One by one, the myths were knocked off. All of the major claims made by business and their media cheerleaders against the Fair Work Act were examined and found to be wanting by an independent review.
On the Act being a drag on productivity:
“Over the two decades labour productivity growth was slowest under WorkChoices, which arguably imposed the fewest constraints on management decisions. Of the four frameworks, the FW Act is most similar to the IR Act post-1993. While productivity flourished in the IR Act post-1993 period, however, it has grown only slowly under the FW Act. Differences between the legislative frameworks evidently do not explain the differences in productivity growth over those periods.”
On the Act increasing the level of industrial disputes:
“… the number of days lost to industrial action under the FW Act has remained within the band of historically low levels (127,000 in 2010 and just over 240,000 in 2011, compared to an average of around 230,000 over the previous 10 years) that have prevailed over the last decade. Taking into account that the number of agreements being renegotiated in 2011 (8,335) was significantly higher than in 2010 (5,133), the 2011 dispute level is not out of line with recent experience. Of days lost in 2011, one-third were in the education and health category and are likely to have been largely due to teacher and hospital disputes in NSW and hospital disputes in Victoria. The NSW teacher and hospital disputes were not under the FW Act.”
On the Act increasing wage pressure:
“The relatively high growth of unit labour costs over the last decade might suggest a problem, not only with the FW Act but with the two legislative schemes that preceded it.”
On the Act allowing unions to interfere with management:
“The FW Act agreement content provisions have not led to any significant increase in these provisions than when they were last permitted in agreements, prior to WorkChoices.”
Indeed, the review showed there had been a fall since Peter Reith’s industrial laws that allowed matters like contracting out to be included in industrial agreements.
The review didn’t, by any stretch, reject all business claims. For example, among the “efficiency” amendments it recommended, it accepted that the locking-in of unions in greenfields agreements was an impediment, although no one could actually identify a major project that hadn’t proceeded because of it. The review proposed imposing good faith bargaining obligations on greenfields agreements and allowing FWA to arbitrate if bargaining reaches an impasse.
It also accepted some business complaints about unfair dismissal laws, although it noted that unfair dismissal claims had been rising when WorkChoices was abolished, and was only now back to pre-WorkChoices levels under the Howard government. It recommended giving FWA greater power to dismiss frivolous or vexatious claims and to award costs against people who bring such claims against their former employers.
On the other hand, it did accept unions’ argument that fly-in-fly-out workforces were disadvantaged in industrial disputes because employers were required to lock them out of their accommodation during disputes. Steve Knott of resources industry employers group AMMA disgracefully described this as “pay[ing] union delegates to bask around the camp’s pool, have a few drinks and get a suntan while taking industrial action” when in fact it’s about ensuring FIFO employees have somewhere to live if there’s a dispute or they’re locked out — under current laws, FIFO workers can’t even be flown off the site by the company if there’s a dispute.
But the four claims about productivity, disputes, wages and union interference are the guts of the corporate sector’s campaign against the Fair Work Act and they’ve yet again been rejected. Business simply wasn’t able to produce the evidence to back up its claims.
Having lost the argument, some business representatives and commentators resorted to conspiracy theory. Julia Gillard and “the usual suspects” had “set the scene” for no change, insisted Knott. “I predicted this conclusion at the time the review was commissioned and the members of the panel were identified,” said Judith Sloan. It’s only a couple of weeks since Sloan accused Treasury of mounting “a pseudo-intellectual defence” of Labor on the issue.
Sloan was so angry about the review that she failed to check her basic facts. “[P]roductivity has fallen in a complete hole in the past three years,” she insisted, ignoring ABS data from the last three quarters showing substantial growth in labour productivity over the last year, while WorkChoices saw labour productivity collapse and the multifactor productivity growth of the first half of the last decade grind to a halt. On greenfields agreement, she declared “the pipeline of projects continues to shrink”, ignoring the 35% growth in mineral exploration over the year to March, or the surge in lending for plant and equipment in May to over $2.5 billion, or the rise of committed mining investment this year to over a quarter of a trillion dollars. If miners are reconsidering projects, it’s because of softening commodity prices, not because of those nasty unions.
Then again, most of that data comes from the ABS. Maybe they’re in the conspiracy as well, along with Treasury and John Edwards, Ron McCallum, and Michael Moore.
For those business types not engaged in conspiracy theories, the general tenor of responses to the review was that it was a “missed opportunity”. To do what? To engage in change for the sake of change, when there’s no evidence of any need for it? Or to engage in an ideologically-motivated campaign to make it easier for employers to reduce wages and conditions in a way that benefits their bottom lines but, as WorkChoices, showed, does nothing for productivity?
Tony Abbott agrees with employers that “[w]e have some serious workplace relations issues in this country. There is a flexibility problem. There is a militancy problem. Above all else, there is a productivity problem.” He’s demonstrably wrong on all three counts, but what does he propose to do about these three major problems? He “may very well” make “careful, cautious, prudent, responsible changes within the framework of the existing Act”.
At least business is honest and consistent about what it wants on IR. Abbott might be being honest, or he might be being consistent, but on IR he can’t be both.
So the FIFO model is preferred over living locally because it has inhibited the ability to strike.
And caused economy destroying “asset inflation” back in the major cities. exacerbating the negative effects of the two speed economy. But strikes are destructive aren’t they!
If only Australian bosses would learn a few lessons from German business leaders who openly embrace unions and their workers on the very logical thought that happy and well paid secure workers mean productivity will increase.
And by that approach negotiations are conducted on a far more civilised level with everyone believing survival of a company is paramount for all to survive and prosper.
Thus Germany is the powerhouse of Europe while our knuckledraggers think China is the shining example of worker’s rights.
Quote from above article “Tony Abbott agrees with employers that “[w]e have some serious workplace relations issues in this country. There is a flexibility problem. There is a militancy problem. Above all else, there is a productivity problem.” He’s demonstrably wrong on all three counts” Tony Abbott wrong? Why, the man has demonstrated over the years that he is an accomplished and consumate L-I-A-R! on just about everything he prattles on about, e.g. Whyalla wipe off the map, coal mines closing down, mining investment grinding to a halt, sovereign risk, etc.
@OSCAR JONES: you only have to refer to Crikey item 3 reference Marius Kloppers and his management skills affair with BHP/Billiton. The Germans might employ him as a middle range management.
Oscar Jones – Very good point,
On Abbott, this is just another issue where people need to think before they vote Abbott in. Clearly he wants to break the unions and allow employers greater “flexibility” (ie you work when I say where I say for how long I say and I can sack you whenever I want) to generate greater “productivity” (ie we pay you less for doing more work) but won’t tell us what his plans are until after the election.
Given Abbott’s other economic policies will cause a recession in this country the noises he is making on IR should scare everybody becasue no job will be safe.