Chapter 10 - Victorian workers
An allegedly unitary industrial system that has such inherent
contradictions as two ‘safety nets’, which operate according to
the form of the industrial regulatory instrument seems, at least, perverse.
Victorian Government, November 1999
Introduction
10.1
Victorian
employees are currently serving as guinea pigs in an experimental deregulation
of most employment conditions. In 1995, the Kennett Government abolished all
Victorian State awards. Then, from 1 January 1997, the former Victorian
Government referred most of its industrial relations powers to the Commonwealth
Government.
10.2
However, this
referral of powers has not resulted in Victorian employees receiving the
benefits of safety net standards that apply to other workers under the federal
jurisdiction. Instead, a completely separate federal system has been
established for those workers unable to access federal awards, the equivalent
of a federal industrial relations ‘ghetto’:
There was a common
perception by many members of the Victorian community...that the transfer to the
‘federal system’ would bring with it the extended benefits associated with
federal award terms and conditions...In reality, however, the handover reflected
a minimalist approach with a direct incorporation of Schedule 1 of the Employee
Relations Act 1992 (Vic)...into Schedule 1A of the Workplace Relations Act
1996...The incorporation of Schedule 1A in this manner had the consequence
of, for those employees covered by it, enshrining in federal law, the lack of
statutory entitlements in a broad range of matters, including: paid bereavement
leave; jury service leave; paid overtime; penalty rates and loadings; spread of
hours; allowances; accident makeup pay; severance payments on redundancy;
minimum and maximum number of hours (not an exhaustive list).[1]
Never forget that we do not
have a state system in this state. We have, I would estimate, up to 750,000
workers who do not have much more applying to them than a minimum hourly rate
of pay for 38 hours, no guarantee of overtime and certainly none of the rights
and conditions that those under either a federal or a decent state award system
would have. I understand it is estimated in the retail industry that a worker
in this state employed in a shop is 25 per cent worse off than a colleague
working down the road doing the same work who is under a federal award. That is
an outrageous state of affairs in a country like Australia where we think there
should be a fair go for all.[2]
Impact of the Workplace Relations Act
10.3
Minimum terms and
conditions for Victorian employees not covered by federal awards are now
established under the WR Act – Part XV and Schedule 1A. These provisions give
Victorian workers just five conditions of employment:
- four weeks paid annual leave;
- one week paid sick leave;
- a minimum wage;
- unpaid maternity and
paternity leave; and
- notice of termination or
compensation in lieu.
10.4
Jobwatch estimated
that approximately 40% of Victorian workers are not covered by federal awards
and rely on the five minimum conditions established by Schedule 1A:
...the 1996 hand over of most industrial
relations powers to the Commonwealth created a situation where not all
Victorian workers were automatically covered by federal awards. We still have a
number of workers who are not within the federal award system...in Victoria, 40 per cent of Victorian workers only have five rights...
In Victoria there is a huge
disparity in the employment conditions between those covered by federal awards
and agreements and those covered by schedule 1A. It is a situation of great
injustice where some Victorian workers have conditions that are so much better
than others, and the ones with the worst are the ones that are the most
vulnerable and the ones that are not organised—they are not in unions.[3]
10.5
The Inquiry was
presented with evidence of widespread exploitation of Victorian workers who are
covered by Schedule 1A conditions. For example, a Victorian hairdresser gave
the Committee a brief explanation of his situation under Schedule 1A:
I work on average between 45 to 50 hours in a
given week. There is no choice on this. It would seem to me that the people who
wrote the provisions for Victorian minimum standards do not understand that it
is not normal for a full-time hairdresser on minimum conditions to simply work
38 hours. Shops are open for trade these days for 65 hours a week. The days and
times that I am expected to work include one, and sometimes two, 12-hour shifts
Saturday and Sunday, all with only half an hour for lunch. These working days
at times include public holidays but I am told by my employer that, if I do not
work, I will not get paid for the holiday. Penalty rates and overtime simply do
not exist. I cannot afford not to work. As an employee, I do not have a choice
but to work these hours on a flat rate of pay.[4]
10.6
Not only are Victorian employees covered by
Schedule 1A conditions not entitled to overtime or penalty rates, there is
actually some doubt as to whether they are entitled to be paid for any hours
worked over 38 hours a week, due to the ‘minimalist’ approach to setting wage
rates. A Victorian barrister submitted:
...I have had cases where
employees in the hospitality sector in provincial towns with high rates of
unemployment have been working up to 70 hours a week with no additional pay
for hours worked beyond 38 hours![5]
10.7
Compounding problems for Victorian employees is
the fact that in 1996 the Government overlooked the need to give federal
officers the power to investigate or prosecute breaches of Schedule 1A minimum
conditions:
When the WR Act was amended by the Workplace Relations and
Other Legislation Amendment Act (No. 2) 1996, no provision was made to
allow the Department’s authorised officers to enter into workplaces where the
terms of employment of employees were governed by contracts of employment
underpinned by the minimum conditions of employment contained in Schedule 1A.
Nor was provision made for the Department’s authorised officers to bring
actions under sections 178 and 179 of the WR Act in respect of breaches of the
Schedule 1A minimum conditions of employment.[6]
10.8
This has allowed employers in Victoria to breach
even the very basic protections afforded by Schedule 1A:
The department effectively
does not prosecute employers who breach [Schedule 1A]. Our organisation decided
to outline these problems because we trust that the Committee will recommend
that the problems be addressed...There have been no prosecutions at all in
Victoria with regard to schedule 1A workers...The Department of Employment,
Workplace Relations and Small Business does not believe it has the power to
prosecute—it is a matter relating to the difficulty with referral of powers.[7]
10.9
An additional
problem that has been highlighted in this Inquiry relates to some employees who
were excluded from the referral of industrial relations powers by the Victorian
Government. On the referral to the Commonwealth, certain matters were reserved,
including matters pertaining to discipline or termination of law enforcement
officers. Law enforcement officers are defined to mean a member of the police
force, police reservists, police recruit or protective services officer. The
effect of the current Act is to force police back into an inadequate or
non-existent jurisdiction, with no rights on termination.
10.10
In effect the Commonwealth has left the extent
to which it meets its obligations under the ILO Convention on Termination to
Victoria. The Commonwealth has failed to meet its international obligations by
abrogating its responsibility to the State of Victoria and by failing to ensure
that the Victorian system with respect to ‘law enforcement officers’ meets the
minimum standards established by the ILO Convention on termination.
10.11
The evidence demonstrates that the WR Act has
failed to provide adequate protection to Victorians not working under federal
awards. The new Victorian Government has expressed it serious concerns with the
legislation:
It is manifestly clear that the current Part XV/Schedule 1A
‘safety net’ arrangements in the WR Act are unfair to Victorian workers.
Victorian workers, who are subject to these provisions, have a demonstrably
inferior safety net protection compared to all other Australian workers covered
by the WR Act.[8]
10.12
Over the last few
years, Victorian unions have attempted to alleviate the situation by extending
federal award coverage to as many Victorian employees as possible. However, in
small workplaces that are not unionised, this is very difficult:
In 1993-94 we took probably
about 400,000 to 500,000 people from the state system into the federal system
to protect them. The only reason we have not done more is the constraints on
unionists to organise workers into roping in small employers in particular.[9]
Conclusions
10.13
40 per cent of Victorian employees have fared
very badly under the WR Act. Employees working under Schedule 1A minima do not
even have access to minimum federal safety net conditions:
Contrary to the claims of the Prime Minister that no Australian
worker would be worse off, the case studies presented here show that workers
have been profoundly disadvantaged by the WR Act 1996. This is especially true
in Victoria, where approximately 40-45% of the workforce have their minimum
entitlements determined by the 5 conditions nominated by Schedule 1A of the
Act. Several of the case studies show that even these minimum conditions are
breached, and the absence of effective remedies leaves workers powerless to
enforce their nominal rights under the legislation.[10]
10.14
Unions have managed to improve the situation for
many Victorian employees, by extending federal award coverage as far as possible.
However, the employment conditions for non-unionised Victorian employees are
unfair and inequitable: it is not acceptable that some Victorian employees are
not protected by the minimum safety net standards, while others performing
exactly the same types of work enjoy award conditions.
10.15
The Labor Senators believe that the Government
must take urgent action to rectify the position, by making available federal
award coverage to all employees. Alternatively, the Australian Catholic
Commission for Employment Relations suggested that former Victorian State
awards could be recreated:
The ACCER does not believe that these statutory minimum
conditions are sufficient to provide workers with fair and just standards of
employment. Therefore it is believed that such statutory provisions should be
supplemented by a safety net of comprehensive terms and conditions of
employment based on the previous state awards.[11]
Amendments proposed in the Bill
Amendments to Schedule 1A
10.16
Schedule 15 of the Bill proposes some limited improvements
to Part XV of the WR Act to allow inspectors authorised under the WR Act to
enter and inspect premises where employees are employed on conditions set under
Schedule 1A and to enforce any breaches of these minimum terms and conditions,
and to ensure that employees who work more than 38 hours a week are entitled to
be paid for these additional hours of work.
10.17
These amendments, which in reality provide a
long overdue fix for technical drafting problems within the Act, were widely
supported:
Schedule 15 is the only
schedule which contains any amendments which are of benefit to workers.[12]
10.18
However, as the
Victorian Government submitted, the Bill does little else to improve the lot of
Victorian workers:
While there are minor changes which would assist some employees
in Victoria, these are relatively minimal and do not address the concerns of
the Victorian Government to provide a fair, safe, secure and more productive
working environment for all Victorians.[13]
10.19
The present conditions in Schedule 1A do not
even provide some of the most basic employment entitlements. As one witness
pointed out:
In Victoria, you have no
legal entitlement to attend the funeral of your own child. It is not in
schedule 1A, so you do not have it. It is probably the most basic of safety
nets that is seen in the whole of Australia.[14]
10.20
The Bill does not
contain any amendments to allow Victorian employees access to additional
conditions, such as bereavement leave, or other ‘allowable award matters’ as
set out in section 89A(2) of the WR Act, to which all other employees covered
by the federal jurisdiction are entitled.
10.21
The Bill would actually further disadvantage
Victorians working under Schedule 1A conditions, as it proposes amendments to:
- ensure that employers can stand down employees employed under
contracts underpinned by Schedule 1A minimum terms and conditions; and
- exempt some types of employees from the entitlements to annual
leave and sick leave.
10.22
The amendments to annual leave and sick leave
attracted particular criticism:
Some other proposed changes in this schedule will actually
compound existing inequities Victorian employees covered by Schedule 1A
currently experience. Two of the changes that will have a detrimental effect on
these employees are those proposed in the new subsections (3) and (5) of Clause
1 of Schedule 1A, which relate to the calculation of annual leave and sick
leave. These clauses rely on a mathematical model which excludes the time an
employee is on leave from the calculation equation. The impact this will have,
especially in relation to the accrual of annual leave, gives Victorian
employees less annual leave over time than those covered by other state laws or
federal awards, which include time taken as leave in the calculation of leave
entitlements.[15]
As poor and as substandard as the existing minimum conditions of
employment are, the Federal and [former] Victorian Governments have determined
to further reduce and cut the essential minimum conditions of Victorian
employees...The proposed changes to Clause 1 of Schedule 1A will see that casual
and seasonal workers who are currently entitled to minimum conditions of
employment in respect of annual leave and sick leave, will lose those
entitlements.[16]
10.23
The Government has justified the amendment on
the grounds that the Department of Employment, Workplace Relations and Small
Business had received numerous requests from Victorian employers unsure as to
whether casual employees are entitled to be paid annual leave or sick leave,
and that casual employees already receive a loading in lieu of these
entitlements.[17]
10.24
However, the Government has not addressed
potential problems that will occur if casual or seasonal workers no longer have
access to these two minimum entitlements, due to a lack of regulation as to
when employees can be employed as casuals:
One outcome of the proposed amendments is that if an employer
designates an employee as a casual employee, (or as a seasonal employee), then
that employee will not be entitled to either paid annual leave or paid sick
leave. An additional potential concern is the lack of an adequate definition
as to what constitutes a casual or seasonal worker.[18]
What makes these amendments even more worrying is that there is
no clear definition as to what constitutes a casual or seasonal worker...The
Commission, in Award Simplification decisions, has given effect to the
legislative process by ensuring that where workers are genuinely engaged on a
regular and systematic basis for less than 38 hours per week, that they are
employed as regular part time employees under an appropriate award and are
entitled to full pro-rata award entitlements. However, in the case of Victorian
employees..., employers are given carte blanche in terms of employing any worker
as a casual or seasonal worker. The real effect of the proposed amendment to
Clause 1 of Schedule 1A is that wherever an employer designates an employee as
a casual employee, or a seasonal employee, then the employee will not be
entitled to either paid annual leave or paid sick leave.[19]
10.25
The Committee
received evidence from ‘casual’ Victorian employees, who were clearly working
full time hours:
I started working for [Data
Connection], and on average I worked in excess of 60 hours a week which is not
exactly what you would call part time. I kept this up for a fair while because
I am working to pay for my coffin. That is not being melodramatic; that is a
fact...I was told that perhaps I could think of alternative employment because
they were not going to be offering me hours in the near future. I said, ‘Are
you firing me? What did I do wrong?’ He said, ‘No, I am not firing you.’ I
said, ‘Then why won’t you let me work?’...I went to see a solicitor about
basically being fired because I have got cancer. Come on here! This is
Australia—you don’t do stuff like this. But it got done and the bottom line is
they terminated me and there was jack all I could do about it...I cannot get a
bank loan because I am a casual employee. I cannot provide a future for my
children because I am a casual employee.[20]
10.26
It therefore seems
that in Victoria employees are already being inaccurately designated as casuals
so that employers can avoid unfair dismissal claims. The Shop Distributive and
Allied Employees’ Association was concerned that amending Schedule 1A to remove
entitlements to annual leave and sick leave for casuals would only exacerbate
the problem:
...there is nothing in either
the minimum wage orders or in Part XV of the Act which defines a casual
employee. What this means is that even though a casual employee has to be paid
a loading on their base hourly rate, there is no prohibition on an employer
employing all employees as casuals...The Workplace Relations Act encourages the
introduction and utilisation of regular part time employment in an award
situation, but there is no such encouragement within the context of workers in
Victoria...It is clear that the changes to Schedule 1A have been made with the
view of allowing employers in Victoria to convert all permanent employees over
to casual or seasonal status, so as to avoid paying employees in Victoria paid
annual leave and paid sick leave.[21]
10.27
Seasonal workers
are not paid a loading in lieu of annual leave and sick leave entitlements, so
it is even more inappropriate to remove these employees’ entitlements.
Amendments to section 111AAA
10.28
The Bill proposes amendments to the principal
object of the Act and section 111AAA, to strengthen the presumption in favour
of State employment regulation, including by legislative minimum conditions. If
passed, the Bill would effectively prevent any more Victorian employees from
transferring from inadequate Schedule 1A minimum conditions to the federal
award safety net:
....there is a particular clause in the bill which says that the
commission would be precluded from making an award for workers where it is
shown that a state employment agreement exists in a workplace. So a Kennett
style contract, a schedule 1A contract with a minimum hourly rate of pay and a
few conditions, would preclude the commission finding a dispute and then going
on to make an award in settlement of that dispute. As you would well know, that
is normally the roping of that employer into the federal award. That would be
stopped. So those 750,000 workers who are currently out there, vulnerable and
with no standards, would have no hope of finding refuge or safety under a
federal award system—or whatever is left of it—if this legislation goes
through.[22]
10.29
The Victorian Government also opposed this
amendment due to its potential impact on Victorian employees:
The Government is opposed to these proposals. This submission
has previously objected to any additional limitations on the AIRC’s capacity to
undertake its independent role. Limiting the AIRC’s role, as proposed in the
Bill, will affect its capacity to help resolve disputes and its flexibility to
consider providing basic award coverage for employees. This issue has
particular significance in respect of a major private sector application, in
the Victorian retail industry.[23]
Conclusions
10.30
There are some benefits for Victorian employees
in Schedule 15 of the Bill. If passed, Victorian employers would no longer be
able to force their employees to work 70 hours a week for 38 hours pay, and the
Department would at least have powers to prosecute breaches of the minimum
conditions. However, this is clearly not enough.
10.31
It is unfair and inequitable that some Victorian
employees have to work under Schedule 1A conditions, while others (generally
union members) have access to the federal award safety net. The Government
ignores this injustice at its own peril, because it is clear that Victorian
employees are fed up. The Committee received approximately 300 submissions from
private citizens opposed to the Bill. More than half of these submissions were
from Victorians. For instance:
I am an employee of a Melbourne based retail computer company,
who have little or no time for their staff, but it is a job. We are underpaid,
and constantly pressured to produce more and more from less and less. Those
same employers pay minimal rates, and make their staff work a 46 hour, six day
week and expect us to work every public holiday. Should you refuse, they have
told us they will replace us. Please do not allow the situation to become worse
by supporting the new industrial relations legislation.[24]
10.32
It is disappointing that the Government is now
attempting to make matters even worse for Victorian employees not covered by
federal awards, by exempting casuals and seasonal workers from annual leave and
sick leave entitlements. In the absence of any regulation of casual employment,
this will only encourage employers to artificially move their employees into
insecure forms of employment.
10.33
The Labor Senators also note that under the
terms of the Agreement between the State of Victoria and Commonwealth of
Australia[25],
‘the parties will with adequate notice consult with each other in a spirit of
cooperation and understanding about matters of relevance and concern to either
of them in connection with the Victorian Act and the Commonwealth Act and the
matters referred by the Victorian Act.’[26]
10.34
It is not clear what consultations the federal
Government had with the former Victorian Government prior to the introduction
of this Bill, but it is abundantly clear that the current provisions of the WR
Act and the proposed amendments set out in the Bill are of extreme concern to
the new Victorian Government.
10.35
The Labor Senators believe that there is little
point in making further amendments to ‘fix’ Part XV and Schedule 1A to the WR
Act, and maintain separate federal regulation of Victorian employment
conditions. All of the benefits of federal jurisdiction should be available to
Victorian employees, including access to the award safety net. The Victorian
Government concurs:
Victoria is especially concerned to ensure that Victorian
employees who have not had coverage of a comprehensive award – ie those
presently subject to the minima in Schedule 1A of the WR Act – are, in future,
fully protected. Victoria considers that the Bill must be amended to provide
that the AIRC be given powers to make comprehensive awards with respect to
these employees so that they will have terms and conditions of employment which
are appropriate for their industry and at least in accordance with community
standards.[27]
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