Major employer organisation leads push to slash pay and work conditions

Contributed by Joe Montero

Employer’s organisations have been busy using the Coronavirus crisis, as a screen to push forward an industrial relations agenda, which promises to propel us back to the John Howard era and even worse.

It is being sold as a way to fix the economic damage that has been caused why the lock down and social distancing, and there is no doubt at all, that we are going to hear this tune being played loudly, over the coming months and beyond.

There are two legs to the strategy. Drastically remove the capacity of workers to organise into effective unions and sharply re-carve national income in the direction of employers, and passing both through the old claim that they will encourage investment and create jobs. Everyone will be left better off is the claim.

The trickle down argument is being resurrected. Nothing proves its fallacy more thoroughly, than the track record over recent times. Both the capacity of workers to organise into effective unions and a re-sharing of national income upwards have been applied over a considerable time. Jobs have gone and and left many worse off. And many employers have been adversely affected through falling sales, when customers no longer have the money to spend.

Figures on all of this have been published again and again, and the reaction of the employer organisations is to push the same direction even further. The graph from the ABS of the income share trend below tells it all.

[note original graph was blocked. The replacement measures per unit labour cost relative to capital cost, which provides an even more accurate picture of respective shares in national income].

Lobbying of politicians during the pandemic has been constant. Scott Morrison has promised and delivered public money to business. He has announced that the industrial relations system will be changed as soon as possible, and he is backing significant changes to Fair Work Australia.

Two important test cases emerged during this week.

Academic staff at universities are out today, on a National Tertiary Education Union (NTEU) led Day of Action related to pay cuts and loss of job security, at underfunded institutions and the massive scale of casualisation of work already in place. The other is the Fair Work Australia decision n to cut wages for those working at McDonald’s.

The McDonald’s case is particularly important, because it might well prove to be the harbinger of what is coming.

It begun when management promised job security in exchange for a pay cut. McDonald’s workers didn’t go for it, and the matter went before Justice Iain Ross at Fair Work Australia. He ruled in favour of McDonald’s.

Photo from the Daily Telegraph: Justice Iain Ross

Key to this has was the involvement on the Australian Industry Group (AIG).

Justice Ross justified his decision on the grounds that it will keep “as many employees as possible in employment.”

Pay cuts will be introduced on 3 July for some 107,000 McDonald’s employees, their minimum hours of work will be cut to 8 hour per week, and the rest made up with overtime shifts without overtime penalty rates, and which may or may not be offered.

On top of this, the employer will be able to tell employees to take annual leave and unused sick leave, which can only be refused in special and undefined circumstances. The reality is that few are going to be in a position to argue the point, when it might mean the loss of shifts. So much for providing better job security.

Under Justice Ross’s decision, MacDonald can instruct its workers to take due holiday and unpaid sick leave, which can only be refused on ‘reasonable’ grounds, whatever this might be. When a large part of the worker’s income depends on being given overtime shifts, refusal could mean the loss of shifts.

There can be no doubt that this precedent will be attempts to export this precedent to other workplaces.

Innes Wilcox, Chief Executive of the same AIG, has made a public call for further big changes to the industrial relations system, which has received a thumbs up from Attorney General and Industrial Relations Minister Christian Porter. Wilcox has called for major to be put on unions.

Photo by Dominic Lorimer: Innes Wilcox the Chief executive of the AIG

This is matched by a press release 9 19 May 2020) form the AIG, which demands changes in three major areas”:

AIG Chief Executive Innes Wilcox wants major limitations to unions being involved in representing workers before the employers.

In a press release (19 May 2020) the AIG calls for changes in three major areas:

  1. Removal annual leave, personal and carer’s leave, redundancy payments, and public holiday provisions from awards, and bringing in greater flexibility in pay rates and more scope for the use of individual contracts, under the name of temporary Individual Flexibility Arrangements (IFA).
  2. Change the Fair Work Australia Act by removing the “better off test,” and replacing this with agreements arrived under individual contracts or enterprise agreements limiting union involvement. Added to this is a reduction of the extent to which an employer must explain changes they are bringing about.
  3. Removal of barriers to the employment of a casual workforce.

This spells what lies ahead. It has the markings of a major showdown. For the unions it means coming up with an effective strategy, involving both industrial and political elements, which build an active movement of workers and others to defend jobs, rights at work and the right to organise into unions.

John Howard’s WorkChoices was defeated by doing this. Now that it is being brought back again, the lessons learned during that time, must be put into effect today.

Opposition to these demands is widespread. It exists in the parliament, and much more importantly, outside it. They can be defeated.

1 Comment on "Major employer organisation leads push to slash pay and work conditions"

  1. For decades now, employers and employer groups have shouted for greater “flexibility” or a “more flexible and nimble workforce” and various similar weasel words. Curiously, whenever those groups get their way and they do seem to be a powerful lobby group when it comes to convincing the Fair Work Commission that “jobs are on the line”; what “flexibility” invariably means for workers is a loss of pay, hours, rights and – get this – flexibility. The AIG’s clarion call means it wants more “flexibility”, but it wants it for employers not for employees.

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