Blame game misses need for IR reform

THE Gillard government has acted swiftly and correctly to terminate the Qantas dispute, but Labor is culpable for the industrial relations system and culture that gave rise to this crisis.

The farcical blame game of the past 48 hours entirely misses the point. The real complaint about Gillard lies not in her weekend response to the Qantas fleet grounding -- it lies in the unsustainable workplace bargaining system that Labor has imposed on Australia.

The critical issue is the cause of the Qantas dispute, not its weekend solution. The Coalition has got this wrong and, in the process, has carried much of a gullible media along with it.

Tony Abbott falsely blames Gillard for not preventing the Qantas grounding, saying this was about "political will", not the day-to-day operation of the Fair Work Act. That's wrong. This dispute is about policy. It is precisely about the daily operation of the Fair Work Act, the very act that Abbott is so reluctant to reform.

The flaws in Labor's workplace system now reverberate through much of corporate Australia, poisoning Labor-business relations, impeding productivity gains and dooming Australia to industrial practices incompatible with national success in the Asian century.

While Abbott has made traction blaming Gillard for the crisis, this game is double-edged with Gillard and Transport Minister Anthony Albanese pinning Abbott as an apologist for Qantas, thereby resurrecting the Coalition's anti-worker Work Choices bogy.

This shutdown was a Qantas contingency. Its chief, Alan Joyce, wanted to take the government by surprise. Contrary to media reports, Joyce did not offer Gillard the opportunity to stop the grounding. Qantas denies this outright. Responsibility for the decision to lock out staff and ground the planes rests with Qantas.

As Gillard told parliament, Joyce gave the government three hours' notice planes would be grounded ahead of a staff lockout. His decision was presented as a fait accompli. Joyce's purpose was to force a crisis, transform the dispute, smash the protracted union campaigns and procure a solution by imposed negotiation or arbitration. It was ruthless and risky.

In a brief discussion with relevant ministers Gillard decided to ask Fair Work Australia to terminate the industrial action knowing, if successful, this would end the dispute and create a 21-day period for a resolution, after which FWA would arbitrate an outcome if required.

Labor's intervention was successful. It delivered a victory to Qantas and defeat for the unions. Indeed, it destroys the union strategy.

While Joyce has achieved his immediate aim, his tactic remains high risk -- he has chosen to damage the Qantas brand and ruin relations with government in his quest to defeat the union campaign.

The opposition should have used this crisis to highlight the defects of the Fair Work Act. It hasn't. Its approach is all politics, no substance. Its aim is to play the woman; that is, to further target and weaken Gillard's standing. It is obsessed about the idea that the government on Saturday should have made a declaration under Section 431 of the act that would have prevented the shutdown. It wants to blame Gillard, not Qantas, for the disruption. That's too smart by half.

Ultimately, this is a judgment call but Gillard's argument is persuasive. She says the Section 431 provision has never been used. She acted on departmental advice. She knew judicial appeal was likely and the unions would fight this path by any means possible.

ACTU chief Jeff Lawrence said on Monday the unions would have resorted to legal appeal at any declaration outside the FWA process. Yes, they may appeal anyway. But it is hardly a surprise Gillard felt a termination from FWA after hearing from the parties was a better option to win all-round acceptance and deliver a surer path to relief. Qantas's statement yesterday that if Labor had issued a declaration under Section 431 it would not have grounded the planes is merely a statement of the obvious.

The more important story lies elsewhere: it is Gillard's revamping of her industrial relations mantra ignited by the Qantas crisis. The Fair Work Act is her personal crusade and her greatest legislative achievement since Labor came to power in 2007. Her argument now is that her act works as intended, witness the FWA Qantas termination.

Labor's hostility towards Qantas from Gillard down is visceral and abiding. It runs across the entire cabinet. Labor ministers have branded Qantas's behaviour as extreme, extraordinary and militant. In private, they have talked about industrial terrorism. Yet Qantas has wide support from corporate Australia precisely because many corporates identify with the industrial dilemma that the airline faced.

On this subject, Labor is in denial. The Fair Work Act is its political prize and emotional anchor. The law is integral to Labor's identity and the government is utterly resistant to the litany of problems it is generating.

The Fair Work Act has changed the industrial relations culture and bargaining in three critical respects. First, it shifts statutory power from employers to unions. Non-union enterprise agreements are virtually impossible. Individual contracts are banned. Union-run enterprise agreements are the name of the game.

Second, the new law means bargaining is more about rights as typified by the Qantas dispute. And rights disputes are more protracted. When quizzed, Joyce was adamant: this dispute was not about money, it was about management control. Business after business has the same complaint.

The Qantas unions seek job security guarantees and tight conditions governing outside contractors, and reject the cheaper conditions being offered in the new Asian subsidiaries. The example Joyce gave on Sunday was engineers trying to lock in work practices of the past 20 years now obsolete given new technology aircraft. It is Gillard's law that included these management issues in the bargaining process. This is Labor's own work.

Third, as many business lobbies have argued, it is difficult if not impossible to extract productivity gains from bargaining under the new laws. The unions are strong enough to deny such concessions. Indeed, that is the real meaning of the Qantas dispute. It mocks Labor's rhetoric about thriving in the Asian century and means Australia's domestic arrangements cannot succeed in such a competitive world.

Union expectations are higher and what alarmed Joyce was his realisation the unions felt they could bleed Qantas into submission through time. As for the claim this Qantas-type aggression will become the new corporate template, forget it. This is about Qantas and only Qantas.

The economy-wide problems of the Fair Work Act are on vivid display yet subject to blind denial in the political system.