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DE RUEHBY #1222/01 3392053
ZNR UUUUU ZZH
P 042053Z DEC 08
FM AMEMBASSY CANBERRA
TO RUEHC/SECSTATE WASHDC PRIORITY 0618
INFO RUEHBN/AMCONSUL MELBOURNE PRIORITY 5809
RUEHPT/AMCONSUL PERTH PRIORITY 4081
RUEHDN/AMCONSUL SYDNEY PRIORITY 4019
RUEHC/DEPT OF LABOR WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 CANBERRA 001222 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ELAB AS
SUBJECT: GOVERNMENT PROPOSES REVISED LABOR LAWS FOR 
AUSTRALIA 
 
REF: CANBERRA 182 
 
¶1. (SBU) SUMMARY: Labor unions are generally happy with the 
Rudd Government's major industrial relations bill, introduced 
on November 25.  This bill proposes a new labor relations 
scheme for Australia, providing stronger collective 
bargaining rights, easier worksite access for union 
officials, the ability to negotiate multi-employer 
agreements, access to compulsory arbitration for low paid 
workers, and strengthened unfair dismissal laws.  The Rudd 
Government consulted extensively with business, which 
although concerned about increased union power, has publicly 
expressed qualified support for the legislation.  Opposition 
Leader Malcolm Turnbull, against the wishes of some of his 
colleagues, said Howard's WorkChoices was "dead" and that the 
Coalition will support the bill in the House of 
Representatives. END SUMMARY 
 
NEW LAW: "FAIR WORK AUSTRALIA" 
 
¶2. (U) The Fair Work Bill 2008, drafted in consultation with 
the Australian Council of Trade Unions (ACTU) and business, 
provides that it will take effect on July 1 2009. Provisions 
include: 
 
-The creation of "Fair Work Australia", to commence in 
January 2010, which will absorb the functions of the 
independent Industrial Relations Commission, plus all current 
government agencies (the Workplace Authority, the Workplace 
Ombudsman and Employment Advocate). 
 
- Ten national employment standards (there are five under 
WorkChoices), which will provide the basis for a modern 
industry award system.  These are essentially minimum 
conditions that will be required in all workplace agreements. 
 The new conditions will provide more job security and 
increased compensation to the worker. 
 
- Unfair dismissal protection for workers in businesses with 
fewer than 15 employees.  Under WorkChoices, employees in 
businesses with up to 100 workers were exempt from unfair 
dismissal laws. 
 
-"Majority support orders" which will require an employer to 
bargain with workers if there is majority support for a 
collective agreement. 
 
-"Good faith bargaining", which includes requirements that 
employers hold meetings at reasonable times, and respond to 
proposals in a timely manner. 
 
-Unions will be able to enter worksites containing no union 
members, provided at least one employee approves this. 
 
-Allowing multi-employer bargaining.  As is the case under 
WorkChoices, legal industrial action by unions will be 
unavailable in this situation. 
 
-Making compulsory arbitration available to low-paid workers 
negotiating multi-employer agreements. 
 
UNIONS GENERALLY HAPPY 
 
¶3. (SBU) While not going as far as it would have liked, the 
ACTU was generally pleased with the Bill.  During the 
consultation process, the unions persuaded Deputy Prime 
Minister and Workplace Relations Minister Julia Gillard to 
include compulsory arbitration for workers in low-paying 
industries; Gillard had previously ruled out compulsory 
arbitration except in extreme circumstances.  Another 
concession made by Gillard was the provision enabling union 
officials to visit worksites containing no union members. 
She had previously maintained the Australian Labor Party 
(ALP) would retain the Howard's government's right-of-entry 
laws.  The unions also convinced Gillard to make it possible 
for union officials to inspect the records of non-union 
employees.  One prominent union official told us the proposed 
law was a "tremendous step forward," citing a provision that 
will allow Fair Work Australia to make a "scope order" to 
Qwill allow Fair Work Australia to make a "scope order" to 
determine the extent of coverage of a proposed agreement.  He 
said telecommunications giant Telstra, for example, splits 
employees into small groups as part of a "divide and conquer" 
tactic. 
 
¶4. (SBU) Some left-wing unions are upset that the Rudd 
government is retaining the Howard Government's industrial 
watchdog in the construction sector and virtually all the 
Howard Government's laws relating to strike action, including 
 
CANBERRA 00001222  002 OF 002 
 
 
secret ballots.  Despite this criticism however, Gillard's 
office told us that "sensible union leaders" are happy with 
the new law, notwithstanding "niche issues."  Her office 
expected the bill would pass the parliament early next year, 
following a Senate inquiry. 
 
BUSINESS NOT SO HAPPY 
 
¶5. (SBU) The reaction of the Australian Industry Group (AIG), 
representing manufacturing, was the most upbeat.  Its Chief 
Executive, Heather Ridout, said the bill was "workable" and 
acknowledged that the government had "listened hard" to 
employers.  The Australian Chamber of Commerce and Industry 
(ACCI), which represents large and small companies, while 
generally accepting, pointed out that allowing arbitration in 
low paying industries was "dangerous and a form of pattern 
bargaining."  ACCI also criticized the increased union right 
of entry powers.  On the other hand, the Australian Mines and 
Metals Association, the Master Builders Association, and 
Australian Hotels Association were extremely critical. 
Gillard's office noted to us that business was part of the 
process "so they knew what was coming" but it also 
acknowledged that business was unhappy over the increased 
union right of entry and greater access to compulsory 
arbitration. 
 
TURNBULL: "WORKCHOICES IS DEAD" 
 
¶6. (SBU) Shortly after Gillard's introduction of the new law, 
the Coalition parliamentary caucus met to determine its 
response.  There was an argument, broadly between moderates 
and conservatives, over whether to take a stand against the 
bill's increase in union rights and the changes to unfair 
dismissal.  Later that day, Opposition Leader Malcolm 
Turnbull announced the Coalition would not oppose the bill in 
the House of Representatives but reserved the right to offer 
amendments in the Senate after the Senate committee process. 
He said the Howard government's unpopular WorkChoices was 
"dead," noting that the ALP had a mandate for its reforms, 
and the Opposition had been advised by industry that the bill 
provided enough capacity for individual flexibility in 
agreements.  A Liberal Party MP familiar with his party's 
thinking on the legislation told poloffs that it was very 
difficult for the Opposition to take a stand against the 
legislation if key industry groups like the AIG and ACCI were 
not prepared to take the lead publicly in opposing the 
changes - something he hoped they would do during the Senate 
committee process. 
 
PLENTY OF PRIOR CONSULTATION 
 
¶7. (SBU) COMMENT: Several months before last year's election, 
Gillard, as Opposition Spokesperson for Industrial Relations, 
announced a new ALP workplace relations policy that had been 
drafted after only consulting the unions.  The howls from the 
business community forced Rudd to step in and craft a new, 
more business-friendly policy.  Rudd and Gillard could not 
back down from their pre-election commitments to the business 
community, and Rudd's tendency would be toward a centrist 
policy in any case.  Gillard also made sure she consulted 
widely on the policy.  The Rudd Government probably delivered 
the unions as much as it could without clearly breaking the 
policy it brought to the election.  Unions here cling to the 
belief that WorkChoices affected their ability to recruit new 
members but union numbers had been steadily declining even 
before the election of the Howard government.  Politically, 
Turnbull made the right move by essentially supporting the 
bill.  WorkChoices was political poison for the Coalition and 
Qbill.  WorkChoices was political poison for the Coalition and 
it does not need another fight on workplace relations. 
Economically, there is a strong case that reducing labor 
market flexibility and raising labour costs will curtail jobs 
growth, particularly in a slowing economy, an argument that a 
prominent labor law professor has said could cause the Senate 
to claw back some of the more pro-union positions. 
 
MCCALLUM