Industrial relations legislation has the potential to backfire ‘as WorkChoices did for the Coalition’
However, there is a risk it all comes back to bite.
The legislation contains exactly what business fears – the reintroduction of industry wide or pattern bargaining across the economy. And from what some of those privately briefed by the government say, the guardrails on this industry wide bargaining will not allay business concerns.
First, there is a carve-out.
Those players that repeatedly breach the Fair Work Act will not be allowed to pattern bargain.
This is effectively a CFMEU carve-out and for business, a Pyrrhic victory. That is because the construction union’s tactics seem to manage to achieve enterprise wide bargaining anyway.
The government will hail other safeguards that will guide strikes across sectors but business is on the back foot. The Business Council’s Jennifer Westacott says many unions are clear that what they want is the capacity for widespread industrial action.
There are broader arbitration powers for the Fair Work Commission to resolve intractable disputes but the commission’s judgment historically is coloured by those appointed to it (as recommended by the government).
The one positive for business is that the Better Off Overall Test will no longer be one where an agreement supported by thousands can be brought down by one or two individual cases. These can be addressed separately.
However progress on the BOOT, pioneered by Westacott and the ACTU’s Sally McManus, must be weighed against the risk of Australia falling back to the bad old days of union militancy.
The Treasurer should not rejoice. History shows that pattern bargaining is the antithesis of productivity. This legislation is a new and serious productivity headwind for the May budget when there will be great expectations for reform to lift productivity.
The government has been forced to reduce forecast productivity growth from 1.5 per cent, the 30 year historical average, to 1.2 per cent. Wednesday’s 7.3 per cent CPI read suggests the Reserve Bank may need to push harder on interest rates. Every month the need for greater productivity is more urgent.
Speaking at the Australia-British Chamber of Commerce’s budget breakfast on Wednesday, former Coalition minister and BCA adviser Warwick Smith said the government needed to tread carefully with the legislation.
“If it is a change to a new regime which makes it harder for businesses to come to agreement with their workers and presupposes that there will be an easy pathway to dispute, that will be bad for our nation,” he said.
“When you see unemployment increase under the numbers we have seen, getting an industrial relations system in sync with what we need to see in terms of growth is going to be really important.”
Smith says the country is already witnessing public service unions in the streets with bus and rail workers striking in NSW. On Wednesday in Perth, government workers walked out to demand better pay deals adding to the recent waves of industrial action in the West by nurses and police.
“If we see a big push back – we saw it from Qantas CEO Alan Joyce this week – by larger employers about the new system, that will cause a lot of problems if it is reflected in industrial action,” said Smith. He said Australia had not seen industrial action at scale for 15 years. And he believes the legislation has potential to backfire in the way that the WorkChoices legislation did for the Coalition.
“WorkChoices for Howard was an overreach that drew in a political storm. Now you have a new industrial relations minister on the other side of the coin reaching into the other dimension.”
He said Labor’s proposed legislation is a slow burn issue that could flare. “If you are trying to deal with that in the middle of great concern about our budget, unemployment going up, inflation staying up, interest rates continuing to go up and putting a lot of pressure on households, it will come with a huge political cost. And it will flip very quickly if the government goes too far,” he said.
Having been in the tent at the Jobs and Skills Summit the BCA, now finds itself firmly out of it
Westacott joined ACTU president Michele O’Neil on ABC Radio on Wednesday morning.
“Can I just go to the IR legislation tomorrow? Michele’s obviously had better access to it than I have, I haven’t been able to see it. And that’s been very frustrating,” said Westacott. “That’s actually not accurate Jennifer, we’ve all been consulted. I have not seen the bill,” responded O’Neil.
Maybe not, but the idea that Michelle O’Neil would not have a very good sense of what the bill contains is laughable.
Last week, Industrial Relations Minister Tony Burke revealed that the Secure Jobs, Better Pay Bill would have closing the gender pay gap as a key objective. But missing in that press release was the prize for unions – pattern bargaining. There is precious little for business in Labor’s budget, but pattern bargaining puts a new strain in the relationship with
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