Dave Oliver's address to the Symposium on the 20th Anniversary of Enterprise Bargaining in Australia, Melbourne Law School, 4 November 2011
Thank you very much for the opportunity to speak today at this conference marking 20 years of enterprise bargaining.
What a week for students and practitioners of industrial relations law.
If this conference had been last Friday, I would have been giving a pretty dry speech laying out the challenges to unions and workers of the present law, and the limits to agreement making that control workers and their conditions.
I would be talking about the set ideological and political positions of the parties in relation to enterprise bargaining and I would be exploring the traditional positions of unions and employers in this realm of industrial relations.
But what a week we have had. The people who normally argue for freedom of the parties to negotiate are screaming for intervention. The people who argue for enterprise level analysis are arguing the limits of the industry’s capacity to pay. The people who normally fight tooth and nail against arbitration are celebrating the Commission like it is the new black.
And the people for whom arbitration and the industrial relations commission were established many, many decades ago are wondering why you need to be paid $5million a year and own a fleet of planes to get access to assistance from the independent umpire.
What do the workers at Cochlear – who have voted for a collective agreement on 5 separate occasions, and have been denied an agreement by their companies juvenile tactics for the past five years – have to do? What do they have to do to get access to arbitration and a quick determination in the commission?
Arbitration is the reward that Alan Joyce will now get as a result of his deliberate action to create significant harm to the economy and ruin the travel plans of some 70 000 passengers.
Here are some of the things my union has been called over the last 20 years in enterprise bargaining by employers, by Government and by newspapers.
We have been called industrial thugs and economic terrorists. We have been accused of bringing important industrial sectors to a standstill and threatening Australia’s economy.
We have been accused of wildcat action.
And we have even been dragged into courts on the basis of pattern bargaining for sending out information to our members about what workers across the industry are paid and what the industry can afford.
For students of hypocrisy in political discourse it has been quite a big week.
Now I have got that of my chest, I will return to the topic of the conference – 20 years of enterprise bargaining and I am very pleased to be here and to use today to make some reflections of behalf of manufacturing workers about the bargaining system that we have been left with after 20 years, and the limits to delivering for workers in this system.
The first thing to say is that while the philosophical underpinning of enterprise bargaining is allowing workers and management to decide and then bargain conditions relevant to that workplace, in practice our system limits absolutely what workers can bargain for. WorkChoices of course made this worse and Fair Work laws have not improved this greatly for members.
My experience over many years of representing workers is that their concerns and worries and desires are not limited to simple wage rises and a limited set of conditions.
Workers care about apprenticeships and training. They care about job security and casualization. They care about productivity and the success of the business that they work in. They care about career structures and learning in the workplace. And they certainly care about the protection of hard earned entitlements if a company goes under.
The decision of Qantas management this week will no doubt lead to many marketing gurus and PHD students measuring the damage to that brand of locking out your workforce in the services sector.
While I am of course interested in that, I would be more interested in measuring the longer term damage to Australian businesses and industries in locking workers out of being involved in the important issues facing their industries through limited bargaining rights. What I mean by this is that longer term workplace and industry wide issues like productivity, innovation, job security, investment, effectiveness of management and future planning of workplaces is not part of enterprise bargaining.
Many of these matters simply cannot be resolved or even debated on an enterprise-by enterprise basis under the present system.
Productivity is surely a problem beyond an individual employer squeezing greater economic output from unit labour costs. What productivity means at the moment is workers taking home less at the end of the day, with reduced real wages, no penalty rates, and less job security. Sure, the individual employer gets increased profits, but not increased productivity. The economy certainly doesn’t get increased productivity.
We would like a debate about productivity that talks about:
• investment in infrastructure, including along supply chains;
• investment in skills, including in transferable skills that other parts of an industry or economy can use when a project or a business doesn’t need a workers any more;
• training of managers, so that they know how to work smarter, not just cheaper;
• examination of industry sectors and supply chains, beyond the individual business.
The problem with the last twenty years of enterprise bargaining of course, is that on these really important industry wide issues, we have had to squeeze the regulation of these standards, into a clause that’s digestible to a single enterprise agreement.
If we look at an issue like training, including apprenticeships, we know that getting training right is essential for industry-wide or economy-wide productivity. Good training means that workers work smarter, with more skills. But training needs can’t be achieved by an individual employer in the short term.
If we use the example of the resources sector, we see that the sector itself has shown a tendency to capitalise on a labour force which has been trained outside the sector.
It cannibalises the trained workers from other sectors, or demands imports of skilled workers from overseas.
What does that do for the training needs of the economy? It depletes the amount of trained workers in the economy, so that non-mining sectors’ productivity decreases. If it does train workers, it trains for the job, not for a broad skillset that will be useful to the worker and the wider economy once the job or the project is done.
That training for the job concept is an important one. An employer will train its workers to increase its profits. The more short term the employment of the worker by that employer, the less interested the employer will be in the formation of skills that will be transferable outside that employer’s business. Project work in the mining sector is a prime example of this, but it’s not the only example. Labour hire work, casual work and other precarious employment reduces skill sets, and reduces our productivity.
For a long time, there was a way around that for us. We achieved training standards and classification structures which intersected with those training standards in what were mostly industry-wide awards. We then ensured that enterprise agreements that we made stated that they were to be “read in conjunction with the award”.
A few things happened which put hurdles in the way of doing that.
The 1996 Workplace Relations Act started the Award simplification process – or award stripping as it effectively was. But classification structures with a relationship to training requirements were still allowable.
WorkChoices did a couple of things to hurt productivity. In this context, it explicitly stripped awards of classification structures, placing them in mythical Australian Pay Classification Scales (which weren’t actually made, they just existed as a concept). Skill-based career paths were also made non-allowable for awards, along with matters such as regulation of labour hire and independent contractors.
WorkChoices also stopped awards applying to workers at the same time as a collective agreement or AWA applied to them. So we couldn’t read awards in conjunction with agreements any more – but that wouldn’t have preserved industry wide classifications and training arrangements anyway, because they’d been stripped out of the award. So we ended up with a complicated arrangement where we’d have an agreement that incorporated by reference the award, but the agreement also had an appendix that copied what had been in the pre-WorkChoices award but was now deemed non-allowable.
In the end, we didn’t walk away from awards– but had WorkChoices persisted, the former award standards would have been less generally applied (because not every agreement was a union agreement) and more out of date over time.
Through a lot of work, WorkChoices was thrown out and modern awards returned. The very rushed FWA process meant that some matters were stripped out of awards, some of the better standards like redundancy in the Country Printing award.
We also have the NES now, which provides for general standards.
But why am I talking so much about award and NES standards in an enterprise agreement speech? Because enterprise agreements cannot and should not be the only type of instrument regulating workers’ terms and conditions of employment. In fact, I’d like to note that after 20 years of EB, only 45% of our members are covered by certified enterprise agreements. We have about 1500 agreements, but the majority of our members are covered by the award or informal over award arrangements.
Some standards have to apply on an industry wide or nationwide basis, or they are meaningless.
And a lot of those things are what matters to productivity and the ultimate success of an industrial regulatory system.
So how do we achieve that regulation? We must have a system of bargaining and a system of enforceable standards. At the moment, in the NES, we have some common standards, without the bargaining. In awards, we can have standards, but we can’t bargain for them. We can only improve on the standards through bargaining on an enterprise by enterprise basis.
But the thing about industry-wide standards now, is that we effectively can’t bargain for them. Pattern bargaining is still prohibited, and so-called “multi-employer bargaining” prohibits industrial action. So we have to put those matters in agreements, even though that instrument is simply not fit for purpose.
Even with the demise of prohibited matters, matters in agreements must pertain to the relationship between the employer and its employees or the employer and the union covered by the agreement. Not employers generally.
Where we do try to bargain for matters that improve productivity, like reducing precarious work and outsourcing of jobs, we first have to fit these concepts into a form that’s capable of being a permitted matter in an individual employer’s agreement, and then we have to bargain for them one by one. Each employer will use all the technical parts of the Act to avoid regulation of casualisation and contracting out. They used to say it was prohibited; now they still try it on to say it doesn’t pertain, so it’s not a permitted matter.
Then when those arguments fail, we bargain, and take lawful protected action during bargaining. What we’ve seen with Qantas in the past week is that when a company decides that they have no technical legal way to avoid a union using industrial action within the law, they’ll up stumps and decide to avoid bargaining by going to arbitration.
Qantas demonstrates that the purist economic theory which is supposed to underpin the rationale for the Act to only allow enterprise bargaining is a load of rubbish.
They say that parties should be left to agree between themselves, that so-called third party intervention is bad, that external regulation of relationships between employers and their employees reduces flexibility and reduces productivity.
Businesses will nod their heads to this while they continue to see their profit share rise while the wages share of GDP heads towards the floor. They’ll nod their heads until enterprise bargaining doesn’t increase their profits. Until they are asked to take a long term view of their business, to address issues like productivity and investing in their workforce.
With Qantas, bargaining was requiring them to look at investing in their workforce, to look at long term productivity, not just profit. All of a sudden, enterprise bargaining isn’t the rich vein of profit that it had been. So they’ve taken action to force arbitration on their employees and their unions. Business are not enterprise bargaining purists, they are profit purists. They will use enterprise bargaining to maximise their profit. Even where we try to bargain for long term sustainable productive measures, they will do everything to avoid that if that threatens short term profit.
Enterprise bargaining is not the autobahn to maximising productivity in the economy, it is a tool for business to maximise their profits, and for unions and workers to resist that maximisation where it is at the expense of workers and long term investment in the workforce and sustainable jobs for the future.
So don’t get me wrong, our members have been able to achieve good pay and conditions by bargaining together. Bargaining gives workers ownership of the terms and conditions of employment, and strengthens the Union. We have used enterprise bargaining to provide for improved pay and allowances leave, income protection, redundancy provisions, paid parental leave, and we’ll continue to do so.
But when it comes to matters that cannot and should not be shoehorned into enterprise agreements, we cannot bargain for them in the enterprise bargaining system, so the system is ultimately limited. We can negotiate for industry-wide matters outside the system, but we have no means to bring employers to the table for matters that are of the utmost importance to productivity and sustainability for the economy across industry.