What’s Going On With the ‘No Disadvantage Test’?

an Analysis of Outcomes and Processes Under the Workplace Relations Act 1996 (Cth)

By R. Mitchell, R. Campbell, A. Barnes, E. Bicknell, K. Creighton, J. Fetter & S. Korman

The NDT, as it is presently constructed and applied, is failing adequately to protect employees, in certain defined respects, from a deterioration 'in relation to their terms and conditions of employment'.

If we consider purely the 'monetary' nature of the exchange involved in enterprise bargaining, it seems that in almost all cases the employee will be receiving at least the same, but usually more pay, and perhaps appreciably more pay, than that person would have received under the award against which the NDT comparison was made. There are, however, several other factors which need to be taken into account which bear upon this evaluation.

The detailed examination of our primary data set (36 agreements) reveals that in many instances the difference between the monetary outcomes of the award and the agreement are very thin. This is particularly the case with respect to AWAs and s.170LK agreements. Where that is so, given the number and nature of non-monetary concessions which employees typically make in such agreements, it is at least questionable whether there is sufficient value to the employee for the agreement to have passed the NDT.

This position is compounded by the fact that many of the items being traded away by employees (or unions acting for them) in bargaining do not appear to be accounted for as important or even relevant in the exchange equation. These items may be assembled into two groups.

First, there are those that go to the employee's quality of working life. When one looks at the NDT 'on balance' or 'in the round' it is difficult to avoid the conclusion that many employees are suffering a significant deterioration in the quality of their working lives in several respects. For example, many have suffered the loss of a clearly defined working week, with consequence to personal and family life. Many have suffered a loss of control over when they can take annual holidays. Many no longer have any control/discretion over the nature of their job duties and functions. This list can be extended, but the point is that, for many workers, enterprise bargaining has brought about a deterioration in the quality of working life of substantial proportions, compensated for, in many instances, by small or non-existent pay increases.

Secondly, there is the related issue of workplace power. In entering into s.170LK agreements and AWAs, employees are, in most cases, being dispossessed of protective power to offset against the employer's managerial discretion. Many agreements considerably extend the employer's power on such matters as the scheduling of work, the definition of job duties and functions and so on, without the need for consultation with employees or unions. Peetz has characterised some arrangements like this, in cases where high wage increases have occurred in exchange for the extended managerial discretion, as attaching a 'non-union premium' to the agreement.86

However, it is obvious from our agreement studies that in many instances, such transfers of power are occurring in agreements with little or no recognition of the need for a power-transfer premium.