Published in the Canberra Times, April 27, 1993, p. 9.
Whoever thinks that anything the Prime Minister said last week on industrial relations reform was accidental or merely imperfectly phrased is kidding themselves.
Mr Keating’s address to the Institute of Company Directors was a calculated effort. The exclusive story in the Australian Financial Review the day before delivery indicates that new directions are being confidently and carefully worked out. It is likely that the Prime Minister will use other occasions to lay down the lore, for the relevant minister to follow, consult, and implement. It is the Keating leadership style.
It was interesting to follow the reaction. The predictable ‘union storm’ stories, including menacing quotes about union officials demanding consultation or expressing concern. Mr Howard quipped on radio that they say that “imitation is a form of flattery.” More union concern; followed by the Prime Minister’s office clarifying that the award safety net is under no threat.
What is going on? What is driving the Prime Minister’s agenda? What are the implications for the union movement, industry, and the wider community? This article will seek to answer those questions and suggest how things might pan out over the next 12 months.
First, some background: Late last year the Federal government announced that two pieces of legislation would be introduced to thwart the Kennett agenda in Victoria. Only one Bill saw the light of day and was passed by Parliament, namely amendments to the Industrial Relations Act allowing easier transfer rights to the federal system where State-award employees are denied access to compulsory conciliation and arbitration. As Mr Kennett’s Victorian laws require that both parties agree to arbitration over a new award, the Commonwealth could more easily acquire jurisdiction over the industrial relations arena in that state.
The Keating government also proposed that ILO conventions, including those covering the right to organise and collectively bargain, should be enshrined in Australian law. But the government ran out of time before Christmas to draft the relevant Bills. Interestingly the Prime Minister now wants to use the opportunity of an unexpected electoral win and consequent huge personal authority to blend those proposed changes with an agenda to quicken the pace of labour-market change.
Why? For several reasons. Many within the government think that the number and quality of enterprise bargaining agreements are too low. Some industries are producing scores of enterprise agreements with almost the exact wording.
For election-campaign purposes, it might be politic to posture that Labor’s enterprise bargaining is working; reality is a different matter. Also the union monopoly rights to securing an agreement are problematical. Is it really sensible that IBM, a largely union-free organisation, cannot secure an agreement with its workforce, unless unions approve? Further, the hardheads in the government think that the economy is fragile and that further labour reforms are required to lower unemployment and assist economic recovery.
The trick over the next 12 months is to see how these two agendas – the union movement’s interest in protecting the weakest sections of the workforce and its own survival, might be married to the government’s desire to engender greater labour-market flexibility. No wonder Mr Brereton will be widely consulting over the next few months.
These factors lead one to conclude that the government will introduce significant industrial relations reform this year on this basis: ILO standards will be righteously paraded as enormously significant.
Never again will the Liberals be able to attack fair conditions. State laws will need to be consistent with those standards. (The ILO conventions which have been ratified by the Federal government give the Commonwealth a head of constitutional power to pass corresponding Australian law).
It is likely that all of the conventions, so far ratified by Australia, will be incorporated into Australian law, including conventions on freedom of association, collective bargaining, maternity leave, workers with family responsibilities and various occupational health and safety conventions. The latter conventions will enable the government to broaden the appeal for this approach well beyond the usual industrial relations constituency.
However, there will be significant implications flowing from this. The 10,000 member rule (requiring unions to show cause why they should not be deregistered if they have fewer than that number of members) will have to go. The ILO Freedom of Association standing committee has already criticised that situation as an unfair barrier to workers freely organising and bargaining.
Also, and more significantly, the monopoly rights of unions will be in doubt – as another restriction on collective bargaining rights. As the Australian Democrats are big on works councils and unsympathetic to union monoplies, they are likely to insist on this.
Concurrently the government could introduce minimum conditions beyond the ILO standards – for example, covering sick leave, minimum pay and other provisions. Such laws though, would only apply to the federal system. Thus the unions can be assured that the government is about protecting standards. A quid pro quo is an insistence that penalties and sanctions be strengthened for breaches of awards or agreements. That change and the repeal of section 45D and E of the Trade Practices Act (and the incorporation of secondary boycotts provisions in industrial law) would probably be best achieved through the creation of a Labour Court. Such a court would also provide an opportunity to restructure the Australian Industrial Relations Commission, in function as well as personnel.
But what about the impact of these changes on the union movement? At the moment, the unions are weak outside of the public sector and the larger companies. Recruitment beyond that base has been patchy and generally unimpressive. Although a few people within the movement argue for competition between unions for members, the government is unlikely to go that far. But an industrial relations system that provides for employees to set up their own bargaining structures, works councils and engage their own bargaining agents may have some positive impacts for the union movement. Unions could offer services for enterprise bargaining negotiation to previously ununionised workers. A lot depends on the ability of unions to innovate in the context of such changes.
Will awards be replaced under this new system? Mr Keating’s office stated over the weekend that the government has no intention of dismantling the award safety net. A close look at Mr Keating’s speech shows he is in no sense abandoning what he had in mind. He argued that there will be fewer awards. As some awards are virtually enterprise awards and will be converted to enterprise agreements on expiry, this is incontrovertibly true. But he also said that there will be less content in awards. As the new legislation will so decisively recast the industrial relations landscape, the government could insist that all awards be renegotiated and stipulate much less. The detail should be left for the enterprise agreement. This approach is consistent with Accord Mark VII, an extremely subtle document, whose full implications are now becoming clearer.
Mr Howard, as earlier observed, pounced on Mr Keating’s remarks as if they contained what he wanted to do at the last election. He is wrong. Labor will not elevate individual contracts as the simple answer. Mr Howard’s comment yesterday in support of wiping out the relevance of all awards show he has learnt nothing.
Finally, some observations about this process: This analysis might seem cynical. A story about dumping the centralised system, radically deregulating the labour market and doing so while proclaiming ILO ideals. Good politics is like that, a mix of symbolism, fast footwork, and agenda-setting. In this case it is also about achieving further industrial relations change with a Labor heart.
I stuck my neck out with this article — naively thinking that prime minister Keating believed in what he had said on industrial relations reform. Personally, I thought it appropriate to introduce enterprise bargaining flexibility in awards and agreements, with a Labor heart.
In areas where unions were weak, where this was unlikely to change, I thought by underpinning minimum conditions in industry-wide awards, a more benign attitude to flexibility and enterprise agreements could be tolerated by the movement. So, I wrote this piece for the Canberra Times. My colours were nailed to the mast.
Soon, however, Keating was disavowing what he had said and John Edwards, his economic adviser, was blamed for economic rationalist over-exuberance. A few ACTU officials said as much privately to me.
The metal workers union and others were critical, however, of enterprise bargaining “in principle” as NSW secretary of the AMWSU, Doug Cameron, once said.
Edwards explains in Keating. The Inside Story, Viking/Penguin Books Australia, Ringwood [Victoria], 1996, pp. 510-511; 513-518, his thinking and the rationale for Keating’s speech, without explaining the controversial, verbal backtracking that followed.