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An IR agenda alive with danger



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MEDIA RELEASE

The industrial relations agenda for the year ahead is alive with danger. There will be major hearings before the Industrial Relations Commission dealing with issues whose outcomes will have the most profound implications for the Australian economy.

Over the next year, the industrial relations agenda will include:

. a review of the level and scope of termination payments . a review o f youth wages . another safety net decision . decisions on allowable matters in awards, and . a final resolution o f the dispute on the waterfront.

Each one o f these is a sensitive issue whose outcome will make a very great difference to the performance o f the Australian economy. We will be living with the consequences o f these decisions for a very long time.

With the Asian crisis on our doorstep, the need now, more than ever, is that the economy remain as flexible as possible. Ensuring that the adjustment process runs as smooth as it possibly can ought to be our highest priority.

In spite o f this, the ACTU has lodged a claim to raise the level and scope o f redundancy payments. The Commission will determine whether the level o f redundancy payments should rise significantly and whether small business should be subject to such payments where they are now exempt.

The ACTU is claiming four weeks pay plus three weeks pay for each year of service. It is trying to extend the scope to the small business sector which has not until now been subject to such claims.

These provisions will make trying to find the next job a good deal harder than it already is. It is short sighted and self defeating approach which will do far more harm than any conceivable good.

In regard to youth wages, the Commission must provide a report to Parliament by June 1999 on whether junior wage rates should be scrapped and replaced with an alternative system.

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May be reported on: Monday, 8 June 1998

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An [R Agenda Alive with Danger

Statem ent by Reg H am ilton M anager Labour Relations

L E A D I N G A U S T R A L I A N B U S I N E S S

One can only hope that with youth unemployment as high as it is, it will be understood that raising the cost of employing young people can only keep them out of jobs, and therefore can only prevent young people from gaining the skills and experience needed in today’s labour market.

In terms of the safety net, there will be yet another hearing in which the Commission will decide whether there should be further increases in award rates to follow the increases over the past two years of between $20 and $24 per week

In regard to Award Simplification, the Commission will decide the manner in which the twenty allowable matters in the Industrial Relations Act are to be incorporated into awards.

And finally, the dispute on the waterfront will reach its conclusion.

Thus, by July 1999, the end o f the financial year, we will know whether the ACTU attempt to load onto small employers very substantial obligations to pay severance pay will have succeeded. The redundancy pay case is a major threat to small business, which are at present exempt from the redundancy pay obligations. In addition, those who already pay will be paying up to three times

their current rate should the ACTU claim succeed.

We will probably by then know the outcome o f the next Industrial Relations Commission Safety Net Decision, and whether once again the Commission has granted excessive, as opposed to modest increases to award rates or no increase to award rates. The magnitude o f the gamble taken by the Commission has not yet been widely realised. The Commission has abandoned its role as

preserver of the safety net, and has once again acted to provide actual real wage increases to a very large section o f the workforce.

We will know the AIRC view of junior rates, and whether the Commission will recognise that these rates have to be retained if young people are to have any real employment opportunities.

We will know whether or not the wage outcomes in enterprise agreements are finally adjusting to the new low inflation environment or whether they are continuing at high rates reflecting previous inflationary environments. We cannot keep accelerating wage increases in an inflation free environment.

We will know the outcome o f award simplification. Will it deliver widespread, substantial reform, or will unions succeed in avoiding any change at all except for cosmetic changes? How quickly will the process operate? Only a handful of awards have yet been simplified, and the results are extremely mixed with the important Award Simplification Decision being watered down in subsequent decisions.

For further comment, please contact: Mr R eg H a m ilto n 03 9289 5289 (B/H)

Manager Labour Relations 03 9481 6959 (A/H)

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L E A D I N G A U S T R A L I A N B U S I N E S S