Fair Work Act: is there a further union agenda?

Analysis

Fair Work Act: is there a further union agenda?

Comments sometimes appear that the ACTU has an ‘unfinished business agenda’, despite the supposedly settled provisions of the Fair Work Act. What are the union movement’s priorities now that the Act has been in force for a couple of years?

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Comments sometimes appear that the ACTU has an ‘unfinished business agenda’, despite the supposedly settled provisions of the Fair Work Act 2009. What are the union movement’s priorities now that the Act has been in force for a couple of years?
 
Some insight into this question was provided at the 2011 Labour Law Conference, conducted by the Workplace Research Centre in Sydney on 1 August 2011.

Joel Fetter, the ACTU’s policy and industrial director, said that the number one issue for the ACTU is now to counter the steady move away from traditional types of employment arrangements towards various types of more informal arrangements such as casual work and contracting.

Fetter noted that only around 40% of the workforce can still be categorised as in full-time permanent employment. He added that the ACTU will shortly launch a new campaign to address this issue.

Avoiding employers’ legal obligations

Fetter claimed that the spread of casual employment is steadily working its way up the hierarchy of jobs in organisations, and noted that Fair Work Australia is currently conducting an audit of this trend.

He also commented that the mining sector shed jobs very quickly during the global financial downturn of 2008–09, whereas the car industry, which has more structured arrangements in place, consulted widely with employees and found ways to keep most of them employed in at least some capacity.

He claimed that avoidance tactics are becoming more common and more sophisticated. For example, in one phone-based sales scheme, workers are required to either work from home or rent or buy office space from the ‘employer’, then pay the latter a fee to gain access to the list of potential and current clients. This amounts to inverting the employment relationship.

Casual employees can be difficult to persuade

According to Fetter, accessing casual employees to obtain a better deal for them is very difficult for unions.

Many casuals don’t recognise that their employment status is precarious, and they prefer the extra cash-in-hand casual loading to the availability of benefits such as sick leave and annual leave. They are willing to take the chance that they will not become sick and unable to work. There has been very little interest by employees in the Act’s provisions that allow them to request conversion from casual to full-time employment.

Fetter described the common ‘man in a van’ scenario. The worker is hard to physically locate and doesn’t want to complain for fear of being branded a troublemaker. Often things go well when the worker first starts his/her work arrangements and problems don’t arise until later (eg when the van breaks down). Then the worker is much worse off, but powerless to do much about it.

Other ACTU concerns about Fair Work Act

Fetter also identified other possible issues with the Act that the ACTU is concerned about.
  • Collective agreements only bind the legal employer of the relevant workforce. Arrangements such as labour hire and secondments can get around this.
  • ‘Corporate shells’ can be used for hiring employees. As well as relieving the ‘actual’ employer of some legal obligations, this means that when things go wrong the ‘employer’ can buck-pass to the shell company and also avoid facing the media for explanation. The Jetconnect case in the airline industry (where airline pilots were hired in New Zealand) was quoted as an example of taking this issue off-shore as well, and Fetter speculated that it may have been a trial run by this industry for a strategy to send pilots’ jobs off-shore and then have a ‘race to the bottom’ (in terms of employment conditions).
  • Bargaining can be used to undermine secure full-time jobs. The legislation focuses on ‘enterprises’, but they may not be the actual source of decision making for wages and conditions. The low-paid bargaining provisions of the Act only partially deal with this issue. Fetter claimed that non-union agreements are often of poor quality and not genuinely negotiated. In general, he believed that the provisions are designed to ensure that unions have to spend large sums of money for little actual gain.
  • Gerrymanders can occur, when employers pick the scope of agreements in order to avoid dealing with particular unions or all unions. Sometimes an employer chooses work areas where labour turnover rates are high, then negotiates separately with the newly-hired employees. Fetter claimed that the Federal Court is beginning to crack down on these issues.
  • Award modernisation has overall resulted in a reduction of protections for many employees, in conditions more so than wages.
  • Individual Flexibility Arrangements (IFAs) have mainly been pattern agreements initiated by employers to cut costs. Fetter suggested that ‘flexibility’ is only beneficial to the employee when driven by the employee. However, contents of IFAs are hard to detect because they are not registered. Despite the Act’s provisions, many IFAs are offered as a condition of gaining employment, and the employee is unaware of some of them until he/she studies the induction package on Day 1 of employment. Fair Work Australia is currently doing a study of IFAs, and the ACTU will await its findings before deciding how to approach the issue.
  • Dispute settlement powers are still very restricted. There is no ‘right to strike’, employees cannot strike during the term of an agreement, and capacity for arbitration is very limited.
Future role of unions

After WorkChoices commenced in 2006, union membership increased slightly after around two decades of steady decline. However, this trend appears have been a temporary blip because the decline in membership has now resumed.

Fetter noted that the decline in membership corresponds to a declining share of wages in GDP and an increase in profits. He claimed that various legal provisions have reduced the incentives to join unions, and younger workers tend to be comparatively unaware of their existence. It is also very hard to form new unions and to gain coverage of new fields of employment. Any new job can potentially be covered, the problem for unions is to gain access to it.

Further information
 
Further information about the conference is available from the Workplace Research Centre website.
 
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