Right to disconnect from productivity growth agenda

Federal politicians have agreed to trample one of the big productivity gains from the work-from-home revolution as part of a suite of industrial relations reforms designed to turn back the clock on workplace flexibility. The right to disconnect is a niche issue for the vast majority of workers, but it has captured media and political attention because it is an emotional free-kick on work-life balance. This has suited the political needs of Workplace Minister Tony Burke and the Greens, but it was always a side-order issue in the main game for Labor and the trade union movement, which has been to bolster union power at the centre of workplace culture to the detriment of employers and often the personal preferences of the people they employ.

Mr Burke’s success in legislating his second tranche of reforms demonstrates his skills as a political negotiator, the disproportionate influence of crossbench senators on national affairs, and the extent to which employer groups have been played off a break by the Albanese government. Starting with the Jobs and Skills Summit in September 2022 when Labor prised open the door to industry-wide pattern bargaining, the federal government has caught employers flat-footed.

The pushback by peak employer groups on the second tranche of reforms has been a case of too little too late, after too much political capital was wasted on issues outside their core interests. The Business Council of Australia says the legislation makes it harder for businesses to offer people work, to pay higher wages and to take on more staff. In short, it will create significant costs for businesses and result in fewer jobs and fewer opportunities. These concerns were taken up by independent senator Jacqui Lambie, who sought changes regarding the rights for casual workers to convert to permanent, unions’ access to workplaces, and the right to disconnect. The changes will make it easier for casual workers to become permanent employees. Senator Lambie raised concerns about the changes to enterprise bargaining which would mean only provisions that are beneficial can be included, and right of entry provisions in the bill allowing unions access to workplaces. These have been the driving force behind the government’s IR agenda, unwinding the more flexible enterprise bargaining system that has allowed employers to trade off increases in pay in exchange for greater workplace productivity. Labor’s model is more rigid, with wages linked to industry awards rather than workplace performance.

The extent of the changed industrial relations landscape is reflected in the award settlements involving maritime unions and waterfront operator DP World, and the Construction Forestry Maritime and Energy Union and West Australian building giant Multiplex. Both achieved a 25 per cent pay increase, which Mr Burke has cited as evidence of workplace bargaining in action. The CFMEU has vowed to ensure the increase flows through the state’s construction industry. The cost of the DP World settlement will inevitably result in higher prices and inflationary pressures throughout the economy.

The same is true of what will happen when the second tranche of reforms begins to bite. Employment conditions will become less flexible, resulting in fewer choices for workers and higher prices for consumers. Businesses will think twice about increasing the number of people they employ. Unions will be emboldened to insert themselves into negotiations, the Fair Work Commission will gain new powers, and business owners and directors will face greater personal risk.

It represents a return to the bad old days of Labor before the economically reform-minded Hawke and Keating government at a time when greater workplace productivity is what is needed most.