The state government is putting ideology ahead of practicality in its industrial relations policies.
THE release this week of the Amendola review of the Western Australian industrial relations system was an opportunity for the Barnett government to address a long-running sore.
The mere existence of the review, and the government’s decision to sit on it for 14 months, has led to untold speculation about its content and impact. The opposition has used the opportunity to try and whip up hysteria about supposedly secret agendas to reintroduce WorkChoices, while the business community has clung to a glimmer of hope the review process will lead to a much more efficient state system.
The government has responded to the highly detailed review with a two-page response that does nothing to appease critics on either side of the debate.
Commerce Minister Bill Marmion’s brief media statement trumpeted just one decision – the government will retain and streamline the WA Industrial Relations Commission.
However, that was always a given. The government has stubbornly insisted that WA should retain its own IR system, despite the diminishing relevance and value of that system.
The Chamber of Commerce and Industry WA, which favours abolition of the WA system, put some perspective around this issue in its submission to the Amendola review.
It estimated that between 20 and 30 per cent of the total WA workforce is in the state IR system.
That compares with Mr Marmion’s comment that the state system applies to “up to” 30 per cent of WA employees.
Master Builders WA has also estimated coverage in the WA system. Up to March 2006, about 70 per cent of employers in the building and construction industry were subject to the WA system.
That proportion has dropped to an estimated 20 per cent, following the advent of WorkChoices under the Howard government. Once again, this estimate is below the widely quoted 30 per cent figure.
To provide wider context, we need to remember that WA is the state with lowest trade union membership, at about 14 per cent of all workers. In the private sector, union density is only about 10 per cent of WA workers.
The vast majority of employers remaining in the state IR system are either public sector agencies or unincorporated enterprises; that is, small businesses.
The CCI believes that the WA Industrial Relations Commission has a “negligible role” in relation to businesses of this kind.
In contrast, the government’s written response to the review argues that “the commission retains broad community support”.
Really? Which community was surveyed to reach that conclusion? This assertion just does not ring true.
When small businesses do interact with the IR system, the result is often confusion.
That was one of the key findings of the Small Business Development Corporation’s submission to the Amendola review.
“It is from this daily interaction with small businesses that the SBDC is aware that many operators continue to experience confusion and receive conflicting advice from state and federal agencies in relation to their industrial relations obligations,” its submission stated.
Against this backdrop, the Amendola review recommended that the WAIRC and its jurisdiction be reduced or transferred to the court system.
Instead the government has decided the commission should be “retained and streamlined”.
Its diminished relevance was illustrated by the government’s conclusion that the president of the commission is not required on a full-time basis. The president’s role in Full Bench appeals and enforcement of orders will instead be performed by a judge of the Supreme Court on an as-required basis.
The CCI believes the government’s response to the review is a wasted opportunity, and amounts to tinkering around the edges of a system that is fundamentally flawed. It is hard to argue with that conclusion.
Before 2006, there was an arguable case for separate state and federal IR systems based on the concept of competitive federalism.
The world has moved on since then, and the state government should move with it.