Forward with fairness, or idling with ideology?


Forward with fairness, or idling with ideology?

Industrial relations has a more political role in Australia than almost any other country.


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Industrial relations has a more political role in Australia than almost any other country. This presents both opportunities and challenges, according to presenters at a well-established annual conference held in Sydney last week.

While the current catchphrase may be 'Forward with Fairness', some of the presenters expressed doubts about the effectiveness of some of the proposed changes, mainly expressing the view that they do not attempt to fix enough of the current problems.

The conference was the 16th annual Labour Law Conference, held by the Workplace Research Centre.

Industrial relations and politics

Former Prime Minister Bob Hawke claimed that public concerns about WorkChoices were the main influential factor in last year’s election result. He noted that on the only two occasions a Prime Minister has lost his seat in Parliament (1929 and 2007), industrial relations was a major election issue.

Hawke claimed that the electorate has ‘a deep commitment to a fair industrial relations system’, and that industrial relations has always had a highly political role in Australia, pointing to events such the Federation conferences in the 1890s, the basic wage decision in 1907 and some later events. This presents both opportunities and challenges for the Rudd Government, he added.

The main opportunity is that it should be easier now to reach consensus about making worthwhile changes. The Opposition is likely to take a less ideological view than it did with WorkChoices and should be more amenable to changes, likewise the Greens and Independent members in the Senate.

The main challenge will be to create a constructive atmosphere that emphasises the legitimacy of each side, to maintain a fair industrial relations system. These basic principles need to be placed in the framework of a global economy, rapid technological advances and continual increases in productivity.

Federal versus State complexities are another challenge. Hawke described State Governments as ‘an anachronism’ that would not exist if a new Constitution was drawn up now. There are no ‘States’ rights’, only ‘people’s rights’. Therefore, State political leaders need to ‘think nationally about industrial relations’.

Forward with Fairness ‘still too narrow’

The Government’s proposed changes to industrial relations law fail to address some of the current problems, and some of the changes may prove to be detrimental to low-paid workers, according to Professor Ron McCallum, former Dean of the School of Law at The University of Sydney.

McCallum discussed the use of different constitutional powers to regulate industrial relations, including the conciliation and arbitration powers (pre-Work Choices) corporations powers (Work Choices) and foreign affairs powers, plus the issues surrounding the referral by State Governments of their industrial relations powers to the Federal Government.

He referred to past landmark decisions as demonstrating that courts and tribunals believed they existed to serve and protect 'ordinary workers' who otherwise tended to lack bargaining power. This led to his strong criticism of Forward with Fairness for its intention to abolish the Australian Industrial Relations Commission ('something even John Howard didn’t do') and transfer its judicial functions within a division of Fair Work Australia. There needs to be an independent inspector, arbitrator and prosecutor, otherwise it is the low-paid workers who will suffer most, he said. Overall, the Forward with Fairness proposals are still very narrowly scoped laws that so far have failed to address several industrial relations issues, such as paid parental leave.

McCallum also added that Forward with Fairness does not cover pay equity, in addition to omitting paid maternity leave.

Referral of State powers to federal system flawed

Nor is McCallum a fan of State Governments referring their industrial relations powers to the federal system. He noted that interest in this issue seemed to begin with a landmark 1983 case that broadened the Federal Commission’s coverage beyond manual workers, resulting in occupations such as teachers, police and other public service employees being covered.

In general, however, employers, employees and unions have shown little enthusiasm for transferring to the federal system, but most were eventually forced into it by WorkChoices (because it relied on the corporations power) and by the Victorian Government’s referral of its powers in 1997. Forward with Fairness also uses the corporations power, meaning that it too is unable to cover all employees.

According to McCallum, WorkChoices amounted to ‘compulsory conscription’ into the federal system, but many of the parties found the State systems to be less technical and bureaucratic. He added that the Victorian referral was done in haste, and resulted in Victorian workers having the worst minimum conditions in Australia, meaning that the legislation had to be substantially amended a few years later.

The strategy of using the foreign affairs powers to include the provisions of ILO Conventions in legislation is not a panacea either. This approach was tried with termination of employment in 1994, but the Termination of Employment Convention was originally intended as a ‘job retention Convention’ to address widespread redundancies in Europe at the time, rather than dismissals, and it made implementing dismissals too complex. McCallum believes Conventions such as these should not be used in federal legislation.

Although the High Court upheld the legal validity of WorkChoices in 2006, there is no power the Federal Government can rely on to cover the field in industrial relations.

Another conference presenter discussed some options for moving on from the current situation and evaluated the prospects of each one. This presentation is reported in another article - to be reported soon.

Are employees ‘on the verge of losing completely’?

John Buchanan, director of the Workplace Research Centre, used this phrase when closing the conference. He also used the term ‘economic correctness’ to describe the current focus on trying to get rid of third parties (unions, employer organisations and tribunals) and rely on individual agreement-making where bargaining power is usually unequal, rather than genuine bargaining supported by arbitrated solutions when necessary. While there is an inequality of bargaining power, it is balanced to some extent by an ‘inequality of certainty’, ie it is not known when hiring an employee how good he or she will turn out to be.

He agreed with another conference presenter that commercial law is superior to labour law in defending workers’ rights (eg franchising legislation).

Recent overseas research

After recent economic disasters in South American countries (eg Argentina), both the World Bank, and Organisation for Economic Co-operation and Development (OECD) conducted research into industrial relations (and other relevant) issues. The World Bank concluded that 'a new humility' is needed, and that unions and collective bargaining were compatible with efficiency. The OECD concluded:

  • The existence of strong labour market standards was compatible with improved economic performance.

  • There was no clear evidence that enterprise bargaining delivered superior outcomes.

  • Low minimum standards and fragmented bargaining were associated with inequality, meaning that as the influence of unions declined, inequality became worse.

Buchanan concluded that the industrial relations debate needed to move on from the current ideological battles and 'engage with reality', eg by addressing issues such as working time problems, work intensification, skill formation, standards to coordinate flexibility, and removing inequalities.

Further information

Further information about the conference is available from the Workplace Research Centre webpage.


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