Magazine of Socialist Action in Australia

Strike to defend penalty rates!

Reading Time: 6 minutes

Over half the population opposes the decision to cut retail and hospitality penalty rates, described as the biggest wage cut since the great depression. Prime Minister Malcolm Turnbull’s dithering shows his fragility. He could be forced by a mass movement to either overturn the decision or be kicked out of office.

Big business and the mis-named Fair Work Commission (FWC) argue cutting weekend and holiday penalty rates will lead to more jobs. But most people believe it will lead to higher profits instead, demonstrated by polling in the Guardian newspaper. These instincts are correct, as we have previously explained. The poll also shows half of people want to see penalty rates protected in law.

Businesses run to maximise profits, not jobs or working hours. That is a fundamental law of capitalism, widely understood for over 150 years by both capitalists and workers. Whenever a boss tells workers a decision is justified because it “means more jobs” you can be sure they are lying. Wages have been falling in real terms for years while underemployment and wealth inequality grow.

Over 700,000 workers are threatened by the proposed penalty rate cuts, says the Australian Council of Trade Unions (ACTU). In particular, young and women workers are set to be disproportionately affected. Retail and hospitality are dominated by young workers. And women make up more of the workforce in the affected industries than men. Women are also a larger share of the part time workforce, who rely more heavily on penalties. This means the gender pay gap will be widened if the cut is allowed to go ahead. Workers in other industries who regularly work weekends and holidays will be targeted next.

Public holiday penalty cuts are due to be enacted in July while Sunday rate cuts are proposed to be phased in over one or more years. The FWC is taking advice from bosses organisations, the government and others on how exactly to implement the changes. They are trying to work out how best to avoid a powerful response from workers. This means that even though they have made a decision, it is still only a paper proposal. It can still be stopped.

Recently many people looked to the cross-bench members of the parliament to block regressive and unfair government proposals, like those in Tony Abbott’s 2014 budget. But this decision doesn’t need approval in parliament, and many of the cross-benchers support the wage cuts anyway. Most importantly none of the cross-benchers have an alternative to capitalism and its logic, which puts profit-first.

Nick Xenophon, Senator from South Australia, historically supports penalty rate cuts. Six years ago, he introduced legislation to slash them. This time, at first, he supported the FWC’s decision. Only later did he modify his position in light of polling that shows his voters are opposed. Now he says penalty rates should be quarantined for ‘existing workers’. But what about for workers who change workplaces, or young people getting their first job? When it comes to workers’ rights Xenophon is basically a Liberal.

Pauline Hanson also supports cutting penalty rates, previously saying “right across the board, get rid of penalty rates”. But like Xenophon she stands against large sections of her voter base who support penalty rates. As a former hospitality boss Hanson’s pro-business, anti-worker position is not new or surprising. She has already helped pass several anti-union laws through the Senate. However, it does show that big groups of her voters could be broken away from One Nation by a progressive and unifying campaign of workers, regardless of race or religion, demanding higher pay for unsocial hours of work. The effect would also be a strengthening of the anti-racist movement.

Bill Shorten’s opposition Labor Party are promising to save the day by introducing laws to save penalty rates. But last year he promised to accept the FWC decision even if they slashed wages. Shorten’s play is cynical political opportunism. He was the workplace minister in the last Labor government who appointed some of the FWC commissioners, including the president, Iain Ross. He also started the review of penalty rates. Moreover, as former leader of the Australian Workers Union Shorten signed off on a number of dodgy deals that sold away workers’ penalty rates and boosted bosses’ profits.

The Rudd-Gillard-Rudd Labor government was first elected on the back of a massive union campaign against the former Liberal government’s “WorkChoices” laws. Trade union leaders told workers that a Labor government would solve the problem. But rather than scrap the anti-worker laws as promised, the Labor government let down the workers who voted for it and re-packaged WorkChoices as the Fair Work Act. We have to remember the lesson, and not be tricked into simply crossing our fingers, electing Labor and hoping for the best. Just like the cross-bench politicians, Labor rejects the alternative of democratic socialism which would put people before profit.

We have to organise a fightback starting in the workplaces and on the streets. We can’t rely on paid off pro-capitalist politicians in Labor or on the cross-benches to do it for us. In particular, we need to build for a one-day nation-wide strike. Strikes, when workers collectively refuse to work, are the most powerful and most basic way that workers can defend themselves from attacks like this. They hit the bosses in the workplace, at the point of production. Because workers are the source of profit, bosses can’t make any money if everyone decides to stop.

Malcolm Turnbull is semi-paralyzed by the bitter factional fighting in the Coalition government. To the frustration of the corporate media it took him three weeks to state clearly that the government supports cutting penalty rates. It shows just how vulnerable “Mr. Harbourside Mansion” is. His one-seat majority government could be forced to overturn the FWC decision or split and be swept from power if faced with a determined mass movement of workers.

If a Labor government was elected on the back of such developments, it too would feel the heat as long as the pressure was sustained. An active mass movement, as opposed to a compliant pro-Labor election campaign, would put the trade unions in a much stronger position to not only demand laws that protect penalty rates but also for a scrapping of the anti-democratic laws affecting the construction industry, for better health and safety legislation and for a workplace regulatory regime that has real teeth to crack down on dodgy bosses.

With all unionized workers stopping work for the day, massive, vibrant rallies in all the major cities and towns could be organised to bring everyone together and show the determined opposition on the streets. The CFMEU-led demonstration in Melbourne on March 9 was a small taste of the possibilities. Such a protest strike would send shockwaves through the big business establishment. Bosses in industries that weren’t affected by the FWC decision would be begging the government to settle the matter so they could go back to making money.

Such a one-day national general strike could be backed up by an ACTU coordinated campaign of boycotts, protests, pickets and occupations targeting particular bosses who refuse to pay penalties.

While we need to stop this new attack, we should also recognize that many workers in retail and hospitality have already had their penalty rates cut. Many work ‘off the books’ and only receive a flat rate regardless of the time of day they work. There are also workers whose bosses simply break the current laws and refuse to pay, like at 7-Eleven. And there are workers who are on dodgy deals done by tame cat unions like the SDA with the likes of Coles and Domino’s.

The ACTU desperately needs to adopt a new policy that forbids any affiliated union to do deals that undermine penalty rates in any way. Actions like these would help involve these layers of workers, giving them the opportunity to get weekend and holiday rates paid.

All of this action would go a long way to helping working people realise the unused power they collectively hold. If implemented correctly, it would help reverse the sharp decline in union membership and start to reverse the trend towards increased wealth inequality. It would begin to rebuild the workers’ movement on the healthier basis of on-the-job organising and workplace struggle. We could replace the model of unionism that acts as an ATM for the Labor Party and relies on pathetic backroom lobbying. Other movements for progressive change would benefit hugely from this, as seen during past periods of strong industrial organisation and action.

This strategy would challenge many of the undemocratic anti-trade union laws that exist. Workers should pressure the trade union leaders, including ACTU President Sally McManus, to stand by their recent statements in favour of breaking the unjust anti-worker laws developed by both the Labor and Liberal parties.

In the main, they will not implement this strategy willingly or enthusiastically. This is because the vast majority of union leaders see no alternative to running society along capitalist lines, which prioritise profit. Instead they bow down to the Labor Party and hope for a slightly less bad, or delayed outcome.

In return many union leaders move onto comfortable parliamentary careers. Labor are the political B-team of the capitalists. They will fight against such an active grass roots strategy because it challenges their power and the profits of their big business mates, and shows workers they can call the shots. To carry this strategy through, workers need to break with capitalist politics and base themselves on the idea of a democratic socialist alternative to the dictatorship of big business.

By Kirk Leonard


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