Enterprise Bargaining – Not just “Broken”, but Rotten to the Core

Recently, I discussed Australia’s “broken” enterprise bargaining laws with Caroline Pryor on Radio Skid Row’s “Workers Radio”. Click here to listen. These “broken” laws are stacked against workers and are an essential element in driving more inequality in Australia.

Later that day, Australian Council of Trade Unions (ACTU) Secretary, Sally McManus, gave an important and revealing keynote address to the T.J. Ryan Foundation in Brisbane, Queensland. (Click here to read the released version.) McManus described increasing inequality in Australia and how the Fair Work Act 2009 (FWA09, the “rules”) is contributing to that. Also, she specifically talked about the enterprise bargaining rules that are stacked against workers.

In this post I include information not covered in the radio discussion, focus on just three of the broken enterprise bargaining rules, and discuss what the Australian Council of Trade Unions (ACTU) “Change the Rules” campaign should prioritize.

In Australia, wages and conditions, and limited workers’ rights are established in 4 interactive ways:

1. the FWA09, including National Employment Standards,

2. minimum rates of pay that come from the Fair Work Commission’s annual wage case,

3. industrial awards (also managed by the FWC) that set additional minimum standards on a range of matters from industry to industry, and

4. enterprise agreements that are negotiated between workers and their unions and employers at the level of the enterprise that can set standards above the minimums in awards and the statute.

What’s happening in the real word?

Right now, all across Australia there are dozens of enterprise bargaining disputes in which workers are learning that the laws are stacked against them and its time to “Change The Rules”. (“Change the Rules” is the name of the overarching campaign coordinated by the ACTU to replace the broken rules with new ones that are fairer for Australian workers.) These enterprise bargaining disputes include complete and partial lock outs, successful and pending applications to terminate enterprise agreements that push workers onto the minimum wages and conditions in their award, and long term delays by employers to bargaining timetables.

And, enterprise bargaining itself is on the wane:

Fore more information across the whole workforce and economy click here.

Enterprise bargaining is not just broken, it’s rotten to the core

Workers are learning that when their employer moves from a relatively benign stance to a determined and militant assault on their wages, conditions and rights, enterprise bargaining takes a long time and there are many ways in which the employer can make bargaining decent improvements extremely difficult. This is even more so if they as workers are determined to defend what they have achieved and stand together for something better. It “hardly seems worth it”.

For workers there are at least 10 different ways in which the rules are stacked against them, and these start with the core framework of the system. The current enterprise bargaining rules in the FWA09 were intended to be better than the despised laws imposed by the right wing Howard governments “Workchoices” laws. They are barely so and are very much in the same neoliberal ideological framework.

Broken Rule 1: the legal or statutory requirements are complex not simple

Workers are entitled to expect that the rules governing their working life are accessible, straightforward and in plain language. This is not true of the FWA09, particularly when it comes to enterprise bargaining.

The legal framework for enterprise bargaining is in 3 separate sections that require frequent page flipping. The objectives of enterprise bargaining are located separately from the process and other requirements, and are themselves connected to the general objectives of the whole Act that is in another section entirely. Further, how an enterprise agreement interacts with the industrial award and the National Employment Standards in the Act, the industrial action requirements, and other rights and responsibilities are complex.

This complexity provides employers with a range of options to mislead workers about the negotiating process and the content of Agreements. This more so for workers not in unions, and, especially so for workers employed by the same employer across multiple locations.

Broken Rule 2: The statutory or legal purpose – Labor’s neoliberalism

It is a common mistake to think that enterprise bargaining is meant to provide for better wages and conditions relative to previous Agreements. There is nothing in the relevant parts of the Act that requires enterprise bargaining to produce a better deal for workers relative to previous Agreements. That may happen but there is nothing in the Act that requires it. Rather, the FWA09 establishes the prospect of concession bargaining, depending on other factors.

Even the Secretary of the ACTU gets this wrong. In her officially released speech to the T.J. Ryan Foundation on September 1st, Sally McManus says:

The system of enterprise-based bargaining was meant to deliver increased wages alongside increased productivity.

Well, since around 2000 this stopped happening5. People are working harder and smarter, workers are making record profits for their employers, but they are not sharing in it.

The purpose of enterprise bargaining is laid out in section 171 of the FWA09 and its link to section 3 that lists the Objects of the whole Act. (Click here.)

There is nothing in either about improvements to wages, conditions or rights in Agreements. The core purpose is to “deliver productivity benefits”.

So let’s look a bit closer at productivity – the core purpose of enterprise bargaining.

Every employer is in business to make profit. Productivity improvement is not an end in itself, rather, it is the pathway to improved profitability relative to competitors in the same or potential new markets, and to competitive units deliberately created and owned by the same company, often in other countries.

This core logic is inherently anti-worker. Every worker (and every employer) knows that a competitor who pays less to workers with weakened bargaining powers will put downward pressure on their own wages, conditions and rights.

The best way for workers to deal with this is, of course, to combine and connect with each other; to form and join unions across employers and industries; to act in solidarity to bring those weakened workers up to their standards instead of being forced into a race to the bottom.

For all practical purposes, “productivity” improvement is code for “profitability”. Profitability improvement comes by increasing the rate of exploitation of workers. Thus the purpose of enterprise bargaining takes workers and their unions into dangerous acceptance of the logic of competition and profitability, making wages, conditions and rights dependent on them. Accepting this logic encourages workers to think of workers in other locations and employers as their enemy.

The FWA09’s scheme for enterprise bargaining allows employers to create separate agreements or none at all, thus creating competitive downward pressure internally, as well as the normal competition from other employers. Workers can be isolated from each other in “silos” and it is more difficult for workers to get the support of paid union officials.

Enterprise bargaining is designed in the FWA09 so that any improvement is not because of it but because of other factors:

1. how benign the employer is;

2. the demand for the particular knowledge and skills held by the workers;

3. whether the workers are in a union;

4. whether they are well organised, well informed, and very determined – mindfully militant.

Broken Rule 3: industrial action repressed – capital strikes accepted

In any negotiating or bargaining process, including for enterprise agreements and breaches of them, employers and workers can use (or not) real or latent bargaining power.

The most important power for employers is the strike of capital (or it’s threat); that is, the power to withdraw, reduce, re-allocate, their capital, or threaten to do so. This action always has a big impact on workers in any bargaining process. There are no restrictions on the strike of capital in the FWA09. (Of course, there are other employer powers as well: the right to lock out without any democratic control, the right to hire and fire, the right to use use labour hire workforces, legal assistance to stop strike action, and so on.

The workers’ counter to the strike of capital, to resist being victims of competition, is the withdrawal of their labour or go slow, and solidarity across workplaces.

In the FWA09 workers start from the basis that industrial action is prohibited and is in general NOT PROTECTED from common law damages and statutory fines. (This is, in itself, a breach of Australia’s commitment to international labour law standards.)

A workers’ bargaining representative – union or non union – can apply for protected industrial action status to the Fair Work Commission (FWC). The union/s (bargaining rep) must prove genuine bargaining as defined in the Act. The employer can oppose the application. If the FWC agrees, the applicant can then run a protected industrial action ballot, conducted usually by the Australian Electoral Commission. Only workers who are represented by the union (or the bargaining representative) can vote. There are strict requirements about who in the workforce will be balloted. The employer can influence this by providing a faulty list of their employees who are union members.

The rules about how the ballot questions are put on the ballot paper are technical and strict. Industrial action becomes available for those forms of action that receive a minimum of 50% of the members provided with a ballot paper.

Once the required majority is established, the workers, usually union members, can take any of the forms of industrial action that have been voted up, and they are “protected” from common law damages and statutory fines.

However, they are required to give the employer 3 working day’s notice of the particular action they intend to take. This enables the employer to minimise the effectiveness of the action.

Then, employers can use counteraction in the form of a lock out. They do not have to apply for that right and there is no requirement for a ballot to say whether or not they should be allowed to. If an employer uses the lock out power, they can decide whether to lock out all who have engaged, or target a selected group, and arrange for others to do the work of those who are locked out.

At any time, the employer can put their own proposed Agreement to the entire workforce for a ballot and they can choose the organisation or private company who conducts the ballot for them.

The employer can apply for protected industrial action to be terminated or suspended under certain circumstances.

The employer can also apply (or threaten to) terminate an Agreement during negotiations and these applications now so common they are a predictable bargaining tactic.

Other broken rules for bargaining

These core anti worker provisions of enterprise bargaining are reinforced by a number of other anti worker rules.

These include the employer’s control over the process for informing all workers about the bargaining rights and process; the ongoing process of bargaining and the arrangements that must be made for genuine bargaining to occur, especially in the absence of a union; the ability to ensure that non-union bargaining representatives can participate at the bargaining table and given access to all workers; and employer control of the ballot on any proposed agreement, including that all workers are able to vote and that the result does not require a 50% response. The content of agreements is restricted to ensure that critical issues can not be bargained, for example access to information and communication rights for workers about supply chains and financial performance.

The priorities for the “Change the Rules” Campaign: minimal or ground breaking?

The ACTU’s “Change the Rules” Campaign is just 3 months old. There has been a lot of education about how the current rules are broken, much of it in the dozens of disputes “resolved”, defeated or still under way all over Australia, including in enterprise bargaining. Sally McManus, the new Secretary of the ACTU has explained the message in social media, media interviews, picket line and action sites, and formal speeches like the one last Friday.

When the Campaign was launched the ACTU provided a list of what a better system might look like. There are 27 specific ways in which the workplace and industrial laws could be made fairer for workers.

Broadly speaking these fall into 3 categories: those that enable workers themselves to exercise their power, including in their unions; workers’ rights that require support from their union, or the FWC, or the Fair Work Ombudsman, and those that are about the rights of such bodies that might flow on to workers.

There has been precious little discussion and education work that enables workers, including union members, to have an effective say in what should be the priority changes.

For workers, the ground breaking changes that will make a real difference, because they are enabled (if they wish) to take matters directly into their own hands and deal with the competition problem, are rights to

1. strike (to match the employers’ capital strike rights),

2. communicate and organize beyond their own workplace,

3. struggle for and negotiate new and better standards relevant to a globalized and digitalised workplace (no restrictions); and,

4. restore Awards as the primary focus for bargaining common standards above the statutory minimums in the Fair Work Act.

Labor’s Shadow Minister for workplace and industrial relations, Brendan O’Connor, is talking up a positive approach on some important problems faced by workers but still remains coy about ground breaking change. He favours an approach where workers are dependent on what a Labor government, or a union or the Fair Work Commission can do FOR workers. He is not yet committing to ways in which workers, combining together, can use power to face their employers.

Sally McManus, on behalf of the unionized workforce and beyond is not yet being explicit about ground breaking change. This is what she said should be the priorities in her speech last Friday:

1. More secure jobs by taking away the incentives to casualise work

2. Restoring a strong, fair and independent industrial umpire

3. Ensuring a level playing field for bargaining

4. Rebuilding a relevant, modern and strong safety net for all workers

The explicit commitment to the powers of the industrial “umpire” reflects a long tradition of right wing unionism in Australia. Note that there is no direct reference to the right to strike or of Awards as the industrial instrument that takes wages and conditions out of competition. Of course, Sally McManus may indeed have covered these points in her delivered speech or in the QandA that followed.

It is likely that both union leaders and the ALP are uncomfortable or wary of talking about industrial action rights because it is true that there will be an employer and government outcry that will try to whip up opposition to any such changes.

Topical questions for further discussion … soonish?

This leaves begging a couple of questions: when is the right time to educate at the deepest levels of the workforce and publicly explain the unrestricted and democratic right to strike for workers? And, is parliamentary Labor already manoeuvring to make sure it does not happen in exchange for minimal changes only because “that’s the best we could do” and “the public is just not ready for it”?

Will union members and potential members permit this neolaboral approach to workers’ rights in the twenty first century to prevail, as it did in negotiating the Fair Work Act 2009?