Sunday, November 30, 2008

Labor's choice an unfair work in progress

Introducing the new industrial relations package this week Julia Gillard had a tough job.

The minister was aware that unions account for only 12 per cent of working people in the private sector.  But she had to reward her soul mates in the union movement, who are also the Labor Party's foot soldiers and bankrollers, with prospects of increased income.

Her task was made easier by Malcolm Turnbull throwing in the towel.  In announcing the death of Work Choices he declared that employees were incapable of looking after themselves in their job selection and on-going working arrangements.

Even so, Ms Gillard had to avoid sticking business with too many extra costs and creating an environment for a replay of the industrial turmoil that took its toll on the economy up until a couple of decades or so ago.

Overwhelmingly, existing employees of firms, especially those in smaller businesses, share a mutual benefit with employers.  The employee knows the ropes of the business, making for easier and less stressful work.  This means better productivity thereby benefiting the employer.

The new blueprint, Forward with Fairness, cautiously rolls back reforms to labour relations introduced by the Howard Government.  The title itself is designed to be non-threatening.  Who, after all, can be against fairness?

But the fairness turns out to be all one way.  Any such legislation only restrains an employer.

A dissatisfied employee can always quit, but the employer is prevented from taking action that would make his or her business more competitive and better focused to meeting customers' needs.

The new arrangements cover thousands of different matters and their actual effect will not be known for some time.

Two matters to be changed concern unfair dismissals and individual contracts.  Restoring the highly bureaucratic procedures of the Hawke-Keating Government's unfair dismissals laws has long been a cornerstone of industrial relations law.  The threat of unfair dismissal underpinned the ACTU advertising campaign that played so well in last year's election campaign.  Myths, such as a working mum facing dismissal if she refused overtime, are counterbalanced by real life experiences of unsackable, poor performing employees creating a poisonous workplace, diverting management effort and adding unwanted costs.  The new arrangements will reintroduce measures that make it more difficult to fire such people.

Another area concerns individual employment contracts.  In future, any new individual contracts are likely to bring higher costs than is currently the case.  The impact of this will be felt most strongly in highly paid mining employment and in the (relatively low paid) hospitality sector.

If employers are forced to return to double time payments, increased costs must be passed on in higher prices and businesses less oriented to the customer.  That would also mean less employment.


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