Cabinet papers 1990-91: accord row sparked IR crisis

A crisis in the Labor-ACTU Accord threatened to undermine the role of the industrial relations tribunal

A crisis in the Labor-ACTU Accord threatened to undermine the role of the industrial relations tribunal and almost scuppered the government’s wage reform endgame.

Cabinet papers show the Labor government in 1991 scrambling to respond to ACTU fury over the national wage case decision handed down in April, and a tussle emerging over the future role of the Australian Industrial Relations Commission in enterprise bargaining.

While the commission had dutifully imposed on employers each version of the Labor-ACTU deal since 1983, it baulked at endorsing the Accord Mark VI, which included over-award enterprise bargaining guidelines, rises in award super and a $12-a-week payrise.

The decision provoked outrage from the ACTU, which branded it “unjust, flawed and unworkable”.

Industrial relations minister Peter Cook’s submission to cabinet in May 1991 was “to determine the government’s position with respect to the union movement’s rejection of the national wage case decision”.

He stressed the imminent threat to reform. “Accord VI focuses on enterprise reform by accommodating company wage bargaining over achieved productivity gain ... The NWC decision would retard this shift,” he said.

Cook’s proposal to cabinet, which he conceded was “strongly opposed” by employer groups, would give government employees the $12-a-week pay rise sought by the unions. The government also would publicly decry the national wage case decision as “incompatible” with government wages policy and state that the Accord, not the commission, “provided the framework for wage fixing in the period ahead”.

He added that the AIRC’s role “must change to ensure that it functions consistent with this strategy”.

Cook conceded that the AIRC’s “ongoing importance as the institution for dispute settlement and a safety net for industrial standards should, however, be confirmed” to avoid “an explosive hybrid system of direct bargaining and arbitrated settlements as in 1974 and 1981-82”.

But it was left to Treasury to point out that “the mechanism by which the government will ensure the AIRC play selected and particular roles is not developed in the submission”.

Peak employers who were consulted “expressed strong concerns about any circumventions of the NWC decision by the government in the public sector or by the ACTU”.

However, Cook’s priority was to ensure unions and “where possible, employers” urgently set up guidelines for enterprise bargaining as part of the “shift to a more decentralised wages system using the Accord framework”.