Event: Jennifer Westacott interview with Kieran Gilbert, Afternoon Agenda
Speakers: Jennifer Westacott, Kieran Gilbert
Topics: Workplace relations, enterprise bargaining, COVID-19 economic recovery
Kieran Gilbert, host Afternoon Agenda: The BCA chief executive Jennifer Westacott joins me. Jennifer we've heard a lot of noise in the wake of the IR bill this week. Do you think there's enough room for a substantial compromise here that does keep both business and the unions happy here?
Jennifer Westacott chief executive Business Council of Australia: I hope so Kieran. We've got to find a way through here because we can't be another decade without making any progress on industrial relations reform. Because there's a million Australians out of work. There are many small businesses who don't know if they can get back going again. We've got a very uncertain world that we're in. Before COVID we had low wage growth, low productivity, much of that to do with where the industrial relations system ended up. So I think we've just got to find a way through. And we've got to find that cooperation that we found when the pandemic was at its height. Where cooperation between unions and employers saved tens of thousands of jobs. We've got to find our way back there pretty quickly.
Kieran: Yep, indeed. I think that's a fair point. We'll get to some of the more permanent changes in a moment. But one of the things that's really caused a lot of criticism, certainly from Labor and the unions, is about the Better Off Overall Test and these provisions which say that any business affected by COVID cannot abide by the Better Off Overall Test. What do you say to the concerns? Do you understand their concerns in relation to how broad that is?
Jennifer: I understand that but let's get to the facts of this as well. First of all, this is an existing provision. Secondly, both parties have to agree. Employers and employees have to agree. So, if you're being represented by a union they have to agree. Thirdly, you have to go to the Fair Work Commission, and they have to agree. Finally, it has to meet a public interest test and has to be for COVID related matters. So, I can't see this being used very often. I understand the concerns about it. And this is one of things where we should say well what are the safeguards that people want that means that the permanent changes in the BOOT test which are absolutely essential for the next decade of productivity and wage growth and job creation don't get lost in the debate about this provision.
Kieran: And so when we look at some of those more permanent arrangements with regard to the Better Off Overall Test. Can you explain to us why some of these changes are important? For example, the BOOT, as it's known, won't be applying to hypothetical situations. Talk us through some of these changes that are going to be made on a permanent basis but not getting the coverage that you might expect?
Jennifer: These are very important changes. And first of all the BOOT test remains, the Better Off Overall Test remains. But some of the unworkability of it is being addressed. So let's go to some of those things. First of all that the overall had been lost in a number of cases and in the interpretations. So we're back to the primacy of the parties working together and if they reach agreement then the primacy of that agreement holds. Or the commission has to give regard to the primacy of that agreement. Secondly, this point that you've just made, hypothetical workers are not being considered. So a great example, Officeworks having to make provision for a liquor allowance. To the best of my knowledge Officeworks doesn't sell wine or beer. The other really crucial change, and this benefits unions as much as it benefits employers, is that people who were not party to the agreement can't come in afterwards and just blow the whole thing out of the water. And we've seen that with a number of very important agreements. Also we’ve got a 21-day approval time. Now many of these agreements Kieran have been stuck in the Fair Work Commission, stuck in protracted negotiations for nearly 12 months. And people have missed out on their wage increases that they would have got otherwise. Or people have walked away, and they've ended up back on the awards. So this to me goes back to the system that Hawke and Keating envisaged. A system where collective bargaining was the centre piece of the industrial relations system. Where employers and employees work together to ensure the enterprise was successful and people shared the benefits of that. Where the primacy of those agreements was given effect. And where the system was about overall better off. If we can make that change, we will revitalise the failing, lagging EBA system which is in freefall. Remembering, that people on EBAs get paid more. And we want people to get better wages and better conditions.
Kieran: Yep indeed. And hope, as you say, that the declining enterprise bargaining agreements might be halted. Because that would be, you know we like to use that phrase a bit, but it would be a win-win wouldn't it?
Jennifer: Absolutely. I mean this to me is really important for the unions too. Because the enterprise bargaining system is the place where they really make their relevance in the industrial relations system. Doing those negotiations. Doing that long-term thinking about what's in the interest of their members. And of course employers, thinking about the success of their enterprise. This has been a hugely important part of our industrial relations system and it has been one of the things that has delivered higher productivity, better wages and surely that's what we want. We want a system that's modern, that keeps pace, that allows flexibility, that keeps the safety net but a system that has people working together.
Kieran: Now onto the casual worker issue. The Labor party has been critical of some of the reasons why businesses might not be able to deliver on one of these elements. Which is basically to give workers more certainty. For example, a casual worker who's had regular shifts, a regular shift patterns for six months, being with an employer for 12 months, that they should then have the right to move to part-time or full-time employment. Labor's worried that some of the reasons or mechanisms for business to avoid that transfer from casual to part-time or full-time work that it's too broad for the business community. Are you comfortable with where this definition is at? And do you think it will have some tangible effects for workers, casual workers, to give them more certainty?
Jennifer: First of all we have a proper definition that we can now say what is a casual. And that's been a real problem in the system. Secondly. we do have this pathway for people to become permanent. And going to those conditions that you just outlined, the employer must, that's what the legislation says, must give that employee the option to become permanent. And if they don't they are in breach of the law. There are reasons why people cannot do that, but they have to be in exceptional circumstances and if they do, they can be subject to conciliation and where agreement, arbitration in the Fair Work Commission. So there's lots of things that people are saying about this. I don't often read things on the news as you know, but this is what one of the sections says, section 66 L:
“An employer must not reduce or vary an employee’s hours of work or terminate and employee’s employment in order to avoid any right or obligation under this division.”
That is the right to convert to permanency. Now again, if people want to strengthen these and put some more protections in there, then by all means let's talk about that. But we were in a situation beforehand where people didn't have a proper definition. Where the employer basically deemed what a casual was. Whereas now we have a very clear definition, and we have a pathway for people to become permanent. Now surely that is a vast improvement of where we are now.
Kieran: Jennifer Westacott, BCA chief executive thank you as always. Appreciate it.
Jennifer: You're very welcome thank you.