State legislation and awards could become benchmarks for all Australian workers

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State legislation and awards could become benchmarks for all Australian workers

The thrust of the Federal Government's WorkChoices legislation is to create a freer market in relation to wages and conditions in Australian workplaces.

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The thrust of the Federal Government's WorkChoices legislation is to create a freer market in relation to wages and conditions in Australian workplaces. However, the active continuation of the state industrial systems could undermine the essential purpose of the Federal WorkChoice legislation.

As an example, Unions NSW have sought a 4% safety net increase for NSW state award workers. This case has been coordinated with other state union peak councils. New award minimum rates set by state tribunals will put great pressure on the overall (federal) wage system in Australia to come into line.

State legislation and industrial instruments

The state systems (excluding Victoria) will also continue to legislate for all those workers who are not covered by the WorkChoices legislation - essentially any workers employed by non-incorporated entity (eg natural person, trust, partnership). State industrial legislation will continue to be passed, state awards and agreements will continue to be made. Minimum standards will be set via legislation and awards.

The impact will be that the state systems will be setting the wage and conditions levels as they currently do and those business seeking guidance to actual industry rates and conditions - as opposed to the standards set by the federal Fair Pay Commission - will look to comparable state awards and minimum state conditions set by legislation if the federal minimum conditions standards fail to adjust.

Multiple systems could defeat return to 'the market'

Contrasting the experience in New Zealand where the Employment Contracts Act 1991 was introduced across the country to apply to all employees, the Australian situation is distinctly different. Both employers and employees were thrown into a free market situation in NZ with no real benchmarks particular to individual industries. In Australia the state systems will maintain systems built around industry awards and as long as those awards are kept current they will remain important reference points or benchmarks for industry.

This pressure for a considerable degree of conformity currently exists with state and federal awards being consistently compared as variations are sought.

When the federal award system fades in this respect, the state systems will continue to provide the benchmarks.

Market pressures as opposed to legal obligations

Although the WorkChoices legislation will allow much freer bargaining, the underlying relevance of state systems awards will continue. Federal agreements cannot simply state that certain state awards apply and adopt their wages and conditions in that way. In addition, federal agreements cannot include certain prohibited conditions/provisions - eg prohibiting AWAs; or restricting the use of independent contractors or on-hire arrangements etc - see: previous article. However, federal agreements mirror state rates and conditions by parties writing them in as their negotiated rates and conditions. The fact that the same rates and conditions appear in Federal agreements as in state awards does not invalidate the agreements.

It may be difficult for an employer in the federal system and operating in NSW to resist the minimum rates and conditions set by a state award that apply to employees in NSW employed by, for example, a partnership or trust. A similar story would apply in other states where minimum rates are varied. Union pressure in terms of publishing the wages and conditions achieved in the state systems will be a relevant factor.

Related

State Governments' reaction to Federal IR agenda


 

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