After years of relative stability, Coalition Government moves against trade unions, and a recent Federal Court of Australia decision related to casual workers that is currently being appealed at the High Court, have brought conflict and uncertainty to the industrial relations landscape. An economic crunch and spiralling unemployment on the back of COVID-19 have heightened concerns among employers and employees alike.

Rolled out four decades ago, the 1983 Prices and Incomes Accord between the Australian Council of Trade Unions (ACTU) and the Hawke Labor Government was designed to bring peace to industrial relations and deliver structured pay rises to workers while reducing unemployment and inflation. Successive Accords have largely achieved this, maintaining momentum throughout the enterprise bargaining period since 1993.

With structures in place to promote the interests of employees since then, there has been less of a perceived need for trade unions. Coupled with the decline of the Australian manufacturing industry and other blue collar work, union membership faded from a peak of 2.5 million members in 1976 to 1.5 million in 2016. During the same period the union member share of all employees (or union density) dropped from 51 to 14 per cent. The decline in union membership has been accompanied by rising casual employment, and the advent of the gig economy, leaving workers without entitlements and protections their full-time counterparts enjoy.

Meanwhile, the nature of employment today has also left workers much more vulnerable to economic dislocation wrought by the coronavirus pandemic. To address this, the Morrison Government legislated the JobKeeper payment scheme in early April, which has kept employees attached to their workplaces and getting paid through the worst of the crisis. At the same time, the contentious Newstart model of unemployment benefits was repackaged as JobSeeker, with a much higher payment rate. This is something that the Australian Labor Party, the Greens, social services organisations and even employer groups had been calling for, as Newstart was well below the poverty line.

The same groups are warning the Government against returning to the old rate as part of the Prime Minister’s economic ‘snap back’ in September. The Australian Council of Social Service (ACOSS) has encouraged the Government to consider a permanent increase in the JobSeeker payment. “In this precarious economic environment, it is more important than ever that we have a robust safety net for the 1.6 million people who are now locked out of enough paid work, and the projected more than 2 million people needing income support in September," ACOSS CEO Dr Cassandra Goldie said. “The reality is that doubling the previous unemployment rate to $550 per week has put people just above the poverty line. We hear from people every day that they are spending the higher payments on desperately needed essentials like fresh fruit and vegetables, utility bills and warm winter clothes for their children. This has transformed lives and provided a lifeline to a flagging economy.”

Both unions and employer groups believe that the COVID-19 pandemic presents an opportunity to advance their interests. On 16th of June, the ACTU announced that, for the first time since 2012, a majority of Australians believed workers would be better off with stronger unions. Up to 75% of Australians surveyed said unions provided an essential service to ensure members were paid properly, had a safe working environment and provided a strong collective voice. ACTU Secretary Sally McManus attributed this turn in public sentiment to the role unions have played during the pandemic. “Australian unions fought for and won the JobKeeper wage subsidy and the increase to the JobSeeker payment,” Ms McManus said. “We continue to campaign for paid pandemic leave and proper workplace safety regulations to keep all workers safe as the economy reopens.”

By contrast, the Australian Industry Group (Ai Group) has said that the pandemic meant wages should be frozen. At the final hearing of the Annual Wage Review on 10 June, the Ai Group argued that the Fair Work Commission should not award a minimum wage increase given the impacts of the COVID-19 pandemic on the economy and businesses. "If, despite Ai Group's submissions, the Commission decides that a wage increase is warranted, Ai Group will argue that the increase should not be operative before 1 January 2021. The priority at this time needs to be on preserving jobs and encouraging, not deterring, employers from taking on more employees and allocating more hours of employment,” Innes Willox, Chief Executive of the Ai Group said.

The Government has used the pandemic as a reason to attempt to loosen enterprise bargaining agreements, cutting the consultation period for changes from seven days to just one day, which Labor’s Shadow Industrial Relations Minister Tony Burke described as ‘a lousy move that has undermined the tremendous goodwill and cooperation that was established between employers and workers when the coronavirus crisis began’. However, the regulation enabling the change was disallowed in the Senate after the Government failed to gain the support of One Nation.

The ruling of the full bench of the Federal Court in WorkPac Pty Ltd v Rossato [2020] FCAFC 84 has also caused significant concern for employers. The court found that casual workers employed on a regular, permanent basis are entitled to annual leave, sick leave, and other entitlements, despite being paid casual loadings designed to compensate for the lack of these entitlements. Industrial Relations Minister Christian Porter said the decision would do further damage to businesses already weakened by the coronavirus pandemic. “Given the potential for this decision to further weaken the economy at a time when so many Australians have lost their jobs, it may also be necessary to consider legislative options,” Mr Porter said.

The Government has cooperated with the ACTU in leading the nation and the economy through the pandemic. At his address to the National Press Club on 27 May, the Prime Minister was asked whether this new spirit of cooperation represented an ‘accord version 2.0’. Mr Morrison didn’t accept that framing, but responded that all sectors, including the unions and employer groups, had engaged with good faith and honesty to get through the crisis. The same afternoon, Mr Porter offered further clarification, saying that the Governments’ measures were ‘more targeted’, and would seek to reduce the complexity of existing awards and enterprise bargaining agreements.

The coronavirus pandemic has brought to a head many of the currents that have been circulating in the industrial relations arena. The exigencies of the pandemic have surfaced new-found workplace flexibility to some, and economic disaster to many others. Employers and employees alike will be vying to advance their interests as Australia establishes a ‘new normal’ in industrial relations.

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