IR Review: WorkChoices Does Not Justify Doing Nothing

THE MERE HINT of a review of Australia’s labour market laws — never mind actual reform proposals — is enough to send the ALP into paroxysms of outrage, with the Howard Government’s WorkChoices laws again being dusted off for battle; armed with a rigidly pro-union workplace regime and readying to fight a fourth consecutive election on WorkChoices, Labor has no reason to countenance change and will refuse to permit others to do so.

I intend a short post — even by my loquacious standards — yet I fear this will end up being anything but “short;” it has been an extremely busy and eventful week, as readers will know from the dearth of comment appearing in this column, and to be honest I’m very, very tired. But I wanted to say a few things before I head off for a few hours’ sleep a bit after midnight in Melbourne on a sultry and unpleasantly humid Thursday night.

The long-awaited review by the Productivity Commission into Australia’s workplace relations system is set to commence shortly — extra reading, depending on preference, can be found from the Fairfax and Murdoch stables — and thanks to the reposting by Labor MPs on Twitter of incorrectly published material from the Commission, we already know what it will examine: and that the minimum wage, penalty rates, enterprise bargaining, individual contracts, unfair dismissal and anti-bullying laws comprise the agenda for the review ought to surprise no-one.

No-one, that is, except the conflicted ALP and its vested interests wherever the snouts of its union mates in protected troughs are concerned.

I was listening to Tom Elliott’s Drive programme on 3AW in the car on the way home this afternoon (go to the 62:00 mark of the 22 January podcast of his show); his guest today was ACTU president Ged Kearney, and the scary thing about listening to her latest enunciation of hatred toward the conservative government and Australian business is that people take notice of her for no other reason than all she preaches is fear: the government wants to cut living standards, make people pay for Medicare (irrelevant in the context of a discussion of workplace laws), drive down wages, slash conditions, blah blah blah…it’s enough to make you want to slit your wrists.

Yet people like Kearney can afford to be smug; the legacy of the Gillard government (held squarely by the balls by its masters in Kearney’s own union movement) is a regime of industrial relations laws, underpinned by the so-called Fair Work Act, that enshrines rigid and expensive conditions whilst conferring a raft of benefits around access, organisation and mobilisation on unions.

Aside from using these issues as battering rams against the detested Liberals, the end consequence of the Gillard government is that unions in this country have never had it so good — and that’s a problem.

Whether you like it or not, Australian labour is expensive by world standards; and the minimum wage — also very high by international standards — is, far from being the guarantor of “fair” pay and comfortable subsistence the likes of Kearney bleat about, is actually a disincentive (or outright bar, for some businesses) to hiring anyone at all.

I wonder how many readers understand that as a result of the Fair Work Act, unions can enter any “workplace” they like; I especially wonder how many readers understand its application insofar as enshrining the right to organise and recruit members during working hours: for just as some of the big, heavily unionised workforces in Australia have collapsed over the past couple of years, the unions have to secure their future somewhere — and they aren’t going to be allowed to do it if the ridiculous favours showered upon them on Gillard’s watch are removed.

It is instructive, therefore, to see WorkChoices — the long-defunct Howard era workplace relations laws — now apparently being readied for re-use as a political sledgehammer at a fourth consecutive election by the ALP and its thuggy associates in the union movement.

The Howard reforms were a modest and sensible suite of measures that encouraged direct bargaining between employers and employees, and which — subject to a no-disadvantage test omitted from the initial version of the laws, but hastily restored after a backlash — enabled flexibility and tradeability around hours, allowances, leave provisions and so forth.

Its greatest flaw was that it was never taken to an election, a misjudgement for which the Howard government paid with its electoral life in 2007.

But to see the idiocy of jumping savagely up and down over a purported “resurrection” of WorkChoices, it is not necessary to look even as far backwards as the Howard government, but to a more recent outrage largely of the unions’ own making.

Back in December 2013 I published a commentary entitled “Moving Forward: Marginalising Unions Without WorkChoices;” that article came as GMH was readying to announce the closure of its Australian manufacturing operations, and also contains several links to excellent articles by other journalists and to other resources, and I encourage those who missed it to take the time to review the material included.

Yet the GMH case and the exodus of the car manufacturers more broadly paints the picture of the logical (and actual) end destination of the preferred operating conditions of the union movement, their eventual deleterious effects on employment, and the obscene bounties carted away by its unquestioningly loyal footsoldiers when the whole edifice collapses under the absurdity of its own weight.

Unions point to “base rates of pay” in enterprise bargaining agreements as evidence of just how poorly remunerated their decrepit members are, but fail to mention the plethora of allowances, loadings, bonuses, penalties and other goodies that in some cases can see workers employed under them earn three, four, five times that rate.

Some of the GMH workers made redundant — the poor, maligned bastards — will walk away with redundancy payouts of between quarter and half a million dollars, and when it is considered that the liability for these payments was a consideration in General Motors’ decision to close its Australian operations it’s hardly a stretch to suggest the unions, in striking enterprise deals that enshrined them in the face of the threat to strike, are largely to blame for the “misfortune” of their members’ unemployment.

But if that is too difficult for some to accept, I cite the example at the polar opposite end of the industrial spectrum of restaurants operated in Melbourne by high-profile chef George Calombaris — and scores more like them — that do not open on Sundays for the rather obvious reason that paying kitchen staff and waiters up to $60 per hour to serve customers, cook food and wash dishes is, on any objective criteria, ridiculous.

Yet the unions have an answer for that too: of course businesses can afford to pay! Their attempts to avoid doing so merely show how greedy they are and how much they hate their staff by depriving them of high-paying hours. It’s just another conspiracy, you see, between the nasty bastards in the Liberal Party who want to wreck the standards of living of millions of Australians, and the business community that gets fat off the profits and gratefully bankrolls the Liberals in return.

That’s a simplistic — but accurately distilled — version of the basic premise of union resistance to workplace reform, and it’s absolute bullshit.

WorkChoices had nothing to do with the demise of car manufacturing in Australia, but the Fair Work Act has a great deal to do with pricing workers at the lower end of the market out of jobs (or at least, reducing the amount of available work to be obtained — which the analogy of the Melbourne restaurants neatly illustrates).

Now, a review by the Productivity Commission — to develop recommendations for the Abbott government to consider, with a view to taking a package of them to the electorate next year — is about to commence, and the unions and an irresponsible ALP are set to raise merry hell over it.

Of course all aspects of workplace laws should be reviewed if there is to be a review; that’s the whole point. Of course things like penalty rates and the laws surrounding terminations and disciplinary action should be included, even if doing so enrages the vested interests who stand to profit most from them being left untouched. But then again, Labor is the party that held a taxation review and prevented it from considering the GST, so it is unsurprising it should object to the framework of the Productivity Commission’s investigations now.

This morning’s article is really meant only as a curtain raiser to what I am sure will occupy a great deal of our time in the medium term, and some thoughts — again, from an addled mind devoid of the six hours’ sleep it needs to function — as a starting point. We will be revisiting this subject rather frequently this year, methinks.

But at the end of the day, a review that encompasses all the things that provoke fury in the ALP/ACTU axis for even daring to mention is not incompatible with a regulatory regime that prevents, for example, the less scrupulous shysters and cowboys in business from firing their staff and rehiring others at half their salaries — a point nobody seems to be making much noise about thus far.

And this is relevant because a sensible and balanced debate over workplace relations reform (which did not accompany the introduction of WorkChoices, was dispensed with when the Rudd-Gillard governments introduced the Fair Work Act, and which Labor and the unions now seek to shut down before it even begins) would talk about the labour market from the perspective of liberalising it and the benefits of doing so: again, an exercise given short shrift in Australia over the past ten years or so, although Coalition figures like Andrew Robb tried to fashion the case with the 2007 election bearing down on the Howard government, but by then it was too late.

After all, there is nothing as effective in politics as fear; these days, of course, Labor peddles little else.

Very simply, when there is plenty of work around and not many people in the market to take it on, employers should have the freedom to pay those who fit their requirements more for their services and, by contrast, when jobs are scarce and many people are competing for them, the impetus to pay them more is, quite clearly, nowhere near as compelling.

The corollary of this is that when businesses cannot afford to hire as many people as they like, forcing them to pay more for the people they do hire is just as likely to drive them out of business — destroying jobs anyway — whereas refusing to remunerate candidates from a smaller pool well to fill an abundance of jobs will damage the business too: no workers, no work, and no work, no profits.

And with observable minimum standards and a system of regulatory safeguards for those already in employment, the horror scenarios being cooked up and bandied around need only remain the stuff of nightmares — not reality.

As we head into this review and the debate that should accompany it, both the ALP and the union movement should stop trying to scare the hell out of people, abandon the story of the nasty, greedy nexus between the Liberals and business, and recognise that business stands to win (and lose) as much from intelligent reforms as their workers do, and that simply ripping people off is in nobody’s interests.

But to do so would require them to concede that their own agendas and their own handiwork, protected by legislation specifically designed in the unions’ favour, actually destroy jobs, and hundreds of thousands of them at that: and in the certain knowledge that Labor and its union cronies will never concede such a thing, the loud and vicious campaign to shut the entire debate down (or to at least render it politically impossible to proceed with anything arising from it) will now begin in earnest.

If you vote and you live in Australia, you’re about to hear an awful lot more about WorkChoices. Again. The 2016 election will be the fourth consecutive election Labor and the unions have fought on WorkChoices.

And rather than being frightened witless by the awful scenarios their rhetoric conjures up for workers and their families, perhaps — after a decade of this tactic — a better question might in fact be what the ALP and the unions are actually afraid of, and why they are so determined to fight tooth and nail to resist any change that compromises the cosy little sinecures they enjoy as the “masters” of Australia’s workforce.

After all, if you don’t belong to a union, neither the ALP or any union in the country could care less about you — however mistreated or exploited you are. If you don’t belong to a union, you may as well — to them — be dog shit.

And if simple, decent folk think about that, they might realise that the fight over workplace laws and employment conditions has less to do with actual workers than they ever believed, or thought was possible.



10 thoughts on “IR Review: WorkChoices Does Not Justify Doing Nothing

  1. Yes Yale, all correct. The trouble with this area is that the government is either unable or unwilling to make a decent argument. You appear to have fallen into the same trap that they always fall into. Trying to argue for all workplace changes at one go is too complicated and loses the public. They need to stick with one issue, describe it in many different ways and have many people argue the case until the necessity for the change is clear in the public’s mind. I suggest unfair dismissal. This concept only existed as a public service rule to prevent bullying in the public service. Then it was arrogantly misapplied to the whole economy. It is no business of the government why a private person or company employs or dismisses another private person or company. How dare the public service second guess private decisions? Furthermore, this has created the absurd situation where it is easier to get divorced than to dismiss an employee. This is astonishing! There is a good argument to be made here which I believe the community will accept, but when it is one item in a long list then the argument is not made.

  2. Workchoices, the evil Liberal policy. It was so bad, unemployment was around 5% rather than the 6% plus we have now. For a confident Government, this replay from a decade ago would be gold. Ask anyone, what was it about Workchoices that hurt you the most? Can’t think of anything? Oh, you don’t actually know what Workchoices involved? etc etc.

    Obviously, the Abbott Government will somehow turn this into another disaster like medicare and higher education.

  3. I welcome your comments that will probably not agree with my views in the majority of cases. But I consider it fair to listen to the opposing argument. However, I become concerned when I read your comment that some car workers will walk away with $250K to $500K due to redundancy. Granted you said “some car workers” but lets look at the facts. Car assembly line workers are typically paid $20/hr (and are likely the majority of workers retrenched). The redundancy award for car workers is apparently 4Wk/year of service plus 3.5 weeks of pay. So an assembly line worker with 25 years of work whose salary is typically ~ $42K/year will walk away with a redundancy payment of 103.5 weeks of pay equating to ~$83,000. This amount is far short of the $250-500K you mention. To achieve a redundancy payout of $250K (the minimum you reported) the redundancy award or salary would have to be three times what exists, or alternatively, a typical assembly worker would have to have worked for ~ 75 years! To achieve the $500K payout, the salary or the redundancy award would have to be 6 times what exists for the typical car worker with 25 years of service.

    My estimate is that the vast majority of retrenched car assembly workers will have less than 25 years of employment and will walk away with far less than $83,000 into an area with few prospects for employment. A situation not to be envied. In the case of those very very few souls retrenched who may receive $250-500K, they will have a significant taxable component (including medicare levy) as they will have exceeded the eligible termination payment that was $180K in 2014.

    When you argue your case for change in industrial conditions, at least present the likely scenario and don’t pick on the outlying numbers in the distribution curve to justify your point of view. I’ll then respect your comments.

    • LLAF (if I can abbreviate you to that) you are right when I point out that “some” will walk away with quarter to half a million dollars.

      However, you have also fingered the flaw in your own argument: the base rates of pay, which exclude the loadings, allowances, penalties etc that go on top to make the “base” rate a mere fraction of what the typical auto service worker is ACTUALLY paid. These are factored into the GMH EBA, which also provides for explicit additional amounts to be paid in redundancy on top of the statutory requirements you outline.

      There is a link to the EBA in one of the articles I linked into that particular article (the one from Grace Collier from memory — I’m working remotely and unable to check in responding to you now).

      The very outliers in the provisions of that EBA are what make it so outrageous. The overall cost of honouring the payouts, outliers or not, is exponentially higher than a comparable workforce of non-unionised (but legally remunerated) labour would attract in similar circumstances. It is costing GMH more than half a billion dollars in closure costs in Australia and a large portion of that is labour payout costs. If you think these sorts of numbers are appropriate to burden a private sector organisation with that is expected to provide high levels of ongoing employment, I simply can’t agree with you.

      I appreciate your arguments though. We must simply agree to differ.

  4. this is a bit from your article

    But if that is too difficult for some to accept, I cite the example at the polar opposite end of the industrial spectrum of restaurants operated in Melbourne by high-profile chef George Calombaris — and scores more like them — that do not open on Sundays for the rather obvious reason that paying kitchen staff and waiters up to $60 per hour to serve customers, cook food and wash dishes is, on any objective criteria, ridiculous.

    now what job in a restaurants pay $30.00 p/h

    • John, it’s just the usual self serving exaggeration you’ll find most zealots use to back up their claims.
      And Yale, I suppose we shouldn’t be surprised given his track record with broken promises, but Abbott said Workchoices was deed and buried.

      • And perhaps you could get your pinko mates to explain why even a REVIEW needs to be shut down forthwith, without so much as a syllable of discussion permitted?

        This isn’t about workers’ rights; it’s about the greed of unions and the extortionate existence they eke out off the backs of workers.

        When is a unionist concerned about the jobs of non-unionised workers? They aren’t, and that’s a big reason why they should simply be ignored when it comes to the discussion of laws affecting the rest of us.

  5. Because it is hard to trust the review process is when the Abbott government’s views are so slanted one way plus the lack of action taken from the Abbott government to any Productivity Review findings that the government doesn’t like.

    It has happily ignored recommendations it doesn’t like from other evidence-based Productivity Commission inquiries (like the need to conduct proper cost benefit analyses before promising huge amounts of money to infrastructure projects).

    BTW, I’ll just try and find these pinko mates – oh, sorry they’re just normal people who think that bashing the disadvantaged and workers under the excuse of fiscal responsibility is unfair. Yale, you really must join the 21st century and stop this cold war jargon.

    • By your own words then, the Productivity Commission should be allowed to do whatever it likes; on your theory, the problem is what the Abbott government might do subsequently.

      This does not adequately explain why the Commission should be shouted down and screamed into silence, prevented from reviewing anything at all.

      It also fails to answer the singular charge that the unions and their stooges at the ALP are more concerned with protecting their own vested interests than they are in the interests of workers.

      If you want to try talk about the 21st century, you are going to have to accept that the tired architecture of union manipulation of capital under the threat of withdrawing labour is yesterday’s story.

      There are already adequate safeguards (and recourse to action under law) – partially as a result of the historic endeavours of unions – to make it worth anyone’s while to persist with the “Cold War” as you put it. But the unions will persist, because it’s an existential threat to themselves.

      Not the workers they purport to champion, but to themselves.

      I am always happy to concede unions played a positive historic role, but doing things the same way they have always been done, just because it threatens a few insidious gravy train surfers getting fat on the skimmings from union dues, is not a reality worth preserving.

      In fact, it’s not fit to piss on. And neither are the unions.

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