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IR cooperation is fine, but what happens when we ‘snap-back’ after COVID-19?

9th April, 2020

Anthony Forsyth, RMIT University and Labour Law Down Under Blog

The Coalition Government, business and unions have cooperated on industrial relations reforms like never before in the last month.

Last week, the Prime Minister praised the ACTU and business for working together in the national interest, claiming that ‘there are no blue teams or red teams now … no more unions or bosses … just Australians’.

The Australian reported two weekends ago that IR Minister Christian Porter and ACTU Secretary Sally McManus are in daily contact, going from having ‘no relationship’ to becoming ‘BFFs’.

Past enmities have indeed been superseded by the imperative to save jobs in the face of the economic carnage wrought by the COVID-19 crisis.

This has led to swift changes in employment regulation that would have been unimaginable even a month ago. The Fair Work Commission has approved joint union-employer applications to vary three key awards giving greater flexibility for businesses to adapt to changed operating conditions.

For example, hospitality and restaurant workers can now work across classifications, full-time and part-time employees can be directed to work shorter hours and employers can direct staff to take annual leave on 24 hours’ notice.

Similar changes have also been made to the clerical award, along with others enabling employees to manage working from home at the same time as increased responsibility for children’s schooling.

The FWC has also acted on its own initiative to vary 103 of the 122 awards, inserting a new entitlement to two weeks’ unpaid pandemic leave for employees required to self-isolate who cannot access other leave entitlements.

Union-management cooperation has produced other outcomes. For example, the United Workers Union and DHL Supply Chain reached an agreement enabling employees in COVID-19 affected sectors to be redeployed under their same wages and conditions of employment (rather than being subject to different conditions under another firm’s enterprise agreement).

Cooperation is a precarious balancing act, with Jobkeeper a major test

This level of collaboration is a far cry from the normal battle between deeply-entrenched ideological combatants in Australian workplace relations.

It wouldn’t take much to upset the balance though. Either side pushing too hard might do just that.

Last week, the Council of Small Business argued for a pause on unfair dismissal claims during the crisis. The Australian Mines and Metals Association went much further, pressing for a suspension of awards and enterprise agreements for 3 to 6 months.

Minister Porter was right to reject the latter demand, stating that: ‘This is not the time for ambit claims for systemic or ideological changes to the IR system from either side of the IR fence’. In other words, don’t use the crisis as a stalking horse for your frustrated deregulatory reform agenda.

However bedding down the Jobkeeper wage subsidy scheme presents new challenges to consensus. This is a critical intervention to support Australian businesses and workers, and keep as many people as possible in jobs.

The ACTU reluctantly agreed to provisions in the Jobkeeper legislation, passed by Federal Parliament yesterday, that allow employer directions to employees that would otherwise breach award or agreement protections – where these are necessary to facilitate a worker’s access to the $1500 per fortnight Jobkeeper payment.

So, for example, an employee could be asked to take annual leave, or accept a reduction in normal working hours that would mean only working the number of hours equivalent to the $1500 payment. Any direction must be reasonable and part of the business’s necessary response to the disruption caused by the crisis. There are limited safeguards, such as the ability to take a dispute to the Fair Work Commission.

These are massive things for the union movement to have given up, even if only for the 6-month period of the new law’s operation. In addition, unions have to wear the Government’s steadfast refusal to include around 2 million ‘short-term casuals’ and migrant workers in the Jobkeeper scheme. ‘We’re all in this together’ clearly has its limits.

The legislation gives the federal Treasurer extensive power to make rules needed to fully implement Jobkeeper. This has double-edged potential: it provides an opening for ongoing union and community lobbying to ensure a ‘wage subsidy for all’, but it also raises the prospect of further erosions of employee’s rights at the stroke of the Treasurer’s pen.

Would that go against the spirit of all the cooperation to date? Undoubtedly, but today the Public Service Minister has determined that federal public sector wage rises are on hold for the next 6 months. Who knew of a provision in the Public Service Act that enables the Minister to unilaterally override enterprise agreements if ‘of the opinion that it is desirable to do so because of exceptional circumstances’!

So what happens after the snap-back?

The Treasurer has made it clear that the Government does not want the massive public expenditure on Jobkeeper and other economic stimulus measures to be ‘in place for a day longer than it has to be’.

What this means is that when the Prime Minister’s claimed snap-back to normality after COVID-19 occurs, the wage subsidies and other forms of support for the most vulnerable in the community (whose ranks have swelled) will end abruptly.

That is in itself a major concern. But so also is the possibility that the compromises unions and workers have made ‘so we all get through this’ are not considered temporary measures, but become semi-permanent or locked in features of our employment landscape.

Cooperation has been necessary to address the worst aspects of COVID-19’s impact. Building and exercising collective worker power will be the only way to ensure that the crisis does not become the vehicle for the erosion of employment protections in the longer term.

This will require more of the agility that many unions are already showing through online organising, digital picket lines and virtual mass meetings.

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