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Tuesday, 7 July 2009

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Today’s decision by the soon-to-be-scrapped ‘Fair Pay Commission’ is another kick in the guts for working Australians from the Liberals’ WorkChoices, say unions.

More than 1.3 million Australians that rely on minimum award wages, including many low paid young workers, women and migrant workers will suffer.

ACTU Secretary Jeff Lawrence said the Fair Pay Commission had shown no respect for the contribution low paid workers are making to the economy during the downturn and had relied on discredited and flawed research.

“The Fair Pay Commission has saved its worst for last,” Mr Lawrence said.

“The decision means ordinary working Australians and their families are bearing the brunt of an economic downturn they did not cause.

“Many workers have already lost their jobs, had their hours cut and now more than a million families are facing a pay freeze despite rising living costs.

“Only a week after new IR laws came into operation, WorkChoices is back from the dead.

“Working families are again the victims of the unfair wage-setting system established by the previous Liberal Government.

“The real wages of low paid workers have gone backwards since the Commission was established, and today’s decision is another attack on their living standards.

“The costs of rent, food, medicines, education and utilities have all risen in the past year and families need a pay rise to keep up.”

Mr Lawrence said the decision was unwise in the current economic circumstances and rejected the argument that a pay freeze for the low paid is good for the economy.

“A pay freeze will sap consumer demand and undermine confidence. Any green shoots of economic recovery will be nipped in the bud by this unfair and unwise decision.

“It will be felt not only in the homes of Australia’s 1.3 million minimum wage workers, but in the shops and businesses in every main street of every Australian town and suburb.”

Mr Lawrence said the decision runs counter to the economic stimulus strategy, ignores the Federal Government’s submission in favour of maintaining real wages, and even ignores the views of some business groups who supported a modest wage rise.

“There is no credible evidence that modest rises in minimum wages have a negative effect on jobs. This is a furphy put about by the same free market fundamentalists that brought us deregulation and who contributed to the GFC.

“We look to Fair Work Australia’s new wage-setting body to provide a fairer and more rigorous approach.”

Kirsty Needham and Stephanie Peatling
July 2, 2009

UNEASY employer groups lined up beside the triumphant ACTU president, Sharan Burrow, and the Deputy Prime Minister, Julia Gillard, to face the full bench of the nation’s new workplace tribunal yesterday.

Fair Work Australia replaces the Australian Industrial Relations Commission in an expanded role in which it will set minimum wages and adjudicate collective agreements – heralding a significantly altered industrial relations landscape.

The acting chief executive of the Australian Chamber of Commerce and Industry, Greg Evans, told Fair Work Australia that in the difficult economic climate many businesses were struggling to maintain viability and employment levels.

The chamber is concerned about the effect of unfair dismissal laws on small business and noted Fair Work Australia had already appointed 25 roaming conciliators that it said highlighted an expected “upsurge in claims”. All employers were also now facing widened anti-discrimination provisions, it said.

Outside the tribunal Mr Evans warned unions against going “too hard too early” under the new workplace laws and said this would threaten not only the existence of their members’ jobs “but potentially Australia’s economic recovery”.

“Unfortunately, employers are now required to sit down at the bargaining table despite unions making irresponsible wage claims,” he said.

However Ms Gillard said employers should be celebrating the introduction of a system “that matches the will of the Australian community, that ends the era of division”.

“Employers can look to this system as one that is simpler, has less red tape and enables them to bargain at the enterprise level in good faith,” she said. “And gives them a safety net that is simple to understand rather than thousands of complex pages which employers had to struggle with in the past.”

She said it was to be expected “that unions will make claims on behalf of their members, you would expect that employers will respond to those claims … what matters is what happens at the enterprise level where representatives of employers and employees will sit down and work out a deal that is best for their enterprise”.

Unions have moved quickly to test the new system. The hospitality union, the LHMEU, has lodged an application to bargain collectively for agreements on behalf of low-paid staff at 15 hotels. The Australian Workers Union also signalled the start of a campaign to increase membership in 100 workplaces.

The Treasurer, Wayne Swan, dismissed a call by the Australian Manufacturing Workers Union for a wage increase of 4 per cent as an “ambit claim”.

The Prime Minister, Kevin Rudd, urged wage restraint on the first day of the new industrial relations system, saying employers and workers had a responsibility to remember the fragile state of the economy.

Telstra, the ACTU and three communications unions yesterday jointly released a set of principles for bargaining in good faith under the Fair Work laws.

Ben Schneiders
July 2, 2009

LOWLY paid workers such as security guards and cleaners will be the big winners under Labor’s new Fair Work laws, unions say.

But employers warned that the new system, which took effect yesterday, would result in a sharp rise in unfair dismissal cases and greater costs for business.

Liquor, Hospitality and Miscellaneous Union national secretary Louise Tarrant said many low-paid workers would now be able to collectively bargain with employers rather than rely on changes to award rates to boost their pay.

The introduction of laws to help low-income workers bargain and laws that required parties to negotiate in “good faith” were a marked shift from WorkChoices, Ms Tarrant said.

Other significant changes include enhanced unfair dismissal rights and a more significant role for the industrial umpire to settle disputes. Standards covering penalty rates and hours of work will start from January.

The LHMU was the first union to use the new industrial watchdog, Fair Work Australia, yesterday when it applied to represent 3000 hotel workers in negotiations. Australia Post could be the first employer to face a strike, with the Communications Workers Union set to apply for industrial action.

Australian Workers Union national secretary Paul Howes said his organisation would go on a recruitment drive this month as it took advantage of the improved environment for unions. But he said the top priority for members was job security.

Australian Chamber of Commerce and Industry workplace head David Gregory warned of a rise in unfair dismissal claims as thousands of businesses with 100 or fewer staff lose the exemption they had under WorkChoices.

But Victorian Trades Hall Council secretary Brian Boyd said he was yet to be convinced the new laws would reverse the extremes of WorkChoices.

Fair Work Australia will replace several bodies including the Australian Industrial Relations Commission and the Workplace Ombudsman.

Speaking at yesterday’s launch of Fair Work Australia in Sydney, Deputy Prime Minister Julia Gillard said the laws would provide a “decent safety net”, but enterprise bargaining would secure conditions in workplaces – not decisions by the independent umpire.

Meanwhile, Treasurer Wayne Swan and Prime Minister Kevin Rudd yesterday called for restraint amid claims that the laws could produce increased wage demands in the manufacturing sector, where 1300 agreements have expired. But the Australian Industry Group’s Peter Nolan said that in Victoria, wage settlements so far had typically been around 2.5 per cent to 3 per cent. “We don’t expect to see any massive outbreak of industrial activity,” he said.


David Uren, Economics correspondent | July 02, 2009
The Australian

THE claim by ACTU president Sharan Burrow that higher real wages will boost demand repeats an argument pressed by labour economists throughout the late 1970s until it was destroyed by the wages explosion of 1981 which ultimately cost 300,000 workers their jobs.

Ms Burrow said yesterday that wage increases — possibly in the region of 4 per cent — would set the economy up for growth.

“If you don’t maintain demand, then our rocky economy gets even rockier,” she said.

A deal done between former prime minister Malcolm Fraser and the then ACTU president Cliff Dolan in 1981 to settle a transport workers union strike, which excluded employer representatives, set off a burst of wage inflation, with increases averaging 14 per cent over the next year.

Mr Fraser was under pressure to settle the strike because he was eager to join his wife Tammie and the governor-general at the wedding of Prince Charles and Princess Diana.

With the economy heading into a downturn, unemployment rose from 5.9 per cent to 10.3 per cent over the following 18 months, a fact which former treasurer and prime minister Paul Keating always blamed on the union wage push.

Credit Suisse Asset Management economist Barry Hughes said that as well as slashing demand for labour, the wage explosion contributed to the decline of Australian manufacturing. “The employer body, the Metals Trades Industries Association, became known as the Metals Trades Imports Association as whacking up wages priced you out of markets against import competition,” he said.

The latest survey by the association’s successor, the Australian Industries Group, showed yesterday that nearly all sectors of manufacturing are contracting, with the overall performance worse in Australia than that in the US, Europe, Britain or Japan.

Dr Hughes said there was an often-heated debate through the late 1970s between economists based at the Melbourne Institute who were arguing that wage rises boosted demand while others, including Treasury, said that any wage rises in excess of productivity resulted in a “real wage overhang” which would result in unemployment.

“That argument got overwhelmed by the wage explosion of the early eighties,” he said.

Dr Hughes noted that Ms Burrows’ nominated figure of 4per cent was a long way ahead of any realistic inflation forecast in the recession.

Monash University’s Professor Peter Dixon said that while real wages usually rose as the advance of technology lifted productivity, there were times when they must fall.

“When our terms of trade decline, with our income from overseas falls, you might have to see real wages decline to maintain employment. Also, when the required rates of return on capital go up, because people are more scared of investing, you would need real wages to go down to keep full employment.”

Professor Dixon said that if you wanted people to spend more money, the better path would be to lower taxes, rather than raising wages.

Australian National University professor Bob Gregory said that although the academic evidence on whether a boost to income from higher wages would be offset by falling employment was still ambiguous, it would be “game” to advocate increases in real wages in the middle of a recession.

Professor Gregory said the ACTU would be on firmer ground arguing that the poor should not be made to suffer real wage cuts on equity grounds, rather than pushing the line that wage rises would lift demand.

It was a mistake to equate handing out wage increases with government stimulus packages, Professor Mark Wooden of the Melbourne Institute said.

While government handouts would be paid by future taxpayers when debts were repaid, wage increases were funded either from lower employment or lower profits, which in turn meant lower investment. In a recession, only monopoly industries would be able to pass the cost of higher wages on to customers.,25197,25721017-5013404,00.html

Ewin Hannan | June 30, 2009

Article from: The Australian

FEDERAL Labor’s revamp of the award system faces fresh delays after the Australian Industrial Relations Commission took the unusual step of calling on Julia Gillard to set out the hours of work, penalty rates and overtime that should apply in the restaurant sector.

Employers and union officials last night interpreted the AIRC’s move as reflecting its disquiet at Ms Gillard recently bowing to industry pressure and directing the commission to create a separate award for restaurants and cafes.

Ms Gillard’s office made it clear last night that the Deputy Prime Minister had made “quite specific requests of the commission, (and) it is now a matter for the commission to progress”.

Business expressed concern that the move by AIRC president Geoff Giudice would further frustrate the award system revamp and leave employers without adequate time to understand the new award, due to be operational on January 1.
The Restaurant and Catering Association’s chief executive, John Hart, said he feared the AIRC was trying to restart a process that had already taken 18 months.

Last month the Workplace Relations Minister directed the AIRC to treat restaurants, cafes and catering businesses separately from hotels as part of its award overhaul.

Ms Gillard’s move came after a month-long campaign by restaurants and cafes for the federal government to rethink the overhaul, warning they could be forced to close if they were confronted by substantial hikes in minimum award wages, penalty rates, casual rates, shift loadings and allowances.

In her directive, Ms Gillard said the AIRC should create a modern award that “establishes a penalty rate and overtime regime that takes account of the operational requirements of the restaurant and catering industry, including the labour-intensive nature of the industry and the industry’s core trading times”.

In a statement released last Friday, the AIRC’s award modernisation full bench, led by Justice Giudice, called on Ms Gillard to provide further information.

“Given the circumstances which have led to our consideration of the proposed award, we would be assisted by any indications on behalf of the minister of the scope and terms of the proposed award, including terms relating to hours of work, penalty rates and overtime.”

The president has previously pointed out that Ms Gillard has varied her original award modernisation request four times.

A spokeswoman for Ms Gillard said the minister’s amendment made “quite specific requests of the commission”, including that the AIRC “establish a penalty rate and overtime regime that appropriately recognises the restaurant and catering industry’s core trading times and the labour intensive nature of work in the industry”.

“It is now a matter for the commission to progress, in consultation with the relevant parties,” the spokeswoman said.

“The award modernisation task is extremely complex and the commission has managed this task with its usual professionalism and expertise.”

Mr Hart said he was concerned at the commission’s move, saying Ms Gillard’s request did not require clarification. “The minister’s modification to the modernisation request I think was abundantly clear.”,25197,25710563-601,00.html

Ben Schneiders
June 30, 2009

UNIONS expect a new era in industrial relations and a more conciliatory relationship with employers from tomorrow as they seek to take advantage of new laws that finally consign WorkChoices to history.

ACTU secretary Jeff Lawrence said yesterday unions would seek to “strategically” take advantage of Labor’s Fair Work laws and the improved bargaining rights and protections provided to workers.

He said it was a good day for workers and unions would “exploit” the laws to the maximum.

Their introduction follows a long union-led campaign against WorkChoices that was regarded as an important factor in the election of the Rudd Government.

Mr Lawrence said unions would test important elements of the new laws such as the requirement that parties bargain in good faith.

Companies such as Cochlear, which he said had sought to bypass unions in talks, would be targeted.

Mr Lawrence said the ability of unions to grow would depend on how well they targeted particular industries and employers using the new laws. “New industrial legislation doesn’t mean unions automatically grow.”

Victorian Employers’ Chamber of Commerce and Industry workplace relations head Alex Marriott said smaller businesses were likely to face the biggest challenges from the new laws.

She said the reintroduction of unfair dismissal laws for businesses with fewer than 100 staff would add to pressures and costs for business.

A recent poll conducted for the VECCI found that 70 per cent of respondents agreed with the proposition that “small business employers need the ability to sack workers who are not pulling their weight”.

Construction, Forestry, Mining and Energy Union national secretary John Sutton said the new laws were a step forward in some areas but kept some of the restrictions on unions and bargaining from WorkChoices.

“The Fair Work Act and other pieces of industrial legislation fall short of the trade union movement’s legitimate expectations,” he said.

A government-funded program has offered $12.9 million to employer groups and unions to educate their members about the new laws. Most of the money is allocated to business groups, with about $2.5 million going to the ACTU.

01 July 2009 8:16am

Elements of the new workplace relations legislation – including new unfair dismissal, right of entry and bargaining laws – come into effect today.

In this article, HR Daily provides an update and links to recent articles that tell employers all they need to know about the Fair Work Act 2009.

Unfair dismissals
As of today employees with more than six months’ service with large employers (>15 full-time workers) or 12 months’ service with smaller organisations will be entitled to make unfair dismissal claims.

Employees will have 14 days to lodge claims in the event of a dismissal.

Deacons partner Stuart Kollmorgen says that redundancies will be illegal if redeployment options go unexplored.

Good faith bargaining
Business stakeholders are now obliged to bargain in good faith.

Throughout the bargaining process, all parties must attend and participate in meetings at “reasonable times”, respond to proposals in a “timely manner” and disclose relevant, non-confidential information.

Adelaide University Professor of Law, Andrew Stewart, says that employers must determine the kind of information unions are likely to ask for and what they can claim to be confidential.

Freehills partner Chris Gardner says that there are numerous grey areas in the new bargaining laws that must be tested before employers can be assured of clarity.

But CoSolve director Clive Thompson says that the good faith laws could herald a new era of productive bargaining if stakeholders let go of the traditional adversarial approach.

From January next year, collective agreements will have to pass the better off overall test, or the BOOT, before being approved by Fair Work Australia. Under the current rules, the Workplace Authority need only be satisfied that classes of employees won’t experience a reduction in their overall terms and conditions.

According to Kollmorgen, the BOOT could mean that employers are faced with the onerous task of proving that every employee is advantaged under a new agreement. He says that some employers are taking steps to have new agreements approved as soon as possible to avoid the uncertainty that is likely to surround the test from 1 January.

Right of entry
As of today, union officials will have the power to enter premises on suspicion of a workplace breach regardless of whether or not the employees are union members or covered by a union-binding agreement.

However, Freehills partner Anthony Longland notes that officials can only enter premises after clearly articulating the nature of the suspected breach and where employees are “potential” members.

Transfer of business
The definition of “transfer of business” expands significantly today. For the purposes of the Act, a transfer will occur when an employee is engaged by a new employer within three months of a termination where the new and old employers have at least “one connection” and the work the employee performs is “substantially the same”.

Deacons partner Sally Woodward says that this might give rise to the “difficult situation of a new employer potentially being bound by different enterprise agreements in relation to employees performing the same work.”

She says that HR must conduct a thorough due diligence process to identify potential conflicts (where workers on one agreement perceive workers on another to be at an advantage), and to determine the circumstances where they can apply to Fair Work Australia for permission to discontinue old agreements.

And the rest?
Other elements of the Fair Work Act, such as the National Employment Standards and modern awards, will come into effect on 1 January 2010.

More legislation news
For more Fair Work information and news, click here and follow the “legislation” link.

Alternatively, enter key words in the HR Daily search engine, or visit HR Daily’s associate publication, Workplace Express.

Also, see the Federal Government’s new online entry point for the IR system: Fair Work Online.

Ben Schneiders
June 22, 2009

A SENIOR union leader has promised a tough line on violence and intimidation, saying it will not be condoned, amid claims of death threats and violence at the recent West Gate industrial dispute.

The dispute was used earlier this month by Deputy Prime Minister Julia Gillard to justify Labor keeping laws that treat the building industry and building workers differently. They include tough coercive powers that can require building workers, under threat of jail, to answer questions.

Australian Manufacturing Workers Union national secretary Dave Oliver said if allegations were proved against any organiser at his union they would be dealt with.

“Very clearly we have a policy in place, we do not condone violence, intimidation and bullying and if anything is substantiated about any allegation about our organisers we will deal with it,” he told The Age.

A union organiser was alleged to have made death threats against a security guard and his family, although these claims have been denied. Civil and criminal and court court cases are under way as a result of the dispute and Mr Oliver said he would watch what came out of them.

“If anything comes out we will deal with it appropriately, we don’t condone that (violence) whatsoever,” he said.

Ms Gillard has been criticised for using the dispute despite none of the allegations being proved by a court. Labor’s stance has enraged many unionists.

Electrical Trades Union state secretary Dean Mighell said construction union organisers would be “laughed at” if they told members they should vote Labor at the next federal election.

18 June 2009 6:37am

With less than a fortnight to go before the national workplace relations changes begin to take effect, all recruiters must ensure they’re aware of their responsibilities and obligations. Here, Deacons partner Stuart Kollmorgen highlights the key issues.

Unfair dismissals
Under the Fair Work Act, parts of which take effect on 1 July, a larger number of employees – including on-hired workers – will be eligible to bring unfair dismissal claims against their employer.

Currently, only “large employers” (employing 100 workers or more) face these claims, but the threshold is being reduced to 15 employees. The minimum employment period before bringing a claim is six months for large employers (15+ workers) and 12 months for small ones.

When making employees redundant under the new laws, an area Kollmorgen says is “obviously critical at the moment”, there are a couple of extra tests that employers will need to satisfy in order for a dismissal to be fair.

The employer has to consider redeployment options within the company and associated entities, he says, which could include host companies.

An employer also has to comply with all consultation obligations under awards or collective agreements with employees affected by redundancies. “If they haven’t done those two things [the dismissal] could be unfair.”

Recruiters should also be aware that there will be a new decision maker – Fair Work Australia – determining these claims, Kollmorgen says.

“It’s going to be less formal, but we don’t really know yet what differences there will be in the way Fair Work Australia conducts mediation and final hearing phases.”

View the federal government’s fact sheet on unfair dismissals for small employers here.

Right of entry
There are some minor changes to unions’ right of entry to workplaces which will affect recruitment and labour hire companies, Kollmorgen says.

“It used to be the case that if you had a collective agreement applying to a workplace which had a union party to it, then that made it clear which union could enter to meet with potential new members and investigate breaches.

“That’s changed. Now if you’re a union whose eligibility rules cover an employee, you can enter the workplace to meet with employees whether or not you’re bound by a collective agreement there. So another union could come in and meet with your employees.”

Why it’s important: The changes give unions increased ability to organise within the on-hire industry, Kollmorgen says, with implications for bargaining (see below).

Check out the right of entry fact sheet here.

Good faith bargaining
The good faith bargaining elements of the new laws pose significant issues for the recruitment industry, Kollmorgen says.

“An employer can no longer say, ‘I’m not interested in bargaining’. If it’s approached by a bargaining representative for an employee – in reality a union – and the union is able to show there is majority support within that group of employees for a collective agreement, then the employer… has to bargain in good faith.

“What that seems to mean is that there is a presumption that an agreement will be reached and that the employer has to approach negotiations in good faith, provide information, and meet at reasonable times, etc.”

Why it’s important: A labour hire company might be quite large with employees “all over the place in different pockets”, Kollmorgen points out. The test for “majority support” could be met if most workers at a worksite, or across a couple of regions, or right across a whole workforce indicate they want a collective agreement.

“If there is majority support within a group, whatever it is, those employees could force the employer to the table to negotiate.”

Labour hire providers are most likely to be affected when their employees are working alongside directly employed workers who are covered by an agreement with attractive conditions, he says.

They can protect themselves against bargaining requests by “making sure that their employees are happy with the terms and conditions that they’re on and the sort of flexibility that labour hire employment gives them.

“If that’s the case, there doesn’t appear to me to be a reason why they’d want to change their terms and conditions just because a union comes along and says ‘join up and we’ll represent you’,” Kollmorgen says.

View the good faith bargaining fact sheet here.

Modern awards
Currently, the recruitment industry is providing workers to lots of industries with minimal award coverage, but under the new system, modern awards will apply as a common rule to all employees in a particular industry or occupation.

Therefore, Kollmorgen says, “I believe there’ll be very few non-managerial employees who will not be covered.”

The terms and conditions of modern awards are quite similar to the awards that commonly apply under state systems (or in Victoria under the federal system), “so in many cases there won’t be a great deal of surprise in terms and conditions, but the fact there is award coverage is the impact there”.

Modern awards come into force from 1 January, and some have already been developed (including those for clerical, retail, cleaning, graphic artists, IT, restaurants and construction).

What to do: Labour hire providers should check the relevant modern awards for the industry they provide staff to and ensure they understand the new terms and conditions that they’re going to have to meet, Kollmorgen says, and identify any potential problems.

If labour suppliers want more flexibility than is provided in the awards, they have the option of making an enterprise agreement, which will over-ride the award but must pass a “better off overall” test (the BOOT).

An agreement might, for instance, change an entitlement such as a penalty rate or an overtime rate, in exchange for a higher base rate of pay.

Read about the BOOT here.

Transfer of business
The transfer of business provisions in the new Act, which come into effect in July, make it more likely that labour hire employers that transition on-hire employees will be bound by the agreements of the temps’ previous employer, Kollmorgen says.

The test for whether a business has transferred will, under the FWA, be satisfied in a greater number of cases where employees move from one employer to another, he says.

It will apply to host employers in temp-to-perm cases as well as labour hire employers that transition on-hire workers after a supply contract changes hands.

If the employees becoming permanent or being transitioned are covered by a collective agreement, “that agreement will go across with them and bind the employer for an indefinite period of time – not just the 12 months under Work Choices but indefinitely”.

The test for whether an agreement goes across with the employees is firstly whether the work being conducted by the employees is “substantially the same”.

“It used to be the case that it needed to be the character of the business that was substantially the same, and on-hire was different to, say, construction or manufacturing, whereas now it’s the work. So if an employee is doing construction or manufacturing work for the on-hire employer and then the same work for the direct employer, that test would be satisfied.”

The second part of the test is whether there has been a transfer of some assets, “which could easily be satisfied in a typical transfer of business”, Kollmorgen says.

This could create problems for the on-hire industry because “you can have two groups of employees working alongside each other, doing the same work, but being paid differently”.

What to do about it: A labour hire employer’s solution to the problem is to do a new collective agreement covering “everyone”, Kollmorgen says.

“They could effectively be forced into that, so if you’re going to take on employees, and transfer them across to you, then you need to be aware that you may in the future need to do a collective agreement in order to regularise all the terms and conditions.”

Employers are “grappling” with that now, he says, “because a 12-month transition period [under the Work Choices regime] was manageable, but if you’ve got to have two payroll systems indefinitely, and maybe not just two, that is a major problem in an organisation”.

Read more about agreements here.(