IR changes: the twisted logic of using corporations power


IR changes: the twisted logic of using corporations power

The Federal Government’s plan to use its constitutional corporations power to regulate industrial relations is inappropriate.


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The Federal Government’s plan to use its constitutional corporations power to regulate industrial relations is inappropriate. The power is intended to regulate the operation of corporations, not industrial relations law, and amounts to an unwieldy attempt to 'corporatise' industrial relations. These views were expressed by Professor Ron McCallum, from the University of Sydney, in his opening address to the Annual Labour Law Conference conducted by the industrial relations research organisation ACIRRT in Sydney on 8 September 2005.

The Federal Government has flagged using its corporations power to take over the various State industrial relations systems if the States refuse to cede their own industrial relations powers to the Federal Government – which they have already stated they would refuse to do.

There has been much talk of possible court challenges by State Governments and other interested parties if the Federal Government takes this step. Overall, it is probably the most controversial aspect of the Government’s package of planned industrial relations changes.

First problem

According to McCallum, the first problem is one of coverage gaps. A federal system based on corporations power could only cover corporations and their employees. In New South Wales, about 25% of the workforce would not be covered. When Victoria ceded its industrial relations powers in 1996/7, it did so in respect of private sector employees only, and retained control of public sector employees.

The question of whether the Federal Government can force employees to work under a federal system is, according to McCallum, one that the High Court may be required to answer.

Further problem

A further problem is the nature of the powers themselves. While the powers are usually purposive ones (eg expressed in terms such as 'for the purposes of'), some are objective powers, which means that they must be attached to a corporation in some way. McCallum drew an analogy with a hypothetical 'Men’s Act'. Using the same interpretation, any conduct by women would only be valid if they were 'interacting' with men at the time.

McCallum’s opinion is that the Federal Government appears to be less concerned about the constitutional validity of some of its proposed changes than it is about simply bringing its changes into force. It will then wait and see what, if anything, happens in the courts.

Other points

Other notable remarks by McCallum included the following:

  • Unions may only be registrable as single enterprise unions, not industry unions. This would prevent them being directly involved in workforce-wide issues such as work/life balance and other test cases. If this happens, unions might be better off remaining unregistered and attempting to negotiate common law agreements. Like many other issues, this one requires further details to be released by the Government before firm conclusions and recommendations can be made.
  • The proposed Fair Pay Commission is likely to be staffed by economists rather than practitioners or members of the current industrial relations commissions.
  • 'Market forces' are not the solution to everything (in much the same way that Socialism wasn’t a generation ago) and at some stage Governments and others will have to pull back from them. McCallum’s closing words: 'Let us not forget fairness and humanity towards each other'.

Further information

Further information about this conference is available from ACIRRT.

Federal IR changes 2005


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