19/11/2009 - 00:00

New IR laws a cause for concern

19/11/2009 - 00:00


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The changing industrial relations climate is a slow burner issue that needs careful management.

The new industrial relations regime means more paperwork for no apparent gain.

NEWS that emerged last week about planned strike action by the Maritime Union of Australia brought back bad memories for those of us able to recall the 1970s and 1980s.

That was a time when the MUA and other militant unions seemed to constantly be taking or threatening industrial action.

Younger readers will have no memory of the post-War years when strikes and other forms of industrial action were a commonplace occurrence across most industry sectors.

Entire industries could be shut down, in extreme cases for weeks on end. Often the industries directly affected by the industrial action did not even employ the striking workers; they were, to use a modern term, collateral damage.

Looking back, what is most surprising is that many of us assumed that was the natural order of things. The industrial relations system was highly centralised and employers had no effective way of negotiating directly with their staff. Dealing with industrial action was considered to be just one more business risk that had to be managed.

That started to change in the mid 1980s, when the Hawke Labor government brought a more consultative approach to settling wage claims and resolving workplace disputes.

A small group of business leaders, led by mining boss Charles Copeman, pushed for more dramatic change.

Mr Copeman did more than any other individual to break union control of the Pilbara mining industry. He was demonised at the time, yet his resolve laid the groundwork for workplace agreements that have boosted both worker productivity and worker incomes.

The Howard coalition government reinforced these changes, bit by bit introducing laws that progressively weakened the role and influence of unions.

It adopted special measures to combat pockets of extreme union militancy. A prime example was the formation of the Australian Building and Construction Commission to rein in the Construction Forestry and Mining and Energy Union, led in WA by Kevin Reynolds and Joe McDonald.

The Howard government’s reform trajectory led to the introduction of the Work Choices package, a step too far, judging by community reaction and the results of the last federal election.

Drawing on the laws of physics, many people thought the Howard government’s actions would be followed by an equal and opposite reaction by the Rudd government.

That was especially so when responsibility for workplace relations rested with Deputy Prime Minister Julia Gillard, whose rhetoric sounded like a throwback to the 1970s.

In practice, her reforms have not justified the alarm that was raised around the time of the federal election, but they are nonetheless a concern.

For most businesses, the new industrial relations regime means, at the very least, unnecessary administrative hassles and paperwork. New laws, leading to new compliance requirements, for no apparent gain.

For some businesses, the consequences are more significant. The enforcement of penalty rates for weekend work, for instance, will have a big impact on the costs facing affected employers.

The awards simplification process is another concern. There are a growing number of anecdotal reports about the higher costs and, more significantly, the reduced flexibility across workplaces.

The beauty of a deregulated system was that each workplace was able to adopt practices that suited its needs. The result was a win-win lift in workplace efficiency, business performance and worker salaries.

Labor, by contrast, clings to a paternalistic belief that individuals need to be protected by the state from possible exploitation.

This is manifested in Ms Gillard’s direct intervention in the so-called award simplification process.

Critics of Work Choices asserted that workers might have done okay during the boom, but that would not continue during a downturn.

The weight of evidence is to the contrary. As reported in this week’s cover feature, there has been a surprisingly small increase in unemployment over the past year.

Instead there has been a sharing of the pain, with salary freezes and increased part-time work being used so that employers do not have to lay off staff.

After battling during the last boom to find good staff, most employers are doing all they can to look after, and hold onto their current workers.




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