Employers want to go back to ‘before WorkChoices’


Employers want to go back to ‘before WorkChoices’

A major employer organisation has called for a return to the pre-WorkChoices days when employers and employees could make individual agreements with a ‘no disadvantage test’.


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A major employer organisation has called for a return to the pre-WorkChoices days when employers and employees could make individual agreements with a ‘no disadvantage test’.

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry (ACCI), told the ABC this morning that WorkChoices had gone too far in removing such a test.

‘But for the 10 years before WorkChoices we had a system of collective bargaining and also a system where you could make individual agreements with a “No Disadvantage Test”,’ he said.

‘That system worked quite well. Unfortunately when the current government removed WorkChoices, it didn’t just remove WorkChoices rules, it actually removed some of those rules, laws, arrangements and flexibilities that had existed for the previous ten years.’

Pendulum has ‘swung too far’

‘In other words, the pendulum has swung back too far towards “one size fits all” rules across our economy. In the current situation where we have such uneven economic performance, “one fits all” rules are ultimately going to be a drain on flexibility if you’re not in the fast lane of the economy.’

Anderson said industrial relations was part of doing business and affects jobs and productivity ‘and we shouldn’t be churlish and deny that’.

Last week, Reserve Bank Governor Glenn Steven said the Federal Government workplace reforms had reduced flexibility and Anderson said that was one of the keys to productivity.

He said the manufacturing and service sectors had seen some erosion in flexibility and higher costs because of the Fair Work changes to labour regulation.

‘We need competitiveness to maintain and grow jobs and productivity to pay our way for the living standards and wage increases we want,’ Anderson said.

He said the new workplace laws assumed all businesses are in very similar circumstances ‘and we know that’s factually just not the case’.

Additional costs

As well, there had been additional costs in the service industries, like retail or tourism.

‘We’ve seen increases in penalty rates, not as a result of any tribunal examining whether or not there is a case for higher penalty rates, but because there has been a re-organisation of rules and a standardisation of some of those rules across the nation,’ Anderson said.

‘This has imposed higher costs on the doing of business even though those businesses had stable industrial relations arrangements that were previously accepted as quite satisfactory.’

Anderson said both sides of politics have done a disservice to [the IR] debate over the last couple of years.

Sensible reform

‘Any proposal that is mooted for sensible reform, on the Government side, is said to be an attempt to return to WorkChoices and clearly that’s just an attempt to nullify the merits of these propositions,’ he said.

‘On the Opposition side, [they] have really said that they just want to stand back and let these laws work their way through and let others in the business community argue the case for change.’
‘Well the role of a political opposition is to propose sensible alternative approaches, particularly when it’s demonstrated that there are some problems.’

‘Anything that needs to be done to our industrial relations system doesn’t need to be done through the prism of ideology or radical change but we need to make the right decisions and there are areas where our current laws do not strike the right balance and where the Government has swung the pendulum too far back by removing some of the flexibilities that have existed since the mid 1990’s and we need to address those.’

Holding back productivity

Former ABCC head John Lloyd said the Fair Work laws were holding back productivity reform, and the return of individual contracts was the answer.

Lloyd, who now heads a work reform and productivity unit at the Institute of Public Affairs, called for more individual agreements, along the lines of those brought in by former workplace relations minister Peter Reith in 1997.

‘When you get employers and employees engaging directly, that’s the best way to improve the productivity of a business,’ he said.

‘The system based on collective bargaining doesn’t really lend itself very easily to encouraging and rewarding performance.’

Lloyd said a good productivity system ‘is where employers and employees are engaged. and the employees are motivated’, and that systems which allowed employers to introduce rewards for good performance could generate productivity improvements.

Union power
‘Our system now is almost exclusively collective bargaining,’ he said.
‘A formal system of tribunals, a reintroduction of union power and immense regulation is contrary to getting employers and employees engaged on what the business requires to survive and improve.’

‘The unions will say any reform to the industrial relations system is going back to WorkChoices, but there is definitely a lot of reform that can be done that is a long way from WorkChoices.’
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