Unions opt for jobs over pay

Ewin Hannan, Brad Norington and Lauren Wilson March 12, 2009
Article from: The Australian

PAY rises for thousands of workers in the nation's struggling retail and hospitality sectors could be deferred for up to five years, as unions concede the need to minimise cost pressures on employers during the economic downturn.

Confronting employer claims that the Rudd Government's proposed revamp of award conditions for low-paid workers would cost jobs, union officials said yesterday they were prepared to spread the pay rises over five years to help business.

Julia Gillard's plan to have the workplace umpire modernise hundreds of awards that govern minimum pay and conditions by January 1 is running parallel with the introduction of Labor's new laws to replace the Coalition's Work Choices.

The proposed pay rises flowing to many workers in retail and hospitality -- which have sparked warnings from employers of large-scale job losses -- challenge the Deputy Prime Minister's claim that Labor's industrial regime will not cost jobs.

Employers have complained bitterly that they will suffer pain from the process as restaurants, hotels and other businesses are forced to accept increases of 8 per cent to 50 per cent in wages, penalty rates, loadings and allowances as states with lower minimum rates are forced to accept a higher common standard.

The Liquor Hospitality and Miscellaneous Workers Union said it would also consider an employer demand to delay any pay rises for the next 12 to 24 months in exchange for higher increases in later years.

Union officials representing retail workers have also agreed to spread pay rises over five years. While some retail workers would be worse off, many would be better off and unions said they accepted the need to sensibly address employer complaints.

LHMU national secretary Louise Tarrant will meet with the chief executive of the Restaurant and Catering Association, John Hart, today to discuss an implementation schedule for award changes introduced along with Labor's Fair Work Bill.

"There may well be a five-year phase-in for the additional loadings," Ms Tarrant said. "That way it can be transitioned in a way that can be sympathetic to employers. We want to make it workable, that's our intention."

Mr Hart said the association would want all pay rises deferred for the first 12 to 24 months.
"What we'd be looking to negotiate is greater increases later in the five-year period, with probably no increase in the next 12 months to two years, depending on the economic outlook," he said. Ms Tarrant would not rule out a wage-rise deferral. "We want to make sure it's done in a managed way," she said.

Joe de Bruyn, the national secretary of the Shop Distributive and Allied Employees Association, said some retail employees would lose out under award modernisation, including casual retail employees in Victoria, who would have their loadings reduced.

But Mr de Bruyn said the union was prepared to "be reasonable" and allow the pay rises to be phased in over the five years. "To overcome this employer bleating about 'we can't pay', we just say, 'well, let's phase it in over time'," he said. "Whether employees are going to be disadvantaged or whether they are going to be advantaged, let's just do it over a five-year period and then nobody can really complain."

Ms Gillard's office confirmed yesterday that the minister was willing to accept a transition period of up to five years to ease the pain for employers.

A spokeswoman for Ms Gillard referred to the Government's supplementary submission to the commission on awards last month, in which it backed employers and unions having sufficient time to become familiar with the content of new awards "before their commencement on 1 January 2010".

Quoting from the Government's submission, she said: "This is particularly important in light of the global financial crisis, with businesses requiring certainty regarding their costs."

The Australian Chamber of Commerce and Industry claims Ms Gillard's directions on phasing-in common award pay rates appear confused because it was not clear if she meant a fixed January 1 starting date or "signposts" for increases over the next five years.

The chamber's workplace director, Scott Barklamb, said employers wanted to avoid "massive shocks" as minimum pay rates in different industries and states were dramatically increased for the sake of simplifying the system.

Mr Barklamb said employers were not clear whether or not she meant freezing some award pay rates and lifting others over time.

"We are looking forward to getting award modernisation right with little or no costs change," Mr Barklamb said. "But we remain sceptical because Ms Gillard has said the modernisation of awards is not meant to disadvantage employers or employees.

We can't see how employers will be spared cost increases if rates are increased up to a common level."

Ms Gillard proposed a round of late amendments to the Fair Work bill on Monday, in a letter to senators that was meant to satisfy concerns about the legislation raised by employers.

Employers remain deeply concerned, however, that unions will be able to force "good faith" bargaining on employers with few members at a worksite. Small business objects to a reintroduction of unfair dismissal claims for all workers, overturning an exemption for companies with fewer than 100 employees under Work Choices.

Speaking on Sydney radio yesterday, Ms Gillard said she accepted employers needed to have a "really good look" at new workers to see if they fitted into a business.

Under Labor's revised laws, she said, small business employers with fewer than 15 employees would have an exemption from dismissal claims for up to 12 months.

"In bigger businesses, it's six months," Ms Gillard said.

While not ruling out job losses caused by the economic downturn, she insisted Labor's laws were fair and the legislation should proceed unchanged. Family First Senator Steve Fielding has proposed amendments to exempt small business from compulsory union bargaining and right of entry provisions.

Additional reporting: Patricia Karvelas