MPs should think before passing IR reforms

Our two-lane system remains the fundamental weakness at the heart of the Australian workplace relations.

When thinking about proposed industrial relations reforms that are before parliament, we must first doff our hats to Sarah Chidgey, the deputy secretary of the Integrity and International Group at the Attorney-General’s Department. Recently, Chidgey and her mob put the cat among the pigeons with written demands for documents from, and threats of six months’ jail to, an individual associated with organising a conservative conference where former prime minister Tony Abbott was a speaker.

Chidgey, who was denounced and condemned, actually did us all a great favour. The Morrison regime demonstrates competence but there is a strong whiff of authoritarianism in the air. Governments are fervent regulators and have granted various agencies extensive powers; Chidgey demonstrated how easy it is for these to be abused, resulting in citizen mistreatment and diminished freedoms.

Under their duty of care to us, before voting all politicians must stop and think about how the draft laws could be misused, and by whom. As Chidgey proved, the parliament failed in its due diligence in its rush to regulate, and so in the future it must do better.

This brings us to the two new areas of industrial relations reform on the agenda. One is related to underpayment of wages and the other to the conduct of unions.

Both proposals contain serious consequences for offenders and, as such, the parliament must ensure the laws are fit for purpose, that all the implications have been thought through, that all those involved have been canvassed and that the potential for misuse has been eliminated.

Our industrial relations system can be best imagined as two lanes on a highway. In one lane, we have employers and employees, chugging along, governed by various laws that confer responsibilities and entitlements, and obligated to pay income taxes.

In the other lane, governed by a different set of laws and with no obligation to pay taxes, we have registered industrial organisations: unions and employer groups. These entities have been set up to service and represent their members, the people in the other lane, but are privileged in that they coast along in an environment where the regulation is far less and the taxation potentially non-existent.

This two-lane system remains the fundamental weakness at the heart of the Australian workplace relations arrangement. We can fiddle around with the size of the lanes and change the speed limits but, until the two lanes are merged into one, the people in one lane are more or less above the rules but nevertheless applying them to the people in the other.

Under the push to lift union conduct standards, the threat of union deregistration looms, and individual unionists can lose their job status and the legal privilege that goes with it. This legislation is probably worthwhile provided that the potential for misuse is eliminated. However, it would be far better to merge the two lanes by bringing unions and employer groups under the scope of corporations law, and levying the same range of taxes on them. This would put everyone in the same position, permanently solve the problem of misbehaviour, and prevent unions and employer groups from colluding together to do over their respective members for the benefit of themselves.

When it comes to underpayments of wages, or wage theft — which is deliberate underpayment — new measures are mooted that would send some employers to prison and ban others from sitting on boards.

There is no doubt wage theft occurs, often with the approval of some unions. Further, our legal system does not allow employees access to a quick, cheap, easy and effective method of wage recovery. Where an underpayment has occurred under the context of an enterprise agreement that pays below the award to some people (and therefore should never have been put in place), employees can apply to the Fair Work Commission to have the agreement struck down. This is a process in itself, but even when success occurs there is no mechanism available to recover the lost wages.

Where an underpayment occurs in the context of a dismissal, the employee must choose between pursuing an unfair dismissal claim or pursuing lost wages. Where the employee chooses the unfair dismissal route, at the end of the process a deed is signed that settles all future claims and so prohibits the pursuit of the lost wages. Where the employee chooses to forgo pursuing the dismissal and instead goes after the lost wages, the industry regulator can investigate and determine that wages are owed. However, resources are scarce, so unless the case is high profile or in the public interest, a prosecution will not occur and the employer can simply refuse to pay. The employee then must chase the issue through the small claims jurisdiction, and on from there.

Passing new laws to put employers in jail and to prevent their board appointments will grab headlines, and I hope that such a big stick won’t ever be used to hit the wrong people. None of that will put money in the pockets of people who have earned it, though. Scary new laws are one thing, but practical measures are another. The government should design a wages recovery system that is accessible, cheap, efficient and effective, and facilitates the prompt payment of lost pay to the people who are duly owed.