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.

We need to move forward with awards. Illustration: Peter Wilkinson

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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15 comments

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    • Voxpop says:

      06:53am | 21/08/09

      Workchoices screwed over the working poor - so I take it those figures you quoted above represent the the difference between a Worchoices AWA and equitable pay.  Finally some fairness for people on the lower earnings bracket.

    • mikk says:

      08:04am | 21/08/09

      This is a particularly obscene example of the politics of envy. Envy of the poor! How people can begrudge a lowly secretary or checkout worker a few extra pennies while turning a blind eye to the excess in the remuneration of the executive classes is just sickening. Look to the real parasites and fraudsters and leave the people who actually do the work to be rewarded with a bit of fairness and equity for once.

    • Joel B1 says:

      08:31am | 21/08/09

      I’m betting we’ll see six (6) different and derisive spellings of “workchoices” in these comments. My spouse says seven (7), any takers for 8, 9 or even 10?

      Ah, Labor, it’s a breath of fresh air in my mundane life.

    • laurie says:

      08:56am | 21/08/09

      I know many small businesses that have operated for years retail, clothing, gift, cafe, orchardists who have never made enough to draw a salary now that the minimum conditions have been applied i can see the end of the small trader and farmer and fruitgrower. The awards are arrogant and non-caring for either party. It will come to pass.

    • Macca says:

      10:01am | 21/08/09

      Voxpop and Mikk,

      Its all well and good to get a higher hourly rate, but only if your business can afford it.

      I would like to commend many of the unions on their (uncharacteristic..) flexibility during the economic downturn that has allowed many employers to reduce labour hours and costs, without reducing their head counts.

      Why then, when we apply the same rules to small businesses, do you all throw your hands up in the air in outrage. Under Saint Gillard’s modern awards, your local corner store or pharmacy will no longer be able to run to their traditional flexible hours due to the financial costs.

      As a young worker, I don’t feel I should have to be paid more money to work after 7 or on Sundays. The problem with award modernisation is many employees won’t be paid more for working these times at all, because they won’t be working. And small business, despite their yearning for protection, will be the ones who suffer.

    • Andy says:

      10:30am | 21/08/09

      Macca maybe your jsut used to being ripped off, im a mid 20’s worker and wouldnt even consider getting out of bed on a sunday without a penalty bonus. People want things to be available 24/7 then you pay the price for having that available simple as that really. Work-NO-choices was a nasty piece of work for those affected by it.

    • Chris Martin says:

      11:18am | 21/08/09

      and maybe if you got out of bed a bit earlier on sunday’s and did something other than expect a living Andy, you may not have to rely on the government to ensure you will get your precious penalty rates to finance the fortuitous lifestyle you and the rest of you’re ungrateful lot have grown accustomed to.
      the same lot, who when businesses go under, cry that the government did nothing top help them, or should pump in more hard-wroking taxpayers dollars to prop-up an unviable business.
      Macca, you are a breath of fresh air.

    • Ben says:

      12:37pm | 21/08/09

      WorkChoices screwed people because with the abolition of the No Disadvantage Test AWAs were often significantly less favourable than the award. AWAs are hardly evil incarnate but better suited to industries which require inherent flexibility such as mining. They are also very useful for attracting and rewarding high performers when many awards do not allow for this.
      Modern awards are important because of the issues arising from the ubiquitous phrase ‘salary and conditions’. Because the Industrial Relations Commission is inherently an adversarial model it became much easier for unions, employers and governments to acheive improvements for workers if they the improvements were called conditions rather than a salary increase. The outcome is that many employees total package is comprised of a relatively low salary (cash rate) and generous conditions on things like overtime - hence the outrage when WorkChoices gave employers the ability to reduce overtime rates etc. A modern award which encompasses the combined total of salary and conditions would have prevented this from occurring.

    • Soxy says:

      05:38pm | 21/08/09

      Forty hours work, forty hours play, forty hours rest. Once upon a time, TIME was valued within a social context. Work, aka economics is the only thing that matters, was fitted into the complex social and family obligations of a rounded and meaningful life. Family, church, and leisure were also important.
      Shops closed at lunchtime Saturday, work finished at 5pm, all sorts of crazy standards were applied. In short, people had a LIFE not a JOB.  The award system reflects this historical valuation of time. If you wanted some one to forego their family time or leisure then an additional payment was needed. Shock horror.  Nowdays, the average Aussie community has been strangled by extreme work hours and 24 hour trading - who has time for family, community service, or leisure these days? Of course, behind this has been the mega-inflation of home prices that has driven everyone into multi-income families tied up in knots running hither and nigh to the ABC centre, and missing out on FAMILY, COMMUNITY, and LEISURE time. Contrary to the mantra of all good facists - Work will set you free - uncontrolled work hours have ripped the fabric of the Australian life. Awards, are not just about money, they protect and value TIME, which should be spent having a LIFE not just a JOB

    • Andy says:

      07:21pm | 21/08/09

      Actually Chris Martin i work every weekend champ but im payed a higher rate whilst others get to enjoy it at home. Take away that penalty rate and what incentive is there for me to give away my only two days off or do you expect me to just work every day with a whistle and a smile? I work for my lifestyle Chris and i work hard for it (and might i add its a rather modest one at that). I just oppose work choices for the nasty piece of work that it was, sure not everyone got stung because as Ben says AWA’s weren’t the problem for those in the higher end of the pay scale but the AWA took away the option to collectively bargain and by doing so took away the safety net of minimum conditions we all enjoy (sick leave, annual leave etc).

    • Voxpop says:

      08:30am | 22/08/09

      I’ve had experience on both sides. 
      I worked in hospitality and retail and I fully support penalty rates for working weekends, public holidays etc.  For approx 10 years I worked every Xmas lunch, every New Yrs Eve, mother’s day, Easter etc etc at great personal expense, losing contact with family and friends and missing out on things a lot of people take for granted.
      In a management position I had to hire people on AWA’s that took all of those conditions away from them - and I felt like shit for doing it, knowing that I had always been paid better for the same job.  So yes conditions went backwards and the low paid were being paid even less - meanwhile other sectors were thriving and pay conitions improved for others.  Don’t underestimate the gap this produced - I earnt more in those industries 15 yrs ago than what they get now.
      Then I had my own business (a small Cafe) and I found myself working 7 days/week as I could barely afford to pay the wages of my 2 casuals.  So yes I do understand the costs of small business and how difficult it can be.  But you cannot undervalue your staff because without them your business would fall over anyway.  You need to treat them right to get the best out of them (I worked very hard but I had a vested interest in making it work - the staff need to be paid fairly for them to take on that level of commitment.)
      At the end of the day it’s just one of the many costs of business.  Rents and running costs go up and need to be covered.  If the business isn’t viable then it goes under - a sad fact that has always been there.  But to blame it on wages is wrong - a good business model will handle that.

    • topsy99 says:

      10:14am | 22/08/09

      many small enterprises are barely profitable and due to stiff competition operators often dont draw a wage but their dream is to run their own business. The choices can be with the Government via regulating working conditions and with consumers but with labour costs, services, electricity costs etc the businesses are barely sustainable but provide jobs and services and competition to local communities. If costs get too great then the dole becomes the option. or government assistance e.g. the vodaphone issue in tasmania where the Government coughed up $5mil this week to keep 400 jobs.  You cant have it all.

    • Ben says:

      01:17pm | 23/08/09

      Contributing to the issue of small business viability is that many small business people are like hobby farmers. Often very successful people in their fields think owning their own little business will be a romantic experience and discover it to anything but often resulting in inadvertent industrial issues. If these people got some help from a chamber of commerce or some such they would be a lot better off and you wouldn’t have all the dramas with unnecessary industrial relations hoo ha.

    • Steve of Cornubia says:

      07:37pm | 23/08/09

      Ok, so we have a small factory employing twenty people and the kindly Labour party wants the lowest paid, say the cleaner, to receive a pay rise to $18/hr. Fair enough, eh? However, now he/she is earning more than the guy who looks after the works van, so he’ll need a pay rise, too. Let’s give him $22/hr. Bugger, now he’s earning more than the storeman, who’s pretty damn good at his job. $25/hr should keep him sweet. Arse, now the storeman is earning more than the guy who assembles the product, so he gets a boost to $28/hr. Trouble is, that’s more than the guy who does the testing, so he gets a rise to $34/hr, which is now more than his supervisor…...

      Say, whatever happened to that little factory on the corner that used to employ 20 people?

 

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