National Union of Workers

Articles from Workplace Express, Thursday August 18, 2005

Thursday 18th August 2005 12:50 pm EST

The Senate inquiry into workplace agreements looks set to inflict a new round of damage on the Howard Government over its' second wave IR agenda, with academic Professor Andrew Stewart highly critical of the OEA's approval processes and young employees testifying of their Award entitlements being undercut by AWAs.

In submissions to the inquiry, Stewart, from Flinders University, says evidence of deficiencies in the OEA’s AWA approval processes reinforces a widespread view in IR circles that it is “not hard” to get the deals approved, while a Krispy Kreme employee details how an AWA cut her pay by 9 per cent to less than $11 an hour, and another employee of the US chain claims she was effectively compelled to sign an AWA that left her at least $50-a-week worse off.

The references committee hearing the inquiry is one of the few not dominated by the Government .
In his August 8 submission, Stewart says what is known about the OEA’s AWA-processing performance is “not reassuring”.

He cites this month’s example of the SA IR Court finding that a Baker’s Delight employee was underpaid by $1400 in less than 10 months under a substandard AWA that was allegedly made in the same terms as 50 others at the same workplace.

The IR Court judge, Peter McCusker, said it would be “troubling” if so many AWAs had been approved by the OEA in such terms.

“If the employer was correct in asserting that the OEA had routinely been approving AWAs identical to the one set out in this judgment, ‘troubling’ would indeed be an understatement, given the evident disparity between the rate in the agreement and the applicable Award rates for casual work,” Stewart said.

He said the Baker’s Delight case and academic studies that had uncovered approved AWAs that should have failed the no disadvantage test “can only serve to reinforce the view amongst practitioners that it is not hard – or not as hard as it ought to be in some instances – to get AWAs approved”.

“That should be treated as a matter of significant concern, given the government’s desire to extend the OEA’s remit to include the approval of certified agreements as well”.

Stewart said the OEA’s “evangelical approach to promotion of AWAs” and its apparent treatment of “the number of AWAs approved as some sort of key performance indicator”, made it hard to believe AWAs would always be rigorously and objectively assessed.

This was reinforced by the “very few” AWAs rejected by the OEA, and the “disturbing practice” of fast-tracking approval of AWAs submitted by industry partners.

Stewart also waded into the debate over equality of bargaining power, saying that in the real world, only “the most blinkered ideologue” would deny there was an inequality of bargaining power between individual workers and their employers.

He said the Government’s real agenda with its second wave changes was to boost business profitability, rather than productivity. But there would be a social cost to going down this path, which focussed on cutting labour costs, rather than improving productivity or product quality, he said.

If the Government believed this was the price to be paid for better economic performance, he said, “then so be it – but they should have the courage to come clean and say so, not hide behind spurious rhetoric as to individual ‘freedom’ and ‘choice’.”

AWA at Crispy Kreme cut pay by 9%, says worker

In another submission to the committee, 18-year-old Jasmin Smith said she was bullied into accepting a pay cut of more than 9 per cent under an AWA when she worked as a casual shop assistant with Krispy Kreme Australia Pty Ltd's store at Penrith, west of Sydney, in 2003.

Smith said the AWA - known as the Krispy Kreme Retail Workplace Agreement 2003 All hours Team Member - undercut her previous conditions under the Shop Employees’ (State) Award (NSW) by:

• cutting her hourly pay rate from $11.63 to $10.85;
• removing overtime between midnight and 6am;
• axing Saturday loadings;
• expunging 50 per cent Sunday penalties; and
• deleting uniform allowance.

"I did not receive any substantial benefits in return for this loss of pay. As a casual employee I was not entitled to sick leave, annual leave, redundancy, notice of termination, additional hours (overtime), bereavement leave or jury service," Smith said.

Smith said her manager "made it clear to me that if I did not sign the Agreement there was no guarantee of hours in the future. As a casual employee with only a few months service I felt I had no choice. I felt pressured and bullied into signing the Agreement. . . (and) many of my work colleagues felt the same way but almost all agreed to sign the document due to the risk of losing work."

She claimed she finally resigned after being sexually harassed by a male manager about 30 years her senior. Smith said she was forced to continue working alongside the manager despite a written complaint of sexual harassment sent to the company's head office and a request to another manager to be rostered separately.

Smith continued that she had no confidence in a non-binding mediation provision contained in the AWA for settling the harassment dispute, saying the AWA should have provided for referral to an independent third party, such as the AIRC or the NSW IRC, which she previously had access to under the Award. "Instead, I was left to work side by side with the same older Manager who had sexually harassed me without any investigation, follow up or consequences."

Krispy Kreme worker felt “compelled” to sign AWA

Another Krispy Kreme employee, Thea Birch Fitch, who eventually rose to store manager after signing an AWA, says in her submission that she was “compelled” to sign the individual deal at the Penrith outlet, under threat of having no guaranteed working hours or opportunities to be promoted to manager.

The employee said most employees at Penrith were aged 15 to 18 and didn’t fully understand their employment rights or “what was at stake”. Most signed, Birch Fitch said, but she remained on the Award.
She told of how when the deadline for signing the deal arrived, she went to the store manager’s office.

“I sat in the manager’s office in tears whilst I was told that I had to sign the agreement or I wouldn’t get any hours and I wouldn’t be promoted.
“I felt that I was left with no choice and signed the agreement.”

Birch Fitch, who was 22 at the time, said the AWA she eventually signed meant she was at best $58.62-a-week worse off, and at worst $319.03-a-week.

The highly flexible AWA allowed her to work 10 consecutive days without the company incurring overtime payments, work more than 12 hours on a shift once a month without overtime and work split shifts without earning overtime. It paid a flat hourly rate, starting at $15 for trainees through to $16.50 an hour for supervisors.

She said that once she won promotion to manager at the company’s new Liverpool store, “I was given the promotion, wore the manager’s uniform and performed most of the manager’s duties, but was still only paid a level 2 rate of $15.50 an hour”.

The committee is due to report to the Senate on October 31. Hearings, at least in Melbourne and Sydney, are likely to start late next month.

Thursday 18th August 2005 4:19 pm EST

The Federal Government's second-wave IR proposals will not, as the Prime Minister promised, end "the era of the select few making decisions for the many". Rather, it will result in a highly complex system of partisan regulation hard to match in the industrialised world, according to an article in the latest Australian Bulletin of Labour.

In "Coming soon to a workplace near you - the new industrial relations revolution", Griffith University's Professor David Peetz argued that the Government's IR platform would transfer the powers of independent arbiters to government agencies - agencies that "either currently act under direction from the Minister, or (in the case of the "Fair Pay Commission") could be easily made to act under instruction from the Minister or the Cabinet - the 'select few' - with a few select words of legislation".

Peetz continued that there were already numerous complaints that the OEA and the various bodies involved in regulating the building industry (the Cole Royal Commission, the Building Industry TaskForce) were highly partisan - "complaints that are difficult to refute and in some cases come from both sides of politics".

"Coercive powers, beyond those available to police, have already been given to the Minister's Building Industry Task Force to compel union members in that industry to answer questions and provide self-incriminating documents, with penalties up to six months jail for non-compliance. This body will shortly be transformed into a permanent Building and Construction Commission with even stronger powers.

The enabling legislation contains heavy retrospective penalties, against individuals and unions engaged in broadly-defined "illegal" industries action - penalties that can be instigated by the new agency even if employers demur. . It is a form of state micro-management of industry," he said.

"The new system that will follow from 2006 will not be a deregulated system, such as New Zealand's under the ECA (a mere wisp of a pamphlet by comparison with the size of the amended WR Act). It will be a highly regulated system but one in which partisan regulation, through the corporations power, has replaced independent regulation through the conciliation and arbitration power, and in which a partisan state takes a highly activist role," he said.

"Across the industrialised world, it would be hard to find a combination of complexity and active partisanship to match that of Australia."

AWAs will grow

On AWAs, Peetz said the plan to replace the no disadvantage test with a wage rate and four minimum conditions would create widespread potential, which was likely to be realised, for employers to reduce employees take-home pay. It would also lead to the surge of registered individual contracts the Federal Government had not been able to achieve so far.

Peetz argued that the growth of formalised individual contracts in Australia in recent years had actually been slow. Registered individual contracts grew from 2% in 2002 (about 157,000 workers) to 2.4% (195,000 workers) in 2004. While the number of people on AWAs doubled from 1.2% in 2002 to 2.4% in 2004, more than half resulted from the demise of individual agreements - mainly in WA.

In the meantime, the number of workers on collective increased from three million in 2002, to 3.3 million in 2004 - ie by 300,000.

"Back in 1998 the Employment Advocate predicted that AWAs would eventually cover six to seven percent of the workforce. . . Seven years later, with this expectation barely a third met, there must have been considerable frustration in government and corporate circles."

That, however, was about to change. Peetz maintained that the new low floor for agreement making would create "widespread potential for reductions in employee weekly pay, arising from the scope for cuts in penalty rates, overtime rates, leave loading, shift allowances and all other items of remuneration not covered by the 'fair' standard. If history (and the present) is any guide, then this potential will, in significant ways, be realised," he said.

There would also be a surge in registered individual agreement-making, at the expense of AWAs.

"Some currently unregistered individual agreements may be registered because of the lower transaction costs, but the main mechanism for AWA growth will probably be a drop in award-only coverage, as the new requirements and processes will make it so much easier for employers to undercut award conditions on payment for working time. Indeed, for employers who wish to make it so, the award will become irrelevant."

Award rates above the minimum unlikely to rise

On minimum wage-fixing, Peetz said it was likely that the Government's decision to give the function to the new Fair Pay Commission reflected an "interest" that went beyond the size of minimum wage increases to the structure of award wages.
"No promises have been made that award wages about the minimum wage will increase in nominal terms - only that they would not fall beyond the level set in this year's safety net case.

 "So, a more plausible scenario is that, while the minimum wage may be adjusted at a rate consistent with government submissions to previous AIRC cases (around 2 per cent per annum), award rates above the minimum wage may rise by little or nothing, until such times as, one by one, they are absorbed by the minimum wage."