FAIR WORK BILL - Dr Dennis Jensen MP

Dr JENSEN (Tangney) (1:22 PM) —From the outset, I must admit that my expertise does not lie in this area, so I shall use my scientific training to look at the hard data in both the specific area of industrial relations and the economic and social context in which the various regimes have been implemented. As has been acknowledged by this government and as was predicted by former Treasurer Peter Costello almost exactly a year ago, the world economic reality today is a far cry from that of only a year or so ago. When the Labor Party formulated their industrial relations policy, the world economy was, to a large extent, booming. Work was plentiful and our economy was very strong, thanks in no small measure to the hard work of the Howard government. Although the government is always loath to admit it, the mere fact that economic experts are predicting that Australia’s economy is one of the few which may not slide into recession is a testament to the relative insulation from the world economic disaster provided by a decade of strong economic management under the Howard government.

That does not, of course, mean that this strength will continue. One of the main criteria by which this government will be judged is how it manages the economy, including industrial relations, in the coming years. The rest of the world will not care about ideology, just hard economics. If Australia becomes uncompetitive, it will lose market share, especially in primary commodities. If the industrial relations regime allows us to slip back to the bad old ways when, for example, ships were queuing off the Pilbara coast unable to load because of industrial disputes, this will be one of the government’s greatest industrial relations challenges, especially in light of certain union leaders’ bellicose threats before this legislation has even come into force.

The front page of the West Australian on Tuesday 25 November was a harbinger of what we may expect to face, with the headline ‘Time to strike for rights say unions.’ Surely these unions would have been involved in the unprecedented degree of consultation with employer and employee representatives which the minister referred to in her second reading speech. We must ask the question: is this legislation as fair as the minister claims? If so, these unions are clearly threatening to return to the bad old days of capricious, unnecessary and destructive strike action. The pressure will then be on the government to back up the claim made by the minister that parties refusing to bargain in good faith will gain no advantage by flouting the law. You can have the best dispute resolution provisions in the legislation but if certain parties refuse to adhere to them and the law is not backed by fair and scrupulous enforcement then these provisions will be nothing more than a feelgood sham.

I am a bit concerned that the minister seems to be mainly concerned with protracted industrial action. Obviously, strikes which drag on over long periods of time are by definition deliberately harmful to both employers and, in many cases, employees. However, calling a short strike, even for just a few hours, can cause the employer to lose many thousands of dollars. An example of that would be the previously familiar occurrence of strikes in the middle of concrete pours on construction sites. Although the strikes were only of short duration, the cost of the entire initial concrete supply, of removing the partially poured concrete and repouring a fresh batch, can be almost ruinous. Therefore, to judge the severity of the strike purely on the length of time it takes overlooks the economic reality of life in business.

Speaking of industrial disputes, it is worth charting the recent history of the level of industrial disputation in Australia. According to the ABS, the number of industrial disputes across Australia has declined markedly in the past 20 years. In 1987 there were 1,519 industrial disputes, compared with only 135 last year. This decline coincided with a range of institutional, legislative and economic changes which affected industrial relations in Australia.

Following the economic downturn of the early 1990s, there has been a sustained period of prosperity characterised by strong employment growth and a decline in unemployment. One would normally have expected prosperity and low unemployment to be the ideal time for industrial muscle flexing. I believe the reason disputes did not increase was that employees realised the benefits of industrial peace and the industrial regime in force made irresponsible strike action much more difficult.

What is even more noteworthy is that the number of working days lost has also been at historically low levels in the past decade, which also helps the economy a great deal. This reflects well on both participants in industrial relations and the regime under which they operate. For example, in the construction industry, working days lost went from 194,600 in 1987 to 6,800 last year. Working days lost per thousand employees in the construction industry went from 605.2 to 10.1 in the same period—a remarkable achievement and one which should not be ignored. Let us hope that the new regime provides a similar climate for industrial harmony, especially with tougher economic times ahead, particularly for business.

It is also gratifying that the provision for a secret ballot before industrial action is taken has been retained by the Labor government. One wonders, if the principle of secret ballots is supported by Labor and the coalition, why union bosses in Western Australia felt so aggrieved when secret ballots prior to industrial action were introduced in 1997. Many people on both sides of politics have said that Work Choices is in the past and that it was the main reason the coalition government lost the 2007 election. Some have expressed concern that this loss came only after a most disingenuous fear and loathing campaign, to use a phrase much beloved of the trade union movement. However accurate that observation may be, we on this side of the House accept that for whatever reason Work Choices is no more. Despite that, it would be inappropriate to repudiate all the industrial relations reform which happened throughout the 1990s, as much of it was of great benefit to employers and employees. The Labor Party has said as much, and so should we. My colleague the member for Goldstein, when addressing the IPA, was generous and honest enough to acknowledge the part that the Hawke and Keating governments played in freeing up the previously straitjacketed industrial relations system. I would hope for some reciprocal honesty and generosity about the reforms of the Howard government.

This new legislation should be viewed through the prism of past experience—what worked and what did not. What Australia needs is for this government to take the very best of the Hawke, Keating and Howard government reforms and then employ them fairly. Labor has said that an old centralised wage-fixing system is not relevant to Australia’s modern workplaces and modern economy. Therefore, any attempt to return to the pattern bargaining and secondary boycotting practices of the past would be a direct contradiction of the policy Labor took to the last election. I was pleased to hear the Minister for Workplace Relations say in her second reading speech that pattern bargaining is not permitted. The CFMEU stated on its website:

The CFMEU makes no apologies for chasing industry-wide agreements that have common conditions and rates of pay. Pattern bargaining is neither illegal or against the interests of workers. In fact, it is the only way enterprise bargaining can work in a fragmented industry like construction.

Hopefully, this will put the CFMEU on notice. The Labor Party makes a great deal of protecting workers’ freedoms and yet under the previous system there were surprisingly few instances in the media of the terrible exploitation of workers which the Labor Party and the ACTU claimed had occurred. That might have been because the campaign was simply a new version of the good old fear and loathing campaign. However, whatever the rights and wrongs of that campaign the message was loud and clear. The Leader of the Opposition has acknowledged the fact that industrial relations was one of the major factors in the election result last year. The job of this government is to ensure that the baby is not thrown out with the bathwater and that the many good initiatives of the past two decades are not sacrificed on the altar of ideological purity or discarded in order to do the bidding of its mates in the ACTU.

Make no mistake, the ACTU is hoping to go back to the days when it ran the industrial relations arena as its own fiefdom and had a disproportionate say in many of the rest of the decisions made by Labor governments. Who will forget the immortal and very revealing words of the former ACTU official and now member for Charlton, who was reported as saying, ‘I recall we used to run the country, and it would not be a bad thing if we did again’? The power of the ACTU clearly came through its industrial muscle and through its symbiotic relationship with the Labor Party. This usurping of power must not be allowed to recur in the future. When reading through Labor’s policy and the minister’s second reading speech, one has a distinct feeling of deja vu—’Where have I heard these words before?’ The first frisson of familiarity was with the words ‘minimum conditions’, guaranteeing a safety net of enforceable conditions, including minimum wages. I was irresistibly reminded of Western Australia in 1993, when the Court government introduced the Minimum Conditions of Employment Bill, which later became an act and is still in existence. That act provided for minimum rates of pay, maximum hours of work, leave for illness or injury orfamily care, annual leave, bereavement leave, public holidays and parental leave.

This bears a striking resemblance to Labor’s 10 National Employment Standards outlined in Forward with Fairness and in the minister’s speech. It is very gratifying that the Labor government is acknowledging the fairness and responsibility of the Court government’s industrial relations legislation by copying it so assiduously! Labor’s IR policy also included a mention of work-family balance. Is it possible that Labor has kept and cherished a copy of Work and Family Makes Cents, a booklet put out by the Court government illustrating the benefits of having family-friendly work practices? I would like to think so.

The minister’s speech also refers to freedom of association. Not unexpectedly, the greatest emphasis is put on freedom to join a union and participate in collective activity. The opposition of course supports freedom of association too, but in practice not just in words. I will support this legislation on the understanding that an employee’s right not to join a union is as vehemently defended as the right to join. Unfortunately the history of industrial relations under Labor governments does not engender a great deal of optimism.

There have been cases in the past in which employees have been denied their right to freedom of association. One of the most notorious instances of which I am aware happened in the early 1990s in Western Australia. A woman working in the north-west claimed that she had been sacked for refusing to join a union—clearly a breach of section 96b of part VIA of the Industrial Relations Act 1979. An investigation was duly undertaken, at the conclusion of which a senior officer in the Department of Labour Relations quite properly recommended prosecuting the employer. In one of the most appalling cases of wrongdoing by a minister, the officer was ‘admonished for submitting recommendation to prosecute and instructed by the minister to find legal advice to support a recommendation not to prosecute’. It is not only against the principle of the separation of powers for a minister to intervene directly in a decision to prosecute, but that a minister would lawyer-shop to get a legal opinion supporting a breach of the law is unconscionable. I hope that such blatant abuse of the law would not occur under this legislation, and I am sure that the minister will undertake to ensure that it never would.

It is a welcome reform to Labor ideology that employees will have the freedom to choose their bargaining agent. This echoes exactly the same principles as those behind the introduction of free choice of bargaining agents in the Court government’s Workplace Agreements Act of 1993. It will be interesting to see if and how this freedom is upheld in the future. The legislation also reintroduces penalty rates. I sincerely hope that in either the legislation or regulations there is some mechanism to prevent abuse of penalty rates. They should be used for those working considerably longer than is normal, unsociable hours, weekends, public holidays or shifts. Penalty rates should not be abused, as they have been in the past, by some workers dragging out work just a few minutes after knock-off time and getting two hours of extra pay at time and a half, which was a regular occurrence in some workplaces.

The right of union or other officials to inspect employment records is yet another provision which was part of the much-maligned Workplace Agreements Act in Western Australia. It remains to be seen whether this right will be used responsibly or whether we will see a return to it being used as a transparent excuse to cause disruption in workplaces, as has been done in the past. There is another requirement of the legislation which has not had much attention. Ron McCallum, former Dean of Law at Sydney University, made an interesting observation in an article on the Bulletin web site. The article said:

... if the IR system is to be based on the corporations power in the Constitution, laws governing employment will have to conform with what is good for the corporation.

As I have said, there will be analysis of the details of the legislation in the near future, but the real assessment of this legislation will be in the results which accrue from its introduction. Apart from the level of industrial disputation, to which I have already referred, another criterion will be the level of income which flows from this legislation, taking into account the broader economic debate. It is worth noting that from 1997 to 2007, national income—that is, the real net national disposable income per person—rose from around $30,000 to around $39,000. It should also be noted that these figures are adjusted to remove the effects of price change.

Much has been made of the welfare of those on lower incomes. It is to be hoped that the new system will be as beneficial for those workers as the previous one was shown to be. The ABS says:

The average real equalised disposable household income of the low-income group is estimated to have risen by 31 % over the period 1995-2005, although part of the increase may reflect improvements to the way income was collected in the survey from 2003-04. The same individuals were not necessarily in this income grouping for the entire period. But for those people who were, rising incomes on average would have provided a capacity to improve their standard of living.

The favourite catchcry of those in industrial relations and economic disciplines is productivity. It is to be hoped that the new industrial relations regime will be as successful in achieving the productivity gains of the last decade, when multifactor productivity rose by 1.1 per cent per year on average. We will now have to wait to see whether the rhetoric of fairness in this bill is borne out.