Making might equal right

John Della Bosca

Before commencing I would like to acknowledge that we stand on the traditional Aboriginal land of the Gadigal clan of the Eora people. I would also like to thank the Evatt Foundation for inviting me to speak. It is an important forum for the discussion of industrial relations issues and debate on future public policy.

On federal election night last year, I was in Canberra, in the national tally room, with Bronwyn Bishop. We were providing commentary. As you can imagine, Bronwyn was all smiles and I was looking for the door by about 7:30. Late in the evening - or it certainly felt like it - it became clear that the Coalition might control the Senate. It may have sounded like sour grapes - but it let me make a fearless prediction: that the seeds of the Howard government's demise had been sown. Absolute power in the Senate would be intoxicating. It would be impossible to hold back the radical elements of the Cabinet and the backbench. And even before the new Senators have taken their seats, we've already seen a number of ideologically-driven proposals - including those on abortion, IVF and student unionism.

A radical re-casting of Australia's industrial relations systems may be the first use of this power - but it's got nothing to do with productivity, or efficiency, or prosperity. Perhaps industrial relations reform is seen as the least-worst way of satisfying the Coalition's ideologues, for the moment. But my view is that up-ending traditional Australian rights, benefits and conditions will be every bit as divisive - with no economic benefit.

The prime minister who successfully appealed to middle and low-income voters - will lose their support when they find that four weeks annual leave, weekends to take the kids to sport and maternity arrangements are not in the constitution. They can - and will - be taken away. My problem is not with debating what an appropriate industrial relations framework should look like - but before embarking on this debate it is important that the problem is correctly identified.

"Of course, the real agenda of the conservatives is to reduce minimum wages by removing the Australian Industrial Relations Commission from its assessment ..."

Instead, this debate should be premised on an ethical doctrine based on several principles:

  • that employment relationships ought to be freely entered into,
  • that underlying any such framework, natural justice dictates that there ought to be a minimum wage sufficient to allow a family to live in comfort,
  • employers should not be permitted to use their bargaining position to drive wages down below the minimum, and
  • that managing workplace affairs through associations and tribunals is desirable, and through the direct intervention of the state if required, and
  • employees and employers have a right to combine in the making of broader social and employment contracts with enterprise arrangements still subject to reasonable minimums.

In fact it is this framework that was borne out of the Australian tradition that developed from the late nineteenth century and made Australia prominent on the world stage as a social reformer - or as Henry Bourne Higgins penned it - 'a new province for law and order'.

We cannot look at the industrial relations system in Australia without being reminded of some of the personalities associated with its formative years. Henry Bourne Higgins, whose Harvester Judgement in 1907 shaped the future of the Australian wage system. Conservative leaders such as Alfred Deakin, Edmund Barton, and Samuel Griffith who supported a federal conciliation and arbitration system and decent wage level for workers. These were all responsible people who did not want a return to the grim days of significant social and industrial dislocation in the 1890's and the great strikes witnessed on the wharves and in the mines and the shearing sheds.

Unfortunately, the federal government, buoyed on by the likes of the Business Council of Australia and the Australian Chamber of Commerce and Industry, peddle an ideological agenda based on a number of myths dressed in the cloak of a unitary system. These myths are that greater restrictions on the rights of employees and employers to collectively bargain will somehow increase labour productivity; that reducing the minimum wage will lead to employment growth; or even in the Federal government can unilaterally deliver Australia a unitary industrial relations system.

The sheer fact that the federal government is relying upon the corporations powers within the Australian Constitution to achieve its workplace outcomes is troubling in itself. The conciliation and arbitration powers within the Constitution has at its centre a focus on the rights of employees and employers and dispute resolution between the two. The corporations power on the other hand focuses on laws about the corporation itself and not about human beings as workers. It also promotes a culture, already apparent in the federal system, of a strict legal nature or a black letter law to the resolution of industrial relations issues.

Of course, the real agenda of the conservatives is to reduce minimum wages by removing the Australian Industrial Relations Commission from its assessment, severely limiting the role of collective bargaining, drastically weakening the trade union movement and developing a workplace disputation culture of 'might equals right'.

The NSW government is fundamentally opposed to this hostile and unilateral takeover of its industrial relations powers. This opposition is not premised on 'states rights' but on a fundamental commitment to a fair, equitable and productive workplace relations. And that's what the New South Wales system delivers for employers and employees. A fair and simple system, that is easy to use; a system of common rule awards that are relevant to the industry; a system with the capacity for enterprise bargaining for those businesses who choose to, consent awards for those who want specific arrangements, or industry wide processes for those businesses who have neither the interest or capacity for bargaining; a system that protects independent contractors from capricious corporate behaviour; a system with an Industrial Relations Commission that has the power to resolve disputes and get people back to work; and a system that is not complex, technical and prescriptive.

Turning to back to the notion of federal government mythology I would like to address the notion that industrial relations reform is needed to improve productivity. Quite simply, this argument is a nonsense.

Productivity improvement doesn't come from reducing workers entitlements, and forcing people to work harder and longer. Real labour productivity improvement is invariably based on modernisation of business process, improving the skills base of the workforce and use of new technology. Work intensification is not a sustainable goal if we are to have regard to the quality of life. And economically it is not sustainable.

Looking for continuing productivity improvements may be appropriate in some industries - manufacturing for example. But how do you squeeze productivity improvements from carers of aged care workers, nurses, or staff in the hospitality industry? Make them work harder and faster, or with less staff? These are the key growth areas of the economy. The federal government industrial relations reform agenda offers nothing to businesses and workers in the small business service sector but confusion and concern.

The most significant period of labour productivity improvements have occurred during the 1980s and 90s under the Hawke/Keating Labor governments. During this period, there was a significant process of reform underpinned by two key elements. The first was the modernisation and restructuring of the award system, which rationalised multitudes of classifications and introduced skills attainment as the basis of work classification. The second was the initiation of the enterprise bargaining framework in the federal system, underpinned by a strong and robust award system.

That system gave employers the flexibility they needed to negotiate enterprise appropriate arrangements, but gave employees protections from arbitrary loss of conditions of employment. It attempted to ensure that flexibility met the needs of employees as well as employers. That flexibility was underpinned by protections to the workforce. This reform process was an extremely successful component of the economic success story of the eighties and nineties. Most importantly, the reform process was inclusive, with its general directions agreed upon by business and unions with a strong role for the Australian Industrial Relations Commission in protecting the public and employment interest.

We need a productive economy to support a fair and decent society. A productive economy of itself is of little value. Equity and the public good must be factored in to this equation.

The most pressing area of labour market reform relates to workplace safety. Certainly in my time as the country's longest serving current industrial relations minister, the one thing businesses have always nominated for reform, is consistency of occupational health and safety arrangements. Global and national firms operating within Australia can largely choose to operate within the framework of the Workplace Relations Act.

Yet, there is no capacity for harmonised arrangements to apply across the nine jurisdictions to opt into a national occupational health and safety scheme. Not only has the Commonwealth abandoned this as 'too hard', they've actually moved it a step backwards by abolishing the National Occupational Health and Safety Commission, which had statutory powers, and will replace it with the Australian Safety and Compensation Council, which will have no legislative powers and will function only in an advisory capacity. The process of setting and declaring national standards that are then referenced in State and Territory legislation will be lost.

The key deficiency in the federal government's approach to workplace relations is they give no regard to the fact that employment relationships are fundamentally human relationships, not economic, and not contractual. The system of conciliation and arbitration has been a civilising influence on unfettered exercise of economic power and industrial strength. The system that gave us an industrial mediator and umpire, and that no matter how much we disagreed with its decisions at times, we respect its competence and right to make the final decision.

For the vast majority of small and medium businesses in Australia, being forced to move to a national system of industrial relations will be expensive, complex and time consuming. And they don't want to be the captives of an ideological warfare.

For the families of many working Australians, it will be a bitter experience as they find their working and family life a much more difficult place to be in a system where the cards are stacked against them.

The state systems are the safety net for small businesses and generally lower paid workers. They offer simplicity for businesses and greater equity for workers. They have acted as a handbrake to the excesses of a federal system that is more technical and steeped in conflict. To get rid of the state systems is to get rid of that counterbalance.

And as for the Howard government, as the ramifications of its reforms are felt on working Australians, it will be the beginning of the end.


John Della Bosca is the NSW Minister for Industrial Relations. This is the text of his address to the Evatt Breakfast Seminar on the Howard government's labour agenda, convened at the Mechanics' School of Arts, Sydney, 26 May 2005.


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