As Australia contemplates its post-COVID economy, industrial relations reform has been repackaged by some as the way to “kickstart” growth.
The Business Council of Australia (BCA) has called for our workplace relations system to be simplified and enterprise bargaining to be improved. The Australian Industry Group and the Australian Mines and Metal Association are also beating the drum for reform.
Reserve Bank governor Philip Lowe says we need to look at the system’s complexity, while this week former Productivity Commission chair Gary Banks singled out the virtue of industrial relations reform.
It’s true our IR needs to be simpler.
But to do this right, we must focus on making enterprise bargaining easier for workers.
What does “simplify” really mean?
When lobbyists for large corporations call for a “simpler” IR system, too often this means reducing the scope or value of the award safety net.Joel Carrett/AAP
Awards now have similar rates of pay for similar types of work. For example, a qualified employee on a trade (C4) classification has pretty much the same minimum pay under any modern award, no matter their occupation.
Three decades of “award restructuring”, “award modernisation” and “award simplification” have done that.
Now, “simplifying” has become code for the earlier one-size-fits-all approach to reducing or removing penalty rates, overtime pay, shift premiums, provisions on starting or finishing times, or the minimum pay rates themselves.
The need to address enterprise bargaining
What really needs simplifying in Australian IR is our enterprise bargaining system, which is remarkably complex.
This is not because the “better off overall test” means no worker can be made worse off by an agreement — something that irks some large corporations. It’s because the procedures tie worker representatives, in particular, in knots.Jeremy Piper/AAP
It makes bargaining a convoluted, tedious process, with many tripwires even for experienced parties.
Enteprise bargaining provisions: too many, too complex
It is one thing to say (as a minority of OECD countries do), that strikes should be preceded by a secret ballot. It is another, less defensible thing to provide 24 pages of detailed prescription on how those ballots must be undertaken.
The system also imposes complexities that are uncommon in other collective bargaining systems.
Over time, these provisions have been seen as placing restrictions on workers’ rights to take industrial action.
It is an oddity that, while awards have been simplified, the process of collective bargaining has been made remarkably complex in Australia.
Why should simplification of one be linked to intensified complexity in the other?
What’s at stake
To bring the system more in line with international practice on collective bargaining and industrial action, many restrictions should be removed.
This does not mean that every limitation should be abolished, but the level of detail in Australian legislation goes far beyond what could reasonably be expected in most other OECD countries.
The efficiency costs may be justified if those restrictions arise from equity considerations, to protect lower paid workers or the like. But these restrictions appear to exist simply to interfere in negotiations and tip the balance of power to one side or the other.
What happens now?
What the federal government will actually do is harder to predict.Jeremy Piper/AAP
It declined to implement major industrial relations reforms after that because of fears of the political consequences.
While it may be emboldened by the COVID-19 context, its interests are very different to those of the BCA’s members.
- ^ has called for (www.bca.com.au)
- ^ singled out (www.afr.com)
- ^ just 121 today (www.bartier.com.au)
- ^ Working from home: what are your employer's responsibilities, and what are yours? (theconversation.com)
- ^ reducing or removing (www.amma.org.au)
- ^ is little evidence (www.rba.gov.au)
- ^ damage economic performance (www.bloomberg.com)
- ^ better off overall test (www.fwc.gov.au)
- ^ irks some large corporations (www.afr.com)
- ^ Fair Work Act (www.legislation.gov.au)
- ^ remedies and enforcement (www.legislation.gov.au)
- ^ Coronavirus redundancies are understandable, but there are alternatives (theconversation.com)
- ^ is low (www.abc.net.au)
- ^ 24 pages (www.legislation.gov.au)
- ^ United Kingdom statute (www.legislation.gov.uk)
- ^ no friend of unions (core.ac.uk)
- ^ overly complex processes for secret ballots (www.pc.gov.au)
- ^ Overworked and underpaid: the revival of strikes in New Zealand (theconversation.com)
- ^ pattern bargaining (www.fwc.gov.au)
- ^ as in Canada (digitalcommons.osgoode.yorku.ca)
- ^ COVID crisis has produced many negatives but some positives too, including confidence in governments: ANU study (theconversation.com)
- ^ employees and their wages (www.abc.net.au)
- ^ Work Choices (www.aph.gov.au)
Authors: David Peetz, Professor of Employment Relations, Centre for Work, Organisation and Wellbeing, Griffith University