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Transcript of a speech given by the Hon. John Howard, MP, Shadow Minister for Industrial Relations, Employment and Training, on the occasion of the launch of the Coalition's industrial relations policy



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JOHN HOWARD M? MEMBER EvR 3 EN' NE L0 \ G

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TRANSCRIPT OF A SPEECH GIVEN BY THE HON. JOHN HOWARD, HP, SHADOW MINISTER FOR INDUSTRIAL RELATIONS, EMPLOYMENT AND TRAINING, ON THE OCCASION OF THE LAUNCH OF THE COALITION'S INDUSTRIAL RELATIONS POLICY, AT THE SHERATON WENTWORTH HOTEL, SYDNEY, ON TUESDAY, 20 OCTOBER 1992

(applause) Thank you very much, Bevan, Peter King, John Hewson, Tim Fischer, the Leader of the National Party, my other parliamentary colleagues and leaders of industry organisations, ladies and gentlemen,

This morning is of course a very important political moment in the history of Australia because it represents the formal presentation of one of the most historic political and (inaudible) that has ever faced this nation.

For something like eight or nine years now, a debate has gone on in this nation, steadily winning more converts every day, about the fundamental nature of our industrial and our labour relations.

One of the great cornerstones of the post Federation years was, of course, the centralised wage fixation system. And over the years that system has presided over shifts in the Australian economy and in the 1980s it presided over an

extraordinary irresponsible expansion of our national debt, a significant depression in real wage levels and, of course, appallingly low levels of productivity. And it is against the background of those three circumstances this policy is

launched.

This policy, above everything else, is a policy for more jobs and for higher real wages based on higher productivity.

Every man and woman in business in this audience knows only too well that the only real foundation of higher wages in this country or, indeed, any other country is higher productivity.

Higher real wages not based on higher productivity can only in the medium and longer term be granted at the expense of other

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peoples' jobs and the greatest challenge of all that this country faces as we move towards the 21st century is whether as a group of people we are going to have the wit and the capacity to win for ourselves an enduring share of that 500 million strong market of middle-class consumers that will be

in our region of the world by the 21st century. And we always ought to take pause to think about the significance of that figure. By the next century there will be 500 million people in our region of the world who will basically have the living

standard that we have at present.

It is both a daunting realisation but also an enormously challenging one. And if we are able, as a group of political leaders and as a group of business and community and union leaders, to grasp the nettle and to take to ourselves a system of industrial relations that will lead to higher productivity then future generations will be able to say of us that we were equal to that particular challenge.

So this policy is very much about jobs, it is about securely based real income gains, it is about lifting the productivity of individual workplaces.

National productivity never exists in isolation from individual workplace productivity. You know there is no such thing as having higher national productivity without lifting the workplace productivity of individual businesses and enterprises around the country. And from the very beginning of this great industrial relations debate that has now gone as

John said for the best part of a decade it was always about lifting the productivity of individual businesses.

Our belief, as John said, is that the working men and women of Australia are mature enough and responsible enough and sensible enough in the long run to know what is good for them and for their families.

This policy is accordingly based on four fundamental principles.

The first of those principles is what I have just stated. And that is the absolute right, subject to certain minimum conditions which can never be breached or altered because they will be written into the law of the country, the fundamental

right of people to make direct contracts between themselves governing their working lives. We believe that every employee in this country does have the right to make a direct arrangement or agreement with his or her employer without the mandatory intervention of a trade union or an industrial

tribunal. And therefore the most important change that this policy brings about is to confer the fundamental right on

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every Australian. It is a right that does not exist at the moment. It is a right that is subject to paternalistic and interventionist review at various levels, and it is a right that we believe is absolutely essential if the true potential

of the workplaces of this country are to be realised.

(Applause)

That doesn't mean, as John Hewson said, that there is no role for the trade unions. Because whenever you guarantee somebody a freedom, you also guarantee them the freedom to take advice and seek assistance in enjoying that freedom. And there will be nothing in this policy that will prevent a group of employees who are resolved to go into a workplace agreement to use the bargaining services of a trade union, a shop steward,

a union organiser or, indeed, anyone else. And one of the great advantages of this policy is that you can choose to use anybody you like or, indeed, nobody as your bargaining agent or your bargaining representative.

Now let me make that very clear. Even though you may be working towards a workplace agreement you can if you so wish still use the services of a trade union or a trade union official.

And nor does this policy take away the right of those people who wish to remain within the award stream, to remain within the centralised wage fixation system. It is our view that you are more likely to get massive productivity gains if people

move into workplace agreements. It is our view that people should be encouraged to move into workplace agreements. But we nonetheless recognise that given the structure of Australian business that there are some enterprises that will

find it more productive and convenient to remain at least for the time being within the award stream. Because as I am sure many of you know it has always been a feature of industrial relations in Australia that there has essentially been two worlds, you have a small number of very large companies that

have highly unionised workforces and then you have thousands of small and medium sized companies that have either lightly unionised, or non unionised workforces. One of the enduring weaknesses of the present system is that it was really

fashioned to suit the first group of enterprises and has been essentially blind to the needs and the aspirations of the second set of enterprises.

And as a result we have fashioned a policy that will give people that clear choice. We are saying to those employers and employees who want to remain within the award stream if both of you choose to do so, and I'll come in a moment to the question of where there may be disagreements, if both of you

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choose to do so then you can remain within the award stream. On the other hand, if you want to go outside the award stream and you want to enter into a workplace agreement then you will be encouraged to do so and of course allowed to do so.

There will be cases where, perhaps, an employer will want to go outside the award stream and an employee, or group of employees, will want to remain within the award stream. Now in those circumstances, the award will legally come to an end

but the employee will continue to reap the benefits and the terms and the conditions of the award until further agreement, but in the form of a contractual relationship with the employer on the understanding that the terms and conditions to be enjoyed were the terms and conditions that were operating

at the time the award terminated.

Now it is very important to emphasise there that the award terms and conditions can't be unilaterally taken away, although the award itself will legally terminate on the next occurring anniversary of the award's commencement after the date that it will be proclaimed under the legislation.

It is also important for me to emphasise that any individual workplace can have a mixture of people under awards or under workplace agreements. You can have, say, 200 employees at Howard Engineering at which 150 would be under awards and 50

under a workplace agreement. We believe it is important that the fundamental element of flexibility be preserved.

The second of the great principles on which the policy is built is, of course, the principle of freedom of association. Freedom of association is one of the oldest Liberal principles and, therefore, should be one of the first in any genuine

Liberal policy.

Freedom of association means the right to join, and it means the right not to join. It means that if you choose not to join a union you should be protected against discrimination or recrimination. Equally, if you exercise your democratic right as an Australian to join a union you should also be protected against discrimination and recrimination. And there is no point in people hiding behind the rather empty sophistry that compulsory unionism does not exist in Australia. The practice of compulsory unionism is a widespread practice in the Federal public service at present. And there are still many conspicuous examples scattered all throughout industry of the

application of preference clauses and closed shops and it is very important that it be understood that we are going to move against those practices.

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(Inaudible) also important to say that we are going to be evenhanded in our approach and to the extent that the federal government, given the constitutional situation, can influence these matters let me also say that we believe that if it is

fair enough to prohibit the compulsory membership of trade unions it is equally fair enough to prohibit the compulsory membership of professional organisations, be they law societies, medical associations, or, indeed, any other body.

Because (inaudible) what is sauce to the goose must indeed be sauce for the gander.

Now that is the second of those very great principles.

The third of the great principles is to maintain the authority of the ordinary courts of this country over certain forms of the consequences of industrial action.

I suppose, ladies and gentlemen, one of the most loved phrases in the trade union debate normally used by those on the union side in industrial relations matters is the expression "hard won gains". Let me say as far as the industrial relations

debate is concerned one of the hard won gains the way I saw it in the 1980s was the steady establishment as the result of court battles involving such issues so well known now as the Mudginberri dispute, the Dollar Sweets case and, more

recently, the pilots' dispute, the establishment of a very simple principle. And that is that if somebody destroys your business, or does (inaudible) unjustifiable damage then you have the right to take that person, or that body, to court. And that applies whether that is a company, a group of

individuals, a trade union, or indeed somebody else.

And that is a very simple principle. And we're going to maintain the common law authority of the ordinary civil courts of this country. We are against the establishment of any specialist labour court, or specialist industrial court. It

has always been my view that when you establish the special court you inevitably carve out a special deal for some section in the community. And it seems to be fundamental to the kind of society, the truly egalitarian society that Australians have always believed in, that we should build a situation where everybody is equally accountable in the proper way before the ordinary courts.

We will, of course, maintain the effectiveness of Sections 45(D) and 45(E) of the Trade Practices Act. Sections that were put there by the Fraser government in 1977 to deal with secondary boycotts which have, arguably, provided more

effective protection particularly to small business against predatory union behaviour than any other legislative act over

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the last 20 or 30 years.

The fourth of the great principles that underpins our policy is a commitment to greater choice so far as the structure of unions in Australia is concerned. At present, so far as the federal law is concerned, we have the highly unsatisfactory, the highly autocratic and undemocratic situation that once certain transitional phases have been passed through every

federally registered union in this country must have no fewer than 10,000 members and it strikes me as a grievous contradiction that of a government saying it believes in enterprise bargaining, a government saying that the enterprise ought to be the focus of the industrial arrangements and that we ought to be moving towards the enterprise as the centre of

our industrial world, but there is one thing we won't do, we won't allow enterprise unions to emerge. That seems to me to be an absolutely fundamental contradiction.

And it therefore follows that under our policy it will be possible for workplace or enterprise unions to emerge. If you believe in freedom of choice, you must also believe that those Australians who choose to belong to trade unions in

exercising that freedom of choice should have an unfettered right to join the union of their choice, whether it is an industry union, an enterprise union or, indeed, a craft union. And for that reason we are going to change the law. We are

going to abolish that 10,000 minimum threshold requirement, we are going to, by abolishing the "conveniently belong" principles in the Industrial Relations Act, we are going to break the existing bargaining monopoly and representational monopoly enjoyed by current registered unions and we are going

to facilitate and encourage the emergence of workplace or enterprise unions because we cannot accept that if you really believe that the focus of industrial relations must be the enterprise, and that the whole emphasis must be on enterprise agreements, it seems absolutely contradictory to that notion that people should not be able to form themselves into workplace or enterprise unions.

Mr Chairman, I would now like to turn to a number of specific issues that may well arise under the policy.

The first and most important of those, which I foreshadowed earlier, is the question of minimum conditions.

Obviously if people remain within the award stream then those people will continue to enjoy the conditions and the terms prevailing under that award. But if, on the other hand, people enter into a workplace agreement then there will be certajLn minimum conditions that must be observed in relation

to that workplace agreement. And that means that every

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workplace agreement that is written will need to respect those minimum conditions.

The first of those will be a minimum hourly rate of pay, calculated by reference to what would otherwise have been the award minimum if the person in question had remained within the award. And it is very important that I emphasise that it will be an hourly rate of pay. That carries with it an

enormous change under this policy. What it means is that the policy is effectively abolishing the concept of a fixed working week. What it means is that the length of the working week, and whether somebody is paid penalty rates, or holiday

loadings, that all of those things will become, if people go into workplace agreements, will become matters of negotiation.

I've frequently said as I've gone around Australia, as has John, talking about this policy that if we really want to modernise the Australian economy, if we really want to internationalise the work practices of Australia, if we really want to make the Australian workplace competitive with the

rest of the world we have to embrace a very important principle, and that is if somebody makes a capital investment in this country, they ought to be able to run that capital investment 24 hours a day, seven days a week, 365 days a year without penalty as to the time of the day or night they run

that investment.

(applause)

And that's a very, very important and significant change. And I know there has been a little bit in the papers recently about tourism, which has been one of the great growth industries of this country and frankly I can't think of any

industry in Australia that will benefit more than the tourist industry from this particular change. Because the flexibilities that that will confer will be enormous.

And the other great advantage of that approach is that it will give to Australian families far greater flexibility to blend their workplace and their family responsibilities. There are hundreds and thousands of Australian parents who find the conflict between work responsibilities and family responsibilities one of the most stressful parts of their daily lives. What they want is more flexibility. They need a greater capacity and a greater freedom to arrange their working lives and their family lives and if you have a more

flexible industrial relations system, particularly in relation to when you work, and the length of the working week, then the blending-of those responsibilities becomes a lot more feasible and realistic.

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The second minimum condition that will have to be observed is four weeks' annual leave.

The third minimum condition will be two weeks' non-cumulative sick leave.

And the fourth, will be twelve months' unpaid maternity leave subject to twelve months' prior service in the relevant work or occupation.

Now those are the minimum conditions that must be respected by every single workplace agreement. Therefore let nobody after this morning say that our policy is about driving people back to the early days of the industrial revolution or driving people down on to sweated working conditions. Because those

four minimum conditions cannot be breached by any workplace agreement anywhere in Australia and that is an absolute answer to the scare campaign that will inevitably be undertaken by some of our political opponents.

And one other issue on the question of protection for individuals. I am an optimist about the nature and the instinct of Australians. I don't take the view that most

Australians, whether they're employers or employees, I don't take the view that most Australians are inherently malicious and desire to take their fellow man or woman down. I do take the view that in any system there are some who would seek to exploit it. There is exploitation under the present

industrial relations system. To start with there are a million people out of work and that is the worst form of exploitation of all.

And therefore we have decided to insert in our policy a special additional provision to make it absolutely certain that anybody who goes into a workplace agreement and is unfairly treated can have speedy and inexpensive redress. We

are going to establish a new office, and that new office will be called the Office of the Employee Advocate. And the role and responsibility of that office will be to provide a speedy and free advice system for people who claim to have been unfairly treated under a workplace agreement. And that means

for example that if somebody under a workplace agreement is owed five or six hundred dollars' accumulated holiday pay or wages, or whatever, when they leave the employ and they can't get it out of the employer they can go to the Employee Advocate, they won't be sort of told "Oh you can go to your

lawyer and sue for it" - they can if they wish, they won't lose that right - but they will, if they choose, be able to go to this office and that office will take up the claim, if it's a reasonable one, on their behalf and if necessary take the

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employer to court in order to recover that money.

So that is a total answer to people who will say "What about the case, John, of the migrant lady who can't speak any English and has been diddled out of a few hundred dollars' sick leave. You're not going to tell me she can go to court. How ridiculous". What I'm saying she can go to court if she wants to, but she will also be able to go to this office,

report what happened and if it is a fair and justifiable claim then action will be taken to recover that for her. And that also is an answer to those who say that this is some policy or prescription for exploitation and ill-treatment of the vulnerable.

And those two things that I've mentioned, the minimum conditions and the Office of the Employee Advocate are designed to produce that blend of freedom with security which is a hallmark of this policy. This policy does confer enormous additional freedom on Australians. It is a policy,

as John Hewson said, that makes optimistic assumptions about the nature of Australians. It is a policy that recognises that so far as industrial relations is concerned Australia has come of age. I don't pretend, and it would be dishonest of me to do so, that there haven't been any changes in the

industrial relations scene over the last ten years. Nor do I pretend for a moment that any one group of people has a monopoly of concern about the future of this country. Over the last few years, there have been a number of significant

trade union leaders who have played a major part in improving the quality of the industrial relations debate and the quality of the economic debate in Australia.

And one of the more gratifying things about being in public life in 1992 is that despite some fundamental differences, and very fundamental differences between the two sides of politics there is nonetheless in the broader community a sober

recognition of the fact that the salad days are over for this country and a sober recognition of the fact that we have to change many of our attitudes and many of our practices if we are to really successfully survive and compete as we move towards the next century.

And many people have played a part, and played a role in that.

And let me take this opportunity this morning of saying something about the attitude of the trade union movement to this policy. We have no quarrel with the legitimate bona fide role of the trade union movement in our society. Trade unions have .been with us for a long time, they will be with us for many years into the future. How strong will depend,

ultimately, on the service they offer. No political party, no

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religious denomination, no other community group has guaranteed adherence in our society and the same must, of course, apply to trade unions.

Under the new industrial relations era, some unions will prosper, others will wither on the vine as it is with your own business organisations and your own individual businesses. It, therefore, follows that in this new climate trade unions

will need to change and I welcome the fact that some of their leaders, like Bill Kelty and Michael Easson and other have publicly acknowledged that fact.

I have no doubt, ladies and gentlemen, that between now and the next election there will be a lot of criticism of the policy, the Jobsback policy, that I have launched this morning. Of course there will be. There will be all sorts of

dark and dire predictions of Armageddon and confrontation and all sorts of things but I am equally certain, ladies and gentlemen, that come the Monday after the election the leadership of the trade union movement will work with the elected government of this country. And they do that because they are at heart democrats and leaders in the democratic process, and they will do it because they will know that for

the past ten years we've had a Labor Government and it can hardly be denied that the union movement has had a fair input into that Government. They will do it because they will know that we will have the most emphatic mandate for change in any area that has ever been delivered to an incoming government.

Not even the most supreme sceptics about the principles of z mandates in politics could conceivably argue after the next election that we wouldn't have a mandate for industrial relations reform. Some of us have talked nothing else but

industrial relations reform for the last eight or ten years, and one of the reasons that the Coalition has been so resolute in putting forward clearly and succinctly the policies on which we stand, why John Hewson has stood so firmly and so

rock solid in favour of the policies that we have enunciated is our fundamental belief that if you are open and candid with the people before you win the election you have the moral authority to do what you said you were going to do after the election.

(applause)

(inaudible)... ladies and gentlemen, a tremendously important thing to bear in mind about this industrial relations policy. I launch it with a great deal of hope and optimism. It is something that I have believed in for a long time. It is

something that was fiercely debated inside the Liberal Party

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for a period of time and then in the broader community. There are many people here this morning, outside the political process, who have played a significant role in that great debate and I am very happy to see them here this morning. But

it is, as John said, the ultimate area of reform. It is the ultimate economic change that this country needs because there is no area of policy change which has the capacity to unlock the productive and competitive energies and talents and zeal of the Australian people and deliver to all of us a decent

share of the huge potential market that lies before us as we move towards the next century.

Thank you.

(applause)