No losers in Gillard’s new awards (or so she thinks)

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No losers in Gillard’s new awards (or so she thinks)

Federal IR Minister Julia Gillard wants Australia’s 3000–4000 awards to be modernised in a way that doesn’t disadvantage workers and also doesn’t add to employers’ costs ¯ something which at least one economics commentator says can’t be done.

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Federal IR Minister Julia Gillard wants Australia’s 30004000 awards to be modernised in a way that doesn’t disadvantage workers and also doesn’t add to employers’ costs ¯ something which at least one economics commentator says can’t be done. 

At a press conference this week Gillard was asked: ‘The pay for a retail worker in WA is much different to Sydney.  Can you guarantee that as a result of your award modernisation program that no worker on an award will be worse off?’

Gillard replied by saying that one of the aims in the award modernisation program that had been given to the AIRC is ‘to not disadvantage employees’. 

JOURNALIST:  ‘So how are you going to reconcile the fact that similar workers in different cities have much different pay rates?  Does that mean that the lowest ones come up?  

GILLARD:  ‘Well, the request as we’ve drafted it for the Australian Industrial Relations Commission sets a series of aims. One of those aims is to not disadvantage employees.  One of those aims is to not add costs to business.’ 

Aims are ‘contradictory’ 

Alan Wood, economics editor of The Australian, says those two aims are contradictory. 

In his column in The Australian this week, Woods wrote:  

The fact is that there is no way the complex system of awards in Australia can be modernised into fewer, simpler awards with nationwide application without lots of pain and lots of losers ¯ workers, unions and bosses ¯ along the way.

‘How, for example, would the AIRC design a national transport award that covered road, rail, shipping and aviation without upsetting a network of existing agreements and conditions that would stir up a hornet's nest of union and employer opposition?

‘Even a national road transport award seems highly unlikely given the widely differing pay, conditions and individual arrangements, not only between the states but within them, to meet local conditions.

‘Multiply these problems across 3000 to 4000 awards and you understand why all earlier attempts at award rationalisation have failed miserably, and why this one will too.’

Cost would be ‘horrendous’

Woods said one solution would be to reduce awards to a few minimum conditions, with the rest determined by bargaining, but that this is anathema to Labor and the unions.

He said a second alternative is that national awards could pick up all the ‘rolled gold’ conditions from individual awards so no employee would be worse off, but a lot of employers would be ‘because the cost would be horrendous’.

These issues were put to Gillard when a journalist asked her whether the aim was to have awards with nationally consistent items in them ¯ or will there just be simpler awards with inconsistent items?

‘We haven’t specified a target number of awards,’ she said. ‘But what we have set is very clear criteria about what we want done. And I would point to the fact that the award modernisation request is not about taking current awards and shaving bits off them. It is about creating new, modern awards.’ 

Yes, but how will the new, modern national awards deal with the different levels of pay for the same jobs across Australia? 

Highest pay level 

Will all employees in a category rise to the highest pay level? Employers will scream blue murder at that result, and have already warned they will not accept it.  

Will everyone drop to the lowest pay rate? The unions would call a national strike. 

Will wage rates and some conditions be negotiated outside the award between employee and employer? That sounds a bit like AWAs, and in any case unions will be very unhappy with that outcome if they can’t pattern bargain to achieve standardised outcomes. 

No gain without pain

So, how can no workers be disadvantaged and no employers face higher costs, as Gillard wants? 

Wood says the problem is that the Rudd Government ‘cannot accept the simple truth that, given the existing award system, there can be no gain without real pain’. 

Related

Modernising and simplifying awards

Labor’s first IR Bill - a closer look

AIRC to be told: ‘get on with modernising awards’

 

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