From Paul, Bob (and Bill) to Scott, Christian (and Sally) ... Morrison's IR reform consultation is no new 'Accord'

Anthony Forsyth, RMIT University and Labour Law Down Under Blog – an edited version of this post was published in The Conversation on 28 May 2020: Government invites unions to dance but employer groups call the tune

Prime Minister Scott Morrison’s National Press Club speech on Tuesday outlined a process for industrial relations reform, squarely aimed at rescuing jobs in the post-pandemic recovery phase.

Comparisons have since been made with the 1980s Accord between the Hawke-Keating Labor Governments and the trade union movement.

However, the Coalition is simply recasting the IR reform agenda that business groups have been pushing for the last decade, and inviting unions (along with other stakeholders) into the room.

This is a long way from the original Accord, a series of compacts between Labor and the Australian Council of Trade Unions. It brought the unions inside the government’s economic reform program with the promise of improvements in the ‘social wage’ in exchange for restraint in their pay claims. (see: https://theconversation.com/australian-politics-explainer-the-prices-and-incomes-accord-75622)

As a result, landmark social improvements including Medicare and superannuation were achieved for all Australians. As the Accord wore on, though, unions paid a heavy price as ‘efficiency’ became an element in wage fixation. The move to enterprise bargaining from the early 1990s was more about business productivity than wage gains for workers.

Since the Accord ended in the mid-90s, we have had an endless national debate about IR reform. The Howard era saw a shift to an overtly anti-union posture from both the state and employers, culminating in the 2006 Work Choices legislation.

Work Choices shifted the balance too far in favour of employers. The Rudd/Gillard Governments corrected this through the Fair Work Act. It abolished individual workplace agreements and reinstituted a union-centred collective bargaining system.

The business lobby has fought back on two fronts: continuing to campaign for deregulation, and developing strategies (including through litigation) to enable employers to side-step the Fair Work Act’s provisions supporting collective bargaining. The success of this approach for many employers largely explains the ACTU’s ‘Change the Rules’ campaign leading up to the 2019 election. (see: https://theconversation.com/where-to-now-for-unions-and-change-the-rules-117583)

IR reform has therefore remained a highly contested area of public policy. Prior to the COVID-19 crisis, it was almost like a war of attrition. The Coalition and business were on the offensive, best illustrated by the Ensuring Integrity Bill’s attempt to curtail union power. (see: https://theconversation.com/louts-thugs-bullies-the-myth-thats-driving-morrisons-anti-union-push-123688) The union movement was bunkered down, fending off these attacks and working out ‘where to next?’ having banked on a Labor election win.

Now, the PM wants everyone to put down their weapons. That has already occurred in the last two months, through significant cooperation between the Government, business and the ACTU over emergency measures to deal with the pandemic.

In the shutdown period, unions agreed to the removal of award restrictions, enabling changes to business operations and work-from-home arrangements. They lobbied hard for, and extracted from the Coalition, the JobKeeper wage subsidy scheme.

But how much more will union leaders be prepared to concede, when it comes to considering permanent changes to workplace regulation through the PM’s IR reform process?

The scope for consensus is limited, especially given that four of the five items on the Government’s wish-list are in sync with the reform agenda of business organisations like Australian Industry Group. (see: https://www.smh.com.au/politics/federal/not-the-time-for-tired-arguments-employer-group-unveils-industrial-agenda-20200519-p54uf2.html)

First, award simplification: this reflects the arguments of business in response to the wage theft scandals in recent years that ‘awards are too complex’. Yet we have gone from several thousand federal and state awards to 122 awards (one for each industry). (see: https://theconversation.com/no-a-complex-system-is-not-to-blame-for-corporate-wage-theft-126279) It is hard to see unions agreeing to (for example) the removal of leave entitlements from awards, when they are currently arguing in a case before the Fair Work Commission for pandemic leave to be included in awards.

Secondly, enterprise bargaining: business complains that the FWC’s strict approach to the ‘better off overall test’ and other technical requirements make reaching enterprise agreements too difficult to bother. The unions contend that employer tactics, like having a sub-standard agreement voted up by a handful of carefully selected employees, have perverted the enterprise bargaining process. There is very little room for common ground here.

Thirdly, casuals and fixed-term employees: this will be the most hotly fought area. The Government is likely to address business concerns about last week’s Full Federal Court decision in the Rossato case, by coming up with a new statutory definition of ‘casual’. The intent here will be to prevent employees from claiming both a casual loading and leave entitlements. For unions, the Rossato decision shuts down the ability of employers to keep workers in long-term casual engagement. A possible compromise might involve ensuring that casuals have a legal right to convert to permanent employment after 12-18 months.

Fourthly, compliance and enforcement: this is the one area where employee gains could be achieved, if the Government picks up on its previous intention to introduce criminal sanctions for systemic underpayments. And although it has dropped the Ensuring Integrity Bill for now, it’s certain that the Coalition will continue to pursue hard-edged enforcement of workplace laws in the construction industry.

Finally, greenfields agreements for new projects: a long-standing bug-bear of resources and construction employers is that they are currently compelled to negotiate with a union for a new project agreement. The ACTU is unlikely to give up the important principle of being at the table in this way. There can be no return to the concept of ‘employer greenfields agreements’ under Work Choices, which were unilaterally-determined employer deals.

There’s nothing in the Government’s list about issues of major concern to workers and unions prior to the pandemic: wage stagnation, the need for sectoral and supply chain bargaining, and worker exploitation in the gig economy. These are still alive, if not deserving of greater attention as we all emerge to whatever ‘normal’ looks like.

The Government has set a September deadline for this consultation process. It may deliver some changes to workplace regulation in the national interest. But it is a more narrowly-focused agenda than the 1980s Accord, skewed towards the reform ambitions of the business community and without offering any equivalent of the social wage benefits of the original Accord.