21/04/2011 - 00:00

Workplace relations a sleeper issue

21/04/2011 - 00:00


Save articles for future reference.

Among the many big policy issues facing government, workplace relations could have the largest impact on business.

Workplace relations a sleeper issue

THERE is no shortage of challenging policy issues confronting the Gillard government.

The proposed carbon tax is meant to be one of its defining reforms, yet this policy faces mounting opposition from both the business community and the union movement.

The planned mining tax does not attract the same attention nationally, but remains a key issue in the mining states of Western Australia and Queensland.

The annual budget is shaping up as another tough issue, with Treasurer Wayne Swan warning he will have to deliver big spending cuts when he hands down the budget on May 10.

That has led to the rare sight of scientists, led by 2003 Australian of the Year Fiona Stanley and Nobel Prize winner Barry Marshall, rallying against rumoured cuts to research funding.

The combined effect of these and other issues was reflected in the latest opinion polls, showing a continued slide in voter support for Labor.

Even attempts to sugar coat the carbon tax by promising to over-compensate low-income earners does not seem to have helped.

This promise may end up proving to be a negative – it certainly deserves to be, as it amounts to little more than crass politicking at the expense of principled policy making.

The government hasn’t finalised plans for the tax. It’s still unclear what industries will be covered. And we don’t know what the carbon price will be, or how much revenue it will generate. So how can the government realistically promise to over-compensate?

More fundamentally, the whole rationale for imposing a carbon price is to encourage changed behaviour; how will that occur if many of the ‘losers’ are compensated?

For the business community, indeed for the community at large, the impact of these policy issues could potentially be outweighed by the creeping impact of the federal government’s workplace relations reforms.

The reforms, under the banner of Fair Work Australia, have started to reverse a two-decade long shift to a more flexible and deregulated labour market.

That reform process went too far and too fast under the Howard government, which is one of the main reasons Labor won power.

But with unions representing a minority of the labour force, particularly in the private sector, we really need to carefully scrutinise the impact of recent reforms.

The Australian Mines and Metals Association, the Australian Industry Group and the Australian Chamber of Commerce and Industry are doing just that; and they are worried.

That is why they are appealing this week against a decision by Fair Work Australia, which they believe sets a dangerous precedent.

The case involves 23 workers at Sydney waste collection company JJ Richards.

More particularly, it revolves around the issue of when unions are able to call protected industrial action; in this case, the Transport Workers Union arguably did so without engaging in negotiations or establishing it had support from a majority of the workers.

AI Group’s intervention is particularly telling because it has previously worked closely and supportively with the Labor government.

Yet its chief executive, Heather Ridout, has gone public with criticism of the current policy framework.

“The government needs to accept that the laws are far from perfect and there are problems which need to be addressed,” she said in a recent speech.

“The problems are becoming more apparent by the day.”

AMMA chief executive Steve Knott has been even more pointed in his criticism, saying the JJ Richards case sets a critical precedent.

“If this is left unchallenged, it will flow across to the North West Shelf, to the mining industry, to the manufacturing industry. It is not an isolated case,” Mr Knott said.

“It goes against everything the resource sector was led to believe by the government about how the laws would operate.

“Unless overturned there will be serious consequences for employers.”

The Australian Building and Construction Commission’s inquiry into so-called sham contracting is another illustration of the changing balance in the workplace relations arena.

The challenge is to craft a system that affords protection where needed but generally encourages freedom and flexibility, which have been pivotal to the great productivity gains achieved in Australia over the past two decades.

That progress is at risk.



Subscription Options