Workplace policy is defining issue
[First published in The Age, 13 November
2007, (unabridged version)]
The extensive "me too" strategy adopted by Labor
leaves workplace relations policies as the only major policy
difference between the major parties. Labor asserts that continuation
of the Government's WorkChoices legislation would reduce conditions
and bargaining power of employees, this despite the new fairness
test and the strong increase in employment and real wages. For
its part the Coalition claims that, if Labor is elected, the
large number of ex-unionists in Cabinet would allow unions to
exercise undue influence, thereby risking inflationary wage increases
and reduced employment. Labor's responds that past Labor
cabinets with ex-unionists implemented economic reforms including
in workplace relations.
Credit must be given to the Hawke/Keating governments for
starting the move away from the centralised system. By 1995 the
Industrial Relations Department survey showed 58 per cent of
employees under enterprise agreements with, significantly, individual
contracts an "established part of the wages determination
system" involving about 10 per cent of employees. Even so,
the highly regulatory system prevented "radically different
outcomes in terms of workplace relations".
Although the Organisation for Economic Cooperation and Development
acknowledged in 1998 the Coalition's Workplace Relations Act
of 1996 as "a significant advance", it also called
for further reductions in regulation, including the award system.
The OECD's 2006 report considered that, while WorkChoices had
left more room for bargaining and had moved towards a simpler,
national system, it remained complex.
To describe WorkChoices as "complex" is of course
a gross understatement. But if the OECD has to describe Labor's
proposed system, it would be lost for words. It is simply farcical
for Labor to claim its policy as constituting "a new industrial
relations system based on driving productivity in our private
sector" and creates "a fair system, a simple system,
a flexible system". With 10 minimum legislated employment
standards, and 'modern, simple industry awards' which could include
up to a further 10 minimum standards, its system would be extremely
complicated and inflexible.
Further, shadow minister Gillard's description of the policy
as enterprise bargaining is laughable. Sure, enterprises would
bargain but their hands would be tied by the new (misnamed) fair
work Australia bureaucracy administering the multiplicity of
Further, where a majority of employees wants to bargain collectively,
employers would be required to comply and the FWA empowered to
determine the extent of support. Indeed, contrary to WorkChoices,
under Labor "all bargaining participants will be obliged
to bargain in good faith".
Just as concerning is Labor's plan to allow union bargaining
demands over "any matter", paving the way for strikes
over any subject matter contemplated by union officials.
The bargaining power provisions effectively mean employers
seeking an employment agreement or a change in an existing one
would have to involve unions if requested even by one employee
who is a union member.
Ms Gillard claims the "obligations are simple" and
only require such things as attendance at meetings "at reasonable
times", timely "disclosure of relevant information",
and "timely responses to proposals". But in practice
the obligation to meet and to disclose relevant information would
make it difficult for employers to avoid agreeing to certain
Thus, under a regime of mandatory collective bargaining and
bargaining in good faith, unions could effectively force employers
to pay the "reasonable" going rate or apply the "reasonable"
condition, as the costs of paying the condition would be cheaper
in the short run than continuing to bargain. But over time there
would be a loss of productivity.
Ms Gillard also claims that, with enterprise bargaining, there
would be no return to the old centralised system. However, this
is simply airbrushing reality. In addition to the ten legislated
conditions, unions may be able to force compulsory arbitration
to decide possible further minimum employment standards and they
would also doubtless seek to influence the FWA when it sets annual
minimum wages at an industry level under a new award system.
Moreover, while Labor would legislate to forbid industrial action
during the life of an agreement and action in support of an industry
wide agreement, unions would refer the FWA to its power 'to end
industrial action and determine a settlement'. If this isn't
a return to a form of centralised compulsory arbitration, what
The foregoing suggests the extent of union influence under
Labor is much less dependent on the ex-unionists in Cabinet than
on the proposed legislation already on the electoral table. It
is incontrovertible that it would allow unions greatly increased
scope to intervene in workplace arrangements - and unions would
be foolish not to seize the day. It is the serious backward steps
inherent in the legislative plans to which the Coalition should
be drawing attention, not the likely union cabinet members.