Kim Beazley's commitment to eliminate Australian workplace agreements (AWAs) threatens the essence of workplace reform over the past two decades. And common law agreements will not take the place of AWAs, as Beazley suggests.
The advantages of individual employers and employees having power over wages and conditions depend on their having the right to strike a mutually beneficial bargain in which conditions are traded off for things to which the parties attach greater value.
Employees might trade off penalty rates and overtime for a regular salary; travel entitlements for a car allowance; daily breaks for a finishing time that allows them to pick up children from school, or rostered days off for more annual leave. Or they might accept less than award wages to get training and experience in a first job.
Beazley's position is that workers can "trade up but not trade off". This threatens the very idea of individual agreements. Why would employers offer more than the award base if workers cannot give up conditions to which they attach little or no importance but which make the business uncompetitive?
The Labor position is not just antagonistic to AWAs -- it would make awards and collective agreements superior to all individual agreements. His policy would require retention of the whole system of awards or legislation to establish his chosen base conditions. It would entrench the award system, and the power of unions and arbitrators in that system, at the expense of workers losing power over their working lives.
This would threaten many common law agreements because:
Awards override common law agreements, so employees are legally entitled to the highest combination of the benefits of any applicable award plus the benefits of their common law agreement, even if they purport to agree to a trade-off.
There would be two classes of workers. Many covered by common law agreements are award-free but, in most industries, common rule awards apply to clerical and administrative employees, IT professionals, transport workers, sales personnel and other classes.
Certainty. AWAs give both parties certainty about terms of employment, enable a "package deal" approach, provide a single source of rights and obligations and minimise the risk of either breaching the law unknowingly. Parties who rely on common law agreements are still bound by awards, even if they don't know the award exists.
Flexibility/ productivity. Because AWAs prevail over awards, the parties can replace restrictive award provisions with flexible work practices and personal incentives. AWAs can include performance measures and rewards particular to an employee. Awards cannot. Common law agreements can, and often do, include incentive provisions but they cannot effectively overcome restrictive award conditions that apply in addition to agreed terms.
No industrial action. Employees who sign AWAs are not permitted to take industrial action during the life of the AWA. This gives employers significant protection from industrial action and can protect employees from unwanted union intervention.
Reduced union involvement. Where all employees in a workplace have signed AWAs, union officials now have no right of entry unless an employee asks one to attend. Common law agreements do not have this effect.
In the past decade there has been growth in individual agreements, a decline in union membership, less coercion in the workplace and increased authority of workers and employers over workplace regulation. Although not due to workplace reform alone, these developments have coincided with increased employment, higher real wages, lower working hours, historic growth in productivity and a strongly growing economy.
While awards continue in force, we cannot rely on common law agreements to deliver another decade of these benefits. The transitional provisions in the federal legislation mean that awards continue to apply for up to the next five years -- the Beazley policy would make them permanent.
AWAs give workers and employers power over their own workplaces. Beazley's reactionary policy would deny many workers the opportunity to secure the income and work conditions that best serve the interests of their families by removing their right to trade away conditions that restrict their employer's business for terms workers see as more valuable for themselves.
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