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IR reform - return to the Dark Ages

By Carla Lipsig-Mumme - posted Wednesday, 12 October 2005

The workplace laws package launched at the weekend by Prime Minister John Howard reveals that the changes are not designed to modernise the industrial relations system, but to terminate the industrial relations system altogether.

The package will create an unregulated, disorganised and individualised workplace, taking employment outside the arena of state-sanctioned regulation. Individual workers, forced or lured into Australian Workplace Agreements, face their employers and each other without representation or voice. Employers are encouraged to restructure creatively to remain union-free, and unions are blocked by the Government from doing the work they are meant to do to level the playing field.

The upcoming legislation leaves huge groups of workers isolated and vulnerable. Far from creating a modernised industrial relations system, this is an Americanised, pre-modern return to the law of the jungle. Is this what we want in the free trade era? Stripping Australia of its industrial relations system is a dangerous call.


In advanced industrial countries, IR systems generally share five traits:

  • a legal framework that legitimates the regulation of employment through collective negotiation;
  • legal protection for unions to negotiate collectively around a range of issues that affect workers;
  • protection of the right of workers to freely associate in a union without fear of retribution or disadvantage;
  • an arm's-length conflict-settlement agency with enforcement powers; and
  • a minimum standards safety net for workers who would otherwise fall through the cracks.

The Howard changes fail on every one of these. The rights of unions to negotiate now shrink to five narrow issues. Excluded from enterprise bargaining are 15 other issues over which unions have been allowed to bargain since the Coalition took office, and the wider range of issues that allow workers to fully participate as citizens with a voice in the economic and social behaviour of their employers. The right of workers to join unions is facing the full frontal attack of the AWAs and the imminent loss of the much-respected Industrial Relations Commission.

In some sectors, the disadvantage to workers who remain unionised is already real in terms of job loss, economic disadvantage and insecurity. In others, government encouragement of managerial militancy makes joining or remaining a union member an exercise in old-fashioned, individual courage.

When the 80 per cent of the nation's businesses that employ fewer than 100 workers are exempt from unfair dismissal suits, how does a union protect workers? How do individual workers protect themselves? What happens to workplace citizenship in this chilling climate? Increasingly, unions will negotiate with their employers outside of, and parallel to, this punitive system. Recourse to union-busting law firms - so long a feature of American labour relations - is combining with growing use of violent and under-regulated private security agencies in Australia. Is free trade bringing the Americanisation of Australian managerial attitudes to industrial relations?

In most countries, establishing and protecting an arms-length body for settling conflict and certifying employer-union agreements is recognised as crucial. Australia's Industrial Relations Commission has been exemplary in retaining the trust of all parties for a century.


Finally, the Howard proposals take very large numbers of workers outside the protection of law or collective representation. In place of the AIRC, we will have a Fair Pay Commission to set minimum wages. The new commission's members will be politically appointed, make decisions based on informal consultations (without a transparent and formal record of deliberations?). We are promised a pay rise by September 2006, and it will most likely be sizeable. But after that? Let's not hold our breath. The Fair Pay Commission represents political capture by the Prime Minister and his Coalition.

So the package spells the death of the industrial relations system. We should not be surprised if labour-management negotiations move to an informal arena, where each party arm wrestles the other into concessions. Civilising industrial relations? We are going in the opposite direction. But should there be any doubt that the Government is more concerned to terminate trade unions than to create an IR system for the free trade era, we need only look at the higher education sector. Here, agreements consensually negotiated by management and unions are now overridden by a government department, which inserts its own clauses and red-lines those it finds distasteful.

Howard's radical vision of a work world free of industrial relations is American, but it is out of step and out of time. This vision for Australian industrial relations after 2006 resembles the US in the 1920s, before Franklin Delano Roosevelt's New Deal civilised labour management relations by creating a legal framework for union recognition and collective bargaining, and a board to regulate conflict. Before the New Deal, Republican governments encouraged and aided companies committed to driving unions from their industries, with whatever it took.

But given rising managerial militancy and its government encouragement in Australia today, will the regulation of work and employment now move into the dark zones of informal struggle, as it did in the US of the 1920s? It is a very volatile time in the world arena for Australia to be experimenting with a return to the pre-modern era.

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First published in The Age on October 11, 2005.

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About the Author

Professor Carla Lipsig-Mummé is Research Professor in the School of Political and Social Inquiry.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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