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Beazley Announces ALP Industrial Relations Policy

Opposition Leader Kim Beazley has come under sustained attack in Federal Parliament following the announcement of the ALP’s Industrial Relations policy this week.

Beazley committed a Labor government to abolishing the system of Australian Workplace Agreements introduced by Industrial Relations Minister Peter Reith.

Whilst only about 90,000 Australians are parties to individual workplace agreements, otherwise known as individual contracts, they are an important symbolic feature of the coalition’s approach to industrial affairs.

The government has attacked Beazley in Parliament this week, alleging that he has caved in to union demands. Unions now represent around 30% of private sector employees.

Text of Opposition Leader Kim Beazley’s Inaugural Fraser Lecture on Industrial Relations, delivered at the Canberra Labor Club.

It is a great honour for me to be here tonight to deliver the inaugural Fraser Lecture.

As you all know Jim Fraser, after whom this electorate and indeed this lecture is named, was the member for Canberra from 1951 until 1972. It was not until 1966 that he won full voting rights in the House of Representatives. For all that time he played the role of mayor, ombudsman, State and Federal MP for his huge electorate. Jim was just as much at home discussing leaking water meters as he was speaking on the big issues of the day.

Jim was the quintessential Labor member of Parliament. Many people have come to see Canberra and its environs as a Labor enclave, yet in the Menzies years the government was very popular with its employees. Jim had to work hard to make this a Labor-voting area, and we will always be grateful to him for achieving that with his tireless local efforts – carried on to this day by Bob McMullan, Annette Ellis and Kate Lundy.

One of the things I remember about him was the enormous number of people who came to say goodbye to him at his funeral just down the hill from Parliament House. They were spilling out of all the doors.

This was a big man in all sorts of ways. A man who appealed to people from all walks of life, from all sides of politics — a man Gough Whitlam called a friend — an unaffected and accessible spokesman, mediator, and advocate for all those he represented.

Jim served for many years as the local vice-president of the Australian Journalists’ Association. As a good union man he would have had no patience with the narrow ideology that governs industrial relations under John Howard and Peter Reith.

In a modern democracy the way industrial relations are played out is a sure test of the character and effectiveness of Government. And I want to focus this inaugural Fraser lecture tonight on industrial relations because of the impact bad policy has on the way Australian workers and their families live.

Many observers would have been surprised to hear Peter Reith tell a recent meeting of the NSW Industrial Relations Society how well off workers and the community were because of his policies.

These were his descriptions of the experiences of Australian workers today: “…more cooperative workplaces with greater workforce participation in wage and condition setting”; “…more flexible conditions enabling work and family issues to be addressed”; rewards “more readily shared throughout the workforce”.

Most of us would have had a lot of trouble recognising this workers’ paradise.

And this whitewash came from the lips of Peter Reith — the man whose industrial regime is characterised by men in balaclavas leading attack dogs against waterfront workers.

This is the Reith regime – where the state of workplace relations was described recently by a Victorian Supreme Court judge as “ritualised mayhem in which only the innocent are slaughtered”.

This is the place where industry research shows such a sharp erosion in loyalty between boss and workers, that young people entering the workplace had never experienced it – they have never experienced job security and job loyalty.

This is a regime Mr Reith describes as “responsible public policy making”. All the evidence, though, shows that he is the most divisive and untrustworthy minister the portfolio has had for as long as most of us can remember.

And he is making industrial relations in this country over in his image – confrontational, bullying, aggressive.

In the Australian way, the Minister for Industrial Relations should be the one who — along with the independent umpire, the Industrial Relations Commission — is responsible for fairness in the workplace.

Mr Reith has simply shrugged off this responsibility, and through a series of measures in the Parliament he has made sure that the umpire, the Industrial Relations Commission, has been stripped of its ability to deliver fairness.

Peter Reith has been handed his confrontational brief by the Prime Minister who told Parliament in 1992, when asked about the coalition’s plans for the Commission, that: “We will stab them in the stomach”.

This is what he told the Parliament in Opposition – he was quite upfront about it in June 1992 – he wouldn’t come around and stab the Commission in the back, he would tackle them head-on and “stab them in the stomach”.

And this is the message John Howard handed to Peter Reith on winning Government in 1996 – a message couched in the language of violence and confrontation.

Is it any wonder that people on both sides of politics are telling us that a strong umpire is needed today as never before? As workplace changes come thick and fast, the Commission’s role should be expanded, not eroded, as has happened under Peter Reith.

The smooth operation of industrial relations is a vital part of national welfare. We all know this. Happiness in the workplace is fundamental to happiness in families. Family-friendly industrial relations are fundamental to a whole and peaceful society.

These issues are too important to be handed to a wrecker like Peter Reith.

You should have a look through his website sometime – it makes amazing reading. It’s worth making your way through all the misspellings and tortured syntax -to get to the nub of the Reith agenda.

Is this Federal minister interested in how to achieve fairness in labour relations in the new economy? Is he interested in balancing productivity increases and workers’ rights under globalisation? What about the new challenges of trying to win Australia a future as a Knowledge Nation in the new industrial revolution the world is experiencing?

It’s all too hard for Peter Reith. His press releases tell the tired old story of divisiveness and union bashing. The headlines scream: “Labor’s Payback to its Union Masters”; “Beazley Should Stop Third ACTU President”; “Union Control of Labor”; “The Unions Are Now Running Policy in Victoria – Again”.

Peter Reith’s first formal speech as Minister was spent attacking unions, and there has been a strict consistency in his views ever since. “Never forget the history of politics and never forget which side we’re on,” he said during the recent election campaign. He told a newspaper: “people have just got to stand up to unions and we will support them. All you have to do is pick up the phone and we will support you”.

Some ministers with more subtlety might have gilded the lily a little – arguing for balance or the middle way. Not Partisan Pete.

You know, the best character analysis of Peter Reith I have ever read was actually written about 50 years ago, by George Orwell, in the famous novel “Animal Farm”.

He introduces one of the farmyard animals as follows:

“The best known among them was a pig named Squealer, with very round cheeks, twinkling eyes, nimble movements, and a shrill voice. He was a brilliant talker and, when he was arguing some difficult point, he had a way of skipping from side to side and whisking his tail which was somehow very persuasive. The others said of Squealer that he could turn black into white.”

You might remember Peter Reith’s legislation called “More Jobs, Better Pay” last year. You’d need a good memory, because of its demise in the Senate. But if the name of that particular legislation wasn’t a case of turning black into white, I don’t know what is.

And let’s be quite clear about the people Peter Reith sees as the enemy – workers covered by trade unions. About two million workers in all walks of life – nurses, transport workers, teachers, miners, shearers, factory employees — people who have put the backbone into the economic development of this great nation.

There are many others who may not belong to unions but who are sympathetic to workers’ rights to associate, their rights to better safety conditions, their rights to bargain for a fair deal and for some semblance of job security. The Australian workers endorse a strong basic award system, underpinning their working arrangements.

Mr Reith’s attack on these people shows he has no interest in industrial harmony. In his own words, he will never forget whose side he is on.

Of course nothing shows us more clearly how far he will go to advantage what he perceives to be his side — how far he will bend the law and the truth — than his handling of the waterfront dispute – one of the most bitter and divisive conflicts in Australia’s history.

For the first time in Australia a Government set out to create a massive dispute in order to get a mass sacking of workers.

Have no doubts that it was orchestrated at the highest levels of Government. A leaked internal Government document from early 1997 shows a ruthless campaign to smash a union.

The Government document – signed off personally by the Prime Minister — has the most chilling of tones. Cold, calculated, it puts paid to any sense that the Government was acting in the interests of all Australians as it has claimed.

In the document entitled Waterfront Strategy, which I commend as a fascinating insight into the Government’s attitude to unions, the following lines appear:

“The courts and the Australian Industrial Relations Commission cannot always be relied upon to act in a decisive and timely manner against the union.”

“It would be preferable for a major dispute to be one for which the Government has planned in accordance with our own timetable.”

“A key part of the interventionist strategy is that the MUA [Maritime Union of Australia] should be caught by surprise. To this end it may be quite appropriate to keep the unions wondering whether the Government would settle for an evolutionary approach.”

This was the Howard Government’s way of showing which side it was on.

This was supposed to have been the big bang to deliver huge changes on the waterfront. And yet after all the divisiveness, the secrecy, the lies, we now discover just what a damp squib the outcome has been.

Figures released last month showed that crane rates in Australia’s ports in the last quarter had fallen to near the levels they were before the 1998 dispute.

It is a lesson the blinkered members of the Howard Government just never seem to learn – the politics of confrontation and ideology achieve nothing.

The industrial relations system under Labor was based on cooperation, and it was aimed at boosting industrial productivity and economic progress with fairness.

The introduction of enterprise bargaining under Labor played a central part in our strategy for modernising Australian industry.

The changes we made, especially in our final five years in office, were part of a continuous process of reform.

As the record shows, economic performance especially during the last five years of the Labor Government was impressive. Between the early 1980s and the mid-1990s, exports as a share of GDP nearly doubled. Between the 1993 and 1996 Federal elections, 670,000 new jobs were created. In 1994-95 growth in manufacturing production reached an historical peak.

In the first half of the 1990s the increase in productivity in Australia was much faster than the OECD average, and was faster than Australia had seen for thirty years. All this was achieved in an atmosphere of unprecedented industrial peace.

What has happened since then has gone a long way towards destroying the cooperation and harmony that used to obtain in the industrial system and, in doing so, threatens our industrial progress.

There is no doubt that the waterfront dispute — masked men and attack dogs chasing people out of their place of work — must have come as a great shock to working people and their families everywhere.

This is the inevitable result when governments toss out the rules, emasculate the independent umpire, and sit back to allow guerrilla warfare through the courts to determine who will win and lose in the workplace.

Strikes have increased across Australia in 1999, the second consecutive year of increase, after a long period of decline. Intractable strikes are on the increase, with all the bitterness they leave in their wake.

Industrial action by employers has become more vicious. G&K O’Connor’s Meatworks in country Victoria — in an action labelled a “baseball bat lockout” by Justice Spender of the Federal Court — locked out its employees for eight months because they refused to accept pay cuts ranging up to 17.5 percent.

ACI in Melbourne locked out its employees on Christmas Eve last year and kept them out for five months.

Certainly, nobody should have been shocked when a national study of workers’ attitudes carried out for the Australian Industry Group discovered a workplace environment in which the values of cooperation had been driven out by the raw drive to survive. “Employees have never competed so ruthlessly against each other for jobs and money,” the study reported. “Loyalty between employer and employee is being eroded across the board and many young people don’t experience it.”

The sense of insecurity among workers is great and growing. It can be found not only in the AIG study that I have just quoted but also in the surveys done regularly by the Roy Morgan organisation and — most notably because the canvass was so broad — for the ACTU by Yann Campbell Hoare Wheeler.

Peter Reith has overseen a system to which an incoming government will have to make significant change if Australia is to have an economy and industries fit for the challenges posed by the new century.

In the highly-skilled, well-paid Knowledge Nation that the Labor Party wants for Australia, the industrial relations policies for encouraging productivity, developing skills and promoting safe and healthy workplaces, must also include policies for nurturing workplace cohesion and cooperation

Some of the elements of what the Labor Party has in mind for industrial relations are already well known. Other elements are not as well known, or not well understood. We start with three basic points.

Firstly, we will restore the powers of the independent umpire, the Industrial Relations Commission, so that it can bring back fairness in the workplace, act in the public interest, and keep the industrial peace.

Secondly, it is essential, especially as arbitration gives way to bargaining, that the law require all parties to negotiate in good faith. Our law will support the primacy of — and we will give precedence to — collective forms of bargaining. But it will insist on good faith bargaining, whatever bargaining options are preferred.

Thirdly, our law will recognise that the right of employees to act, organise and protect themselves collectively is a fundamental element of justice in the workplace.

The role of the independent umpire has been under threat from Peter Reith since John Hewson’s Fightback of the early 1990s.

In his 1996 laws, Mr Reith transferred jurisdiction over matters including the conduct of industrial action from the Commission to the Federal Court, in spite of its inexperience in this field.

But Mr Reith has been disappointed. The Federal Court has refused to be one of his poodles. Perhaps ‘Squealer’ is not as persuasive as he likes to think. He has been forced to cast around for alternatives.

He next tried to force coverage of industrial relations matters onto the new Federal Magistrates’ Court, which was supposed to deal with the overflow of matters from the Family Court. Twice, the Government tried to add industrial relations to the authority of the new court. Twice, the Parliament stopped it.

His next plan, now in legislation before the Parliament aimed at preventing so-called pattern bargaining, would extend jurisdiction over the conduct of ‘protected action’ from the Federal Court to State and Territory courts – anywhere, of course, but where it should belong – the Industrial Relations Commission.

Peter Reith said on May 22 that the legislation proposes more, not less, power to the Commission relating to industrial action. It does nothing of the kind. What it actually proposes is to put limits on protected action and then direct the Commission not only to police these limits but also to do so within a very limited timetable.

One of the most revealing examples of Peter Reith’s contempt for the Commission is the proposal in his pattern bargaining Bill that it: “must have particular regard to the views of the employer who is a negotiating party to the agreement”. In other words, no attempt to ensure a balance between the parties, just a totally partisan game.

Peter Reith has been nobbling the Commission since 1996. Firstly he legislated to restrict the Commission’s power to arbitrate and, in doing so, its capacity to conciliate. He restricted the Commission’s power to make awards. He has limited its capacity to prevent and settle disputes.

Instead, the courts have become the arena for settling industrial disputes. This has placed huge financial burdens on working people in trying to achieve justice.

The Hunter Valley Number One coal mining dispute has been dragging on for years while lawyers are carrying out complicated and expensive manoeuvres to deny employees access to what is left of the arbitration powers of the Commission.

The waterfront dispute — with all its implications for the national economy — had to wend its way through the Federal Court and up to the High Court before it could be settled.

The Commission has had to cope with a stream of morale-sapping criticism whenever it tried to act independently as a fair umpire.

Labor is committed to an industrial relations system that aids the participants to come to agreement. The Commission – as the independent umpire – must have the power to resolve disputes.

The Labor Party will take action now to seek to give the Commission the power to restore the balance, keep the peace and protect the interest of the community in workplace issues. We will do it in two ways. We will be moving amendments to this effect in Parliament to Peter Reith’s “pattern bargaining” Bill which we oppose. And we will be moving Private Member’s legislation as well.

We will seek to ensure that, among the principal objects of the legislation which governs industrial relations, the Commission will have the power to conciliate when bargaining gets bogged down and, where necessary, to arbitrate.

We will seek to give the Commission the power to ensure that parties negotiate in good faith. It would be able, for example, to consider their conduct: whether or not they have behaved reasonably, failed to negotiate or prevented others from reaching agreements.

We will seek to give the Commission power to arbitrate decisions if it can see that disagreements have become intractable, and we will attempt to enable the Commission to make or vary awards in order to resolve disputes.

Another of the issues I want to talk about this evening is Peter Reith’s Australian Workplace Agreements – the AWAs that we plan to abolish.

It is important to know the history of AWAs. They are Peter Reith’s invention and, like all his workplace ideas, they have a partisan purpose.

I was prepared to consider whether or not there was a way they could be civilised. As late as last December I told the ACTU that we were prepared to look at these agreements in the light of the Beattie Government reforms to the Queensland version of AWAs. I have been consistently sceptical about them, but I had kept an open mind. Now, however, the overpowering weight of evidence, State and Federal, confirms my scepticism.

The Office of the Employment Advocate told a Senate committee earlier this month that only about 90,000 workers are currently covered by AWAs. Of these, nearly 28,000 are in the public sector and a little more than 62,000 in the private sector. Roughly 10,000 AWAs were forced on Victorian public servants by the Kennett Government, and 6,000 or so were forced by Peter Reith on Commonwealth public servants.

Our analysis, allowing for such factors as labour turnover, suggests that the total AWA coverage could be a little less than 79,000 – this is less than one percent of the workforce. There is no doubt that these agreements have not exactly swept the popular imagination. They fall a long way short of the 10 percent of the workforce originally proposed by their advocates.

The Labor Party opposed AWAs when they were introduced. We have always been against Peter Reith’s insistence that these agreements should be exempt from scrutiny by the independent umpire.

We were worried they could be unfair, or used to undercut other workers. The National Institute of Labour Studies reported in 1997 that 93.5% of those who signed up to AWAs did so without being represented by a bargaining agent. It found that individual employees felt restricted in their ability to consult unions.

A study by the Australian Centre for Industrial Relations Research and Training (ACIRRT) of AWAs negotiated in Queensland before the Beattie Government came into office found that, compared to collective agreements, they lacked innovative work flexibility arrangements, contained fewer provisions for employment conditions, and provided no significant improvements in conditions.

In WA, these individual agreements were found to fall well short of collective agreements in terms of wage increases, casual employment conditions, workplace flexibility, hours of work and absorption of allowances.

The latest ACIRRT Report finds that, on the basis of enforceable rights contained in 5,000 agreements, wage rates for those covered by AWAs are more likely to be lower than under union agreements. “Non-union collective agreements provided for the lowest average annual wage increases (3.1%), followed by AWAs (3.3%) and union agreements (4.4%)”.

Similar trends were evident when examining other employment conditions such as hours of work, training, employee input and consultation. Significant changes to hours of work provisions seem to be the main area of focus for AWAs and non-union agreements.

A Senate inquiry has found that women, workers juggling work, family and social obligations, young workers, and people from non English-speaking backgrounds were particularly disadvantaged by AWAs.

According to their advocates, one of the principal benefits of AWAs is that they allowed individual bargaining between employer and employee to introduce more flexibility into individual workers’ employment conditions.

In practice, this is a myth. Far from being individual contracts, AWAs have generally been used by employers as just another form of collective bargain. AWAs have generally been introduced to impose uniform working conditions across workplaces — but with significantly reduced rights for working people.

For example, in Victoria, there are only 12 different variations on the AWAs enforced by former Premier Jeff Kennett on 10,000 State public servants. And I am personally aware of AWAs being offered to all members of the one workforce that offer precisely the same terms and conditions. These are not individual bargains; they are collective deals imposed on the workforce by the employer.

The Senate inquiry was given many examples of jobs offered on an AWA-only basis. One was the Sydney restaurant, Blackbird Café, that Peter Reith chose last year to celebrate the 50,000th AWA. He probably has not been told yet that the restaurant dropped its AWA policy and has opted instead for a collective agreement.

The development that we found most valuable as we considered our view on AWAs was the experience of Queensland Workplace Agreements (QWAs) introduced by the Borbidge Government in 1997, modelled very closely on the AWAs.

In 1998, the incoming Beattie Government conducted an inquiry into the Borbidge agreements. This showed that the QWAs tended to provide for low pay, to reduce award conditions, and not to come about as a result of genuine negotiation.

The Beattie Government therefore amended the legislation. Employers can no longer make QWAs with juniors. The secrecy provisions for QWAs have been removed, opening them to public scrutiny.

Most importantly, the State Commission is now required to ensure that QWAs are not contrary to the public interest, and, when it considers the public interest, it may consider the relative bargaining power and the particular circumstances and needs of low-paid workers, women, young people, outworkers, apprentices and trainees.

There have been two interesting results from the Queensland experience. One is that QWAs — as distinct from AWAs elsewhere — are now fairer, more openly and fairly negotiated and more responsive to the public interest.

The other result is that, since they have been improved in this way, they have virtually fallen into disuse. Under Borbidge, an average of 282 new QWAs were agreed per quarter. Under Beattie, the average has dropped to 16. In other words, the fairer QWAs are, the less attractive they are to employers.

AWAs are not only not attractive; they are not even cost-effective . The Employment Advocate himself admitted that the low take-up of AWAs could have been due to their high transaction costs. The Australian Mines and Metals Association reported that members were complaining about the procedural complexities, and delays in registration and approval.

Even the Australian Council of Commerce and Industry (normally such Reith loyalists) seemed quite agitated about the “significant resources” involved, the “onerous”, “convoluted”, “disturbing”, “bureaucratic” and “cumbersome” nature of the process.

We have costed these AWAs at about $500 each, taking into account work hours in their handling. This compares with around $22 for each worker covered under the collective agreements covered by the Industrial Relations Commission.

So what do we have here?

An expensive and complicated process with a $45 million bureaucracy to run it but which applies to less than 1% of the workforce.

A secret, unreviewable form of agreement reached between the employer and individual employees which has been shown in very many cases (if not most cases) to be unfair and less favourable in pay and conditions than collective agreements.

Peter Reith’s system of AWAs will go, as we promised in our policy at the last election. In the same way, the expensive Office for the Employment Advocate will also go.

I said earlier that we had been keeping open the possibility of replacing Peter Reith’s AWAs with a modified form of statutory agreement. As late as December last year I said that we looked forward with great interest to see how Queensland’s modified version of statutory individual contracts worked, to see if it could provide us with a model to modify Federal AWAs.

Well, we now know the results of the Queensland experiment. The Queensland Industrial Relations Minister Paul Braddy said only last month that the Queensland version of AWAs had been “a monumental flop”. An independent report into these agreements found they were unpopular and had been virtually ignored by employers and workers.

Now that we know what the Queensland experience has been, (they cover only 0.2 percent of the Queensland workforce), we have come to the conclusion that there is no point in seeking to replace the Reith AWAs with a modified form of a statutory individual contract.

In Labor’s policy, employees who prefer an individual agreement will be still be able to use common law contracts, as workers have done for the past couple of hundred years. The irony of all this is that common law contracts are still far more than popular than Mr Reith’s AWAs .

There are bigger issues to concern us in industrial relations.

Our workforce is now more atomised and casualised than at any time in our history. We have the second highest level of casual employment in the developed world. We are working longer hours than we were a generation ago.

Employment itself is being contained in ghettos of good fortune, whole areas of the nation being turned into no-work zones. Work processes and technology are changing at an enormous pace. The level of anxiety and insecurity among Australian workers is around the highest it has ever been in peacetime. We have a disorganised and underfunded training system.

When we consider questions like these, we realise just how narrow-minded the industrial world view is of this Government and its Minister.

Just as on so many other issues, like tax and privatisation, Peter Reith and John Howard are mired in the industrial relations debate of past times.

The debate used to be: confrontation versus cooperation; or arbitration versus bargaining; or collective versus individual. The new industrial relations debate has advanced beyond this. In a Knowledge Nation the central focus of industrial relations must be to create cooperative, consensual workplaces with a better-educated, better trained workforce.

This is the way the Knowledge Nation generates greater productivity.

So not only is it good social policy to have a fairer, more cooperative workplace, there can be no doubt it is good economic policy as well.

But this Government just doesn’t get it. And in truth, it is not all Peter Reith’s fault. It’s John Howard who is really to blame. He just doesn’t get cooperative industrial relations. Just like he doesn’t get reconciliation. Or the republic. Or a tax policy that’s fair on families.

On all of these issues, as on industrial relations policy, John Howard and his Government have a fatal flaw: they are in love with the past and at war with the future.

With Labor, fairness will be restored, along with a central role for the independent umpire

That’s the Labor way.

That’s the Australian way.

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Malcolm Farnsworth
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