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Speech notes for an address by the Hon. peter Reith MP Minister for Industrial Relations to the Australian Liberal Student's Federation



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Speech Notes for an Address by

THE HON. PETER REITH MP MINISTER FOR INDUSTRIAL RELATIONS

to the

AUSTRALIAN LIBERAL STUDENTS’ FEDERATION

Melbourne

Monday 27 January 1997

COMMONWEALTH PARLIAMENTARY LIBRARY

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It is a great pleasure to address the ALSF.

Universities provide a vital forum in the great battle o f ideas which chart the direction o f our

society. In politics, they must be a nurturing place for the concepts which underpin the liberal

views which in turn form the basis o f the Liberal Party.

It is also essential that the arguments o f our political opponents are vigorously opposed on

campus. We need an organisation that allows young people to acquire campaign skills. We need

people who understand both the nature o f the arguments our political opponents espouse and the

task ahead. The ALSF carries out these roles and produces such people. It is a very valuable

organisation.

Knowing the strength o f the ALSF’s concern about compulsory unionism you may be interested

in the following anecdote. Yesterday I put the new industrial relations legislation to the “barbecue

test” - a critical poll in Australian politics. At a barbecue, someone whose son works for a major

retailer told me that at his work, this enterprising young man is distributing leaflets headed “Want

a $4 a week pay rise?” and setting out the steps by which people can now, as a result o f the new

legislation, resign from unions whose service to its members is unsatisfactory.

Although our new industrial relations system is not yet four weeks old, there are already some

practical demonstrations o f the advantages it offers to Australian workplaces. The new laws are

already leaving their mark on the behaviour o f the industrial parties. In comment pieces last week,

both Alan Wood and Alan Kohler - by no means uncritical supporters o f the legislation - said that

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there were encouraging signs that employers were moving quickly to take advantage o f the new

legislation. Let me give some examples.

For many years, Australian Industrial Relations Commission (AIRC) orders instructing unions to

desist from industrial action and return to work have been studiously ignored.

An anecdote from early in my ministerial career is instructive here. Certain industrial action was

underway and in my simplicity I asked my senior departmental staff why wasn’t an order being

sought from the Commission to end it? Their answer - no disrespect to them - was that the

Commission - no disrespect to it - had not been asked because it was known that it would be

reluctant to make such an order because if it did it would be ignored and therefore the

Commission’s credibility would be damaged.

Well, w e’ve changed all that.

In recent days there have been a number of cases o f employers obtaining orders which directed

unions to return to work; orders issued in the new environment in which, if the unions fail to heed

them, companies can obtain Federal Court injunctions to enforce the orders. Sanctions, real

deterrents, follow.

The cases are those o f industrial action at Shell’s German Creek mine in Queensland, M obil’s

Altona Refinery project and Metro M eat’s operations in South Australia.

The full implications o f these cases are not yet clear. But what they do show is that companies

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are availing themselves o f the capacity provided by the new legislation to halt or deter

unprotected industrial action.

On 20 January the Chief Executive o f the Queensland Mining Council, M r Michael Pinnock, was

quoted in The Courier Mail as saying that the fact that the unions at German Creek had heeded

the Commission’s order to return to work was a vindication o f the practical pow er o f the new

laws.

Not only are there examples such as these where the new compliance provisions have been relied

upon, there is evidence that some unions are changing their approach to avoid the consequences

o f unlawful industrial action.

In a backhanded compliment to the legislation, on 20 January the Queensland State Secretary o f

the Australian Manufacturing Workers Union, David Harrison, was reported in the “Courier Mail”

as saying that in light o f the possibility o f the unions being liable for damages, the decision to

return to work at German Creek was only prudent. I also understand that the CPSU is rethinking

its approach to taking industrial action in the wake o f the Government’s announcement o f firm

guidelines to ensure that public servants taking industrial action will not be paid for w ork not

done.

There is also preliminary movement towards award simplification, which the M TIA characterised

on 23 January as one o f the most important changes brought about by the new Act.

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On 21 January, in the hearing o f the Living Wage case, ACCI initiated an application for a Full

Bench o f the Commission to establish the principles o f award simplification. The Government

supports this application and we are encouraging other employer organisations to take similar

action. I have instructed the Department o f Industrial Relations to reorganise its resources for

the provision o f advice and advocacy so that it can contribute more effectively to the process.

The MTIA has announced it will begin to draft simplified manufacturing awards. The National

Meat Association will be pursuing an application to simplify its industry awards in the near future.

In particular, it will be using the new provisions o f the Act to seek the deletion or modification

o f the current tally system in the meat industry - something I strongly support as it is a major

impediment to productivity in this vital export industry. And Shell Australia is lodging an

application for a enterprise award, significantly simpler than the standard industry award, to cover

its Moranbah North Mine. Hearings before a Full Bench o f the AIRC will begin in February. And

for other awards, the process will be hastened where applications by unions to cover new

businesses will necessitate bringing forward the simplification process.

Obviously the details and the outcome o f these applications are matters for the parties and the

Commission.

But it must be emphasised that although the Government has established a new industrial relations

framework, only by employers and employees taking up the opportunities it affords can the

benefits o f reform be gained. The Government welcomes all moves to realise the flexibility and

simplicity, the increased productivity and the higher wages the new system offers and in the year

ahead I will be working hard to encourage all concerned to do just that.

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Despite the fact that perhaps no aspect o f our new system has been more vilified by Labor and

unions than Australian Workplace Agreements (AWAs), I knew that this type o f agreement

would be attractive to many on a practical basis. But I scarcely expected that within weeks o f

the commencement o f the legislation a major union, the Association o f Professional Engineers,

Scientists and Managers, Australia (APESMA), would have finalised a service contract with Civil

Aviation Safety Authority (CASA) Airworthiness officers to represent their industrial interests

specifically by negotiating AWAs. I am advised that the Office o f the Employment Advocate will

be in a position to receive applications for the approval o f AWAs from M arch 1997.

There are also encouraging signs on the unfair dismissal front. In the first three weeks o f 1995,

unfair dismissal applications were 134, 142 and 168 (444). In the first three weeks o f 1996, they

were 177, 263 and 250 (690). In the first three weeks o f 1997 they were 12, 62 and 77 (151).

While there could be a number o f factors at work, there is some evidence that employees who

don’t have a good case have read the writing on the wall and that the lottery mentality which

prevailed under Brereton’s unfair dismissal system is on the wane. If this is so, it will encourage

employers to be more willing to take on new employees.

So it’s very early days, but the indications are that Australian workplaces are responding well to

the new legislation.

And if the ALP continues to oppose the new system as it did all last year, it must explain to

Australian businesses why they should forego these advantages.

Just as there have been preliminary reactions in practice to the new system, January has produced

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some indications o f the tack Labor will take in the year ahead.

This year the ALP must spell out the industrial relations policy it will take to the next election.

It must do so because o f the importance o f the benefits o f the new system and because the

stridency o f ALP complaint about the new legislation begs the question o f their proposed

alternative.

Last year the ALP’s position on industrial relations was entirely confused, reflecting uncertainty

about the future relationship between the political and industrial wings o f the labour movement.

The confusion persists; the ALP has still not worked out the form o f the relationship a Labor

government would have with the trade union movement. Last year some - like Gareth Evans -

favoured a revived, full blown Accord but Jenni George rejected the proposition. After some to-

ing and ffo-ing, on 20 September Kim Beazley came up with the nebulous formulation o f some

form o f looser agreement between a Labour government and the union movement.

O f course a future Labor government would have some form o f agreement with the union

movement. And the nature o f that relationship will define Labor’s industrial relations policy. But

Kim Beazley’s problem is that it’s not up to him.

To give us an indication o f the nature o f that relationship we have the record o f the Hawke-

Keating Government. And we have the continuing strong links between the ALP and the ACTU -

shown by the fact that the seven new Labor Senators who took their seats last year were all

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unionists and that George Campbell is due to replace Bruce Childs.

I predict that the relationship will again be one in which the union movement, whose declining

relevance in the community sits in contrast with a continuing strong, even increasing, influence

over the ALP, will dictate industrial relations and other policies to the party.

Last year the Shadow Minister for Industrial Relations, Bob McMullan, said that Labor’s future

industrial relations policy would not regress from where it stood in M arch 1996. But then, in the

debate over the Workplace Relations Bill, Labor did actually regress from its existing policy. As

I pointed out in my detailed analysis issued last year, they did so in at least ten significant ways

including by their opposition to non-union collective agreements.

A predisposition to return to the failed system o f the past already exists within the ALP, so union

demands for a rolling-back o f reform will fall on fertile ground.

Within this political context, Martin Ferguson’s recent attempt to re-make himself as a sensitive

new age former ACTU President by advocating job sharing reveals the difficulties facing Labor

in formulating its industrial relations policy. He also revealed that he has some problems with

consistency. Deep-rooted philosophical objection to other than standard working hours has ever

been a central tenet o f union and Labor thought.

His next problem is that another name for job-sharing is part time work. The new industrial

relations legislation specifically removes restrictions in awards on part-time work, yet all last year

Labor was hysterically railing against their removal.

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Ferguson compounded this hypocrisy on ABC TV on 17 January when he said that workers

would be happy to eschew big wage claims in exchange for more leisure and should use enterprise

bargaining to negotiate such more flexible arrangements.

R ather than eschewing big wage claims, Ferguson can’t even bring himself to condemn the

ACTU’s Living Wage claim, which would see major increases going to the higher paid and which,

according to the Treasury, will put 400,000 jobs at risk.

Traditionally, Labor’s industrial relations policy has been good at problems - creating them rather

than fixing them. Laurie Brereton’s unfair dismissal legislation was a case in point.

So Ferguson must state, far more categorically than he has done so, that his advocacy o f job

sharing does not disguise a push for a reduction in standard hours, nor an increase in labour costs.

Either o f these outcomes would simply deter employers from hiring staff, thus compounding the

employment problem he aspires to solve.

Nor is job-sharing necessarily the magic bullet on employment. The Government is by no means

opposed to job-sharing - these sort o f arrangements are exactly what our removal o f restrictions

in awards on part-time work and our provision o f genuinely flexible enterprise agreements are

intended to permit.

But I am also mindful o f the conclusion in the December 1993 Discussion Paper Restoring Full

Employment, commissioned and published by the Keating Government which said (p68-69) that

alternatives to full employment such as job-sharing may in some cases increase employment in

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the short-term (but) they lead to a poorer long term employment result prim arily because they

lower overall productivity levels, and therefore p er capita incomes. The Paper went on to say

that This is not to deny that work sharing in particular might have positive implications in some

individual cases where the people concerned are prepared to share their incomes as well as their

jobs.

Next Ferguson must explain to the battlers about why it is good for them to take a pay cut. He

might prove surprisingly good at this. After all, under Labor real wages fell, unemployment

reached levels not seen since the 1930s and for thirteen years Ferguson and his ilk managed to

explain it away with Big Picture mumbo-jumbo. But seriously, no wonder union reaction to

Ferguson’s proposal was so cool.

As so often with Labor the solution to the problem lies closer to hand than Ferguson’s vaporous

posturing would suggest.

Because if Ferguson and the union bosses really do want to give the battlers a break, the simplest

way for them to do this would be to stop using union muscle to extract inflationary wage rises.

So all in all, these are my predictions for the industrial relations scene in 1997.

Employers and employees, encouraged by the Government, will continue to take up the

opportunities offered by the new legislation.

The ALP will remain rusted on to the ACTU, making feeble attempts to portray itself as having

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an open mind on industrial relations.

And we will await with interest a comprehensive Labor policy statement on industrial relations

(one which they must make if they are to rebuild any credibility), if only to see the degree o f skill

with which a regressive agenda is concealed by bland rhetoric.

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Better Pay for Better Work was the name of the industrial relations policy we took to the election.

In the last nine months we turned the policy into legislation and passed it, in the teeth o f

opposition, through the Parliament. This year Australians will start to reap the benefits o f the

policy, one o f the most important reforms the country has seen for some years.