Seven reasons why Workchoices is bad for business

Cutting the Wages of Workers Means Less Money to Spend as Consumers

Work Choices is designed to cut wages and conditions. When people get paid less they have less to spend. WorkChoices provides employers with many ways of to cut workers take home pay.They can achieve this by offering employees Australian Workplace Agreements (AWAs) which cut the wages and conditions below existing awards or collective agreements. Eg employers can now offer a minimum wage of only $12.75 per hour and cut penalty rates, overtime provisions, meal breaks etc.

A good example of this was Spotlight worker Anne Harris from Coffs Harbour who was offered a 2c increase in her hourly rate of pay in exchange for a $70 per week pay cut because the employer had abolished penalty rates and overtime provisions etc.

These industrial relations changes will be used mainly by big business who have the money to employ human resource managers and lawyers who can take advantage of the law.

Cutting wages hurts the consumer base of small business. Small business in particular relies on the purchasing power of consumers in their local areas.

Cutting Annual Leave Damages Regional Tourist Towns, With Fewer Families Taking Holidays

Work Choices allows employers to agree to an employee cashing out up to two weeks of their annual leave. Whilst many employers might see an advantage in this, the consequences in the long term, particularly for domestic tourism and regional towns cannot be underestimated.

Many employees who have their wages cut by AWA’s will probably find it necessary to want to cash out their annual leave to offset their overall cut in pay. For example if an employee is behind in their mortgage payments because their overall wages have been cut they will probably decide to cash in two weeks annual leave to make the payment.

The fact that employees then have less annual leave to take will mean less numbers of people and families taking holidays which will affect businesses in tourism destinations.

The introduction of Work Choices will also further exacerbate the already high levels of casualisation in the workforce. Casuals do not receive paid holidays. A recent report commissioned by Tourism Research Australia indicated that the industrial relations changes would have a devastating impact on domestic tourism: -

”For people working long hours or combining work and study, finding time to travel is an increasing problem”

”The increased casualisation of the labour market is likely to continue. This being the case, the difficulties people are having in organising and taking travel could be expected to worsen.”

There has been a growing incidence of the use of casuals particularly for workers who are on AWA’s.

More Time At Work Means Less Time Involved In Community Activities, Like Sports, Church Groups, Charities And Local Projects

As people have to work longer hours or work two or three jobs to make ends meet there will be less time for family and community activity. There has already been a large decline in people engaging in voluntary work eg. church groups, surf lifesaving, football clubs etc. Work Choices means longer working hours and less time for people to commit to activities, which make our communities more cohesive and humane.

Competitors Who Cut Wages Gain An Unfair Advantage Over Decent Employers Who Want To Treat Their Employees Fairly

Employers who do not want to reduce the wages and conditions of their employees could be caught up in a race to the bottom if their direct competitors go down this path.

Many businesses will be hurt by this competition in many different ways. Firstly, if you are the smallest of small business, that is a trader or a partnership that is not incorporated Work Choices does not apply to you. In other words you are still bound to pay your employees as per all of the current awards that are in place eg. if you operate a local fish and chip store, café or hairdressing salon as a sole trader you will still be paying your employees under an award.

When a competitor who operates in your locality, who is covered by WorkChoices, eg. McDonalds, Boost Juice,or a hairdressing salon which is a corporation decideto pay their employees 25% less in overall wages and conditions they put your business in an uncompetitive situation.

WorkChoices advantages larger business chains and franchises against small businesses.

The New Laws Are Very Complicated And Will Be Costly For Many Small Businesses To Implement

The new WorkChoices Laws were not written with small business in mind. They were developed by and for employers who have human resource departments and slick legal teams. However, many small business who are unincorporated may feel obliged in order to compete with other employers who are cutting wages and conditions to join the race to the bottom.

Non-corporation businesses who decide to become incorporated in order to take advantage of the new laws will find that this could cost their business thousands of dollars extra per year (some estimates are up to $10,000 extra per year.) This is made up of costs such as annual charges and fees including greater accounting requirements, Australian Securities and Investment Commission filing fees, fees to maintain company registers etc. You will then need to get legal advice on how to utilise the legislation.

The new WorkChoices laws are very complicated. The new Workplace Relations Act and its Regulations (WorkChoices) is over 1500 pages long and business will need to understand all aspects of the Act otherwise they may face lengthy litigation in the Courts.

Businesses should not underestimate the negativity associated with cutting your employees wages particularly when your employees have their own mortgages to pay and their own families to look after. There are many examples where trying to introduce AWAs has created low morale and resentment towards employers. This of course can lead to lower levels of productivity or customer service.

Insecure Jobs Undermine The Stability Of Families And The Cohesiveness Of Communities

Families are already under enormous stress with record levels of personal debt. Many family breakdowns are associated with this financial stress. WorkChoices has been modelled on the American system where over 16 million fulltime workers and 50 million people earn less than the official poverty line. In regions, towns and suburbs where there is a high proportion of people living in poor neighbourhoods there is a much higher level of crime, vandalism and health related problems. Workchoices is not good for our childrens future. Our future shouldn’t be based on a society where there is a growing divide between well off and the working poor.

Local Businesses Rely On Local Workers Employed In Secure Jobs On Decent Wages To Make Their Local Economies Work - WorkChoices Puts This At Risk

Local businesses need workers in secure jobs that pay fair wages. Its what keeps local economies ticking over. Workchoices is not good for business in the longer term because it is not good for the type of country we want for our future. We are not China, India, or indeed America. We are Australia which has had a proud saying of “A fair days work for a fair days pay”. Workchoices will destroy this and along with it the fairness in the workplace. Workers will lose but so will many businesses in the longer term.