No Award For Inaction

COVID-19 has exposed the poor health of our national wage system, and workers and small business owners are paying for it with their jobs and enterprises. By James Mathias.

The Australian industrial relations system has not changed in any meaningful way for more than a decade. Now it is struggling under the pressures of the COVID-19 pandemic.

As the only country in the world to have Government-mandated, industry-wide pay agreements, the slow pace of change is potentially costing many Australians their jobs.

It has taken more than two weeks for the Government to negotiate changes to just three awards – the hospitality, clerks and restaurant awards. This covers barely more than a million workers. Changes include the ability to allow reduced workloads by 60 per cent and for employers to direct employees to take unpaid leave if necessary.

The Government has flagged changes to five more in the next two weeks, meaning that on the current trajectory, by the end of this pandemic we may have changes to up to 18 awards. The total number of awards is 122. This would represent only 15 per cent of them.

Deputy Director of Workplace Relations at the Australian Chamber and Menzies Research Centre Director, Tamsin Lawrence, who has been immersed in negotiations with the Government and unions since the pandemic began, is struck by the system’s sclerosis.

“The whole bargaining process is to get something that really seems common sense for most people,” she told Watercooler LIVE this week.

Lawrence said that under the clerks award, which covers administrative and secretarial roles who are now working at home with children, that “you can’t allow them to start early and to work late without being punished.”

Created in 2009, the Fair Work Act has more than 214,000 words, 800 sections and 122 awards. It is longer than the Oxford Dictionary. Many awards exceed 100 pages.

“You basically need a law degree to understand it,” Lawrence said.

A retail employer, for example, must determine which of 514 different rates applies to each full-time employee. For part-time workers, the number of rates drops to a relatively convenient 500. 

Further examples of why the system is compounding the crisis are alarmingly easy to find. Can an employer stand down workers or place them on unpaid leave? Small business owners whose skills are confined to butchering, baking or candlestick-making are not equipped to answer these questions, yet the penalties for mistakes can be devastating. Just ask George Calombaris.

Lawrence says the onus of proof is on the business owner. “You literally have to have zero trade in effect before you can (retrench staff),” she said. “No business can survive 10 per cent, 20 per cent, 30 per cent reductions.” But the legislation requires a 100 per cent reduction.

The COVID-19 pandemic has uncovered major flaws in Australia’s industrial relations systems, ones that have held us back for more than a decade.

This is costing jobs and wages at a time when business owners simply want to do the right thing.

Lawrence reminded us that, “New Zealand got rid of this more than two decades ago.”

If trans-Tasman rivalry means anything, it’s time we caught up with the Kiwis and injected some 21st century pragmatism into our industrial relations system.

COVID-19: Read the MRC’s coverage of the debate in Australia and around the world