Letter from... Australia

Janine Mace reports on the concerns held by Australia's workforce to new labour market reforms

When the French President, Jacques Chirac, bowed to weeks of angry protests and scrapped his proposed youth job laws, many Australian unionists and workers were taking careful note.

Just as the First Job Contract legislation was promoted to workers as a vital job creating reform for the French economy, Australia’s “brave new world” of labour market reforms are being sold as a way to introduce more “flexibility” into the workplace.

The Prime Minister, John Howard, has been promoting them as “sensible and fair steps to further strengthen the Australian economy” and a way to “bring forth the next wave of productivity improvement which will benefit all Australians”.

Although there have not been weeks of street marches and strikes, polls show Australian workers are deeply concerned about the new “WorkChoices” reform package that came into effect on 27 March.

The reforms are being promoted to a suspicious electorate as a “plan for a modern workplace”, but in a country with a long history of centralised wage fixing and strong union traditions, anxiety is high about Australian workers being forced into a deregulated, American-style labour free-for-all.

The WorkChoices legislation fundamentally alters the landscape for industrial relations (IR) law in Australia, and represents one of the most significant rewrites of the country’s employment laws ever undertaken.

The new legislative environment confirms the Australian Government’s push for a single IR system where legislation on minimum wages and conditions is made at the national level. Under the old system, there were six sets of state employment laws and around 4,000 individual industrial awards governing employment conditions in particular industries.

While the reforms have been sold as a simplification of the complex existing IR system, the WorkChoices Act and supplementary regulations amount to more than 1,500 pages of new rules for employers to wade through.

Even if they make it through all those pages, employers are likely to find the broadly drafted legislation riddled with uncertainties. The legal fraternity looks set to be the biggest winner from the new regime as courts struggle to untangle the meaning of various sections within the legislation.

Together with ushering in a national IR system, WorkChoices will streamline workplace agreements and set a national minimum standard on conditions, such as annual and parental leave and maximum working hours. It also establishes a new body, known as the Australian Fair Pay Commission, to set minimum wages.

Employers have won one of their key demands with the new legislation exempting companies with fewer than 100 employees from unfair dismissal laws. Larger companies are also exempt if there are bona fide “operational reasons” for a dismissal.

Another long-held goal of many government ministers has been achieved with trade unions now facing mandatory secret ballots for industrial action and discouragements for pattern bargaining. Unions also face changes to their traditional right of entry to workplaces.

In response, the Australian union movement has actively campaigned against the legislation, taking the fight to the Government with an emotive advertising campaign. Its effectiveness forced the Australian Government to respond with a multi-media support campaign that cost taxpayers over A$45m.

Australia’s national day of protest over the legislation was a far more modest affair than the French marches, with only around 600,000 people taking part in rallies.

But the battle over the new legislation looks far from being resolved. Right on cue, in the first week after the legislation came into effect, the Australian media was full of stories about 29 country abattoir workers sacked and told to reapply for their jobs at lower wages.

Even the validity of the regime itself is under fire, with the six state governments currently challenging the legislation in the High Court of Australia.

Constitutional experts view the case as highly significant, with the states challenging the Commonwealth Government’s right to use certain powers under the constitution to take over IR law. They claim it is an attack on states’ rights.

As the Western Australia Premier, Alan Carpenter, put it: “The Commonwealth can’t just come in and take away the responsibilities of state governments. Otherwise, we’re going to end up just being an outpost of Canberra.”

With a national election looming next year, it looks like the arguments over labour market reform occurring in Europe will continue to have a distant echo on the other side of the globe.

Janine Mace is an Australian freelance finance and business journalist.