Event: Jennifer Westacott interview with Fran Kelly, RN Breakfast
Speaker: Jennifer Westacott, Fran Kelly
Topics: Workplace relations, COVID-19 recovery, domestic borders
Fran Kelly, host RN Breakfast: Jennifer Westacott is the chief executive of the Business Council of Australia was a key member of that roundtable process. Jennifer Westacott welcome back to Breakfast.
Jennifer Westacott, chief executive Business Council of Australia: Thank you Fran.
Fran: Now none of us have seen this bill yet so we don't have the detail. But Labor has already laid down some markers as has the ACTU. Labor says the package must deliver secure jobs and decent pay. How will you measure the merits of this package and whether it's good for business?
Jennifer: Well I think it's about whether it is achievable and practical. And certainly what we've seen to date and what we're expecting to see is that it's a practical, realistic, and pragmatic set of changes. What we want to see is a system that removes the conflict-driven system that is slow and complex. Where those rigidities were very heavily exposed during COVID. A system that gets the flexibility but protects the safety net. And for me, a really crucial thing is a system that revitalises the enterprise agreement system which has seen people get paid more, which has seen companies be more productive, and create the conditions for employing more people, giving them better conditions, and having employers and employees work constructively together.
Fran: Okay, let's talk about some of the elements we believe are in there. Employers in retail and hospitality, two of the hardest hit sectors from the pandemic, will be able to ask part-time staff to work longer hours on their ordinary pay. So without overtime or penalty rates. Why is that a good idea? And why is that in the best interest of the part-time workers?
Jennifer: Well I think it has two effects. First of all, it allows people to get more hours of work. And as we know it's not just an issue of unemployment at the moment, it's people wanting to work more hours. So this gives them a capacity to work more hours. It encourages employers to give them more hours. I think it will encourage more permanent, part-time work rather than casual work. But it's that flexibility we need Fran to ramp up, ramp down without the issues of having to pay people overtime which I think creates an environment where people want to hire more casuals and stops people getting those extra hours that they so desperately want.
Fran: Sure but it also stops people getting their overtime and their penalty rates. So in the end there's less money in their hand right?
Jennifer: Well there's more money in the hand if they're working more hours. And I think overwhelming people want those longer shifts. They want more hours, and they want that to be more predictable, more planned and I think on balance this is a really good thing.
Fran: Yeah but I know that's true in some cases but not in all cases. Some part-timers would currently be working extra hours at busy times, presumably, and if those times are penalty shifts they'd be getting penalties. So under the new regime all that would go. So for some, there will be a loss?
Jennifer: Well I think we've got to make sure that we monitor this as it rolls out. But look I think most employers, certainly the big employers that I talk to, want to give people more hours Fran. And they want to give people more hours over a longer period of time. And many people want to work more hours. But of course, we've got to make sure that we put the checks and balances in. But at the moment we need to be able to get that flexibility into the system and those changes, I think, are going to be very important to encourage people to put more people on that permanent part-time basis rather than the casual basis.
Fran: At this stage, as we understand it, that change is limited to 12 awards as I mentioned, accommodation, food, and retail. Would you like to see it extended to other industries, other sectors?
Jennifer: Well let's see how it works for the industries where it actually really matters. For those industries that do have a lot more casual and part-time workers. And most importantly Fran, the industries in distress. Let's see how that works, let's make sure that we've got the checks and balances in place before we start making decisions about rolling it out more broadly.
Fran: Okay the government has also reportedly looking at changing the Fair Work Act to come up with a loaded rate, like a loading. Bundling all the extras like penalties and overtime in a single higher hourly rate of pay. Now buyouts happen in some industries. Is it really possible to do this in a way that's good for both business and workers generally?
Jennifer: I think so because it removes some of this complexity. And I think that's a very practical, sensible idea and that's the whole point of this package. It's the practical, sensible things. It's the long-standing problems that have been plaguing the system that the package, which has been as you said earlier, worked up by employer groups and by unions. I think that's one of those things that creates a lot more simplification of the system if you will. And I think that's a practical kind of idea.
Fran: When an employer talks about practical, sensible, pragmatic things, often in the translation that means the employee is getting less cash in their hand. Is it fair to say?
Jennifer: I don't think it is fair to say. I think, and one of the things that's important in this package is tougher penalties for people who engage in deliberate wage theft which is different to of course mistakes which happen in complex payroll systems.
Fran: And it's different to not paying penalties. I mean if penalties are no longer a thing of the past. They are not the same thing; wage theft and workers being denied penalties and overtime through the system.
Jennifer: Sure but I think you don't want to encourage people to orchestrate conditions so that people are worse off obviously. And I think these changes won't encourage that. I think in many respects they'll make sure that those things don't happen. And I think the wages theft, if its deliberate wages theft, penalties are a very strong signal that the government expects employers to do the right thing. I don't believe that people overwhelming want to do the wrong thing by their workers. Because they're the fundamental asset, they're the most important thing to get their customers in shops, to expand and grow their business. I think it's wrong to say that the starting point is that people want to rip off their workers. I just don't think it's true overwhelmingly. There are examples and we should crack down on that and we should be hard on that.
Fran: You talk about the safety net. The safety net currently is called the BOOT, the Better Off Overall Test. It's a safety net for workers in enterprise bargaining agreements. You've long argued that the BOOT is a productivity killer because it prevents trade-offs. Now there is a suggestion that the BOOT could be effectively set aside for two years. Labor is flagging a major fight with the government over this. Could this jeopardise senate support for the bill? And what do you think? Do you think the BOOT should be set aside for two years?
Jennifer: No, no I think people have misunderstood this. What we've said is that the BOOT has to be fixed. No one is expecting the BOOT to be removed, Better Off Overall Test. What we think is it has to be fixed. It has to be more workable. So, some of the things that are not working. So for example, hypothetical workers, people who aren't event working, that is a big issue. Things like not giving primacy to the parties. So we've got a ridiculous situation where a union and an employer sit down, they work out the EBA and someone who hasn't been party to those agreements can come in and blow it up. We've got long delays, some cases nearly a year, for EBAs to be approved. That means a year that those employees have gone without their wage increases. Because the system is so complicated. We want to see a system where people are able to trade stuff off and negotiate. And that was the system Hawke and Keating envisaged. And it's about fixing the Better Off Overall Test. It's about getting that 21-day approval that people are talking about, so we encourage people to go back to enterprise bargaining which was the system that created higher productivity and people on EBAs get paid more.
Fran: And have you and the ACTU come to an understanding around this? Because some employer groups were reportedly unhappy with the BCA’s deal with the ACTU on this.
Jennifer: Well we worked very constructively together. And both Sally and I thought it was important to try and find common ground. And both of us believe very strongly that the enterprise agreement system is an absolutely central platform to employees getting higher wages and better conditions, and employers being able to modernise change to their enterprise so they can be more successful, employ more people. And that's done by working together Fran. Not by complex awards. Not by a conflict driven system. That's done by a well-crafted enterprise agreement system and that's what Sally McManus and I were seeking to achieve.
Fran: What about the other employer groups?
Jennifer: I think it was always up to the government to apply this more broadly and we'll see what they've done with the EBA process. Obviously, I'm not in a position to talk about it. We're all under confidentiality agreements. But this was always going to be an important process. And these processes are never easy Fran. But I think where we've got to now is a different tone in the industrial relations debate. We've got Sally McManus last week, very importantly in my view, saying let's stop talking about WorkChoices, let's all move on. And I think we've created the foundations for the unions and the employers to work more constructively together.
Fran: Sally McManus and Labor, we've had Tony Burke on this morning, are pretty clear they are not prepared to go along with the changes in the bill in terms of treatment of casuals so business can claim 'reasonable grounds' if it doesn't want to offer a casual or permanent position after 12 months. And there is no recourse to the industrial umpire as Tony Burke told us. No remedy attached. You have to agree by consent. Which where does the power balance lie in that? So how is this going to create a pathway to more secure employment for the 2.6 million casuals?
Jennifer: My understanding is the Attorney General did confirm yesterday that the Fair Work Commission would be able to hear disputes on this matter.
Fran: Yes but there's no enforcement attached to that, as I understand that though. They can hear it.
Jennifer: Well let's see what the bill actually says on that. But let's just go to this casual issue. Because first of all, now we have a definition that is very important. Which says that if you work regular hours and you've got a forward commitment of future work you're not a casual and you can apply to be made permanent. You've now got a pathway to that which we didn't have before.
Fran: But only if it's enforceable. There's no practical pathway, to use your terminology, a sensible pathway if there's no enforcement on it.
Jennifer: Let's see what the legislation says on that. Because it is important that people have that pathway. And I think this is a really important change. And of course the double-dipping, which was going to be crippling for small business, that's been fixed. So let's see the detail of the legislation. But my understanding is the Attorney confirmed yesterday that the commission would be able to hear those disputes. And let's see what the wording of the legislation looks like.
Fran: Alright just finally on another issue Jennifer Westacott. The borders are open around the country now which is a great relief for everybody. You've been calling for national consistency over closure of borders and treatment of hot spots, so we don't get a haphazard approach to this. Do you think we're there yet? I'm not sure if you notice that the Premier of Western Australia has warned he won't hesitate to shut the borders again if he thinks it's appropriate?
Jennifer: I think we're getting there but we need that certainty that you've just mentioned. If you're Qantas and Virgin, you cannot run an airline with a 24-hour notice that the borders are shut. An aeroplane is not like a car in the garage, you just warm it up and get going. An airline system is complicated. So what we need is a nationally consistent approach as you've just said to getting that local containment right, getting that tracking and tracing right, getting quarantine right which we can still see has some mistakes in it. So that we have that predictable, sustained border opening.
Fran: Do you think we're there yet?
Jennifer: I think we've got a little way to go. I think we've got to get that nationally consistent set of standards about what triggers, local circumstances. I think we have to get a much clearer sense that's how we are going to manage this rather than stopping and starting with border closures which I think are job sapping to be honest.
Fran: Jennifer Westacott thank you very much joining us.
Jennifer: You're very welcome Fran thank you.