Log of Extraordinary IR Measures During COVID-19 Shutdowns

COVID-19 containment measures have suspended large sections of the economy. Governments have committed over $220 billion in income supports to workers and firms. The $130 billion JobKeeper wage subsidy scheme is the most extensive “shock absorber” (with worrying exclusions of many casual and migrant workers). With the scheme now in place, assessment of the government’s COVID-19 measures is now shifting to implementation. This includes effects on the laws and regulations governing wages and how businesses and employees (and their unions) interact to determine the terms and conditions of employment.

Despite enduring a heightened anti-union agenda, unions (headed up by ACTU) liaised early with government to secure the JobKeeper wage subsidy to prevent mass layoffs. Unions have negotiated with industry to adapt Awards and enterprise agreements (EAs) to new business conditions. The Coalition government has proceeded with significant changes to the Fair Work Act that could hamper efforts to drive an inclusive economic and labour market recovery. What's more, the Morrison government has indicated it will continue its pre-COVID agenda to further weaken representation rights and minimum labour laws.

To inform assessment of the impacts of COVID-19 on jobs, wages, and workplace protections, we have summarised major developments within the industrial relations system since March 2020. The log traces revisions to Awards, enterprise agreement-making rules, new instruments formed between unions and industry, major decisions by the Fair Work Commission, and ongoing lobbying efforts by business to weaken minimum labour laws. Links to relevant research from Centre for Future Work released during the crisis, or prior to, are provided. All log entries are reported in the industrial relations publication Workplace Express. Links to other media outlets are provided where relevant. 

If there are any major IR developments that we have not reported here please get in touch at futurework@tai.org.au.

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Pandemic Shows Australia Needs Domestic Manufacturing

Disruptions in global supplies of essential medical equipment have served as a wake-up call to Australians that it is always vital for a country to retain the capacity to domestically produce manufactured products that may be crucial to national security and well-being.

In this commentary, Centre for Future Work Economist Dan Nahum reviews the qualitative reasons why manufacturing retains a special strategic importance to the overall economy, and discusses the potential synergies between the development of sustainable energy resources and a revitalisation of manufacturing.

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Public Sector Pay Freezes Could Push Economy From Recession to Depression

New research from the Australia Institute’s Centre for Future Work reveals the consequences of freezing public service pay, both for public sector workers and for the broader economy.

Governments are devoting unprecedented resources to protecting Australians against the health and economic effects of the pandemic, but a contradictory push to adopt fiscal austerity measures is also becoming apparent. Leaders of governments at all levels -- federal, state and local council -- have already announced plans to freeze wages and cancel previously agreed pay raises for public servants.

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Working from Home in a Pandemic: Opportunities and Risks

With many regular workplaces shut down to 'flatten the curve' of COVID-19, millions of Australians are now shifting their work to home. Home work has great potential to cushion the economic blow of the pandemic: allowing many to keep working and earning an income, and many firms and industries to continue at least partial production. But there are also many challenges and risks associated with this major shift in work patterns. Much of the increase in home work will likely become permanent, even after the immediate health emergency passes. That makes it crucial to 'get home work right': providing home workers with appropriate support and protections, and preventing abuse and exploitation as home work becomes more common.

This new Briefing Paper from the Centre for Future Work, written by Alison Pennington and Jim Stanford, surveys the scope of home work, considers its impacts on economic and gender inequality, and proposes several policy recommendations to make home work safer and fairer.

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Australians Want JobKeeper Program Extended to Include All Who Need It

The Commonwealth government's proposed JobKeeper wage subsidy scheme represents an important and promising response to the COVID-19 shutdown of several key sectors of Australia's economy. The scheme would support an estimated $130 billion worth of wage payments over the coming 6 months, keeping millions of Australians in jobs even if their employers experience major revenue losses from the restrictions that have been imposed on activity, mobility, and work during the pandemic.

However, the program as originally proposed contains several design flaws that will seriously undermine the effectiveness of the program if they are not fixed.

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Webinar: Protecting Jobs and Incomes During the Pandemic

The COVID-19 pandemic is producing an unprecedented shutdown of large parts of the national and global economies. Our Director Dr. Jim Stanford provided an overview of the coming recession, how it differs from previous downturns, and the best ways for government to respond to protect Australians as much as possible from the economic fall-out.

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Open Letter From Economists and Policy Experts: Wage Subsidy to Protect Jobs During Pandemic

109 Australian economists and policy experts have signed an open letter, initiated by the Centre for Future Work, supporting a government wage subsidy to prevent mass unemployment during the coming economic downturn resulting from the COVID-19 pandemic.

The letter and the full list of signatories is reprinted below. It has been forwarded to Prime Minister Morrison.

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Minimum Wage Awards Playing a Larger Role

The Centre for Future Work has made a submission to the 2020 annual wage review conducted by the Fair Work Commission. The submission compiles evidence showing that the annual minimum wage adjustments (which flow through into wages specified in the Modern Awards, as well as some enterprise agreements and individual contracts) have played a more important role in recent years in supporting the overall level of wage growth in Australia's labour market. Without relatively strong minimum wage increases since 2017 (of 3% or higher for three consecutive years), Australian wage growth would still be languishing at all-time record lows of under 2% per year.

In this context, the Centre argued it is vital the Commission proceed with a normal, healthy minimum wage increase for 1 July, 2020, with full flow-through into Award wages. Otherwise wage growth will slump significantly (to an estimated 0.7%, or even lower), heightening the risk of economy-wide deflation.

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Responding to the Economic Emergency

The scale and scope of the economic downturn caused by COVID-19 will be unprecedented in our lifetimes. Mainstream economists have belatedly realised the pandemic will cause an economic downturn, but they are not yet appreciating the size of that downturn, nor the unconventional responses that will be required. Simply calling for government "stimulus" is sadly inadequate, given the complete shut-down of work and production that is occurring in many sectors of the economy. The task is no longer supporting markets with incremental "pump-priming." What's needed is a war-like effort, led by government, to mobilise every possible resource to protect Australians' health and livelihoods. Money is not an object - and this epic effort should not be held back by normal acquiescence to private-sector priorities and decisions.

That's the core message of new analysis by Centre for Future Work Director Dr. Jim Stanford, published today by the Australian journal New Matilda.

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Catalogue of International Initiatives to Support Workers through COVID-19

The Australian government has pushed back against introducing needed measures to support workers in casual, self-employed, or gig positions during the unprecedented labour market turmoil resulting from the COVID-19 pandemic. Other countries, however, are moving quickly with unprecedented measures to support jobs and incomes for all workers - including those in non-standard employment - to ensure they can take necessary time away from work, and do not lose their livelihoods as a result of the virus. We have assembled a catalogue of international initiatives aimed at achieving these dual outcomes.


Update September 2020: The JobKeeper subsidy has been extended from 28 September 2020 to 28 March 2021, at incrementally lower rates as this period continues. In brief, the JobKeeper wage subsidy will continue until March next year, but payments will fall from $1500 to $1200 a fortnight after September (or $750 for those working less than 20 hours per week). The JobSeeker coronavirus supplement will continue until December but fall from $550 to $250 a fortnight, meaning people on the program will receive $815 a fortnight after September.

The Commonwealth is providing $1500 of paid pandemic leave in Victoria, New South Wales, Western Australia, and Tasmania for workers who need to self-isolate either because they are suffering from the virus or because they are caring from someone who is. At this stage, other states and territories have not signed onto this agreement.

We have added further information on the UK's response.

Update July 2020: Governments around the world continue to take extraordinary measures to contain the economic damage associated with COVID-19. The Australian government has flagged that it will end the JobKeeper wage subsidy and the JobSeeker COVID subsidy (essentially doubling the unemployment benefit) in September, and has already done so for childcare, with negative on-effects for both a particularly feminised workforce and for working women more broadly. Given that economic conditions continue to worsen despite the government's efforts thus far, it is hard to see how ending JobKeeper across the board would be either politically or economically feasible. In contrast, internationally, governments are expanding economic measures, including those specifically aimed at young workers.

Update March 2020: The Australian government announced a massive $130 billion wage subsidy program, to catch up with similar schemes that have been implemented in other countries (described in detail below). This is a welcome development, attributable largely to the advocacy of the ACTU and its affiliated unions. However, there are several weaknesses in the design of the scheme – most acutely, the fact that it excludes over 2 million short-tenure casual workers and foreign visa workers. Watch this site for a more detailed analysis of the pro’s and con’s of the government’s package. And we will continue to update the catalogue below with relevant developments from other countries as the world continues to respond to the COVID-19 pandemic.


 

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