Workplace relations: April 2007

Still waiting for the WorkChoices 'miracle'

A preliminary study on the impact of WorkChoices up to February 2007 suggests that the 'economic miracle' on which WorkChoices was premised has not materialised.

WorkChoices has been associated with a decline in average real wages in the short term, particularly for women, despite a positive economic climate.

Results of the study by David Peetz of Griffith University were presented at the 24th conference of the Association of Industrial Relations Academics of Australia & New Zealand in Auckland on 9 February 2007.

The study reveals that under WorkChoices:

• more employees are moving onto AWAs and fewer onto collective agreements, with award coverage declining
• there has been a substantial loss of conditions for many workers signing AWAs, although this has not been the case in all sectors
• there has been a loss of conditions in mainly non-union collective agreements
• minimum wage fixing arrangements have led to a real wage decline for most award-reliant workers

According to Peetz's study there has been a drop in real and relative earnings for women.

In the six months to August 2006, earnings for females in the private sector rose by just 0.5 per cent compared to 1.3 per cent for males. In real terms female earnings fell by 2 per cent, indicating an increasing inequality between men and women.

There have been real wage declines in retail and hospitality, which may be due to the loss of penalty rates.

The report also notes that recent employment growth is more likely to be due to underlying demand in the economy than to restriction of unfair dismissal laws under WorkChoices.

The first six months under WorkChoices saw a continuation of the long-term trend of reduction in industrial disputes.

However, the 53 per cent drop in industrial action, compared to the same period the previous year, might be due to WorkChoices making a range of industrial action illegal.

Inflation and interest rates rose over the first six months under WorkChoices. While not directly attributable to WorkChoices, it was claimed that WorkChoices would have beneficial effects in these areas.

EOWA reporting changes still on hold

The federal government has announced that employers' obligations to report to the Equal Opportunity for Women in the Workplace Agency (EOWA) are to change from annual to biennial reporting.

This follows the release in January 2006 of the Report of the Task Force on Reducing Regulatory Burdens on Business.

However, the EOWA has been quick to caution employers that these changes have not been implemented for the 2007 reporting period. Under existing legislation, organisations, unless waived, are obliged to report by the end of May.

Once biennial reporting comes into effect, most employers covered by the Equal Opportunity for Women in the Workplace Act 1999 will only be required to report every two years. They will, however, have had to be compliant with the Act for three consecutive years.

Employers should note that to date there has been no decision about timing of the changes.

The EOWA states on its website that it will communicate about how these changes might affect reporting responsibilities once it has the relevant information. For further information about reporting obligations see the EOWA website.

New name for Victorian commission

The Equal Opportunity Commission Victoria has been renamed the Victorian Equal Opportunity and Human Rights Commission, following commencement of the Victorian Charter of Human Rights and Responsibilities on 1 January 2007.

The role of the newly named commission includes ensuring Victorians understand their human rights protections and obligations; and providing an independent assessment of how well state and local governments comply with the charter.

The commission will report back to the attorney-general on how the charter is operating in relation to new legislation and the courts, and will look at particular human rights issues at the request of the attorney-general.

The commission will also conduct community education and awareness programs, and review policies and practices at the request of public authorities.

For further information visit the Victorian Equal Opportunity and Human Rights Commission's website.

ACT restaurants short on dough

Two ACT restaurateurs were recently slugged with massive fines for underpaying foreign workers.

In one case the Federal Magistrate's Court ordered a restaurant owner to pay $64,000 in penalties because it underpaid two employees approximately $7868 in wages over a seven-week period.

Pangaea Restaurant & Bar had approached a recruitment agency in the Philippines after claiming there was a shortage of chefs in the ACT.

Two workers signed employment contracts after being engaged in the Philippines, and began working under Subclass 457 visas. They were employed between August and October 2005.

During this period they were underpaid $4264 and $3604 respectively. At the hearing the employer accepted that it breached the relevant award on seven occasions by failing to pay the correct wage rates, overtime rates, weekend penalty rates, annual leave entitlements, unauthorised deductions from pay, and failing to make payment in lieu of termination notice.

The underpayments were large in proportion to the employee's overall entitlements. The court found that the case called for a specific and general deterrence, and imposed a penalty of $64,000.

In another, case Zeffirelli's Pizza Restaurant was ordered to pay $50,000 for underpaying two sponsored employees who had only been employed for eight and 10 weeks' respectively on Subclass 457 visas.

Both employees were employed under the Liquor and Allied Industries Catering, Café, Restaurant, etc. (Australian Capital Territory) Award 1998.

The two employees were offered employment through the Philippine Overseas Employment Administration in September 2005. Their contracts prescribed salaries of $29,182 per annum and various other conditions 'as per Australia labour law'.

Both employees worked a split shift 10-hour, six-day roster each week. However, they were paid salaries based on a 38-hour week rather than the 60 they were working.

The employer had also made unauthorised deductions of rent and other expenses from their wages.

The court found the underpayments owing to both employees were large compared to their overall entitlements.

While the maximum penalty for a breach of this nature was $264,000, the fine was set at $50,000, partly because the employer acknowledged its breaches before the hearing.

Reference: April 2007, volume 77:03, p. 70-71

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