That’s why the ACTU has partnered with the SDA, why it has given a “qualified yes” to the government’s regressive changes around “greenfields”, which further erode the right to strike, and why it agreed in October to the idea of dropping civil penalties on employers who “inadvertently” underpay workers.
So, when the ACTU says it is gearing up for the fight of the century against “WorkChoices 2.0”, we should take the claims with a shovel of salt. After all, the campaign against WorkChoices 1.0 ended well short of a victory, despite mass rallies in the hundreds of thousands. Rather than an industrial response that could have rebuilt union power and put the ruling class in a state of fear, the massive protests were wound up into an electoral campaign, which gave a blank cheque to the incoming Labor government in 2007. Some of the most draconian aspects of WorkChoices were eventually scaled back, but the basic architecture was left in place, and the union movement has continued its decline.
A repeat of this dismal scenario is the best that the top leaders of our movement are aiming for. Basically, we can expect their efforts to consist overwhelmingly of sending emails, alongside a continuation of the months of backroom dealing with our entitlements as bargaining chips.
The ruling class seems happy, for now, to settle for the significant though incremental “reforms” being pursued by the federal government. Even the Australian Mines and Metals Association, traditionally one of the more aggressive employer bodies, has praised the “measured, balanced industrial relations changes” proposed by Morrison and Porter. The Business Council’s chief executive, Jennifer Westacott, calls the government’s bill a “sensible, middle-ground package” that minimises the risk of falling back “into the old language of fear, confusion and ‘us versus them’”—in other words, a package that will further erode union power and workers’ conditions, without reviving the ghost of WorkChoices.
Unionists should keep a careful eye not just on the headline attack of trashing the BOOT for two years, thus reinstating one of the most important planks of WorkChoices, but also on the detail of the claims—and on the deal-making that will go on despite the occasional fighting talk from the ACTU.
If the Australian union movement is to be turned around, it’s not going to come from the ACTU, or from following the dominant approach of passivity or concessions, which has prevailed for decades. It will come from building on the glimmers of industrial action from warehouse workers and some other groups of workers in recent months. It will come from the sort of activism seen in the National Tertiary Education Union, when a rank-and-file revolt defeated the most high-profile concessionary deal promoted by an Australian union leadership in the pandemic. And it will come from rebuilding a current based on the politics of class struggle, rather than class compromise, in Australia’s beleaguered union movement.
Jerome Small is Socialist Alternative’s industrial organiser. This is an edited version of a piece that first appeared in the Marxist Left Review, where it is accompanied by a more detailed explanation of the government’s attacks. Kath Larkin also contributed to this article.