Marcus Hicks’s Web Log

OK, so I have pointed out how IR reforms won’t be good for us, but how will they be BAD for us?
Well, the worst thing about the legislation-in my opinion-is the removal of the ‘no disadvantage’ test. Under the current system, even individual contracts (AWAs) are automatically checked by an independant body to ensure that they don’t leave the worker(s) any worse off than they were before. Under the new system, however, it will be up to workers-either individually or as groups-to pore over all the legalese of a contract in order to determine whether they will be worse off or not.
Another problem is that it strips away the majority of the awards currently enjoyed by workers-and two of the remaining five are open to ‘erosion’ or ‘exploitation’ under the new legislation. The 38 hours a week award, for instance, can be averaged over a whole year-not on a week by week basis, meaning that workers could be made to work up to 50-70 hour weeks, so long as the average for the year still added up to 38 hours. Also, unless specifically negotiated for, these extra hours will not come with penalty/overtime rates. Long service leave is another award which can be exploited, as 2-weeks of it can be easily ‘cashed out’ for a 1-off pay rise, yet there is nothing to stop this initial pay rise from falling behind inflation over time and, once gone, the additional leave can never be regained, except via negotiation. Lastly, thanks to the new ‘Fair Pay Commission’ it is only a matter of time before we see minimum wages falling well below the rate of inflation, thus undermining its value as an ‘allowable matter’ in awards.
Another negative factor is that, in spite of Government claims, the IR legislation seriously restricts the ability of unions to enter the workplace, and to negotiate on behalf of workers. All attempts to enter a workplace have to be vetted by the employer, and meeting times and places are at the employers discretion. There will also be limits placed on what a worker and a union rep can discuss in their ‘private’ meetings.
Lastly, for all the talk of choice in the new legislation, over 40% of the current workforce, and close to 80% of any future workforce, will have only 2 choices in regards to contracts-’take it or leave it’. Workers moving between jobs and the unemployed will HAVE to accept any contract offered to them-regardless of what agreements might exist with other workers. Those in small to medium businesses (less than 100 employees) can effectively be dismissed for refusing to accept a new contract-though only if they don’t make it obvious that this is the reason-with only $30,000+ court cases as an option for employees to fight their dismissal. At the end of the day, their will be nothing to stop the workplace minister of the day from simply tearing up any workplace agreement he doesn’t like-without any need for him to explain his reasons, something which smells of dictatorship.
Other problems with the legislation is that it severely limits the power of workers to strike for better wages and conditions, and grants larger employers (more than 100 employees) to unfairly dismiss their employees for ‘operational reasons’, thus opening up an even larger section of the workforce to sudden dismissal.
Ultimately, these elements of the legislation will generate a massive underclass of working poor-particularly amongst the young, unemployed and low-skilled-or anyone working in smaller businesses. It will also severely harm productivity, as human nature dictates that someone who is overworked, underpaid or generally afraid for their future will often-times not work nearly as hard as someone who is happy, well-paid and has a genuine sense of loyalty towards their employer. It will also lead to a whole mess of side effects in social and economic policy terms-something I will discuss later when I look at international comparisons of regulated and deregulated labour markets…