Table of Contents
The purpose of this chapter is to examine the implementation of the Workplace Relations Act 1996 (Cth) (the ‘WR Act’) and the potential impact of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (the ‘Work Choices Act’) within the Australian Public Service (‘APS’) — where the Coalition government has the greatest opportunity to influence the working conditions of its own employees. The chapter argues that when governments seek to regulate the working conditions and wages of their own employees in a decentralising industrial relations environment, there is potential for tension between the roles of government as employer, as policy generator and financial controller. A government’s financial and political responsibility requires that it control the cost of its own employees; its industrial relations policies may also require that more direct relationships between employers and employees be facilitated by the regulatory system. Nevertheless, as an employer, the government needs to retain ultimate control of its own employees. In the APS, the Coalition government attempted to resolve these tensions by providing policy ‘parameters’, via the Department of Employment and Workplace Relations (‘DEWR’),[1] to its managerial agents within agencies and departments of state. These parameters devolved some autonomy to the government’s managerial agents, but also required them to adhere to a process of centralised oversight of agency agreement-making by DEWR.
The principal public service union, the Community and Public Sector Union (‘CPSU’), was compelled to respond to a process that was procedurally decentralised but where there was considerable potential for ongoing and substantial central intervention in workplace bargaining. For public sector unions, there are both threats and opportunities in this environment. The threat lies in the capacity of employers to minimise union involvement in the agreement-making process. The opportunity for unions is to counter this threat through organisation at the agency level and through efforts to increase union membership. The chapter explores the CPSU’s attempts to retain its legitimacy at workplace level in three lowly-unionised agencies. These efforts are compared with union-management bargaining in an agency in which unions had a greater presence and organisational capacity.
The key objective of the Coalition’s industrial relations policies was to foster a more direct relationship between employers and employees at the workplace/enterprise level.[2] This involved reducing the power of ‘outside bodies’ that were said to interfere with or complicate the fostering of those direct relationships. In practice, this meant that the power of unions and of some (but not all) external regulatory bodies, such as the Australian Industrial Relations Commission (‘AIRC’), would need to be reduced further. The first objective was to be achieved by removing the bargaining monopoly that had been exercised by unions. The second objective was to be achieved by reducing the powers of the AIRC to intervene in workplace-level negotiations and outcomes, to that of simply ensuring that the agreements met specified legislative requirements.[3] The reduction of the powers of the AIRC indeed had been begun by the previous Labor government, although it had been much more cautious about reducing the role of unions in a decentralised bargaining environment.
While the Coalition made some significant changes to the bargaining environment that had been established by the Labor government, it followed in the tradition established by the former government in using the APS as a testing ground for its general industrial relations policies. The Labor government needed to demonstrate that its approach to workplace bargaining was a fairer and more effective system than the Coalition model. The obvious place to conduct such an experiment was in the APS. There was some scepticism, however, that productivity-based bargaining could work effectively in a budget-funded environment. A study involving three academics, Professors John Niland, William Brown and Barry Hughes, considered the utility of a number of methods used in the APS to measure productivity and opted for a system of productivity measurement that combined general performance indicators and quality-focussed approaches to their development and application at the agency level.[4] They were of the view, however, that ‘measures of APS wide productivity growth of an acceptable standard (were) ... not available and (were) ... unlikely to be so in the future’.[5] Productivity could only be regarded as a ‘sub-set’ of performance.[6]
The arguments about productivity measurement in the APS were in part designed to convince the unions that there could be workable agency-level bargaining that would not compromise the regime of service-wide wages and conditions. Achieving the policy objective of introducing workplace bargaining for its own employees did not, however, sit comfortably with the desire of the unions to maintain a high level of common conditions. Moreover, a group of departmental secretaries had conducted a separate enquiry,[7] and the consultants agreed on one issue: that it was difficult to measure productivity in non-market environments.
In fact, the CPSU had no real choice but to accept some model of decentralised bargaining given that both the government and the ACTU wanted a shift in that direction. Of more immediate concern was the impending federal election. The government (and the unions) needed to demonstrate that its model of decentralised industrial relations could work more effectively and equitably than that proposed by the Opposition parties. In December 1992, the government and 27 public service unions signed an agreement on the introduction of agency-level wage bargaining. This agreement provided for the development of ‘more flexible’ employment conditions at the agency level to be achieved in agency-specific agreements provided that there was ‘no overall disadvantage to employees’.[8]
During 1993 and 1994, most APS agencies either managed to negotiate an agency level agreement or gain access to a ‘foldback’ fund.[9] Among the agencies that relied on this latter arrangement were the Department of Finance and the Treasury. This was a considerable source of angst amongst the agencies that had reached agreements.[10] The central agencies were accused of being ‘free riders’ on the efforts of other agencies. An evaluation of the system conducted by the Department of Finance and the then Department of Industrial Relations confirmed this view, and also indicated that small agencies had experienced particular difficulty in identifying productivity savings.[11]
This episode of agency bargaining was followed by a return to a more centralised mode of bargaining and illustrates the conflicting objectives of governments in regulating their own employees. The government had a clear agenda to decentralise the wage bargaining system. The best way to do this was to demonstrate that it could work for its own employees. In the short term, there was an imperative to demonstrate its superiority over the more radical agenda of the opposition. On the other hand, the government needed to maintain control over the costs of such a system. Thus, the central agencies acted as the regulators on behalf of the government. In that sense, the system was not wholly decentralised. The government also needed to wrestle with the practical problems of productivity measurement and the expectation from the unions that all employees would receive a similar wage outcome. The solution to these problems through the ‘foldback’ mechanism meant that some public service managers, who had been able to bargain, had to finance the non-bargaining agencies or free-riders. Even for the bargaining agencies, it was difficult to see how productivity gains could be made without either continuing job losses and/or work intensification for the remaining employees. Nevertheless, the process facilitated further the incorporation of public sector unions into a recasting of the APS.