Workplace policy is defining issue
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 regulations.
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 "pattern" terms.
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 would be?
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.