Working Life

Senate test looms on individual agreements


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By Mark Phillips

Editor of Working Life

Monday, 01 September 2014

LABOR has reiterated its determination to resist all attempts by the Abbott Government to bring back the widespread use of individual agreements, as a crucial vote approaches in the Senate on changes to the Fair Work Act.

Labor’s Employment spokesman, Brendan O’Connor, told Working Life that individual contracts, were a “threshold issue” that the ALP would never be likely to support.

But he added that horse-trading in the Senate may force Labor to compromise on some other proposed changes to “mitigate” against the worst excesses.

And although both Labor and the Greens seem set to oppose the Fair Work Amendment Bill when it comes to the Senate – possibly this week – its fate could come down to a handful of cross-bench and minor party votes.

Get up to speed on the government’s planned changes to workplace protections.

The Fair Work Amendment Bill will be the first test of the new Senate on how it will treat anti-worker legislation over the next few years.

Until now, Labor and the Greens have had the numbers to block detrimental legislation, and have managed to prevent the reintroduction of the ABCC.

But since the Senate changed on 1 July, that is no longer the case.

But Labor is also under pressure, as unions are lobbying intensely against the legislation and expecting the opposition to hold the line.

The Fair Work Amendment Bill contains some crucial changes, most controversially making it easier for employers to use Individual Flexibility Agreements to vary the conditions in a collective agreement or Award.

IFAs were introduced by Labor in the Fair Work Act, but critics say the new amendments would remove safeguards for workers and allow wages to be traded off for non-monetary benefits, such as flexible hours.

Mr O’Connor said in Labor’s view, IFAs under the proposed legislation were Australian Workplace Agreements under a different name.

“We would just not entertain the ability for employers to just take away monetary conditions of employment or other conditions unilaterally or unfairly, so that would clearly be a threshold point for a Labor opposition,” he said.

Other changes include allowing employers to establish greenfields agreements without negotiation with unions, restrictions on the rights of workers to take industrial action, and giving a green light to sham corporate restructures which remove or downgrade employee pay and conditions.

No limit on how much wages could be cut

The Abbott Government claims that the amendments are implementing recommendations of the McCallum Review into the Fair Work Act, that was commissioned by the Gillard Government.

Mr O’Connor conceded that Labor had first introduced IFAs in the Fair Work Act, but he said what the government was now proposing went much further than the McCallum review panel ever suggested.

“We would not entertain the ability for employers to just take away monetary conditions of employment or other conditions unilaterally or unfairly.”

He said his biggest concern with the proposed changes to IFAs were that there would be no limit on how much employers could cut wages by.

“Clearly, they’re seeking to propose IFAs and suggest they’re a different creature from Australian Workplace Agreements which were introduced in the Howard years,” Mr O’Connor said.

“But my reading of the construction of the provision would certainly allow for a fundamental shift away from protections afforded to employees now as opposed to what they would be if enacted.

“The concern I would have is in workplaces where employees will be advised by their employer to sign the document and that agreement . . . would not filed with the Fair Work Commission, the ombudsman or anyone, so there would be no transparency, no oversight, there is no qualification on how much of the monetary benefit can be traded, and therefore that would be a real problem.”

Penalty rates in the gun

Unions say they are concerned that the changes would allow employers to make workers sign an IFA which cuts pay as a condition of employment.

ACTU President Ged Kearney said the remodelled IFAs would make it easier for employers to force workers to forego penalty rates.

“An IFA will allow an employer to pressure an employee to trade off their penalty rates or overtime in exchange for changes to their work arrangements, such as start and finish times.

“Hundreds of thousands of workers could be moved off safety net conditions onto IFAs with less pay and less conditions under a scheme that will make it virtually impossible for workers who are ripped off to recoup their losses.

“We know that most people signing IFAs will do so under pressure to keep their jobs, particularly when starting a new job or to continue their employment.”

Mr O’Connor warned that the volatile nature of the Senate, with a large number of unaligned or minor party Senators, made it difficult to predict how the legislation would proceed.

He said Labor had to keep an “open mind”, and could be forced to compromise on some parts of the legislation to mitigate the worst aspects.

“We won’t be supporting individual arrangements that totally potentially corrode basic conditions of employment and wages for people that work in this country,” she said.

“We wouldn’t want to see people having no rights to properly bargain, we want to see people have the capacity to negotiate in good faith.

“So there are some threshold issues, yes — but there are some that we would have to see what we could achieve. We’re not in a position to just say yes or no, that’s not the political situation in which we find ourselves.”

It is for those reasons that unions are this week urging their members to contact cross-bench Senators directly to ask them to oppose the legislation.

The changes at a glance

Here are the key amendments that the Abbott Government is seeking to make to the Fair Work Act:

The return of individual contracts: The Bill opens the way for a return to the most insidious aspects of individual statutory arrangements which were emphatically rejected by Australians in 2007. A worker who signs on the dotted line will be held to their “agreement”, whatever the circumstances – even if it demonstrably and unfairly cuts their pay and conditions (like paying them in pizza instead of overtime rates). Even if a court finds that an agreement was so unfair that it should never have been entered into in the first place, the worker may never be able to recover their losses.

“Strike first, talk later”: As catchy as the phrase may be, the truth is our laws have never allowed anyone to engage in industrial action unless they are genuinely trying to reach agreement.  Parties seeking to use lawful industrial action in support of their claims should first try to reach agreement with the other parties to the dispute. Under this Bill, an employer who is completely unresponsive to workers’ claims is rewarded for their intransigence with an immunity from industrial action.

Greenfields “agreements”: When a company is opening a new site or workplace, it will only have to give unions three months notice that it will be writing an “agreement”. On the expiry of that period, the employer can get the “agreement” approved by the Fair Work Commission, whether there have been genuine negotiations or not. This is akin to giving greenfields employers the power to make their own laws.

Source: ACTU

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Working Life is a forum to share ideas and opinions about work and life, both light-hearted and serious. The opinions presented on Working Life are those of the author, and do not necessarily represent policies or views of the ACTU.


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We believe in the free flow of information, and content on Working Life is available to be republished online or in print under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.


  1. Andrew Smith
    Tuesday, 2 September, 2014 at 11:52 am · Reply

    Something about buried and dead comes to mind here. Flexible is an interesting word it tends to have very different meanings depending on whether you are a worker or an employer.

  2. Cassandra
    Saturday, 6 September, 2014 at 11:15 am · Reply

    Given the PUP’s rolling over and having its tummy tickled to lower our superannuation and that most of the other newly elected so called ‘independents’ are ex Liberals an on the record as wanting to reduce penalties and the minimum wage the chances of Abbott getting his way here must be better than his chances of getting his unemployment and welfare cuts through the Senate – in other words pretty good!

    The Labor Party must come out openly and say that any of these sort of changes that are rammed through parliament will be rescinded immediately after they win the next election and reaffirm their solidarity with the Trade Union movement instead of the fence sitting and dissolving of the partnership encouraged by the Murdoch Press.

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