The Importance of Awards

The importance of awards, including the Contracting Award is found in the fact that they were foundations on which wages and conditions in workplaces could be built. They were a set of minimum standards that provided fair and reasonable wages and conditions for all those within workplaces regardless of being unionist or non-unionist labour. They provided a protection from being exploited for those who were not industrially strong; and they protected the fair employer from the unscrupulous employer who would use cheap labour to provide unrealistic tenders with which to undercut competitors. Awards created an environment of relative stability within industries with standards set by the Arbitration Commission after submissions from all interested parties.

The stronger groups in the workforce then used the awards as a base to negotiate better wages and conditions in an individual workplace or site where an employer was doing well and could afford to pay more. These were known as over-award payments and conditions. It is where the term, ‘union rates’ comes from.

After the Keynesian ‘welfare state’ economic model, with it’s emphasis on full employment, was dropped and replaced with the economic rationalist, low inflation way of thinking and no longer was full employment the driving force; it caused a review on the structure of industrial relations.. The Hawke-Keating government of the 1980s set about award restructuring. That Labor Government was careful to put in place a prices and incomes accord which at least gave people a sense of maintaining wage values although it has since been seen that, in Australia, the real value of wages did drop by around 16% in those Hawke/Keating years. It was the beginning of the weakening of the foundations of awards on which wages and conditions were built.

When the Keating Government introduced the principle of enterprise bargaining in 1993 it was a sounding the death knell for awards. This Government deliberately shifted the focus and importance of wages and conditions structure to local enterprise. The fracturing of the basic foundations of awards was now a stark reality. But the labour movement was careful to build into its enterprise bargains those basic award structures that were being lost from the awards. But, this only protected the strong, unionized workplaces. Those who relied on the awards as their safety net were being slowly disadvantaged.

When the Howard Government came to power in 1996 it wanted to escalate the reduction of award entitlements while at the same time restrict the ability of the union movement to negotiate them into enterprise agreements. It also wanted to make it administratively very difficult to negotiate an EBA.

A court decision that has become known as ‘The Electrolux Decision’ defined it as illegal to include into enterprise agreements anything such as training; anything that could be construed as not strictly pertaining to the individual employees. This meant that many of those conditions falling from awards but not being caught in the enterprise agreements were to be lost. The ETU Southern States Branch, moved quickly, and after legal consultation, divided its enterprise agreements into two parts, the enterprise agreement and a legal deed. It was set up in such a way that all of those things deemed to be or that would become illegal in an agreement would be captured in the legal deed and protected from any government attempts to prevent them from being included in an industrial agreement.

Further to that, unions such as the ETU adopted the strategy of pattern bargaining, where many enterprise agreements were made the same and negotiated at the same time. They became, in effect, a pseudo award that protected the weaker workplaces. The Howard Government moved quickly to outlaw pattern bargaining.

The Howard Government also moved quickly to make it particularly difficult for union organizations to consult with and work for their members and made the negotiating of agreements complex legal documents all to be negotiated and signed of individually. This created an administrative nightmare that put an enormous financial strain on organizations. And to further impede the effective negotiation of wages and conditions it restricted third party representation.

It pushed workplace relations back to the industrial ideals that existed before the introduction of the arbitration courts and minimum wage principles that were established in 1904-07 which were established to protect working people from the exploitation I mentioned at the beginning.