The visit to WA by deputy federal Labor leader Julia Gillard has done little to quell fears among the business community that scrapping AWAs would lead to increased industrial action at the hands of a more powerful union movement.
The visit to Western Australia by deputy federal Labor leader Julia Gillard last week has done little to quell fears among the business community, particularly the mining sector, that scrapping Australian Workplace Agreements would lead to increased industrial action at the hands of a more powerful union movement.
A quick glance at the statistics provides some insight as to why Ms Gillard – who’s also Labor’s industrial relations spokesperson – chose to sit down with Rio Tinto Iron Ore’s Sam Walsh and the local Chamber of Commerce and Industry.
At the same time, Kevin Rudd was briefing the National Press Club in Canberra on the ALP’s plan to create a new national industrial relations system that would not include AWAs.
Figures from the Office of the Employment Advocate show WA outstrips the nation in terms of the number of active AWAs.
About 28 per cent of the 747,533 active AWA’s are WA-based.
And the number of AWAs in this state as a percentage of the working population is three times the national average.
About 24 per cent of WA workers are currently covered by an AWA compared with just 8.3 per cent of the nation’s nine million employees.
There is also an unidentified portion of the workforce operating on individual common law contracts, which are agreements struck between an employee and an employer where the occupation is not subject to award or the person holds a managerial position.
The contracts are not registered with any government body.
It’s not surprising, therefore, that trade union membership in WA has been falling.
It plunged 10 per cent last year to account for just 16 per cent of the state’s 886,700-strong workforce.
According to CCI WA, union membership as a percentage of all WA employees has halved since the Court government introduced a form of individual agreements in the mid 1990s.
Workplace relations lawyers spoken to by WA Business News this week said WA’s higher rate of AWA uptake was due in part to the length of time employers have had access to individual agreements.
The state’s large resources sector was another contributing factor, with about 80 per cent of the industry using AWAs.
Some lawyers said their clients were concerned that abandoning AWAs would increase industrial disputes across the state’s worksites and would damage productivity.
Deacons partner Maria Saraceni said it was “ludicrous” to abolish AWAs in a buoyant economy.
“It is seen by a backward step by the mining sector,” she said.
“For instance, the roster system is not nine to five, it is seven days a week and around the clock, so it becomes a nightmare to do timesheets and work out what were ordinary hours, what were after hours, how many hours were worked on a public holiday etc. With an agreement a company can work out the average pay over the year and pay the rate on an annualised basis.”
A recent report by the Australian Mines and Metals Association claimed abolishing AWAs without a suitable alternative would put at risk productivity gains and would amount to more than $6 billion in lost exports.
“The removal of AWAs is not a minor matter, it’s a roll back we can’t afford,” the association said.
AMMA cited a 2001 review of the mining operations of Rio Tinto Hamersley Iron Pty Ltd and BHP Iron Ore Pty Ltd to back its assertion that AWAs increased productivity.
The review found that statutory individual agreements at Hamersley facilitated an increased capacity to implement change, improved the focus on business outcomes and improved efficiency by 25 to 30 per cent.
The association said the majority of BHPIO employees now worked under AWAs.
Rio Tinto Australia managing director Charlie Lenegan said in a speech last month AWAs had played a key role in encouraging more progressive employment options.
“It is nonsense to deny their importance and it is short-sighted to pursue policies which will eliminate this employment choice,” he said.
Mr Lenegan said it that, as the federal election approached, there were two different workplace platforms that could deliver very different futures.
“One provides opportunity and flexibility, with options for further improvement,” Mr Lenegan said. “The other pathway appears to be back to the past, with third party interventions and a movement away from recognition of individuals and enterprises as the key building blocks for a successful economy and society.”
A Rio Tinto spokesman said the company’s position had not changed following Mr Rudd’s speech last week.
CCI WA executive director policy Deidre Willmott said more detail on the ALP’s IR policy was needed.
“At the moment we’re not sure how much choice someone will have and how much flexibility there will be,” she said. “We need working arrangements for the 21st century, which provide flexibility for employers and employees.”
