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Tuesday, 7 December 1993
Page: 3950


Senator SHERRY (Parliamentary Secretary to the Minister for Primary Industries and Energy) (9.09 a.m.) —The legislation before us today, the Industrial Relations Reform Bill 1993 and the Industrial Relations Court (Judges' Remuneration) Bill 1993, is certainly the most significant piece of industrial legislation that this parliament has seen in the last 10 years. It focuses on four or five important developments in industrial relations. I think the most important principle in this legislation is that dealing with enterprise bargaining. The government's concept of enterprise bargaining includes the principles that no-one should be worse off in totality than the award provisions, which the enterprise bargaining is replacing. Central to this is also the concept that the award system continues in tandem with the enterprise bargain and that, from time to time, the award system is adjusted through national wage deliberations. The latest of those is the current $8 round.

  The award system is to remain as a safety net to ensure that those people who are participating in enterprise bargaining are no worse off. Those not protected by the no disadvantage test in the federal act will enjoy a series of minimum standards based on the ILO conventions of the United Nations. They will include a fair minimum wage, equal pay, protection against unfair dismissals and 12 months unpaid parental leave. To those opposite who seem to believe that we should not be embodying those principles based on the various conventions of the United Nations International Labour Organisation, I say that they are what I think are the very basic minimum standards—they are certainly nothing startling—that all workers in Australia should be covered by. But, unfortunately, because of recent changes in industrial legislation, particularly in Victoria and Western Australia and some aspects of the legislation in Tasmania, some workers do not enjoy these minimum standards. The legislation also includes provisions for the right to strike and amends the sanctions under the current Trade Practices Act, known as sections 45D and E. There has been extensive consultation on these variations.


Senator MacGibbon —With the unions.


Senator SHERRY —I note the interjection and remind honourable senators opposite of the lack of consultation that occurred in Victoria and Tasmania when the legislation was being put together in those states. The legislation was presented in the dead of night and rushed through the parliament with minimal time for consultation, yet we have those opposite complaining about the alleged lack of consultation by this government. In fact, this government has spent some six months since the election, when the Prime Minister (Mr Keating) made a speech before a business forum, consulting with all groups in the community. I think that stands in stark contrast to the behaviour of state governments, particularly in Victoria and Tasmania.

  I want to deal particularly with the direct bargaining processes that are contained in the legislation. The making of agreements between groups of workers and employees at the enterprise level with management will be encouraged. To encourage this, a new division of the Australian Industrial Relations Commission is to be established. There will be two types of industrial agreements—a certified agreement and an enterprise flexibility agreement—which, as I referred to earlier, will ensure that the no disadvantage test applies too. On expiry of the certified agreements, it will continue; so the wages and conditions in a certified agreement covering workers will not disappear overnight.

  The corporations power is being used in this area in order to remove the requirement of an interstate dispute. There are significant protections to workers through these two types of agreements: a no disadvantage test; a right to union representation for union members; consent by a majority of employees; protection of unionists from discrimination; the right of unions to be heard—the non-unionised enjoy further protections—and refusal to register the agreements on public interest grounds. The commission can make orders that a party take actions consistent with bargaining in good faith—that is a particularly important aspect—and there is guidance in the act as to what constitutes good faith, such as attendance at agreed meetings, disclosure of relevant information, compliance with agreed commitments, not withdrawing or adding terms capriciously and not refusing to bargain with an organisation. So this issue of enterprise bargaining is a very important matter.

  There are a number of principles that I want to deal with on the issue of enterprise bargaining. It is interesting to note that Justice Higgins, as he then was, said in 1915 in a very famous judgment:

. . . the process of conciliation, with arbitration in the background, is substituted for the rude and barbarous process of strike and lockout. Reason is to displace force; the might of the State is to enhance peace between industrial combatants as well as between other combatants; and all in the interests of the public.

This is a very important quotation because I believe it underlines one of the important principles we have in industrial relations in this country. There are two propositions contained in this quote. The first is an empirical proposition that industrial tribunals will bring about an end to strikes and lockouts. The second proposition, which is more conceptual, is that the power of the state can and should be employed in industrial relations in the public interest. That is a particularly important principle.

  Arising from this debate over the last 10 years particularly is the fact that enterprise bargaining has been seen as a structural fix which has been part of the industrial relations debate but the move towards decentralisation and the focus on the enterprise have been important principles of discussion in industrial relations. However, there are a number of quite dramatically different interpretations particularly between the government and the Liberal and National parties as to how we define and implement enterprise bargaining.

  The opposition's argument, which is central to most of the debate that it has put forward, involves much more of an economic focus. Its theme includes the notions that industrial relations performance can be improved. This will lead to increases in the productivity of Australian firms and industries which will then be able to compete on international markets. This will overcome the balance of payments and—whoopee!—investment will result and our unemployment will go down dramatically. That is the central proposition of those opposite.

  That proposition is based on a number of assumptions that I want to deal with very briefly in this debate. Firstly, it assumes that the labour market is the source of the current economic problems of this country and, indeed, of the world. It is not correct to assume that labour market problems are the source of our economic recession and associated problems. The problems of the economy are much more complex than what happens in the labour market. We have to look only at the international evidence in this regard. If we compare the economic indicators with the industrial relations systems in a number of overseas countries, we see that, at best, the evidence is very mixed and that industrial relations has a great deal to do with economic performance.


Senator McGauran —Oh!


Senator SHERRY —I will read the figures out to Senator McGauran. I glanced down the economic and financial indicators of the Economist of last week. Let us look at unemployment in particular countries that have so-called free and flexible labour markets, such as the United Kingdom, which has an unemployment figure of 10.3 per cent. The United Kingdom has what would be defined as a totally free labour market in the sense that it now has no awards whatsoever to provide any safety mechanism for workers. Indeed, there is a range of rigorous repressive measures against the trade union movement in the United Kingdom, but it still has a 10.3 per cent unemployment rate. Why? If the vigorous reforms of the Thatcher era were so impressive and were to lead to such economic buoyancy, why have they not resulted in lower unemployment? This continuing argument that there is a link between unemployment and the labour market is largely a nonsense and a fiction.

  The continual focus on enterprise bargaining is nothing new. Those people who have some knowledge of industrial relations would be aware that, over the last 90 years, while we have had a federal industrial relations system, there has always been very extensive focus on the enterprise. There are very significant over-award payments right through the economy. This issue of enterprise bargaining is nothing new. One of the arguments from the opposition and from employers is that enterprise bargaining will produce significant changes in attitude which will enhance common goals and interests. It is interesting to note the argument of the Business Council of Australia. It says:

Shared interests are more likely to blossom where employees bargain as one unit and with a workplace focus.

The opposition shares that attitude. However, even the Business Council of Australia's publications tend to refute this argument that common goals and interests will blossom as a result of enterprise bargaining. The Business Council of Australia commissioned the National Institute of Labour Studies to conduct research into a small number of paired Australian and overseas—mainly American—companies. It did so in order to analyse the attitudes of the work forces when covered by multiple union and non-union managements. The National Institute of Labour Studies found:

. . . a curious anomaly in the data. American managers seem more innovative in terms of motivating employees through pay and incentives and participative management. Yet Australian employees are more satisfied and committed to their organisations. The Australian industrial relations system seems to provide an atmosphere where both high job satisfaction and commitment to organisations and peers flourish. The system may also act to protect employees from poor styles of supervision.

That quotation is particularly important because it was sourced and commissioned by the Business Council and directly refutes the arguments of those opposite and the Business Council that, somehow, moving to enterprise bargaining will create a flourishing and blossoming of relationships at the enterprise level.

  The fourth matter is an element that is often overlooked in the debate on industrial relations; that is, that there may be important transition costs which will need to be considered between employers, unions, employees and other interested parties. They will need to devote considerably more resources to this notion of enterprise bargaining. While larger companies and unions may have the expertise and personnel to manage such a movement—if they have not already moved in that direction, and many firms have not—many smaller to medium sized firms may not be so well placed.

  When Senator Peter Cook was the responsible minister he tabled a labour studies report which indicated that only seven per cent of small firms in this country were interested in moving towards enterprise bargaining. Why? I contend that most small employers are not skilled or interested in direct negotiation with their employees.

  This brings me to the next point, which is a central and critical element in one of the failings of businesses today—that they may not have the managerial expertise, personnel or financial wherewithal. There is no doubt that, in attempting to improve our economy, we have become preoccupied in our industrial relations focus, to the neglect of other issues—one of which is the lack of management expertise in many firms.

  The fifth issue, which is unclear but certainly has to be dealt with, is the reduction in the level of industrial conflict. It is correct to say that over the last 10 years, under this government, there has been a significant reduction in industrial disputes. The total abolition of the role of tribunals and unions in the negotiating process is championed by the more extreme members of the opposition, who advocate the so-called New Right position of the H.R. Nicholls Society. They say that unions and arbitration have no place in the workplace. That is a two-sided coin; a two-edged sword. In a booming labour market, they say they are advocating—I do not believe they advocate it seriously—that the power of the marketplace, the power of force, those who have the greatest might, shall prevail.

  Those opposite want to ensure that there is a set of draconian laws—including no right to strike, sections 45D and 45E—and a set of draconian interventions in this so-called free labour market to restrict unions and employees when they do have the upper hand in the bargaining process. That is a consistent theme of the New Right. I believe the ultimate goal of the Business Council of Australia and the opposition is a union-free workplace as the final solution to industrial relations. They are the issues that I wanted to touch on in dealing with enterprise bargaining.

  I have also touched on the central issue of the so-called flexibility in the labour market that allegedly will deliver low unemployment. I referred to the economists' figures for the United Kingdom which are clear evidence that this simply does not happen. There is a range of other issues.

  Those opposite refer continually to Asia. They say that we should be basing and modelling ourselves on our international competitors. But many aspects of the Asian economy are very unlike those in Australia. Whilst wage differentials in Asia are significantly different from Australia—usually below—they are catching up quickly; they are no longer cheap wage economies. Certainly Japan, Korea, Taiwan, Hong Kong and Singapore have had significant increases in their wage levels over the last three or four decades.

  But, importantly, there is a vastly different social structure in these countries. They do not enjoy pension entitlements or workers' compensation entitlements—the sorts of social structures that are provided by government in this country because of the nature of our society and family structure. In most parts of Asia those services are provided via a family structure. So it is not a valid comparison to make in continually referring to our Asian competitors. I refer to an issue that has not been touched on a great deal—


Senator McGauran —Do you like employment?


Senator SHERRY —That is the catchcry: `Do you like employment?'. The honourable senator has not been listening very well because I have argued—I think correctly—and presented the evidence that there is little correlation between industrial relations systems and the labour market. How do those opposite justify the fact that in the United Kingdom there was an unemployment rate of 10.3 per cent at the end of the Thatcher era? Despite all of the reforms and Thatcher rhetoric—the industrial relations reforms, the breaking up and the smashing of unions—the United Kingdom still has 10.3 per cent unemployment. The opposition's model, the Thatcherite model, has proved to be a failure.


Senator McGauran —What is your answer?


Senator SHERRY —The answer lies in a very complex set of solutions that this government has been pursuing: tying our economy much more closely to Asia, ensuring that we have an export drive, and ensuring that we have more internationally competitive management and a better educated work force.

  The last issue I want to touch on relates to my home state of Tasmania. In this act we have a set of very important fundamental protections for workers engaged in workplace bargaining, but we do not have these protections in Tasmania. I urge the federal minister, who has done a very good job in this debate despite some significant difficulties, to ensure that the provisions of the federal legislation override the provisions of the Tasmanian legislation which provides no protection for workers as part of workplace bargaining. That was evidenced recently in a Supreme Court appeal of a decision by Commissioner Johnson, the workplace commissioner in Tasmania. I believe that where states do not provide decent protection for their work forces the federal legislation should override that state legislation.