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IR system obstacle to full employment

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Bob Charles MT

Federal Member for La Trobe




Australia's intractable problem with unacceptable and apparently institutionalised high levels of unemployment (particularly long term) owes much of its resistance to Improvement to Federal Government Ineptitude in reforming our outmoded Industrial relations system.

Despite today's ABS report of a slight fall In seasonally adjusted unemployment, long term unemployment continues to rise.

Employers are still smarting from devastating costs incurred from high redundancy payments as job shedding commenced in 1989 and accelerated through 1990/91.

Many employers now participating in growing markets both domestically and overseas are reluctant to add full time staff for fear that the recovery may not be sustainable and that they may once again be faced with redundancy payments which they cannot afford during even a temporary downturn in business.

Even the unions failed to recognise that the high cost of payouts to employees who are no longer required act as a serious deterrent to employment. The Labor Government with its lack of business experience has through the industrial relations system Institutionalised high redundancy payments In our increasingly bureaucratic

industrial relations system to the detriment of new jobs.

Ultimately it is the unemployed themselves who pay for the temporary financial respite for those who lose their jobs.

Brereton's industrial relations reform legislation which comes into operation in March of this year will Institutionalise bureaucratic procedures, including a Labour Court, which will make it difficult and expensive for companies to dismiss employees for any reason whatsoever.

Business has been particularly concerned that it will be subject to union and court Interference In Its dismissal procedures even for management employees. Companies will resist new full time employment as they lose control of their own business operations to the unions and the court.

During the Cain/Krner years Victoria experimented with a highly bureaucratic tribunal system for so called "unfair dismissal" which proved a disaster for new employment in that State.

Governments don't make Jobs - productive private sector enterprises do - but government Imposed rule : • r:•ulations can certainly deter full employment. COMMONWEALTH PARLIAMENTARY LIBRARY BORON IA

MICAH 13 January 1994

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