AWA arguments don't stack up against evidence Bradon Ellem
IT HAS been a long time since industrial relations was so obviously central to a federal election. The debate is heated but not very illuminating. Voters must have lots of questions and lots of worries. Does the mining sector face ruin without Australian Workplace Agreements? How popular are AWAs? Will workers be better or worse off without them? To answer the questions about AWAs, we should examine the national picture first, then come back to mining. In so doing, we need to deal with some misconceptions and confusions.
First, across Australia, mining is not in fact the main site of AWAs. There are more AWAs in low-paid sectors like hospitality and retail where the official evidence shows that they have been used to cut costs still further. This has mainly been achieved through abolishing penalty rates, reducing overtime pay, meal breaks and cutting out public holiday payments, shift-work loadings and bonuses.
Second, to argue, as the Government does, that we can tell that AWAs are popular just because there are more of them than in the past is simply untenable. Why? Because WorkChoices allows employers to offer AWAs as a pre-condition of employment. "Want the job? Sign the contract." So it is not logically possible to make any claim whatsoever about their popularity based on the number signed.
Let's come back to mining because so much of the debate about AWAs has focused on this industry, and especially on Western Australia's iron ore mines.
Sometimes, the Government would have us believe that the mining boom is happening because of AWAs. The real causes of the boom of course lie elsewhere: the global growth in resources, the phenomenal expansion of the Chinese steel industry, the huge increases in mineral prices.
This means that what is really happening is that AWAs are increasing because the industry is booming. Not the other way round.
The Government and others also talk about AWAs having delivered productivity increases. Why is it, then, that in coal-mining, with mainly union, collective agreements, productivity rates are actually better than in largely non-union iron ore?
At the very least, this reminds us of what the research from many countries tells us: that the connection between productivity and any form of regulation be it awards, enterprise agreements or individual contracts is very complicated. It is a genuinely difficult research problem, and it is not one that is solved by simple association. Just to say that an industry is booming and has lots of AWAs is not to say that there is any causal connections between those things.
As it happens, the Pilbara region in Western Australia provides a good test of these complex arguments. Since 1999, BHP-Billiton has had an iron ore workforce split between workers on the award and on individual contracts. In 2003, the unions sought wage rises to match those given to AWA workers. They told the Western Australia Industrial Relations Commission that people doing the same work should be paid the same rate.
The commission did what a lot of other people ought to do right now. It examined the evidence. The verdict was that "the productivity of award employees and their contribution to the performance of BHP, given the difference in working arrangements, is not significantly different from that of AWA employees".
This is a case that should be much more widely known. Not only does it explore in detail what happens in workplaces, it also reveals how unions and industrial relations have changed in the past few years. This award at BHP is nothing like the prescriptive and detailed, old-fashioned awards that reflected a very different world of work years ago.
If the economy is not really under threat without AWAs, then what about workers themselves? Most researchers would point to good reasons to say they are not threatened either. Quite the contrary. For a start, wages in mining are high not because of AWAs themselves. Remember: prices, demand and profits are at record levels.
There's still more to be said: AWA wage rates are high in mining because of unions. That may sound odd. But wage rates don't come out of nowhere; nor do they just come out of companies' calculations.
In iron ore, the original individual contracts had to compete with union-based rates. And those rates were far higher than average wages. Why? Because from the 1970s, the mining unions had won improvements in wages and conditions. So, even now, with low rates of union membership, the wage rates being paid are a result of previous rounds of unionisation.
This seems a world away from working life today but it is not. In research I have undertaken in the Pilbara in the past few years, there have been clear signs about what workers want from their employers and, when given a chance to have them, their unions. It is not chaos and disruption not even mainly about wages. They want safety, a say at work, and decent communities in which to work and live.
What the Federal Government and some of the companies want is not so clear given that the arguments about AWAs, productivity and high earnings just don't add up. In the east, and in low pay areas, it must be about cost reduction. In the west, in mining, it must logically be simply about keeping the union voice out.
Associate Professor Bradon Ellem is from the Work and Organisational Studies, Faculty of Economics and Business, University of Sydney
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