The NFF and the Workplace Reform Agenda
In February 1986, at the Inaugural Seminar of the HR Nicholls Society, a predecessor of mine at the NFF, Paul Houlihan, stated in his address to the Society:
what this Society must seek to do, if it is to do justice to the memory of HR Nicholls, is not to be intimidated by the size of the guns against us but rather to be uplifted at the potential of the rewards before us for all Australians if we can make the necessary steps to change from a position where industrial relations is seen as some form of alchemy available only to the anointed members of the inner circle of the 'club' and have industrial relations seen for what it is, the basically simple business of getting someone to do the job for you in a way and for a price which is acceptable to both parties.
The NFF position on industrial relations has certainly not changed but those guns have certainly been seized, by those in the industrial club would term as the 'enemy', and now should be used with some considerable force courtesy of a Senate majority to finally achieve what we have strived for all these years.
In developing the NFF reform paper update in mid 2004 it was evident that nothing has changed since the late 80s. So despite all that has occurred over the past 20 years, none of our key objectives have been met.
Why do we seek change? Our opponents and even some employers would argue that we've had reform, we've achieved some successes, whether that be the introduction of enterprise bargaining, the Workplace Relations Act or the Waterfront dispute. Let's be frank, those so-called reforms can be classed into 2 categories either a tinkering around the edges or a full assault at challenging the status quo with some success.
The paternalistic stronghold of government regulation on the employment relationship stifles productivity in this country and treats employers and employees like contemptuous teenagers that need to be locked in their rooms.
We now have a unique opportunity to implement real reform for the ultimate economic gain for Australia and the removal of irrelevant and out dated models of employment regulation.
Farmers broke the shackles of protectionism a long time ago and embraced free trade principles. But this was predicated on the fundamental concept that free trade and deregulation would only occur if our regulatory environment did not hamper that process. Employment regulation has not been a component of regulatory reform and as a consequence precludes us from the potential success of real and meaningful productivity improvements.
NFF seeks real and fundamental reform that actually reflects the capacity for flexibility at the workplace, unfettered by outside forces that take the attitude that neither the employers nor employees can speak for themselves or can be trusted, that they don't know what's good for them---others know best---as with the case of contemptuous teenagers---mum knows best.
A large component of the workplace reform debate raging at present is focused on what system would be our ideal. As proponents of change, while not wishing to lose focus on pursuing our objectives, we also need to be cognisant of highlighting the realities of why we seek change.
We see in the media the big profile strikes and disputes but does that necessarily resonate with Australians as a justification for major change? Does the majority of the population understand the complexity and frustrations and the negative impact employment regulations have on the economy. Do they comprehend the intrinsic and intrusive nature of the role of the Commission on a day-to-day basis in the employment relationship?
NFF, therefore, not only seeks to highlight a reform agenda but also outline the need for across the board implementation. The best stories that touch an accord with those not aware of the system is the role of the IR club.
A few examples, including our more recent forays in the National Wage Cases exemplify why we seek change that brings the idealism of reform into stark reality.
There is a general sense of astonishment that the AIRC can actually instruct from the very outset how the employment relationship is structured and how that relationship is to be developed along the way without the knowledge of the employer, employee, or an understanding of their workplace.
The NFF believes that the AIRC has taken such an excessive pre-emptive approach to resolving disputes that it controls the relationship from the outset. As a consequence, this paternalistic approach is not conducive to developing an employment relationship that should be simple and based on trust, mutual respect and maximisation of productivity at the workplace to the financial benefit of the employer and the employee.
In our view, there is a fundamental problem with the concept that the Commission can accept there is an industrial dispute in existence even when there is no employment relationship existing at the workplace or a dispute is acknowledged by the Commission at the request of the union even though the union has no linkage to the workplace. Yet these examples are common in our system.
A typical example is found in roping in cases.
It is quiet extraordinary that the AIRC can impose an employment regime on employers though the guise of an industrial dispute that is commenced by a union even though there is no request by the employees to create such a dispute. In reality, usually there is no dispute in existence except a paper dispute within the confines of a hearing room in Melbourne. The system enables unions to represent employees without the employee seeking representation and without the need for the union to prove representation. An oxymoron if there ever was one.
One of our biggest frustrations is the centralisation of the system. The introduction of enterprise bargaining was supposed to decentralise the system. Well, let's face it---that's a fallacy. There has, instead been a significant shift to the centre in recent years that is evidenced by the annual Safety Net Review cases that provided wage increases to all classification levels beyond the federal minimum wage and the centralising instrument itself, the Statement of Principles, that provide for the other pinnacle of the key frustration of the centralised system---the dreaded test case.
This centralisation obliterates industry relevance and the true meaning of enterprise bargaining.
The inherent problems associated with a centralised system is exemplified through the Safety Net Review case in terms of the incapacity of business to pay increases to award wages.
NFF has pursued industry wide incapacity to pay cases over a period of 20 years with virtually no success. In the most recent attempt, instead of seeking an industry wide deferment of wage increases due to drought conditions, we took a different tact.
NFF sought an automatic right for a deferment of the wage increases for those farmers receiving exceptional circumstance relief payment from the Federal Government.
Alarmingly that automatic delay wasn't even accepted.
Instead farmers were granted the right to apply to defer the wage case if they provided evidence that they were in receipt of exceptional circumstance relief payments (a welfare benefit payment that requires significant evidence to be provided to centrelink). But in addition, the farmers also had to provide 3 years worth of financial records. And, the union had the right to oppose the application and pursue the financial records regardless of whether the union represented anyone working on the farm.
We were very frustrated with this outcome, what else do you need to do to prove incapacity?
NFF encouraged farmers to test the process, even if it simply provided an example to reinforce the argument that the process is unfair, unwieldy and complex.
Surprise, surprise, the union ignored the procedures outlined by the Commission and took a friendly visit to the farmers without our knowledge, with not a union member on site and as a consequence, we argue they entered illegally. The farmers, already stressed due to the drought, got fed up, decided to throw in the towel including the decision not to pursue an illegal entry dispute. Hence here we had a system that was apparently designed to 'help' farmers for incapacity yet it only added another level of compliance.
This creates a scenario that means incapacity principle is still an impenetrable fortress.
NFF used this example recently to highlight the inadequacy of incapacity to pay claims for the purposes of the payment of redundancy. Despite supplying to a Senate Inquiry, significant evidence, we were accused of exaggeration, not supplying evidence to support our accusations of union misbehaviour, taking cheap shots at unions and treating unions as scapegoats. While disagreeing with these sentiments, we took the venom of attack as a compliment, obviously we hit a raw nerve. The upshot is that the IR club consistently bury their head in the sand as to realities of what employers and employees really want.
The rhetoric of the IR club generally is such that they may sympathise with your cause or even pay lip service with the occasional attempt to assist in removing small parts of the multitudes of barriers in the system, but the ultimate outcome is still a long way off in resolving the problems.
The Australian industrial system can be described in the following manner:
It's unreasonable to suggest that an employer meet a promise to pay a certain amount to an employee when the Commission has made the promise on behalf of the employers without the employer's or approval, without consultation, without consideration of the employer's particular circumstances and without knowing whether or not the employer's employees have actually achieved the task to a satisfactory level. Further, the forced employment relationship may have been developed in the context that the employee has been represented by a union before the Commission without the employer's knowledge let alone consent to determine how much the employee is to be paid, what type of work they are to undertake and for how long they will work. In addition, the employer may also be represented by an employer group without their knowledge let alone consent.
NFF seeks a far more simple scenario of an employer and employee agreeing that a job will be done and at an agreed price. If they want anyone else in helping them with that agreement process then it is up to them to invite a third party into that relationship.
The Reform Agenda needs to provide simple outcomes but we
also need to sell that agenda with simple messages as to why
the system needs such a massive overhaul.