Swan warns unions over big wage demands

John Howard's hated Work Choices laws were finally buried on Wednesday but the Rudd government has a new bogeyman to deal with - union wage demands.

Unfair dismissal laws for small business workers, a stronger safety net and a return to more collective bargaining are the hallmarks of the new Fair Work Australia regime.

Deputy Prime Minister Julia Gillard hailed the industrial relations changes as a historic day, and the embodiment of Labor's election promise to restore the fair go, particularly for young workers.

"In 2007, the Australian people decisively said they rejected the extreme Work Choices laws of the Liberal Party and that they wanted to see fairness and decency in Australian workplaces," Ms Gillard told the first sitting of Fair Work Australia in Sydney.

But proving that nothing is free in politics - trade unions - the voices behind the Your Rights At Work campaign - want something in return.

Treasurer Wayne Swan urged unions not to make extravagant wage demands, following reports the Australian Manufacturing Workers' Union is pushing for annual pay increases of at least four per cent.

"I don't necessarily think it is the time for anyone to go out there making extraordinary demands," Mr Swan told Fairfax Radio Network.

"There are many employers out there who have been keeping people on despite very difficult circumstances."

The new Fair Work Australia umpire will be responsible for setting the safety net for minimum wages and conditions, overseeing enterprise bargaining, adjudicating industrial action and settling employment termination disputes.

The tribunal had Sydney luxury hotel workers as its first clients on Wednesday, after they appointed the Liquor, Hospitality and Miscellaneous Workers' Union (LHMU) as their bargaining agent.

Ana Zubieta, a housekeeper at Sydney's Wentworth Hotel, told AAP she had been earning $14.80 an hour ($592 for a 40-hour week) for the past 10 years.

Aside from not receiving any pay rises over that period, she said the mattresses she was required to lift had become heavier.

The LHMU's national secretary Louise Tarrant told AAP that bargaining was a new experience for many hotel workers.

"That's why they are very excited about it because it really is a new era, where they are hoping that their employers now, under the new act, will actually engage genuinely in good faith bargaining."

Opposition employment spokesman Michael Keenan said good faith bargaining would be bad for the economy.

While Labor had a mandate to abolish Work Choices, the government had exceeded its election mandate by restoring pattern bargaining, compulsory arbitration and union right of entry to workplaces, he said.

"They certainly had a mandate to make changes to industrial relations but they went beyond that mandate," Mr Keenan told AAP.

"The unions have a seat at the table regardless of whether employers want them or not.

"Clearly, the union movement has been waiting for the system to start before pursuing unsustainable claims in this economic environment."

Australian Chamber of Commerce and Industry acting chief executive Greg Evans said it was unfortunate that employers would now have to negotiate with unions making "irresponsible" wage claims.

"Unions that go too hard too early will not only threaten the existence of their members' jobs but potentially damage Australia's economic recovery," he said in a statement.

ACTU secretary Jeff Lawrence urged employers, who have voiced fears of excessive wage claims and a return to pattern bargaining, to embrace the Fair Work system.

"We call on all the employers in Australia to recognise the rights people have under this legislation to sit down with their union, and to negotiate a collective agreement when that will provide a safer workplace ... and ultimately greater protections and rights," he said.

Fair Work Australia replaces the Australian Industrial Relations Commission (AIRC) as an umpire on workplace disputes.

Nicholas Wilson, who was appointed as the Workplace Ombudsman by the Howard government, has been retained as the new Fair Work Ombudsman inspectorate under Labor.

The Fair Work Act will guarantee a minimum safety net of 10 legislated national employment standards from January 2010.

The AIRC will continue operating until January 1, 2010, as it rolls state-based industrial awards into a national system as part of the award modernisation process.