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The Coalition’s industrial relations bill would punch a hole in the award safety net by allowing pay deals that leave workers worse off, academics have warned.
Despite the Morrison government claiming the omnibus bill does not facilitate pay cuts, a group of independent labour law academics has contradicted that claim in a submission to the Senate inquiry.
The group includes Adelaide law school’s Andrew Stewart, the University of Sydney’s Shae McCrystal and UTS’s Joellen Riley Munton.
Since its release in December, the bill’s most controversial provision has been a change to allow businesses to strike workplace deals that pay below award minimums if the Fair Work Commission believes it is “appropriate” in the circumstances.
In question time in federal parliament last Thursday, Scott Morrison said the government was not allowing cuts to workers’ take home pay.
The attorney general, Christian Porter, claimed the bill “ensures that wages will increase”, saying that simplifying the process to strike enterprise agreements would lift pay because under the current system pay rates were generally higher.
Speaking ahead of the release of the group’s submission, Stewart said the biggest concern with the bill was “its overall impact is to put downward pressure on wages and conditions” through changes to the better-off-overall test, “weakening of procedural safeguards for non-union” pay deals and changes to overtime rates for part-time workers.
“If you look at that overall, that’s sending a message to employers, that the way in which businesses should be getting through the pandemic and the recession is to cut wages and conditions,” Stewart told Guardian Australia.
“And every shred of hard economic evidence we’ve got [is] that the route to recovery should be coming from the opposite direction, from wage rises.”
Stewart described the new method to circumvent the better-off-overall test as the “single biggest” change because it was “drafted as a non-exceptional exception”.
In December Porter claimed the provision would be limited to “very distressed businesses where the distress has been caused by Covid”.
But Stewart said on current drafting “employers will be able to seek to use it even when there has been no impact on their business from Covid-19” – because this was only one factor the commission need consider when applying it – or even where Covid had a positive impact on the business.
Stewart noted that although there was a two-year time limit for using the exception, “there is no sunset period for the agreements made using it”.
“And of course most non-union agreements operate long after their expiry date,” he said, meaning sub-award conditions could last for years after the pandemic.
Employer groups including the AiGroup, the National Retailers Association and the Australian Chamber of Commerce and Industry backed the provision, although the latter suggested it could be fine-tuned to specify businesses had to have experienced a negative impact from Covid-19 to qualify.
On Thursday Porter said the bill left part-time workers on the award better off because they could get “extra work and be paid more” under a new rule for extra hours at ordinary-time rates.
Stewart said any extra hours “will just presumably be coming from casuals, who would have been earning the casual loading as well”.
“Yes, some individuals might be better off in total, although their entitlements [to overtime rates] are being cut, but other workers will lose out.”
Stewart said the reason for the award safety net was that “most employees don’t have the bargaining power to deal with their employer on an equal basis”, warning that employers would seek to cut overtime rates and “vary agreements to put conditions below the award”.
In other notable submissions, the Fair Work Commission warned that the proposed 21-day time limit to approve pay deals could result in its member dismissing non-compliant agreements more quickly rather than assisting parties to make them compliant.
The time limit “is likely to have unintended consequences that are contrary to the interests of employers, employees and their representatives who have negotiated enterprise agreements”, it said.
The construction and maritime unions called for the bill to be opposed in its entirety, claiming it incorporated “none of the input” unions made in the roundtable process and “clearly aims to put downward pressure on wages”.
On Monday the Senate inquiry began hearings in Townsville, hearing from witnesses including the Minerals Council, which submitted there were 31 mining projects that could be assisted by the new greenfields provisions. The bill proposes eight-year pay deals for projects worth $500m or more.
The Minerals Council said the bill “will encourage investment in new mining projects by removing the uncertainty of having to renegotiate employment conditions mid-stream”.
Source: The Guardian
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