Enter the new 'deal-making'
Here's my (part one) assessment of the Albanese government new world of industrial relations.
In what has been a comparatively long and exhausting process, I think I can now give you some understanding of the Albanese government’s new industrial relations laws. The final chunk of the legislation passed both houses of parliament on 12 February 2024, so we now have the total picture.
Remember that I’m not a lawyer. My explanations seek to provide some comprehension from a practical ‘on the ground,’ ‘how it applies’ perspective.
Overview of outcomes
Have no doubt that, overall, the changes made by the Albanese government are massive. Managing a business in Australia, large or small, now involves a situation where unions have a legal right to interfere in just about any aspect of managers’ and owners’ decision-making. The scale of this is historic.
But, in the areas of my specific concerns (self-employed rights, etc.) I have been surprised by the extent to which a vast array of the areas where I had concerns have been watered down. To some extent I wonder if, in many areas, the Albanese government has maintained the appearance of being ‘tough’ but has in fact been constrained. Um, strange! Maybe my ‘robust’ advocacy had an impact? Who knows? (If you’re interested, I’ve summarised the events leading up to the new laws and my related advocacy efforts below.)
That said, however, as an overview, the vast bulk of the new legislation should never have even been contemplated, let alone passed. The legislation should be repealed. This is because the government is doing great harm to Australian workers, business activity and our lives. But the impact will take time to unfold and be realised. I’ll explain this further below.
Explaining the laws
In what follows I give you my perceptions, both of the bad and the not so bad. Given the vast scale of the changes and the detail they involve, I’ll produce a series of posts. It’s necessary to understand a fair bit of the detail to fully comprehend the totality of the changes. Therefore, I’ll break the new laws into ‘bits’ so you can grasp the detail in the chunks.
For my paid Substack providers I’ll explain a bit of the technical wording of the Acts and give indicators of where and how I think you might be able to operate around the new laws. I’ll also suggest how you might do this without spending big money on lawyers.
In explaining this I hope I assist in the management of your own business, whether you’re a business of one person or involved in managing a large business. There’s one key rule in business (and life) I think, and that’s the willingness and ability to assess, accept, confront, and deal with reality. Pretence and fantasy help no-one. I hope my contribution assists an understanding of the new workplace reality!
Specifics – It’s a pretend legal process
If you grasp one concept, the ‘penny will drop’ about the truth of Australia’s industrial relations system. The system is primarily NOT about outcomes, but rather is about a complex quasi-legal process to control HOW outcomes are arrived at. Whoever controls the process, controls the outcomes.
The Albanese government’s industrial relations changes have done one big thing. They have massively expanded the power of Labor-affiliated unions to control the industrial relations process. Effectively, the unions can drag managers of businesses into the Fair Work Commission under rules where the business managers have (or feel they have) little option but to kowtow to the outcomes dictated by the unions.
It’s this process—one that that transfers managerial authority of businesses from the business managers to union officials—that is the big item. The extent to which the Albanese government’s changes do this makes the changes historic in their scale.
Wink-Wink. Nudge-Nudge
If you understand that the system is about a process, the next thing to understand is that the process is one of behind-the-scenes, ‘wink and nudge’ deal-making between corporate business managers and union operatives. The lawyers and the Fair Work Commission process provide a legalistic cover-up for the actual ‘wink and nudge’ deals. The system is that simple in broad outline, but in its application it’s highly complex and secretive.
The system largely serves the interests of big corporate players in partnership with the big unions. That is, corporations secure deals with unions that are seemingly operationally and commercially viable. In this respect the industrial relations system is the key that facilitates Australia’s well-entrenched economic system of corporate capitalism. That is, the system by which big corporates, big unions and big government run the country.
The system seeks to ensure that smaller players (small businesses and employees) don’t compete against or unsettle the corporate deals.
The Albanese government’s legislative changes have ‘upped’ the ability of Australian unions to extract deals that embed unions in businesses to such an extent that unions secure their own ‘business’ model. That union business model involves (a) membership, (b) payments to unions’ superannuation and other funds and (c) oversight and control of business managers’ decision-making.
The Albanese government’s laws make it much harder than in the past for corporate managers to achieve operational outcomes that are commercially viable. I flagged that this shift was underway in my Substack post Corporate bootlicking headache (September 2023).
When you hear or read of large corporations and their big business associations bleating about the industrial relations changes, understand that their complaints are really about the fact that their wink-nudge deal-making will now be much harder.
In this post I’ll give you some quick overview snapshots of the ‘bad’ stuff. In follow-up Substack posts I’ll look at the ‘watered-down’ employee-like provisions (my big concerns) and will give greater detail and commentary.
New rules ‘upping’ the IR deal-making power of unions
Same job same pay: Labour hire
This suite of laws gives unions the power to force labour hire companies to pay the same rates and provide the same conditions that the ‘host’ employer (the business where the employees work) pays to their direct employees.
The process involves unions applying to the Fair Work Commission for orders to this effect. The legislation provides a process so stacked in favour of the unions’ authority that the outcomes are almost pre-determined.
The most immediate outcome is that we will likely see a major reduction in the number of labour hire companies in Australia. But there’s a quirk. The majority of Australian labour hire companies are in fact owned by the big Japanese labour hire companies. Immense behind-the-scenes diplomatic and economic pressure will seek to ensure that the Japanese investments are not trashed. The dynamic will likely be that labour hire companies will quickly agree to the union demands and just pass higher costs on to the host employers.
Whichever way things go, unions will use these new laws as a marketing exercise to gain members under banners such as ‘look what we’ve done for you!’
Model terms for enterprise agreements
These laws empower the Fair Work Commission to make determinations on what enterprise agreements should look like. Promoted as enabling easier formatting for enterprise agreements, expect the outcomes to create standard looking agreements.
Effectively this will take the ‘enterprise’ out of ‘enterprise agreements’, removing the very thing that such agreements are supposed to achieve—namely, agreements suited to the particular circumstance of each enterprise/business.
Over time this will effectively kill off ‘enterprise agreements’ making them look more like standardised industrial awards.
Enterprise agreement for one = enterprise agreement for all
This involves a process where unions can apply to the Fair Work Commission to negotiate an enterprise agreement for a small number of agreements (or one) in a single sector and to then have that one agreement applied to an entire sector. That is, they can create an agreement to apply to (say) one or a few plastics extrusion manufacturing businesses, but then have that one agreement applied to all plastics extrusion manufacturing businesses.
Again, what this does is effectively kill off enterprise agreements, reducing them to look more like standardised awards.
Workplace delegates’ rights
These provisions require that every business, including businesses with only one employee, will have a union delegate (termed workplace delegate). Further, that the delegate will have a right to be trained at the business’s expense in union (workplace) techniques and strategies and to attend union (workplace) activities at the business’s expenses. The rules are less prescriptive for small businesses than large businesses, but the outcome is still the same.
What this aspect of the law does is to place union operatives into each and every business in Australia. Unions, of course, believe that such placement will give them massive organisational grunt ‘on the ground’ in every business, thus facilitating increased union membership and power.
Overview of the foregoing rules
The common theme in each of the above is that the outcomes are dependent on application to the Fair Work Commission. That is, that each outcome only occurs following a protracted quasi-legal process in the Fair Work Commission. This will take time—which is precisely the strategic intent. In conducting this workplace ‘revolution’, the Albanese government is very smart.
The processes will unfold a little bit at a time, attract little if any media attention (except in specialised industrial relations media) and the changes will creep up on Australians. Give the process, say, five years, and we’ll find ourselves with a very different Australia and most people will not understand why. It’s very smart politics.
Right to disconnect
This involves a ‘right’ of employees to refuse requests to do any work outside normal work hours. Again this involves involvement of the Fair Work Commission to handle complaints. The issue attracted a lot of media attention when it was first floated. It was the brainchild of The Greens. The Albanese government grabbed it to secure Green support and to make it look like it was responding to the ‘new’ economy. But its effect, other than psychological, is non-existent.
Casual conversion to full/part-time
This also attracted a lot of media attention but is pretty much a distraction from real issues. Big whoop if someone wants to become permanent. Effectively, a decision to become permanent means a decision, by the worker, to have a drop in pay. That’s why a tiny percentage of workers have used existing conversion ‘rights’.
Definition of casual work
I’ve written about this in detail in a recent post: Killing casual work is wage theft (3 March 2024). The new definition of casual is so complex and restricted that I’d defy anyone, including specialist industrial relations barristers, to be able to confidently declare that a business has complied with the legal requirements.
Unions have an obsessive hatred of casual work because they apportion blame to casual work for the substantial decline in union membership over the years. If unions and the Fair Work Commission choose to rigorously enforce this definition, I’d expect to see a massive decline in the number of casual workers in Australia.
More analysis in future posts!
An overview of events and my advocacy efforts
Just for the record, here’s a timeline of events leading up to the legislative changes and my advocacy efforts.
The Albanese government was elected in May 2022.
It moved fairly quickly with its Secure Jobs Better Pay legislation which came into effect on 6 December 2022. This was really an exercise in giving unions stronger legal leverage over employers in enterprise agreements and related areas. The extent of the changes shocked the big employers. See Corporate bootlicking headache.
In April 2023 the government released a discussion paper on its ‘employee-like’ proposals. This is the area that still concerns me as it extends the reach of the industrial relations system beyond that of employee-employer to self-employed people. In doing this, industrial relations laws cross over into commercial law. It’s the destruction of the right of people to be self-employed. I responded to the discussion paper highlighting the flaws in the proposal and initiated an intense advocacy campaign directed to independent MPs and Senators. I posted a Substack commentary: Employee-Like: A radical agenda.
In early September 2023 the government released its Closing the Loopholes Bill. This was 284 pages of highly complex legislative drafting which made it very difficult to understand what was being proposed. Nevertheless, I produced a series of analysis papers and used these to extend the advocacy with the independent Senators and MPs. This involved repeated trips to Parliament House Canberra and more.
Substack commentaries and analysis were as follows during October/November 2023.
· The planned destruction of self-employed small businesses.
· Destroying self-employed rights – Part 1
· Destroying self-employed rights – Part 2
· The owner-driver suicide (Loophole) Bill
· Destroying Competition by destroying small business
I put the case against the Bill in a Senate hearing on 17 November 2023
After considerable amendments the final Loophole Bill passed both houses of parliament on 12 February 2024 and became law on 26 February 2024. Some aspects come into effect reasonably quickly, but key items start on 26 August 2024.