The Work Choices Act, which legislates the balance of bargaining power into the hands of employers, is not due to come into effect until some time late in March. However, Australian workers already face threats to their interests on four fronts which also threaten downward pressures on their wages and conditions even without this legislation.
These include the extent to which the skills shortage and skills migration program will be used to place pressure on workers' conditions. The second is the Award Review Task Force which will examine the basic wage. The third is the reported slowdown in the labour market. The export of Australian workers' jobs offshore is the fourth and last of these pressures.
Recently, a General Motors Holden subcontractor in South Australia imported a team of 34 Croatians and Slovenians on very low wages to build a paint shop in Holden's new plant at Elizabeth (The Advertiser). The National Secretary of the Australian Manufacturing Worker’s Union (AMWU), Doug Cameron, has said that it was very clear that the contractor had made no attempt to source local workers for the job first. He said members of the Croatian community had also contacted the union with concerns about the treatment of the workers.
If there is unemployment in South Australia for skilled workers, and there was no attempt at local recruitment, Immigration Minister, Senator Amanda Vanstone and her department have some serious questions to answer. The temporary importation of low wage, skilled contract workers on seemingly flimsy grounds constitutes a direct threat to the economic well-being of Australian workers. The AMWU questioned whether the Immigration Department had satisfied the guidelines restricting the importation of workers where businesses are unable to meet their skill needs from within the Australian labour force.
The Australian Council of Trade Unions (ACTU) has identified a number of other cases of imported workers who were paid low wages in South Australia and in Canberra. One of the South Australian cases involved US Vice President Cheney's company, Halliburton, employing Indonesian labourers on low wages for 80 days without a break. Another story which came to light recently concerns Brumby's Bakeries Limited and the franchise’s plans to bring in qualified Vietnamese bakers. The ACTU says the use of temporary worker visas is out of control.
Pressure on workers' conditions will also come from the Australian Chamber of Commerce and Industry (ACCI) submission (pdf file 476KB) to the Award Review Taskforce. The ACCI supports the ultimate replacement of award classification systems with a single minimum wage for adults and juniors, and argues, "Issues of classification structure and rewarding skills and responsibilities must become a matter solely for bargaining and the consideration of employers and employees at the workplace level".
The ACCI then goes further, proposing the replacement of the existing award classification structure with a broad-banded, four-level classification system, the ultimate aim being a single adult minimum wage applying to all industries, based around generic descriptors of skill and responsibility to which individual occupations and jobs can be linked.
If adopted by the Government - and there are close links between Peter Reith’s former Head of Staff, Peter Hendy (see description here and a less than flattering Workers Online profile), who is ACCI CEO, and the Government - this submission will have major implications for wage levels in Australia. The ACTU argues that the ACCI proposal will strip 800,000 skilled Australian workers of pay rates based on skills, responsibilities and qualifications, effectively removing career paths from Australia's award system. ACTU President, Sharan Burrows, says, "This is not only grossly unfair but would encourage the de-skilling of the Australian workforce at a time of chronic skill shortages".
Cowling and Mitchell (2005) (pdf file 88kb) have argued that the Work Choices legislation will push wages down. Other commentators (for example, Research Evidence About the Effects of the “Work Choices” Bill, a submission (pdf file 766KB) to the Inquiry into the Workplace Relations Amendment (Work Choices) Bill 2005 by a group of 151 Australian industrial relations, labour market, and legal academics) have argued that the low wage effects of the Work Choices legislation will kick in when employment falls. Reports this month suggest that employment growth is falling and unemployment has increased slightly (The Age).
The export of Australian jobs to low wage countries is occurring in a number of industries. On February 14, 2006, The Sydney Morning Herald reported a growing dispute at Qantas over proposals to export aircraft maintenance jobs overseas. Heavy maintenance tasks are likely to be exported to China affecting 2,500 Qantas maintenance engineers (The Age)
The AMWU is also fighting this issue on other fronts such as objecting to a NSW Government proposal to build a new rail fleet overseas. This is a long-running issue with AMWU workers striking in March last year over NSW Government policies the union claims will privatise the industry and hand contracts overseas to build the new rail fleet.
The AMWU told Channel 7’s Today Tonight, in January this year that "at least 50,000 local jobs in the past 12 months", mostly from the automotive components industry, had already been exported to China. This was in response to a story that Kraft had announced it was closing down its Melbourne biscuit making plant to set up operations in China. That decision alone exported 150 Australians' jobs (Daily NewsWire).
With reduced protection and an unbalanced and unfair "bargaining" regime, many Australian workers face increased job insecurity, loss of penalties, low pay and poor working conditions, when the Howard Government's Work Choices Act takes effect. But, a macroeconomic assault on workers' future is already with us as the workforce faces the importation of cheap temporary labour, sanctioned by the federal immigration department, the export of jobs, and a weakening labour market. Added to these pressures is the militant determination of the ACCI to break down career opportunities and wage growth through stripping away award classifications for workers and standardising wages across all industries.