TRANSCRIPT: RADIO INTERVIEW - ABC ADELAIDE - JANUARY 14, 2020

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO ADELAIDE
THURSDAY, 14 JANUARY 2021

SUBJECT: Scott Morrison’s plan to cut workers’ pay.

PAUL GOUGH, HOST: Federal Labor has released a press release to say that workers in the coming summer holidays could face a pay cuts between $840 up to $1100 from their pay packets if public holiday penalty rates are scrapped. Joining me is Tony Burke, the Shadow Minister for Industrial Relations. Welcome to the program, Tony.

TONY BURKE, SHADOW MINISTER FOR INDUSTRIAL RELATIONS: G’day. Can I add Jimmy Barnes’ Working Class Man to the list. In terms of the lead-in. I really enjoyed what you played.

GOUGH: You can, yeah, well, that's maybe slightly harder, because we're going for the softer hard-working tracks but I will put it in there.

BURKE: For Jimmy that was soft.

GOUGH: That probably was Tony. But a hard impact you're suggesting for those who may be out of pocket come next summer?

BURKE: Yeah, that's right. There's legislation that's before the parliament that we'll be debating when we get back in a couple of weeks. And there's a whole lot of different elements to it. But one of it is that it suspends a thing called the Better Off Overall Test for two years for any business that's been in any way affected by COVID-19. Which, that's a pretty broad remit in terms of the year that we've been through. Now, what the Better Off Overall Test does is it basically says if there's something in an agreement that cuts penalty rates at some point, you've got to increase the base rate of pay to compensate for it so that no one ends up worse off. They're suspending that. And what that means is for any agreement agreed to for the next two years, penalty rates would be able to be cut without the hourly rate having to be improved to make sure that workers are still doing the same.

GOUGH: Right. So let's just take it from the angle of, in an enterprise system, the employer comes up and says, look, we've gone through a bit of a hard period, we would like to consider waiving these penalties. And I guess there'd be some workers that could say, fair enough. But once those rights are waived away then I'm assuming they're not going to come back that easily.

BURKE: Yeah. Something similar was done under John Howard, when the “no disadvantage” test went for a period of time. We still have agreements in place today, legacy agreements, from that period. So even though an agreement has a technical expiry date, if the employer hasn't agreed to there being a new agreement, some of those agreements just keep tracking along. So what happens during the pandemic will have a lasting impact on the take-home pay of workers. And if you have a situation where your hourly rate can stay the same but the penalty rates disappear, the impact when you start looking at shifts that people work is extraordinary. And that's why I thought it was important that Labor release today, just look at the penalty rates that happen over summer for public holidays and nothing else. And you're already seeing some workers lose more than $1,000.

GOUGH: Now, of course, this is the worst-case scenario if this actually does happen, because this has still got to go before the Fair Work Commission and there's still a few hoops to jump through before this is actually going to happen, isn’t there Tony?

BURKE: It's not worst-case in that I haven't counted what happens if you lose your Sunday penalty rates, if you lose late night penalty rates. I mean, some people potentially over the course of a year end up, you know in the order of more than $6,000 worse off. You know, an aged care worker for example can end up $11,000 a year worse off. So the figures we've released today are pretty modest. They're saying if all the employer did was take away the public holiday penalty rate and left everything else in place, then even that would mean a retail worker would lose more than $840. An aged care worker would lose more than $1,000, a cleaner would lose more than $1,000. And you know, think about the reason that people work public holidays over summer. January particularly if you have kids, December and January. As kids you grow up thinking school holidays is a time where there's money everywhere. If you're a parent it's the worst possible time. You go from Christmas, to the kids wanting to be entertained during the course of January, through to the all the costs associated with back to school. And for a lot of everyday Australians in their jobs, they are relying on these public holiday penalty rates to simply get through December and January. And sometimes you give the global figure of a year, someone could lose $11,000 it doesn't gel the same way. Whereas I just thought if you just focus, what does it mean to someone's life if over these two months there’s $840 suddenly gone. Now, that's real, it's modest. It's nowhere near a worst case for what the government would allow to happen.

GOUGH: My guest on Drive is Tony Burke, Shadow Minister for Industrial Relations. I understand all that. I guess my question really was, I mean there are still some hurdles before it gets to this. And every scenario where someone is going to be out of pocket isn't going to be pleasant. But what I'm saying is for that to actually happen the Fair Work Commission actually has to agree to this. How likely are they to do that?

BURKE: Well, look, the agreements when John Howard did something similar got approved. So effectively what the Fair Work Commission will be looking is whether there was genuine agreement as well. But we know what happens at a time of high unemployment, when government support’s being removed, if an employer says to their workers “unless you agree to this I'm not going to be able to keep your jobs”. We know that even though it can be presented as “well, workers would have to vote for it”, in the real world, in the economic conditions we're in right now, we know exactly what ends up happening there. And if you take an industry like cleaning, for example, where you've got lots and lots of contractors. What effectively happens is the first company that might be dodgier in its application gets an agreement through that cuts out all the late-night penalties and cuts out the public holiday penalty rates. They then start to win contracts that the good companies are losing because they haven't treated their workforces badly. And you start to get a domino effect through the workforce. Now, you know, the government saying that even though the vaccine is going to be coming throughout the course of the year, these industrial laws would be in place for two years, the agreements that are entered into, the penalty rate cuts, would survive a further two years. And then potentially you can still end up with legacy agreements like we've got from John Howard's government, where we're now 13 years later and some of them are still around.

GOUGH: Tony, if you wouldn't mind just holding on there. Joining us on the line is Professor Andrew Stewart. He's an expert in employment and industrial law at the University of Adelaide. Welcome to the program, Andrew.

PROFESSOR ANDREW STEWART, UNIVERSITY OF ADELAIDE: Thanks Paul.

GOUGH: Now the Fair Work Commission could allow change to employment conditions under what we've heard from Tony Burke, in regards to the changes to workers and some of the loss in revenue they would see through penalty rates and other allowances abolished. But I suggested this, that there are some hurdles to this, it's just not an open case of it happening is it?

STEWART: No that's right, if the legislation is passed it doesn't give employers open slather to make the kind of cuts that Tony is talking about. But it does provide a mechanism that's most certainly not there at the moment. An employer would still have to get employees to agree. But as Tony suggested, you can well imagine employers telling the workforce, “Look, you've got to sign on to this or else you may not have jobs.” There are also other ways, sneakier ways to get agreements through, where for example if you're starting up a new business, or you are a labour hire firm, maybe you get a handful of employees to agree to this and then you roll it out so the agreement applies to a lot more employees later on. And it's the ones hired later who suffer the cuts. The second hurdle though is yes, the Fair Work Commission has to be satisfied that it's in the public interest for these cuts to be made. Do I think there are members of the Fair Work Commission who might be prepared to agree to that? Yes. I think you might see some of these agreements getting up. And it is possible that you get the snowball effect happening where, once some employers have got these agreements then the pressure is on is on other employers in the same industry to follow the same path. They will also, I'm sure we can expect if this gets up, there will be an army of consultants out there who are going to be talking to small businesses, saying hey, we found a great way for you to save money and keep your businesses going. Just do one of these agreements. I also can foresee that if the Fair Work Commission has an early test case, and takes a look at this and says “no, this really only needs to get used or should be used in exceptional circumstances” then maybe the legislation doesn't have that effect. But the risk is certainly there. And it's also sending a real message to employers, which is the way to recover is not to work with your employees, the way to recover is to take wages away from them. And that's a terrible message right now.

GOUGH: We've had a variety of, you know, on both sides of the fence in regards to this matter through our text line. Some have suggested that the media release, while it's opening up what could happen, they're also saying there's a slight case of scare-mongering to it. Would you agree with that?

STEWART: Well, certainly if the suggestion were this is going to happen. Yes, that would be scare-mongering. But if what Labor is saying is this could happen under the legislation? Well, that's right it could. Because there really are not a lot of safeguards there, everything comes down to the Fair Work Commission. And the Fair Work Commission really would have the power to open up massive loopholes in our safety net of minimum wages and working conditions. They might choose not to do that. But I think there's certainly a legitimate argument that says, is that the direction we should be encouraging businesses to go? Should we be putting the Fair Work Commission in the position where they're being asked to make those kinds of decisions?

GOUGH: And one of the points I made to Tony Burke was that, you know, in the case of an employer saying, “Well, look, this is for the better, good, you know, you're going to keep your job. We've all gone through tough times, let's get rid of these things.” Once they're gone, once the penalty rates have gone, they're not going to introduce them back when things are good, are they?

STEWART: Well, it would certainly be very hard because in the kind of industries where you would expect that employers have got the bargaining power to get these agreements up, employees are hardly going to be in a position later on to try and argue that “no, no, no, no, we should have a new agreement that goes back to what we had before”. Now, it is true that once the agreement reaches its nominal expiry date, which will often be four years later, not the two years for which this suspension takes effect, but four years from the date of getting the agreement approved, there are mechanisms at that point to try and get back to the previous conditions. But for many employees, once they agree to these concessions it will be very hard to get them back.

GOUGH: Professor Andrew Stewart, thanks for your time today, an expert in employment and industrial law at the University of Adelaide. One last very quick question, Tony Burke. I can slip your Jimmy Barnes track in perhaps. What will the crossbench MPs do should this come to a vote?

BURKE: Well, we're completely relying on the crossbench to stand with Labor on this. And, you know, on issues, on industrial relations issues, protecting rights at work so far, most of the time we've got the crossbench. I don't think there's any chance of the government actually folding on this. At the moment government members seem more passionate about whether Donald Trump has access to Twitter than whether a worker has access to their take-home pay. So I think Labor's position is clear. There's no way we will vote for the pay cut. And, you know if we get the crossbench to stand with us then we'll be able to stop it. But if not, then the law will be changed. And if the laws changed along those ways, it'll have real life consequences for people.

GOUGH: Yeah, and as we said it's not going to go back very quickly. Tony Burke, Shadow Minister for Industrial Relations, thank you for your time today.

BURKE: Thanks for having me on Paul.

ENDS