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Australia’s “JobKeeper” Scheme Falls Short by Design

The Australian “JobKeeper” scheme will subsidize the wages of many throughout the course of this pandemic, but more than 2 million workers are set to be left out entirely. What’s more, the scheme undermines collective bargaining agreements, giving more power to employers in a shift that threatens to far outlive this crisis.

Prime Minister Scott Morrison delivers a statement on COVID-19 in the House of Representatives on April 8, 2020 in Canberra, Australia. (Sam Mooy / Getty Images)

On April 8, the Australian government passed legislation enacting the $130 billion JobKeeper scheme, the largest employer-directed wage subsidy in Australian history. Initially, details of the scheme were unclear. But as specifics have emerged, it is now apparent that many will be excluded from the deal and that, under the guise of crisis relief, the plan is actually reintroducing some of Australia’s most anti-worker policies.

Under JobKeeper, businesses suffering a specified shortfall in turnover due to COVID-19 can access a $1,500 payment per fortnight, per employee — roughly equivalent to the minimum wage. In principle, the employer will pass the subsidy onto their employee. In practice, however, many workers will be excluded, and many more will face dramatic cuts to wages and conditions, potentially weakening union power in the long run.

Thrown on the Scrap Heap

In recent years, employers have aggressively casualized workforces. They have pushed down conditions, for example, by outsourcing work via labor hire companies, by sham contracting, or by dividing businesses into legally distinct enterprises owned by the same individuals or group.

To qualify for JobKeeper, workers must be either full-time, part-time, or a casual with “systemic and continuous” employment for at least twelve months. So it’s not only recently employed casuals who will be out in the cold.

Many warehouse workers and cleaners have worked in the same workplace for years, without ever remaining with one employer for over twelve months. The same is true for hospitality workers who have cycled through different cafes or restaurants owned by the same boss, spending no more than a few months at each. Call center workers are often required to invoice their employers, as though they were running a small business.

Without any right to the JobKeeper payment, these workers are at immediate risk of unemployment. According to estimates by an Australian Council of Trade Unions (ACTU) economist, as many as 1.1 million casuals may be left out.

Despite a flurry of union-led social media campaigning, Attorney-General Christian Porter has categorically dismissed these concerns. The government remains committed to upholding the Fair Work Commission’s narrow definition of casual work, stating that “a line has to be drawn” somewhere, making it inevitable that some workers will miss out. Despite unions insisting the subsidy should cover all casual workers, a position backed by 81 percent of Australians, the attorney-general foreclosed the debate, declaring a unilateral “agreement to disagree.”

Worse, the guarantee only covers Australian citizens and permanent visa holders. Migrant workers from New Zealand who hold a 444 visa are also covered, but other migrant workers, not to mention the undocumented, are left out. This leaves a further one million migrant workers in immediate danger of poverty, should they lose their jobs.

So far, many unions have hesitated to stand up for these workers, continuous with a history of racism toward migrant workers, in particular from Asia and the Pacific region, that both helps to justify hyper-exploitation as well as divide the labor movement. One particularly egregious example of this were the “Aussie workers first” union campaigns that blamed migrant workers on 457 visas for Australia’s stagnating wages and rising job precarity.

Upholding solidarity, however, the Victorian Trades Hall Council and the United Workers Union have called for the inclusion of all migrant workers, including the undocumented, under the JobKeeper scheme.

“WorkChoices” by Stealth

The scheme’s implementation raises further dangers. By the government’s own admission, to enact the scheme as it is will contravene conditions guaranteed by industrial awards and violate tens of thousands of current enterprise agreements, voted on by workers in their unions. Their solution? Amend the Fair Work Act (passed in 2009, following John Howard’s electoral defeat) to grant employers new powers to enforce “flexibility.”

Although the legislative changes are constrained by a six-month sunset clause, this is more than enough time to undermine an already weakened collective bargaining system, opening the door to further attacks on workers’ rights.

The basic problem is that JobKeeper gives power to employers, not workers. The industries hit hardest by the pandemic, such as hospitality, the arts, and entertainment, are where wage theft is most systematic. These very same employers will now be entrusted with distributing a 100 percent publicly funded wage subsidy, with limited safeguards and no public oversight. A wage subsidy is supposed to go to workers – but in many instances, employers may simply pocket it.

The discretionary nature of JobKeeper is not a bug, it’s a feature. Employers can decide who is entitled to the wage subsidy and under what conditions. The government’s initial explanatory statement allayed concerns that employers would cherry-pick desirable workers. However, as noted by Adelaide University Professor of Law Andrew Stewart, the “one in, all in” clause, designed to remove this discretion, hasn’t made it into the final legislation. A potential consequence is that employers will negotiate trade-offs between employees or discriminate against active union members.

Employers have also been given the power to stand down workers or reduce hours until they “match” the $1,500 subsidy. For example, an English as a second language teacher earning around $50 per hour may find themselves reduced to fifteen hours a week of work – a pay cut of over half – while their employer offsets labor costs with public money.

Or, in industries beset by precariousness and more pronounced power asymmetries, the opposite may happen. For example, cleaners who work on contract may be transitioned to the JobKeeper payment with the expectation of an increased workload in exchange for the subsidy.

Even previously secure middle-income earners may find themselves in a precarious position as they are coerced into working a full-time week for minimum wage, at risk of losing their job and being replaced. The danger this poses to hard-won wages and conditions is self-evident.

The laws also give employers the power to change their employees’ duties and location of work, provided the temporary role is “safe and reasonable.” In a context of soaring unemployment rates estimated to hit 10 percent, already vulnerable workers have very little power to ensure these changes are fair. Security workers covered by the United Workers Union have already reported being redeployed to high-risk environments outside their usual remit. One employer has been accused of circulating a nonstandard JobKeeper application form committing workers to repaying their wages in the event the subsidy doesn’t begin in May.

All this is reminiscent of WorkChoices, former prime minister John Howard’s notoriously hated industrial relations reform package. WorkChoices sought to give employers free rein to unilaterally set wages and conditions by forcing workers onto individual contracts. While WorkChoices was defeated in 2009, the Liberal Party never abandoned Howard’s dream of giving employers total freedom to evade collective bargaining by cutting out unions and moving workers onto individually negotiated working arrangements.

Before WorkChoices, there was the Prices and Incomes Accord — a neoliberal consensus established between the Australian Council of Trade Unions (ACTU) and the Australian Labor Party in 1983. Defended at the time as a victory, it effectively traded off workers’ collective bargaining power in exchange for a flexible and adaptive industrial framework, contributing over time to the endemic casualization we face today.

Over the long term, this has disoriented and weakened the ACTU. Although it has acknowledged fears of WorkChoices-style reform, as the peak union negotiator on the JobKeeper legislation, the ACTU also declared the scheme a historic win for working people.

In the early stages of the crisis, there was an opportunity to launch a strident critique of neoliberalism and propose a pro-worker stimulus package. But instead of leading industrial action and calling for worker-controlled nationalization and a universal income guarantee, much of the union movement has acquiesced to a minimum wage payment doled out at the bosses’ discretion. Already, last minute changes have been introduced to the JobKeeper payment that allow bosses to force workers to decide on changes to enterprise agreements in just 24 hours, down from one week.

No Going Back

Australia has changed in the past three weeks. Previously invisible essential workers — including early childhood educators, warehouse workers, and cleaners — are now on the front lines, and are suddenly recognized as vital. Previously denigrated forms of work are now acknowledged and even celebrated. This opens an opportunity to rebuild class solidarity. For this, we will need a strong and active rank and file that can break from traditional union structures if needed.

Echoing the industrial action at Amazon and Instacart in the United States, Australian supermarket logistics workers staged a walkout last week after the supermarket chain Coles refused to enforce social distancing measures or provide hand sanitizer in the warehouses. Management quickly met workers’ demands, partly due to fears that the action would escalate. The site boasts well-respected delegates, trained health and safety reps, and a long and successful history of organizing around safety issues. Theirs is an example to follow.

Unionists in Melbourne and Sydney have likewise organized car convoys to protest the exclusion of casuals and migrants from the JobKeeper scheme. Refugee advocates have joined suit, highlighting the specific dangers posed by COVID-19 to refugees detained, often with inadequate access to medical support.

However, under harsh new laws — designed to quell protest as much as the virus — such actions are becoming more difficult. One organizer has been arrested, and $43,000 worth of fines were issued to one car convoy alone. Faced with repression like this, unions should use their political muscle to push back against state governments who want to interfere with the right to protest.

In a crisis like this, only organized labor has the power to protect vulnerable workers’ rights and livelihoods. But more than this, we need to prepare a united front against the austerity measures that are sure to follow unprecedented government spending. As much as union leaders hope they can wait this out and return to the status quo, that’s not an option. The first step is to face reality. The next is to prepare to fight.