|Issue No 108||24 August 2001|
The Man from Manusafe
Interview with Peter Lewis
Manusafe chief Andrew Whiley explains why employers have nothing to fear from the entitlements trust fund.
What are the ideas behind the Manusafe scheme?
Basically to fill the quite glaring shortfall that exists in protection of workers' entitlements in Australia at the moment. The issue was ignored by the coalition, from day one despite a string of collapses and failures like CSA mine at Cobar, Oakdale, Woodlawn, Parrish Meats, the list goes on and on. And the government kept wringing their hands and saying nothing could be done.
The Federal Government then only grudgingly brought their existing scheme into existence, particularly after the National Textiles debacle, where Stan Howard the PMs brother was on the board of the company. John used the communities money to bail-out Stan, and pay of National Textiles workers lost entitlements.
After that grubby episode they had to respond. It was only through tremendous pressure from the community supporting the unions campaign that the Howard Government was forced to introduce the current federal EESS Scheme They would still be ignoring the issue if they could.
But their scheme is just not good enough .The shortcomings of that are manifestly clear to everybody. It is funded by the taxpayer, which is wrong in principle. It doesn't deliver 100% of workers' entitlements in the case of a corporate collapse .The payouts a worker can receive are capped at very low level. It is very bureaucratic. You have to wait until the end of the insolvency and wind up process before you may access the money. It doesn't protect entitlements through a transmission of business. And it doesn't have the support of the States, the unions, or the community.
The vacuum has existed, politically, in response to corporate collapses, and on the other hand, the community has seen the number of collapses has go up. The changes to the labour market and the weakening ofindustrial relations legislation and the move to deregulation has seen a tremendous rise in insecurity amongst workers and that has led to the emergence of a view that there has to be a better way to protect entitlements.
Manusafe scheme was born in response to that .The initiative came from the AMWU, and other manufacturing unions. It has been over 21/2 years in development. It was the Unions response to corporate and industrial landscape that had been created over the last four or five years - maybe longer in Australia.
I know Tony Abbott says this is a union controlled fund. Who runs Manusafe?
Tony Abbott has basically tried to imply fairly quickly that any money that goes into Manusafe the unions can access in some way and they can put their hand in the till and take it out and use it for some kind of devious purpose. That is completely wrong. The Minister is deliberately attempting to misrepresent and deceive the Australian population about the structure of Manusafe and its role. What a clown!
Manusafe is an Industry Trust Fund, similar to many other trusts set up to deal with financial matters to the benefit of workers. Its Board, and its Trust Deed and its policy processes are based on a joint decision making model with employer and employee representation. It is not a situation where it is union controlled. It is not designed to be union controlled. It is designed to be run on a cooperative basis, similar to the way that industry superannuation schemes run; similar to the way that many corporate superannuation schemes are run, similar to many cooperative structures that exist in our society.
The question of union control is the usual diversion that has been thrown up by both the Federal Government and some employers to obscure the core issue, fact that they really don't have any long term, viable answer to the question of protecting entitlements.
The industry trust fund model and the very existence of Manusafe, open for business with contributions from individual employers already rolling in is a tremendous affront to them.
They keep saying Manusafes not the answer but where's the alternative? It leaves the government and those employers who won't face up to solving the problem terribly exposed politically.
So, have you invited the employers to be part of this?
There is an open invitation for the major employer group the AiG, to take up seats on the Board of Manusafe. There is also an open invitation to individual, larger employers within the manufacturing sector to take up seats as well, and that invitation is going to remain open because in the long term that is the best way for the fund to operate.
A trust fund that operates on open and transparent principles must have a decision making process where everybody that is a stakeholder in one form or another has a seat at the table and has a say. And I see nothing wrong with that. I think that is a good, solid model to design these things around.
And I am reminded of the survey released by TMP a few weeks ago that showed 2/3rds of Managers thought that trust funds were the best way to protect entitlements.
Can you understand the argument from the employers which says, if you take away our up front capital it means that we have got less money to operate on, which means that we are less successful, which means there are fewer jobs for the workers?
There are several aspects of that argument. Firstly, in the broad sense, that can be applied to any input cost on an employment process, be it the payment of wages, be it the payment of income tax, be it the payment of licence fees, be it the payment of anything.
One could argue that in a competitive environment if a business can't meet the cost of operation, including making a reasonable provision for liabilities it really shouldn't be in business. That is a philosophical view that some people could take. But in terms of the nuts and bolts, in the long term, putting money into a trust fund will reduce the liabilities that exist on a company's balance sheet, which helps make it easier for a company to attract investment.
And we feel that there is some financial benefit for contributing into Manusafe. That hasn't come out so far in the debate because of the atmospherics and the very determined effort, particularly by the Federal Government, to muddy the waters entirely. They can't argue on anything else except to try and scare employers that somehow you will go broke if you join up to Manusafe.
That is the only line they have got left in this whole workers' entitlement question, because they haven't been able to come up with an effective political response, and the events of the last couple of weeks, particularly the TriStar dispute, has shown that quite clearly community support is behind workers fighting to protect whats theirs, and that in the absence of a political solution which people see is a viable one, and one that they are not paying for out of their own pocket, they are going to support the industry trust fund model.
It's a simple concept, the responsibility rests where it belongs with the employer, and support for trust funds as a way to protect entitlements is growing.
Obviously Manusafe has been the center of many high profile disputes. How many firms do you have on board at the moment?
We have a number of firms on board at the moment, and we have an even larger number that are prepared to sign up but I'm not going to reveal them on the record at the moment because of the campaign that is being run to stifle Manusafe and the pressures that are being placed on companies that are at the starting line not to sign up.
Presuming this gets off the ground, it is going to have a large bank of money which obviously will turn some degree of profit if you invest it in a fairly competent way. What are your plans with that money that comes into the scheme?
Under the Trust Deed of the scheme, any fund earnings must go back to the contributors. Fund earnings are either remitted to individual employees who have accounts in Manusafe, or to their employers who make a contribution into Manusafe. So we are trying to make sure that those people that are putting their money in, whether they are an employer or an employee, benefit from the earnings of the fund. It is not a situation where, despite the sloganeering that is running around, it is some kind of slush fund for unions or employers or anything else. The decision has been made. The Trust Deed is quite clear - all fund earnings will be used to benefit participating employers and employees.
What about other entitlements? One of the issues with a casualised workforce is problems like for instance, very few people stay in a job long enough to have long service leave. If you look at the building industry. They have got a mobile long service leave fund. Is that a sort of entitlement that you would like to bring into Manusafe as it evolves?
Certainly this particular area is one that the labour movement as a whole must address. Whether we like it or not the nature of employment has changed dramatically in the last decade. Workers are much more mobile. There is a huge increase in casual situations; fixed term contracts; moving from employer to employer. And some of the structures and conditions that the union movement fought so hard to establish are still predicated along the old notions of one or two employers over the course of a working life.
So there is now a very mobile workforce - there is tremendous change within the workforce. It is up to the labour movement to establish more non-profit financial support structures and that allow workers to have some kind of real flexibility on their side of the employment equation .Why shouldn't a worker be able to have their own account for sick leave and long service leave and annual leave, or severance pay - and take it with them from job to job?
Portability of entitlements in one form or another is where the labour movement now has an opportunity to develop a long term response. So maybe we should be adapting some of our entitlement structures - building on the success of not for profit examples that already exist primarily to benefit workers. Manusafe is capable of evolving in many directions.
Labor federally has promised an insurance based scheme, surely that is a threat to Manusafe?
Not at all. The Labor Party scheme has at its heart the philosophy that workers should be able to get 100 per cent of their entitlements if they are lost, and that is a vast improvement on the Coalition for a start. Secondly, the Labor scheme is also predicated basically on the employers paying the cost of covering the entitlements - and again that is an improvement on the Coalition's scheme where they want the community - ordinary workers - to pay for other companies going belly up. So, their starting points are immeasurably better.
Secondly, the Opposition Shadow Minister has made quite clear that if the national entitlement insurance scheme comes into being with Labor in power, then there will be room for trust funds. And there are existing trust funds now for long service and severance in a number of industries. So there is no reason why they can't coexist.
But why would an employer choose to pay one per cent rather than 0.1 per cent?
Under the labor model an employer still has to make normal provision for entitlements as well as pay the levy. And many workers will want to negotiate a situation where they can see their entitlements protected in a trust fund as as they accrue. They are not going to sit on their hands and just wait. And any national insurance scheme is not going to be set up overnight, it will require a far amount of work to establish.
So there is a lot more water to go under the bridge including an election yet before that national insurance option actually gets up.
What seems to be happening in several of the se industrial disputes is that the Manusafe option is put up as the preferred claim and then a deal is cut that they go with an insurance bond. Are you concerned that your scheme is being used as almost an ambit in some of these negotiations?
Most of your readers will know that no gains have ever been made without a fair number of battles and a fair number of struggles and the very first time that workers put up the claim of an annual leave, or loading, superannuation or long service leave, or penalty rates, or any of those other things, they didn't necessarily win them.
I think what we have seen after the TriStar dispute is that mostly workers are voting with their feet, and they are starting to take the issue up irrespective of the particular outcome at Tristar , and are saying, we want our entitlements protected and we think an industry trust fund is the best way to do it.
So, I am not concerned about the heat and sparks coming out of the industrial parties wrestling with each other over this issue. I am confident in the long term the industry trust fund model has enough positives to it to survive.
Interview: The Man from Manusafe
Manusafe chief Andrew Whiley explains why employers have nothing to fear from the entitlements trust fund.
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Last Modified: 15 Nov 2005