HARD YAKKA: Fairness and Industrial Relations

Industrial Relations is the current battleground in the lead up to the next Federal Election.

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But who's winning the war?

Insight will hear from both sides; the employers and the employees, all working with Work Choices.

Both parties promise to deliver 'fairness' with the Fair Pay Commission, Forward with Fairness and the Fairness Test; but who's really going to get a fair go?

Does the Federal Government's “fairness test” go far enough?

We'll take a forensic look at what the workplace might look like under Labor.

We'll investigate how working conditions have changed under the new Workplace Laws and how extensively employers are using Australian Workplace Agreements.


Transcript

If there is one word that has been getting a bit of a pounding lately, it is the word 'fair'. Both political parties are struggling to claim fairness as the centrepiece of their industrial relations policy. The Government has its new Fairness Test, a response to what the Prime Minister describes as unease in the community over Work Choices. There's also the Fair Pay Commission, Labor's policy Forward with Fairness and its one-stop shop called Fair Work Australia. Confused? Well, tonight Insight will try to make some sense of it all.

JENNY BROCKIE: We are joined by employers, workers, business and union representatives as well as the Shadow Employment and Industrial Relations Minister Julia Gillard. The gap in our line-up is the Government. Employment and Workplace Relations Minister Joe Hockey unfortunately chose not to accept a longstanding invitation to join us tonight but let's get under way. Peter Hendy, can I start with you? You've been a key adviser to the Federal Government, you now represent business. Do you think the new industrial relations system has been operating fairly?

PETER HENDY, AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY: Certainly, very fairly, and indeed it's delivered great results for the Australian economy, for the Australian people. I mean, only in the last 13 months we've seen 362,000 new jobs, our unemployment down to 32-year lows, we've got real wage increases that have been some of the most sustained real wage increases we've seen for decades. It's a big plus for the whole Australian community.

JENNY BROCKIE: So why did the Government feel it was necessary to introduce this Fairness Test?

PETER HENDY: Well, I'm not here to argue on behalf of the Government. I represent employers. We thought the Fairness Test, which is strengthening the safety net, was not needed because there was no systemic abuse of the safety net or the industrial relations laws as they stood, but the Government's introduced that, and that's in Parliament today.

JENNY BROCKIE: Julia Gillard, what about that argument? The economy's healthy, there are plenty of jobs, the Government says most people on AWAs – Australian workplace agreements – are better off than they were before?

JULIA GILLARD, SHADOW MINISTER, INDUSTRIAL RELATIONS: Certainly the economy's strong. We're in the midst of a once-in-a-generation resources boom and it is driving economic growth, but these laws have been unfair. The Government's tried to hide the statistics but leaked statistics have told us that workers have had penalty rates ripped off, shift loading ripped off, rest breaks, public holiday pay. Indeed, around 45% of workers on Australian workplace agreements lost all 11 award conditions. Mr Howard told them were going to be protected by law. So the very things they thought they would be able to keep have been ripped off them. Now, we don't need that kind of unfairness, particularly in economically prosperous times. There's no need for it and that's why Labor would have a different balance in the industrial relations system.

JENNY BROCKIE: And we'll talk about your policy a bit later on. But, Peter, the figures do show that those conditions have been taken away in a lot of cases.

PETER HENDY: Those leaked statistics that the 'Sydney Morning Herald' got a number of months ago did not reveal the extent to which wages were increased in trade-off for that, they just didn't. And the fact is that in most cases I would guess that they were. And the fact is that under AWAs, for example, which is what Julia's just been talking about, that there is a significant… You get paid about double what's under the award system, that is on average across the AWAs in this country. So, look, real wages have been going up, unemployment's been going down, um, more and more jobs than we've seen for decades. We're at a 3-decade low in unemployment in this country.

JENNY BROCKIE: Let's have a listen to some of the people here stories about what has been happening to them in the workplace. Caitlin, let me start with you. You're a 22-year-old university student, you were working in a cafe‚ owned by a cinema in Melbourne when you received a fax in February this year from your employer. What did it say?

CAITLIN SCOTT: The fax said from now on we would be getting paid $12 an hour rather than the minimum of $15.50 an hour. Therefore I wrote a letter explaining that…

JENNY BROCKIE: Now, you were on an AWA already?

CAITLIN SCOTT: Yes, we were.

JENNY BROCKIE: OK, and the argument that was given was that you were subject to cafe workers' salary not a cinema worker's salary, is that right?

CAITLIN SCOTT: Yep.

JENNY BROCKIE: And what did you do when you got that letter?

CAITLIN SCOTT: I wrote a letter back saying you're bound to this code which states that you must pay us a minimum of – I can't remember how much it was – but of this amount, and I faxed it back to them. Um, the next day I came into work and was told my services were no longer required.

JENNY BROCKIE: So do you believe you lost your job for questioning – just for questioning that salary?

CAITLIN SCOTT: Definitely.

JENNY BROCKIE: Bill Schulze, you're 18 and you worked at a service station in Adelaide and last year when you were 17 you were offered a new AWA. What was it like?

BILL SCHULZE: It was similar but the main problem I had with it was they were cutting the pay by like two dollars and…

JENNY BROCKIE: Two dollars an hour?

BILL SCHULZE: Yeah.

JENNY BROCKIE: Were they offering you anything you didn't have before, though?

BILL SCHULZE: Oh, they had like sick leave and stuff like that but that was only beneficial if you were there for like a year or so.

JENNY BROCKIE: And what about annual leave? Did they offer you annual leave, recreation leave?

BILL SCHULZE: Yeah but, then again, same thing. You had to be there for like a year to make it worthwhile.

JENNY BROCKIE: So you didn't want the trade-off of getting annual leave and sick leave because you weren't planning to stay for very long and you wanted to keep the rate that you had?

BILL SCHULZE: Yeah.

JENNY BROCKIE: Which was two dollars higher than you were been offered?

BILL SCHULZE: Yeah.

JENNY BROCKIE: You refused to sign the AWA. What happened then?

BILL SCHULZE: Well, we asked them if we were able to negotiate and they said no, it's a standard agreement. If you don't like it, there's the door.

JENNY BROCKIE: Peter, your Bill's dad, he was 17 when this happened. What did you do?

PETER SCHULZE: I accompanied Bill to a session that explained what was happening when there was a change of ownership of the outlet and I took the opportunity to look at the agreement and attempt to negotiate some points. The negotiation was rejected and, I asked what would happen if we don't sign the agreement and would there be an offer of employment forthcoming, which the answer was, you know, frankly, no, there wouldn't be, and that surprised me.

JENNY BROCKIE: Now, this was at a service station. How much was the hourly pay going to be on the new AWA?

BILL SCHULZE: I think it was seven dollars something.

JENNY BROCKIE: Seven dollars something an hour.

PETER SCHULZE: He was on $9.09 on the original agreement and it was going to go to $7.17.

JENNY BROCKIE: So what did you do after that, Peter?

PETER SCHULZE: Well, again I tried to negotiate that. When that didn't happen I recalled that a friend of mine that I used to work with who had gained a seat in the parliament had said, look, I want to hear where there's any workers in his electorate – which is in the southern suburbs of Adelaide – are disadvantaged.

JENNY BROCKIE: Was this a Labor MP or Liberal MP?

PETER SCHULZE: No, a Government MP. And so I took the opportunity to make him aware of Bill's situation and I didn't get a response from him.

JENNY BROCKIE: Now I should point out at this point you're a member of the Labor Party, aren't you?

PETER SCHULZE: I am.

JENNY BROCKIE: How much has that been a motivation for you in pushing your son's case?

PETER SCHULZE: It's a fair question and it has to be asked. Look, first of all I'm a father, I'm also a worker as well and I'm a grandfather and, I pay an annual subscription which gets me a newsletter. I'm not on any policy platforms. I'm really just an ordinary person that happens to have a membership just like a surf club or a netball club.

JENNY BROCKIE: OK, what are you doing now about this case? It's gone to court, yes?

PETER SCHULZE: And presently it's before courts at the moment.

JENNY BROCKIE: Ewen McNee, you're an 18-year-old university student, you work at a leagues club. Is that right?

EWEN MCNEE: I do now.

JENNY BROCKIE: What's been your experience with AWAs?

EWEN MCNEE: Oh, I started off working in a bakery, first job. It was $10 an hour, so not a great deal, and I didn't like it at all. They were rude, there was no overtime, no penalty rates and I left after three weeks. I went out and I got qualifications in an RSA and RCG, which you need to work in a registered club. I applied at various places, got offered a position where I work now and I got offered an AWA. Now, the AWA was 20% above the award rate with no penalty times, no allowances, nothing like that, sick leave, annual leave, whatnot, that's all still there. Um, and it's double, it's just under double what the bakery award, what the bakery pay was. So I, you know…

JENNY BROCKIE: So you're quite happy with that trade-off?

EWEN MCNEE: I'm quite happy with that trade-off, definitely.

JENNY BROCKIE: And to be fair too I should point out you're a member of the university's Young Liberal Club, aren't you, so let's just get everything on the table here, folks, everybody's interests, and I expect you all to fess them up if I'm not entirely aware. Um, so what's happened to other people here with pay and conditions? I wonder, Jocelyn, you're here with your 16-year-old son Christopher. Now, he was employed by a Subway franchise, wasn't he?

JOCELYN JAMES: That's right.

JENNY BROCKIE: What happened to Christopher?

JOCELYN JAMES: He got the job about six weeks before Christmas last year and he'd been working there for six weeks and hadn't been paid at all because they said the owner of the store was overseas and, eventually he was paid but only because we made a fuss and then they also said that he wasn't going to be paid for the first 11 hours because that was training. So I was very upset about that.

JENNY BROCKIE: Christopher, was this your first job?

CHRISTOPHER JAMES: Yeah, it was.

JENNY BROCKIE: So how did you feel about this process of being in that situation?

CHRISTOPHER JAMES: Well, I was mostly confused. I didn't really know what to expect out of it and kind of surprised to learn sort of how bad a deal I'd ended up getting.

JENNY BROCKIE: Did you try to talk to your employer yourself?

CHRISTOPHER JAMES: Yes, I did.

JENNY BROCKIE: What happened?

CHRISTOPHER JAMES: I sort of got brushed off, saying it's always like that for the first few weeks and, you know, the manager's overseas, everyone's getting lower pay over these few weeks. So I didn't really know whether I was getting a bad deal or not.

JENNY BROCKIE: Jocelyn, what happened in the end in this story?

JOCELYN JAMES: I started to ring up some government departments and looked up IRS in the phone book again. And then I had to go through the federal department, which was the OWS.

JENNY BROCKIE: The Office of Workplace…

JOCELYN JAMES: Yes, Office of Workplace Services and they said it sounds like there's some issues there. We'll send out some paperwork for Christopher to sign because we can't really proceed with anything unless he signs something. And I thought, oh, fantastic, something's going to happen. There's something in place. But when… So anyhow, a package arrived for Christopher a few days later and what arrived for him to do made me the angriest of all because it was just so involved there's no way Christopher could have done it, let alone, I suppose, it would have been a 14- or 15-year-old, and this is what they had in place.

JENNY BROCKIE: So what happened in the end?

JOCELYN JAMES: A friend's son was working in one of the large supermarkets and he belonged to a union and so I got on to the union and, um, they sent a letter to this Subway store and listed all the things they'd done illegally and about four days later a cheque arrived for Christopher, all the money that was owed.

JENNY BROCKIE: And are you still in the job, Christopher?

CHRISTOPHER JAMES: No.

JOCELYN JAMES: No, they actually… When I said I wanted my son paid after six weeks, they said, ah, that Christopher had to bring in his shirt and they would pay him. So we understood from that he was terminated.

JENNY BROCKIE: Alright, we've heard quite a few different stories here so far. Zana, I'd like to ask you. You're the executive director of JobWatch, which is a community legal centre in Victoria. You get about 20,000 calls a year, What are people saying to you when they contact you and are you just hearing the bad stories, I suppose?

ZANA BYTHEWAY, JOBWATCH: Well, look, we do of course hear the bad stories. That's what we're set up to do. But, however, what people are saying, first and foremost we must realise that there has been an increase by 79% of people with unfair dismissal protection and that's just one aspect of it. The effect of that is that not only is that protection lost, but the flow-on entitlements. You've talked about trade-offs, etc, and entitlements that come about. Entitlements that people normally have which are lawful and they're entitled to have actually get taken away, even though they're unlawful. Because the employer is in a strong bargaining position and because there's no unfair dismissal protection they can basically say to the employee take it or leave it. So not only is the unfair protection lost, but sometimes all the lawful entitlements that go with a normal workplace situation.

JENNY BROCKIE: David Peetz, you're a professor of industrial relations. You've done a report on the impact of these changes, which have been in for just over a year now. What have you found?

PROFESSOR DAVID PEETZ, GRIFFITH UNIVERSITY: Well, we looked at the data from all the available sources at the time, which was about just about the time of the anniversary. Um, we looked at the data on the conditions that have been lost. It's already been referred to tonight but we noticed in particular that the rate at which conditions like overtime had been lost through AWAs had doubled pre-WorkChoices compared to under WorkChoices.

JENNY BROCKIE: And did you look at what sort of compensation there was for the taking away of the overtime?

PROFESSOR DAVID PEETZ: Unfortunately the Government hasn't released those sorts of data. Probably a reasonable indication as to where the compensation's taking place is that pretty consistently each quarter for two years before WorkChoices we were getting 50,000 AWAs signed. The main difference after WorkChoices came in was that the old no-disadvantage test, which was in a sense ensuring that workers got some sort of compensation, that was abolished. The rate of AWAs has now doubled to about 95,000, 100,000 a quarter and the main reason, I would presume, behind that is that the.. it's now much more – there's much more of an incentive for employers to use AWAs, or has been during those period, because you didn't have those protections in there.

JENNY BROCKIE: So who do you think, from the research you've done, is being most affected by these changes?

PROFESSOR DAVID PEETZ: Well, people in low-paid occupations, in retailing and hospitality, young people, some of whom we have seen tonight, people in occupations where you don't have strong bargaining power, has been those that have been most affected so far.

JENNY BROCKIE: Peter Hendy, can I get a response from you to what Zana and David are saying about what's happened since WorkChoices?

PETER HENDY: A lot of things I've heard tonight are actually – if correct – are actually illegal and unlawful under the existing laws, under WorkChoices. So, look, if something's illegal, it's illegal, and doesn't mean WorkChoices is wrong, it means that there are cases of illegality going on. But the fact is that the overwhelming majority of Australian employers do the right thing, and they do the right thing and they're employing people and they're giving them very good wages.

JENNY BROCKIE: Gentleman up the back, yes.

ACCOUNTANT: I'm an accountant and we put a seminar on for our employers when WorkChoices first came out. The first thing the solicitors said was you can write our own laws. That is the great confusion with AWAs, that you can write your own legislation, you can write your own rules into it and that's the biggest problem you have.

JENNY BROCKIE: Peter, a response? You can write your own rules?

PETER HENDY: No, you cannot write your own rules. If anyone knows anything about industrial relation laws, it's the most regulated part of the whole Australian system.

JULIA GILLARD: Jenny, I think the point there is true, though. Under Mr Howard's laws you've been able to write AWAs that only complied with the five minimum conditions. The Government sent a lead right from the top that it was OK to take away penalty rates. Their own propaganda when WorkChoices came in had an example of Billy, who got a minimum-wage job and nothing else, no penalty rates, no overtime, and that was fine. The point about employers using standard AWAs is a very important one. The imagery the Government likes to create is of people individually bargaining a deal that suits them. Yes, that does happen on occasion but ordinarily an employer says to the employees, here it is, I've got 10,000 of these in standard form, sign it or don't get the job. Sign it or don't get the promotion. And there is no bargaining, there is no tailoring to individual circumstances. That's the reality of them.

JENNY BROCKIE: David, no bargaining? I mean is it more of a take-it-or-leave-it proposition?

DAVID EDWARDS, AUSTRALIAN RETAILERS ASSOCIATION: My organisation is the largest industry association representing retailers and it's probably put in place more AWAs than any other organisation and we have never used a template, we have never provided bulk AWAs. Now, I totally agree that there are people out there peddling templates but I don't think that's in the interest of business or employees.

JOHN BUCHANAN, UNIVERSITY OF SYDNEY: But the Government itself promotes template. There are standard forms of AWA promoted by government agencies and there are whole consultancies now set up which they openly advertise on the web – here's a standard form, here's how you can rip off $15, $20 an hour from your employees. Pattern bargaining is alive and well in the AWA system.

JENNY BROCKIE: Explain what pattern bargaining is, John, for the people at home?

JOHN BUCHANAN: It's assuming there is a standard form of agreement and that will apply in a whole sector. And this is not an academic exercise. This is played out on the web and you can see it on the web. Can I also add that in the Government's own data that was released in the 'Sydney Morning Herald', it reported that 25% of the AWAs registered with the Government's own agency were illegal. Now, the Government itself knows of that illegality and it will be interesting to know what they're doing about that.

JENNY BROCKIE: We are going to hear more about Labor's policy on industrial relations as well as from the mining industry, other businesses and the ACTU. I should point out we were very keen to have the Minister Joe Hockey here but he chose not to join us tonight. Julia Gillard, the ALP is saying it will abolish WorkChoices lock, stock and barrel. You've got this new policy called Forward With Fairness – that word 'fairness' again. What is it, this policy of yours?

JULIA GILLARD: Well, when we say fairness we mean it, Jenny, so it's an attempt to restore the balance in industrial relations, to put the pendulum back in the middle. We think Mr Howard's gone too far and pushed it to one side. It's a pretty simple system. 10 legislated minimum conditions that everybody gets, a simple modern award system to provide a safety net for people, the ability to have common law contracts that give you more than the award, or the ability to collectively bargain, to join with your work-mates either with a union or without a union, and to collectively bargain your conditions. It comes with a new body, Fair Work Australia, which would be a new industrial umpire. We would abolish Australian workplace agreements. The rest of the world has found that it doesn't need statutory individual contracts that override awards, that there are other ways of getting flexibilities, and our system would provide that.

JENNY BROCKIE: So at its core, is your policy about going back to the way things were, to some of those basic situations that existed prior to WorkChoicesWHERE there were unfair dismissal lawsWHERE there was an emphasis on collective bargaining? Is that what you want as the Labor Party?

JULIA GILLARD: No, it's going forward to what we think the next iteration of industrial relations should be. This country over 30 years has moved away from centralised wage fixing and arbitration to more bargaining in the field. WorkChoices came along and pushed it to an extreme where people were left without protections, standing alone, possibly able to be unfairly dismissed and they didn't have any power in that equation. We want to have a system that is about enterprise bargaining, individual flexibilities, but a system that's got fairness in it, and that is what the current system has lacked and that's why people have had penalty rates ripped off, they've been unfairly dismissed and not been able to have any say about it. They've wanted to collectively bargain and been told, no, they can't.

JENNY BROCKIE: But what about for the people where flexibility has worked?

JULIA GILLARD: Well, it's of course possible to have a common law contract that is flexible. It's also possible to have clauses in awards that allow for some individual bargaining but give the award a solid basis. What we don't want is we don't want under the name of 'flexibility' people to get ripped off basic conditions that they used to enjoy, and that has been the experience of WorkChoices.

JENNY BROCKIE: Peter Hendy, your response to Labor's policy?

PETER HENDY: Simple response – it's going back to an old system that didn't do anything about the 1 million unemployed in this country back in the early 1990s. The reason you need AWAs is because we have an award system in this country that basically no other country in the world has, and that's why you need AWAs, individual statutory agreements. You cannot just rely on individual common law contracts as Labor Party's arguing because they cannot change award conditions.

JOHN BUCHANAN: Could I just take issue here? It's often argued that the ALP is going back. I don't think it's going back at all. There are some incredibly pro-business concessions in the latest Labor Party policy. The prohibitions on unions being able to take solidarity action are a decisive shift in Labor Party policy and it is quite different to the policy that the Keating Government took to the election in '96.

JENNY BROCKIE: How do you feel about that, Sharan Burrow, that particular matter that John's just raised? About unions not being allowed to do that?

SHARAN BURROWS, PRESIDENT, ACTU: Well, I'm not surprised that Peter Hendy loves these laws because he represents employers and clearly if you've got all the power to say “Sign the contract or you don't get the job” that's a terrific system for one party. What you've got here is a bad set of laws where people don't have unfair dismissal protections. You can be dismissed on a whim, and we've heard some of that tonight. If a person stands up they can be dismissed. What does that say to our young people about a decent workplace or a decent Australia? And the farcical Fairness Test that we'll see debated over the next few weeks in Parliament has so many holes in it that you could drive a truck through it.

JENNY BROCKIE: But it is about trying to ensure if anyone is trading off things like penalties and overtime they get some compensation, they get adequate compensation, isn't it?

SHARAN BURROWS: It can be non-monetary compensation. You can't pay your bills with non-monetary compensation. But, equally, when you've got 2.5 million people who'll sit outside this Fairness Test, when you've still got the same basis that if someone stands up to an employer they can be dismissed, and you've heard that here tonight. These laws have to go, Jenny. They just have to go.

JENNY BROCKIE: Peter, is your main objection to Labor's policy this idea of returning some of those award conditions as the basis, these adding up to 10, these conditions? Is that one of the things you object to strongly?

PETER HENDY: Our principal issues are the abolition of AWAs, the strengthening of the award system, the old archaic award system that basically no country in the world has got except Australia, the increase in power for a super-agency industrial tribunal.

JENNY BROCKIE: This is the one-stop shop.

PETER HENDY: The one-stop shop where you're going to centralise decision-making, you're going to take away out of enterprises the decisions they make whether they're in Bunbury or Brisbane or Darwin or Dubbo. The fact is decisions will be made. It might not be in Melbourne, as it is today, but it will be another centralised bureaucratic offices.

JULIA GILLARD: Jenny, can I say, this is just a distortion of the policy.

JENNY BROCKIE: But let me just push you, though, on this question of scrapping all AWAs, because you said it again just now. Now, Kevin Rudd has been a bit equivocal about this. We've had a bit of a hint from him that he might make some exceptions. No exceptions?

JULIA GILLARD: No, we will get rid of Australian workplace agreements.

JENNY BROCKIE: All of them?

JULIA GILLARD: Absolutely. We will get rid of Australian workplace agreements because they've brought the kind of unfairness we've talked about in this room. But to characterise the policy the way Peter has is really just a misrepresentation. We're talking about modern, simplified awards. We're talking about enterprise bargaining. No-one can come into your enterprise and tell you what to do. No bureaucrat from anywhere can come in and tell you what do. Enterprise bargaining. We're talking about individuals being able to negotiate common law contracts. To characterise that as a centralised wage-fixing system is just untrue. The only wage that will be fixed centrally is the minimum wage, and that happens now.

JENNY BROCKIE: So all people on AWAs are going to have to find another way of being employed?

JULIA GILLARD: We won't have new Australian workplace agreements. Of course we have to transition for people who are currently on Australian workplace agreements. We don't want to throw people into a world of uncertainty. But in… when Labor's system is in operation there won't be new Australian workplace agreements because you don't need it for flexibility.

JENNY BROCKIE: We'll get back to the detail of that in just a moment but, Steve Knott, I'd like to bring you in at this point. You represent the mining industry, another big user of AWAs. How do you feel about Labor scrapping them and Julia's statement that they're all going to go?

STEVE KNOTT, AUSTRALIAN MINES AND METALS ASSOCIATION: The fact is, over the last three months, 80% of mining industry employees are covered by AWAs. So if you want to kill off the resources boom, get rid of AWAs. What you're not hearing from the ALP is that common law contracts are subservient to union awards and union agreements. This debate is all about union power. We've said to the ALP we'll have a collective no-disadvantage test for all workers on site. They won't be worse off. Let us do their individual arrangement. What's the problem here?

JENNY BROCKIE: But the mining industry is undergoing a boom at the moment and we've got miner here. Kade, tell us how much you're earning an hour at the moment as a miner.

KADE: $55.

JENNY BROCKIE: $55 and hour, and you're on an AWA?

KADE: Yes.

JENNY BROCKIE: And you're happy to be on that AWA?

KADE: I am, yeah.

JENNY BROCKIE: Have you ever belonged to a union? Have you ever been interested in being in a union?

KADE: I was part of a union about 12 years ago in the meat industry and while I was impressed with the enterprise bargaining agreement, I wasn't happy with all the stop-work meetings and all the sort of the petty reasons. I found that some employees took advantage of being in the union and would sort of stop work for no reason at all. But I've been on an AWA for seven years now and, yeah, I'm reasonably happy.

JENNY BROCKIE: In an industry, I should point out, that's doing very nicely, isn't it, Steve? I mean, you'd have to acknowledge that at the moment.

STEVE KNOTT: I would acknowledge this has been going on for 20 years. The Court government had AWAs in place in WA and most of the miners were on AWAs then. It was at the bottom end of the commodity cycle. So their direct employment arrangements have worked very well at the bottom end and at the top end. Why do you want to destroy this? No-one's worse off. It's because they want people to bargain with unions in a collective environment and give controls to a third party and the employers in the mining industry and the employees in the mining industry don't want to be forced into that environment.

JENNY BROCKIE: Julia, is it about giving power back to the unions? I mean, if you're talking about collective bargaining, how else are you going to collective bargain if it's not with a union?

JULIA GILLARD: It's perfectly possible under our policy to have non-union collective agreements. That's made clear. And can I just answer some of the things that Steve said? I think we just need to have a little bit of a reality check here. Our resources sector is doing well because of unprecedented world demand, particularly from China and India, and unprecedented world prices. That will be true under a different industrial relations system.

JENNY BROCKIE: But Steve's also saying they've been going for a long time and long before the boom.

JULIA GILLARD: Yes, absolutely and Steve would also acknowledge if we looked across mining overall, 16% on AWAs, 16% on AWAs, far more on common law contracts and far more on collective agreements across…

STEVE KNOTT: Those figures aren't right.

JULIA GILLARD: Across the mining industry overall, going to all forms of mining, AWAs are the least preferred instrument. That's statistically true.

STEVE KNOTT: That's rubbish and you know it's rubbish.

JULIA GILLARD: I can give you the statistics. That's absolutely true.

STEVE KNOTT: It's 37.2% across all – ABS.

JULIA GILLARD: The ABS data across all mining tells you 16% on Australian workplace agreements. What Steve's really saying is he needs flexibility and he needs certainty, and Labor's policy can give him that with modern simplified awards, common law contracts, enterprise agreements and tough rules against unlawful industrial action. So anything he fears about interrupting continuity of supply, Labor's rules can deal with.

JENNY BROCKIE: What about the point that Steve made about this being about unions getting power back? What's your response to that?

JULIA GILLARD: Well, the foundation stone, I think, of living in a democracy, Jenny – nothing to do with being in the Labor Party – living in a democracy, is people can join a trade union if they want to and if they don't want to they don't have to, and it's improper for anybody to bring any pressure to bear for people to make either decision. People should simply be free to decide. Labor's policy provides no more than that.

JENNY BROCKIE: But you're scrapping individual… you're scrapping AWAs?

JULIA GILLARD: Common law contracts. Let's look at our workplace now. There is disputation about how many Australian workplace agreements but to be generous to the Government's debate at the outside it would be 6%, 7% of workers at the moment on AWAs.

PETER HENDY: It's actually 8%.

JULIA GILLARD: 30%…

JENNY BROCKIE: There is dispute about what percentage there is.

JULIA GILLARD: I'm happy to call it 8%. The most preferred form of individual agreement in our workplaces today is common law contracts, on 30%. Common law contracts will still be in Labor's system.

PETER HENDY: They can't change awards.

JULIA GILLARD: If you want an individual common law contract you'll be able to have one.

JENNY BROCKIE: Michael Malone, I'd like to get back to some other industries now, to talk to people in other businesses. Now, you're the managing director of iinet, the third-largest Internet service provider in Australia. Your staff have been on AWAs for the past five years, is that right?

MICHAEL MALONE, IINET: And workplace agreements prior to that.

JENNY BROCKIE: And what do you think of this policy of Labor's to do away with them?

MICHAEL MALONE: I guess I've been comforted by some of the things that Julia's said tonight, I've got to say. But underlying it, I guess, we're concerned about the things that have been raised here, the current amount of flexibility that we have in the workforce, and I've got to say I think the abolishment of them is more driven by the dogma of getting unions back into the workplace rather than actually trying to fix anything that's wrong with the current system. You know, I guess I hear a lot of this out here tonight and it appears to be the battle lines are drawn between employees and employers and they're two different sides going to war with each other.

JENNY BROCKIE: Well, not altogether. We've heard some good stories both ways.

SHARAN BURROWS: There are very good employers out there who we work with every day in a very collective and consensus process.

JENNY BROCKIE: I'd just like to Michael to finish.

MICHAEL MALONE: My problem is, I suppose, we've got two issues. We're in the IT sector, which is a global sector where people can go and work anywhere they want and they're in high demand in the skill set and we're working in WA. And, thanks to Steve and his mates, my guys with degrees can walk out and drive a truck and get paid twice as much as they get paid working for us.

JENNY BROCKIE: So you're on a recruitment drive tonight, by the sounds of it.

MICHAEL MALONE: Simply hanging on to staff or attracting staff…

JENNY BROCKIE: Have you changed the way you employ people since WorkChoices came in, in the last 12 months?

MICHAEL MALONE: For the reasons I've just outlined, you'd be an idiot to do so. I guess we're paying well above the awards and trying to take away conditions from people in this environment would just not be sensible.

JENNY BROCKIE: OK, what would happen if the economy took a turn for the worse? Suddenly you find, you know, this wonderful boom everyone's talking about goes bust. Being honest as an employer, what happens then?

MICHAEL MALONE: My principal… I'm a young bloke. I've never been through the other side of one of these booms but I've got to say we handle about 35,000 calls a week from our customers and that's our principal business, that's what our staff do. I think we need our staff to be happy in their job and to be doing a good job, and if we turned around and started raping them, to be honest, I think that would destroy our business faster than any savings we could make by doing this would justify.

JENNY BROCKIE: Warren McCarthy, you're a small business owner. Now you're not using AWAs. Why?

WARREN MCCARTHY, TRAY FIT PTY LTD: We found that to compile the AWA, to create the whole system, to know what we have to do to go through the various… ..jump through the various tests, the Fairness Test, the different locations to find the information to put it together, the costs and time involved for me as a small business person – I've only got nine people, that includes myself and my wife running the business – it's incredible. As you were saying earlier, the legal costs involved in getting it right can be very crippling for a small business.

JENNY BROCKIE: So how are your people employed?

WARREN MCCARTHY: They're currently on their existing awards. We're getting to the point we need to roll over to this point down the track and we're not sure where we need to go. We don't know how to compile together in a cost-effective manner. The award gave us a basic set of circumstances we can work from and build from that we knew we could stand with. We knew our competitors were working with the same situations. With the AWAs coming in and the variations, I don't know where we stand. We don't know where we're going to have to negotiate to get our contracts right for our staff.

JENNY BROCKIE: Lynn, what about you? You employ 175 people in a home help business in Canberra. You're about to put workers on AWAs, is that right?

LYNN HARWOOD, CEO, HOME HELP SERVICES: Yes, we are.

JENNY BROCKIE: Have you changed their conditions in doing that?

LYNN HARWOOD: For the better and AWA’s for the Home Help Services has been a very positive thing, it allows us much more flexibility. Under the old awards we were very, we had many administrative stringent rules and regulations to follow which were very hard to process and we have been able to remove those. We aim to be an employer of choice and Canberra has a 2.7 unemployment rate and therefore we want people to work for us, we want people to choose the community sector and if they choose the community sector, we want them to work for us.

JENNY BROCKIE: What if Labor gets in and they're abolished?

LYNN HARWOOD: I would see that as a totally backward move.

JENNY BROCKIE: Julia Gillard, how would you get rid of them? You said you would transition people out of them, how would that work?

JULIA GILLARD: We're still talking to employers about that, about making sure that we have arrangements that give certainty, and we haven't made a final announcement about it. Obviously we're conscious that on coming to government, if we are elected at the next election, and we've got a lot of political time to go before we get to election day, but if there is a Rudd Labor government we will need to re-legislate the industrial relations laws. There will be Australians on Australian workplace agreements. We've always said if both parties want to continue the agreement until it ends, and AWAs can be for up to five years, we wouldn't do anything to disturb that. We understand we need to make a full set of announcements about transitionals but because there are employers in so many different circumstances and employees in different circumstances, including some who have been very ripped off by their Australian workplace agreement, we're still consulting so we make sure we get that right.

JENNY BROCKIE: Well, in a moment we're going to look at whether the Government's new Fairness Test will address what the Prime Minister has described as unease with the industrial relations laws. John Buchanan, do you think the Fairness Test that the Government introduced last week, which is designed to compensate people properly for lots of things like overtime and penalties and so on, do you think that will allay voters' fears? Do you think it will be received well?

JOHN BUCHANAN: Look, I'm not sure how they will receive it because it's very vaguely worded. The explanatory memorandum the Government put out has some very interesting case studies which will give people some comfort if they read the case studies. But I think the Government itself has admitted that it's so vague it's going to need an extra 500 staff to interpret it.

JENNY BROCKIE: Zana, what do you think about the Fairness Test? Do you think that is addressing some of the issues of concern to people?

ZANA BYTHEWAY: It's a partial reintroduction of the no-disadvantage test. But, Jenny, there are some key factors that are sort of really important here. Firstly, there's… For an individual agreement there's a $75,000 threshold, meaning up to $75,000. So basically the fairness doesn't apply to all people and of course why should your wage determine whether there should be fairness in the workplace or not? And then secondly, what happens to those hundreds and thousands of people left in the middle? The ones that went on an AWA before the Fairness Test and so they will be working side by side with a co-worker who has better and fairer working conditions whilst they're stuck in the wilderness, stuck in poorer conditions, all things considered.

JENNY BROCKIE: And what you think about the idea of scrapping AWAs altogether?

ZANA BYTHEWAY: Well, essentially I think a collective bargaining arrangement is obviously a much fairer process. Remember the people that we represent are in poor bargaining positions, they're disadvantaged, they're working mothers, young people and people of migrant origin, and of course it's much better for them. They have a much stronger voice in a collective working arrangement.

JENNY BROCKIE: John Buchanan, can we get all this in a bit of perspective? Just how many people are currently on Australian workplace agreements?

JOHN BUCHANAN: That depends on who you follow. The latest ABS statistics say it's just under 4%. Those numbers are about 15 months old. The Office of Employment Advocate or Workplace Authority now says it's more like 8% or 9%. Given the rates of growth of registrations, it's probably somewhere in the middle, probably sitting around 7%, 8%. So it's still a tiny proportion of the workforce, given the scale of the Australian economy.

JENNY BROCKIE: But the government has said that it expects a million people by the end of the year, is that right?

JOHN BUCHANAN: Well, look I would like to know what the government is basing it’s data on because ..

PETER HENDY: I'd say around 900,000.

JENNY BROCKIE: You'd say around 900,000? Why haven't more companies taken them up, Peter?

PETER HENDY: Because this is the point – this is about choice. Most companies in Australia actually like collective agreements but there needs to be an opportunity for individual agreements under statutory agreement-making, individual agreements under common law, and awards, and the fact is that to have the range of options is what is necessary, not to exclude some for ideological purposes.

JOHN BUCHANAN: Jenny, can I come in there? The reason we have labour law is because before we had labour law work was governed by the commercial law or criminal law and it basically made collective activity prohibited. Now, when you bring in the individual statutory right to undermine the collective structures that labour law put in place, you're basically stripping away the basic protections that were put there. So the AWAs cut across the whole philosophy of labour law that prevails in the OECD.

PETER HENDY: Let's go back to the question. There's something like 765,000 people on AWAs right now and if you are to abolish them, most of those people are going to get a pay cut, and that's a fact.

JOHN BUCHANAN: That's not true.

PETER HENDY: It's true. You know that's true.

JENNY BROCKIE: Everyone wants to have a say. David, what do you say about that?

PROFESSOR DAVID PEETZ: Well, you wouldn't necessarily get a pay cut anyway because they will continue until they expire and then I think most employers who are relying on AWAs at the moment will just switch to non-union collective agreements. That will be the preferred form of agreement-making.

DAVID EDWARDS: There's a great theory, this, but in practice before we had AWAs, businesses, small businesses in retail and hospitality didn't use collective agreements and they won't in the past and they won't use individual contracts. I'm very interested in Julia Gillard's award system. I'd love to see a much more flexible and simpler award system and if Labor can deliver on that then that will meet the needs of many, many thousands of businesses. But quite frankly we've had decades of not achieving that. The last time we tried to simplify our award system it took three years, between 1997 and 2000, and we didn't really make much progress, but I'd love to see it take place.

ZANA BYTHEWAY: AWAs… Of course you say that in terms of there being the choice, there are very simple AWAs. My experience is from the callers that we get it's a very simple process. “Take the conditions as they are or just forget about it.” And that's what we find on a daily basis. That's how simple AWA is for our callers.

JENNY BROCKIE: John, just quickly.

JOHN BUCHANAN: Can I just suggest with IR reform the Australian award system has been through… ..has evolved over 100 years. The awards that prevail now are quite different to those around 20 years ago, and it's quite plausible to see awards operating in a way that delivers both fairness and flexibility.

STEVE KNOTT: This issue of common law contracts and awards and so forth, the interaction, the issue is much more complex than people understand. There's over 4,000 awards in Australia, there's over 100,000 classifications and depending on which day of the week it is or which side of politics you're in, if someone doesn't know they're covered by an award and there's an underpayment, it's someone being ripped off or it's an honest mistake. And what AWAs allow you to do is to get away from industrial tribunal – and Fair Work Australia, let's get rid of the jargon, it's another IR tribunal – and get away from compulsory union involvement and this is what this debate ends up drilling down to. We are free of that at the moment and we want to keep our direct employment arrangements.

JENNY BROCKIE: Julia Gillard, compulsory union involvement?

JULIA GILLARD: It's a nonsense, Jenny, it's just a nonsense. And can I say, if the employers were serious, if Steve was serious about government bureaucracy, given the Howard Government is now up to a $1.8 billion expenditure on WorkChoices, I don't know why Steve isn't picketing every day of the week in front of Parliament House about an industrial bureaucracy the likes of which this country has never known before. On the pay cut question, this is an absurdity. What we know about Australian workplace agreements compared to collective agreements is that men and women on them earn less per hour than men and women on collective agreements – women startlingly less. And you've heard tonight about people who have lost penalty rates and the like because of Australian workplace agreements. We'll certainly have a system that has certainty but to characterise ending that as a system that will bring a pay cut is just mischievous.

PETER HENDY: There will be thousands of people watching this show who are on AWAs who know they will get a pay cut if they are abolished.

JULIA GILLARD: That is deliberately misleading.

MICHAEL MALONE: Can I say, in our case, the base rates are above the award and we still pay penalty rates to all staff.

JULIA GILLARD: And you will get a tick under Labor's system. Nothing will change for you.

MICHAEL MALONE: How do we transition? What would we move to?

JULIA GILLARD: If you are paying above the award you will simply move to common law contracts. You won't notice the difference for a second.

JENNY BROCKIE: Sharan?

SHARAN BURROWS: Unions are very proud of their work. A union member gets 20% more in their pay packet on average than a non-union member. They're the statistics you just heard. AWAs pay people less than average. They rip off people's penalty rates, they slash their take-home pay and when you put it with the rest of WorkChoices – no unfair dismissal rights, no rights to collectively bargain. Now, we must accept we live in a democracy and choice is not about Peter's choice for the employer, choice is genuinely about choice for the working person but I want to defend the employers because small business – I do meetings right across the country and small business comes along with working people and they say they want certainty. They want an award they know they can ring up and find out what they have to pay, what the conditions are and of course in that context we are more than happy – and I do it every day – to negotiate flexibility. So, you know, the employers have one agenda here, their choice, not working people, and of course they hate the fact that people might stand together collectively and actually balance the power equation out. Well, working people understand WorkChoices doesn't work for them.

JENNY BROCKIE: David Peetz, from the research you've done – and we are going to have to wrap this up – Are people earning more on AWAs? They are, aren't they?

PROFESSOR DAVID PEETZ: No, they're not, they're earning less. The figures Peter mentioned right at the start comparing people on AWAs with awards ignore the fact that 47% of people on awards are casuals. You're comparing senior executives in the Commonwealth public service who have to sign an AWA with casuals working in hospitality. When you get down to their hourly rate of pay, people on AWAs are earning more than 3% less than somebody who's on a collective agreement.

JENNY BROCKIE: That's based on the numbers of hours they work against the money they're receiving?

PROFESSOR DAVID PEETZ: Somebody on an AWA earns more per week but they work a lot more hours per week. When you work out how much they get paid per hour, they get less.

JENNY BROCKIE: We are going to have to wrap up. Julia Gillard, when are we going to see more detail of your policy?

JULIA GILLARD: We've published Forward With Fairness. It's more detailed than Mr Howard published before the last election. It's a substantial policy document. We have said we will publish a further policy on AWA transitionals. If people read that, that will very clearly tell them what Labor's industrial relations system is about. The Liberal Government, the Howard Government didn't tell you one word of what they intended to do. By contrast, every Australian will be able to understand what we mean for them or their business through our policy before the next election.

JENNY BROCKIE: Peter Hendy, you weren't happy about this new Fairness Test. Do you think the IR laws the Government introduced go far enough? Would you like to see them go further?

PETER HENDY: We're satisfied that WorkChoices and the 10 years of industrial relations reform we've had have produced the strength of this economy, the thousands of new jobs that we've had, the lowest unemployment rate for 30 years. So the bottom line is, yes, we're happy with what the Government's got at the moment.

JENNY BROCKIE: Would you like to see awards abolished altogether?

PETER HENDY: Our policy… I'm not representing the Government so if you want me to answer for the Government…

JENNY BROCKIE: No, I'm asking you. Would you like to see awards abolished? I'm asking you.

PETER HENDY: Our bottom line is that we think there should be minimum conditions and that they should be legislated, there should be minimum wage and all those sorts of things should be legislated and put into place to protect the Australian population.

JENNY BROCKIE: A couple of quick comments from our audience before we wrap up. Lady up the back, just very quickly.

WOMAN: I'd just like to make another point about the Fairness Test. This is a test the Liberal Government has tried to put into place to introduce fairness back into the workplace but it's actually not applying to young people, to disabled people, to working parents and these are the people who really need fairness in the workplace. I've been paid in barbecued chickens for two shifts, and under this new Fairness Test…

JENNY BROCKIE: That's not good.

WOMAN: That's going to be legislated in this new Fairness Test.

JENNY BROCKIE: There's no legislation for barbecued chickens. I totally understand the point that you're making. But we are going to have to wrap up. Just quickly from you, John Buchanan, do you think we will see more changes after the election regardless of who wins?

JOHN BUCHANAN: I think there's no doubt about that. Australian industrial law is in turmoil. Employers have made it quite clear they want to go further. Nick Minchin, when he talked to the H.R. Nicholls Society, showed the Government has another agenda and if you look at the construction industry, the Government's laid out pretty clearly where it wants to go next.

JENNY BROCKIE: Which is?

JOHN BUCHANAN: Super-government agencies that basically work on the one hand to make unions irrelevant andWHERE unions stick their heads up, go after them very vigorously to make sure they're not effective.

JENNY BROCKIE: We are going to have to leave it there. I'd like to thank you all very, very much for joining Insight tonight. It's been a terrific discussion. Thank you.