No award for Gillard on her overhaul of awards
The Australian system of industrial awards and related legislation (the documents that set minimum conditions of employment) are perhaps the most complex in the world. Only the most dedicated students of industrial relations could possibly cope with trawling through these insanely confusing documents day after day.
The former Howard Coalition government knew that this was a problem for business, in particular small business. The confusing red tape that stops enterprise and workers from getting on with the job simply had to be cut back.
The Coalition decided that we would overhaul the complex system of awards, to reduce complexities and make things simple – we called it “award rationalisation”. Unsurprisingly, given Kevin Rudd’s “me too” agenda in the 2007 election, a similar proposal came from Labor – except they called it “award modernisation.”
Two years later and we are now seeing the results of the way Julia Gillard and Labor has botched this process.
In simple terms the thousands of State and Federal awards that exist around the country are being compacted into a few hundred new ‘modern’ awards. The problem is that the conditions in the old awards vary dramatically between States – even within the same industry. For example, a receptionist in Adelaide is paid a different rate than one in Sydney; and they also have different conditions, such as overtime and penalty rates.
What Labor has done is to pick the ‘Rolls-Royce’ conditions from each State and make them the national standard. So if the highest rate for a receptionist was say, $18 per hour in Sydney, then this has been adopted as the rate all around the country. Or if a most favourable penalty rate for working on a Sunday was double time and a half in Tasmania, then this too will become the national standard.
The obvious problem with this approach is that some industry sectors, in some States, will have to comply with Labor’s new ‘Rolls-Royce’ national conditions – resulting in big increases in costs.
A retail shop in NSW for example, with only 4 workers, will pay $22,000 extra per year for wages. It will cost a newsagent in Queensland 31% more to employ a casual worker.
It is small business that will feel the brunt and to cope, jobs will be lost. In retail pharmacy, for example, over 4000 full time jobs will be lost because your corner pharmacy won’t be able to stay open after hours or on weekends – the ‘Rolls-Royce’ awards make it simply too expensive and unviable.
The Opposition has repeatedly asked Julia Gillard to help limit the damage caused by these so called modern awards. Of course the Minister refers straight to the Labor spin manual and attempts to shift the blame, dodge the question, or say something involving the word ‘revolution’ - leaving industry, small business and (most importantly) their workers frustrated and ensuring the spectre of business closure becomes more real by the day.
What’s more, most of the modern awards made so far contain exactly the same complex and confusing language and terms as they previously did – so there will be still be jobs for lawyers and the “IR club”- even if tens of thousands of everyday Australians will be out of work.
A great example of this sort of complexity follows from New South Wales that deals with long service leave:
A person who is engaged in plying for hire or in the delivery of goods or in the transportation of passengers with any vehicle or vessel the use of which is obtained by that person under a contract of bailment (other than a hire purchase agreement) in consideration of the payment of a fixed sum or a share in the earnings or otherwise shall, where the work in which such person is so engaged is work for which, by an award or industrial agreement, a price or rate has been fixed for persons performing such work, be deemed, for the purposes of this Act, to be a worker employed by the person from whom the use of the vehicle or vessel is so obtained, and such last mentioned person shall, for the purposes of this Act, be deemed to be the employer of such worker unless such persons or either of them establishes to the satisfaction of the tribunal in which proceedings under this Act are instituted that the contract of bailment was a bona fide contract and was not entered into for the purpose of avoiding the operation of this Act or of an award or industrial agreement.
Still awake? Confused? Try reading it aloud without taking a breath.
This is the sort of complexity we need to address, but it can be done without closing businesses, raising consumer prices and throwing Australians out of work.
It’s time that this process is suspended so that everyone, workers and business alike, can take a less rushed and more considered approach. Everyone, including the Coalition, wants to reform our award system – so why can’t we slow down and take a breath, do it properly and get it right.
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