Academic journal article The Economic and Labour Relations Review : ELRR

'Stolen Entitlements': The 1997 Living Wage Case

Academic journal article The Economic and Labour Relations Review : ELRR

'Stolen Entitlements': The 1997 Living Wage Case

Article excerpt

To determine the laws which regulate ... distribution, is the principal problem in Political Economy'

David Ricardo, On the Principles of Political Economy and Taxation, Cambridge University Press, Cambridge, 1966, p. 5.

Beginning in the mid to late 1980s, and continuing into the 1990s, most of the major parties advocated the adoption of a more decentralised system of industrial relations regulation; of what was ubiquitously referred to as' enterprise bargaining'. In the April 1991 National Wage Case the Australian Industrial Relations Commission was asked, amongst other things, to sanction and enunciate principles for enterprise, or workplace, bargaining. The Commission decided to defer consideration of the introduction of such a system to a subsequent national wage case, to be held later in 1991. The Commission's deferral was based on fears that the parties had not 'properly' considered the implications of moving to such a system. Amongst other things, the Commission was concerned about the implications of enterprise bargaining for those with limited bargaining power. (1)

The Commission's April 1991 decision was roundly criticised by those who had come under the spell of enterprise bargaining. The Accord partners, especially the Australian Council of Trade Unions, were particularly vehement in their criticisms. In October 1991 the Commission subsequently gave its imprimatur to the introduction of enterprise bargaining. It did so begrudgingly, stating that none of the fears it had pointed to in its April 1991 decision had been allayed by the parties. Amongst other things it said that enterprise bargaining 'would lead to inequity and, ultimately, to a distorted and unsustainable wage structure'. (2)

Both the Keating Labor, and Howard Coalition, governments, under their different regimes of enterprise bargaining, committed themselves to protecting the low paid, and/or those lacking bargaining power, by supporting' safety net adjustments' in proceedings before the Commission. (3) During the Keating government's period of office the Commission approved, between October 1993 and October 1995, three separate $8 per week increases, to award workers, who had not been able to obtain such increases via negotiations with their respective employers. (4)

In the latter part of 1996 the Howard government enacted the Workplace Relations and Other Legislation Amendment Act 1996 (Commonwealth). (5) Section three states that the principal object of this new Act 'is to provide a framework of co-operative workplace relations which promotes the economic prosperity and welfare of the people of Australia by'

a) encouraging the pursuit of high employment, improved living standards, low inflation and international competitiveness through higher productivity and a flexible and fair labour market; and

b) ensuring that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and employees at the workplace or enterprise level; and

c) providing the means:

(i) for wages and conditions of employment to be determined as far as possible by the agreement of employers and employees at the workplace or enterprise level, upon a foundation of minimum standards; and

(ii) to ensure the maintenance of an effective award safety net of fair and enforceable minimum wages and conditions of employment.

In addition, the objects of Section 88 of the new Act, which is concerned with dispute settlement and prevention, seeks to ensure that

A a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and

b) awards act as a safety net of fair minimum wages and conditions of employment; and

B (2) In performing its functions the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following:

a) the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community;

b) economic factors, including levels of productivity and inflation, and the desirability of inflation, and the desirability of attaining a high level of employment;

c) when adjusting the safety net, the needs of the low paid. …

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