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Australian Industry Group, National PIR Group Conference, Hyatt Hotel, Canberra, 27 March 2000: address.

Australian Industry Group, National PIR Group Conference

 

Arch Bevis - Shadow Minister for Industrial Relations

 

Address - Hyatt Hotel, Canberra - 27 March 2000

 

Introduction

 

Thank you for once again providing me with the opportunity to join you in a discussion on our nations industrial relations system and the direction it might take.

 

Last year I commented that over the years, I have enjoyed a friendly and stimulating relationship with the AIG and its predecessor, during my various roles in public life. At that time I forecast that in my current role as Shadow Minister for Industrial Relations it would be no less stimulating. Given the events of the last twelve months, 'stimulating' was a monumental understatement - but appropriately diplomatic.

 

Before I address industrial relations matters directly, I want to slip back into one of those former roles - in fact two - from my days chairing the Parliament's Industry Committee and my time in Defence - and compliment the AIG on your recent report examining the impact of major domestic defence projects 'A case study of the ANZAC Ship Project.'

 

Your report is a timely and valuable affirmation of the importance of Australia's manufacturing industry and the positive effect a government's focused industry and procurement policy can produce. The government should take heed of that thoughtful analysis.

 

It doesn't matter what portfolio I may have; the fundamental reality that a nation must generate wealth in order to distribute it will never be far from my thoughts.

 

Minister Reith - Alienating Our Nation's Workforce

 

Good industrial relations have an important part to play in that wealth creation. Our own experiences, research studies, (some of which I referred to at your conference last year), and sheer common sense, tell us co-operative industrial relations with an informed community are most likely to contribute to economic prosperity.

 

Sadly, rather than promoting confidence and co-operation, the Howard/Reith model is cultivating greater personal insecurity, distrust, and alienation.

 

For proof of that we need look no further then AIG's own workforce survey conducted last year by ANOP.

 

Let me recall some of the principal conclusions drawn by Rod Cameron in presenting that research. Rod Cameron noted;

 

Employees have never competed so ruthlessly against each other for jobs and money … Loyalty between employer and employee is being eroded across the board and many young Australians don't experience it.

 

Cameron's research also revealed disquiet amongst Australian workers, many of who don't feel they are getting a fair go. Comments regularly made by participants in his research such as;

 

• So the economy is meant to be in good shape. Okay. But I'm still struggling' and

• So unemployment is meant to be falling. Okay. But my job isn't safe and job security is a thing of the past

 

These comments illustrate that feeling.

 

Cameron concluded;

 

• Many Australians feel that they are still struggling and that they have received little recognition or reward for their contribution to a more productive and competitive Australia.

 

And why should they when they read about the incomes and pay outs to the top end of town. As one paper reported in January this year;

 

• Ten years ago, many of Australia's top CEOs were earning between $150,000 and $200,000 a year. Today it is likely to be $2 million or more in salaries and bonuses. In 1976, a CEO earned three times the average salary. Today it can be up to 30 times the average salary.

 

Parting handshakes to CEOs like the $35 million to Westpac's Bob Joss, the $11.2 million to Bankers Trust's Rob Ferguson, the $11.1 million to John Prescott of BHP and the recent case of AMP's George Trumbull's $11.2 million make payments of $3.2 million to Coca - Cola's Norb Cole or the $3.7 million to Geoff Kells of CSR look almost modest.

 

The truth is they all create deep anger in a workforce that is increasingly asked to do more with less security and under greater pressure. They fuel the sentiments identified in your research.

 

The Myth of Choice

 

Against that background, the period since the 1996 election of the Howard government has seen unprecedented change in our industrial relations system that has both contributed to and exacerbated the workplace feelings identified in your ANOP survey.

 

When he introduced the 1996 Workplace Relations Bill, Minister Reith said;

 

• ...this bill is about providing employers and employees with much greater choice about how to regulate their relationships...

 

Events since then shows nothing could be further from the truth. One of the great political 'pea and thimble tricks' in the last few years has been the government's charade that the industrial parties have been given greater freedoms, with less government intervention.

 

So obvious has this deception been that even the Business Review Weekly described Peter Reith as,

 

• ...possibly the most interventionist industrial relations minister in Australia's history...

 

This is not the appropriate occasion to go into that in detail. I have done that at other times. But everyone in the industrial relations community knows it to be so.

 

The Howard government's approach to industrial relations has seen more intervention, not less. It's just that the intervention is now directly by the government or its agents like the Office of the Employment Advocate.

 

The Umpire

 

At the same time we have witnessed serious erosion in the role, authority, and resources of the Commission.

 

Indeed, Minister Reith is proud that his legislation and actions have resulted in a weakening of the Commission. For example in 1998, he proudly boasted to the extreme right wing H R Nicholls Society that the inability of our courts and the commission to act in the Hunter Valley No1 dispute was only possible because of his laws. He said that;

 

didn't happen by accident, that happened because of the nature and the tenets of the Workplace Relations Act.

 

The naked truth is that the umpire has been sidelined.

 

There was more than a touch of irony in the Minister's public comments last week welcoming the AIRC's intervention in the Victorian construction industry dispute. The double standards could not be more apparent.

 

When it comes to an industry such as mining, where the employer is a large multinational sharing a similar view of industrial relations to this minister, and with virtually bottomless pockets with which to fund a prolonged dispute - the minister is adamant the there should be no third party intervention - not the AIRC, not the courts - nobody.

 

However, where a dispute involves a fairly large number of employers who clearly have neither the ideological commitment nor the funds of a large multinational mining company - then he is on the airwaves extolling the virtues of the umpire.

 

Labor believes the Commission has a key role in preventing and settling disputes. This must include the ability to make awards and agreements in settlement of any dispute concerning any industrial relations matter.

 

We unequivocally support the pivotal role of a strong, well-resourced and independent commission.

 

In contrast, the objectives of this government are clear:

 

• Firstly to sideline the AIRC so that it has no effective role in the day to day conduct of industrial relations;

• Secondly, to reduce both in real terms and absolute terms the minimum safety net for Australian workers;

• Thirdly, to remove trade unions from the bargaining process as far as is possible and in so doing, dramatically weaken their influence in industrial relations and Australian society generally; and

• Finally, to force greater numbers of employers and employees onto individual contracts - AWAs.

 

Labor is opposed to every one of these.

 

When Simple gets Complex

 

Along with the clearly false claim that this government's legislation is meant to promote greater choice, was the equally false assertion that these laws have simplified our industrial relations system.

 

• One of the stated objects of the 1999 second wave was to continue to remove unnecessary complexity from the system so that in the words of Mr. Reith 'workers and employers get a real say, not just lawyers, management consultants and union officials' (Reith, 1999:7853). Similarly, in 1996, when introducing the ... Workplace Relations and Other Legislation Amendment Bill, the Minister said it promoted a legislative framework without unnecessary complexity (Reith 1996:1298)

 

In the name of simplicity his 1996 Workplace Relations Bill was a massive 306 pages. His Workplace Relations and Other Legislation Bills were more than 140 pages in length whilst the second wave bill was 299 pages. In all, in just three years this government's industrial relations bills, which they claim are designed to simplify matters, have totalled more than a whopping 752 pages!

 

To put that into some perspective, the former Labor Government's major industrial relations Bill, the Industrial Relations Reform Bill, was 193 pages.

 

As the government has sought to add ideological obsession on top of ideological obsession, they have created a practical and legal monster. We need to reduce the complexity and confusion that is today's industrial relations law.

 

Prolonged Strikes on the Rise

 

Another of the great myths cultivated by the government and its followers is that the current system has produced a dramatic fall in strikes and promoted industrial peace.

 

Dr David Peetz submission to the Senate second wave inquiry put all that into a new light.

 

His study, which looks at working days lost since 1966, analyses the data according to the systems in place at the time. The first period, 1966-82 covers the period prior to the accord. The second, from 1983-91 saw a centralised system under the accord. 1992-96 was the period of a decentralised accord process. And of course, 1997-98 saw the operation of this government's Workplace Relations Act. Two important conclusions become apparent.

 

Firstly, the substantial fall in days lost occurred under the accord system.

 

Secondly, under the current system long term disputes have risen. Disputes of 10 to 20 day's duration and more than 20 days have increased under this government's policy. Intractable disputes, with all the deep seated and long lasting bitterness that go hand in hand with them, are on the rise.

 

Of course, many of these protracted disputes are exactly the types of situations where the commission should have a greater role - unfortunately denied to it by this government.

 

I have updated Dr Peetz's table with the most recent data to November 1999. The trend identified by Dr Peetz is still apparent.

 

Working days lost ('000) through industrial conflict 1966-Nov 99

 

 Working days lost ('000) through industrial conflict 1966-Nov 99

 

 

Average Annual Working Days Lost

Per Cent Change

Cause of dispute

1966-82

1983-91

1992-96

1997

1998

Year ended Nov 99

1997-YE Nov 99(a)

1966-82 to 1983-91

1983-91 to 1992-96

1992-96 to 1997-YE Nov 99

Wages

1510

306

143

109

37

43

63

-80%

-53%

-56%

Managerial policy

402

640

259

234

378

272

295

59%

-60%

14%

Physical working conditions

121

166

22

15

42

37

31

37%

-87%

42%

Hours of work

133

32

4

4

0

1

2

-76%

-88%

-60%

Trade unionism

97

73

28

7

13

8

9

-25%

-62%

-66%

Leave, pensions, compensation

84

87

16

4

4

39

16

4%

-82%

-3%

Other

339

158

243

72

138

154

122

-53%

54%

-50%

Total

2680

1422

711

445

613

553

537

-47%

-50%

-24%

Duration of dispute

 

 

 

 

 

 

 

 

 

 

<= 1 day

436

272

245

121

114

246

160

-38%

-10%

-35%

1-2 days

376

280

150

103

310

92

168

-26%

-46%

12%

2-5 days

525

285

183

46

41

85

57

-46%

-36%

-69%

5-10 days

551

226

74

79

55

23

52

-59%

-67%

-30%

10-20 days

433

184

31

39

37

27

35

-58%

-83%

11%

20+days

314

172

28

58

56

80

65

-45%

-84%

131%

Total

2634

1419

710

445

613

553

537

-46%

-50%

-24%

Method of settlement

 

 

 

 

 

 

 

 

 

 

Resume without negotiation

1252

629

510

251

321

301

291

-50%

-19%

-43%

Commonwealth or state legislation

898

552

106

122

82

177

127

-39%

-81%

20%

Negotiation

479

219

97

71

208

69

116

-54%

-56%

20%

Other

40

22

4

2

2

5

3

-45%

-82%

-29%

 

(a) In the absence of data for the calendar year 1999, data for the year ended November 1999 has been used instead - YE: Year ended - Source: ABS, Industrial Disputes (Cat. Nos. 6321.0 and 6322.0)

 

 

 

With many significant agreements due to expire in the year ahead, it is not beyond our imagination, and maybe our expectation, that these figures will worsen. This is particularly so in an environment where worker alienation is so strong and the once authoritative independent commission has been kneecapped.

 

A Labor Alternative

 

Labor holds the view that our industrial relations system must take account of the inherently unequal power balance existing between an individual worker and their employer. This has been long accepted in Australian society and by virtually all Australian governments prior to the current government.

 

In our view, this inherent imbalance requires a collective approach within the industrial relations system if it is to deliver fairness.

 

The government's model of collective bargaining, without an umpire and with no provision for parties to negotiate in good faith is the worst of all worlds. We saw evidence before the Senate inquiry into the second wave of demands, often in AWAs, being put to workers on a take it or leave it basis. Too many negotiations are either shams or not conducted at all. The government has adopted this practice with some of its own employees - irrespective of whether they want a collective agreement or not. Public service departments where staff has voted by as much as 83% for a union negotiated collective agreement have been denied them.

 

In too many cases wage increases are being offered either solely or at a much higher rate, to workers willing to sign AWAs. In effect, workers are being penalised if they want a collective agreement or a union collective agreement.

 

Labor will ensure that the test of 'good faith' is applied to all bargaining situations.

 

Specifically, where workers express a clear preference for a particular type of industrial instrument to cover their wages and conditions, the parties in that matter will have an obligation to negotiate in good faith to successfully conclude such an instrument.

 

Fostering industrial relations best practice and knowledge

 

We need as a nation to foster a better understanding of industrial relations across our community. It is important for reasons of equity and efficiency that those involved in the broad industrial relations community are well informed about the practices and procedures of our system.

 

There has been widespread agreement in the past that those directly involved with industrial relations should be well informed. But we need to do more. We need a far more comprehensive approach if we are to have world's best practice in Australian industrial relations.

 

Labor will promote the knowledge and skills level of the broader industrial relations community beyond the traditional boundaries of simply industrial relations laws. We will establish cooperative mechanisms with participation from the wider industrial relations community to consider current issues and future developments in industrial relations.

 

Industrial relations must be seen in the context of broader industry, employment, education, and social issues.

 

Government should be skilling up the wider industrial relations community - not 'dumbing' it down.

 

International standards

 

Throughout all this our international standing has slipped. Today, Australia finds itself criticised by an ILO panel of experts for breaching ILO conventions. This government's response is either to withdraw from these conventions, as it is in the seafaring industry, or to lecture and attack the ILO.

 

The Howard government has used the same approach recently in response to criticism of mandatory sentencing by the UN Committee on the Elimination of Racial Discrimination.

 

Australia has slid from being amongst the most respected nations in labour relations matters to now being subject to investigation and criticism for failing to meet its obligations.

 

Labor's industrial legislation will observe international standards. I am personally committed to restoring Australia to a position of international leadership and pride in industrial relations matters.

 

Corporations power

 

The Minister has floated the possible use by the Commonwealth of the corporations power to deal with matters that have previously been seen as industrial relations issues. It is clear from his public comments on a number of occasions that this is an issue of importance to him.

 

Having failed to get his second wave laws passed:

 

• also lost the vote to transfer important industrial relations powers to the newly created Federal Magistrates court;

• had his second lot of changes to unfair dismissal laws defeated;

• had his Bill attacking workers in the seafaring industry massively amended in the senate; and

• been forced to do something about employee entitlements of insolvent companies only to now see his good friend the Treasurer buy into the issue supporting an insurance based scheme; (I might add a proposal not dissimilar to Labor's plan)

 

Corporations powers are increasingly looking like that battlefield.

 

Let me say I welcome the opportunity to debate this matter and to explore the potential this head of power has for dealing with a number of industrial relations matters. Unlike Mr. Reith though, I don't see this as simply a replacement head of power for existing functions carried out by the Commonwealth.

 

Nor do I see it as a vehicle for reducing safety net provisions - a course he may well take if the Government loses the CFMEU's High Court case dealing with the constitutionality of restricting existing awards to twenty allowable matters.

 

Given his publicly stated views that minimum wages are 'too generous', Mr. Reith would no doubt be attracted to the prospect of using the corporation power to set minimum wages and conditions by legislation. Adopting that approach would mean he wouldn't have to worry about the AIRC at all - nor would he have set up a new tribunal as proposed in his December 1998 letter to the Prime Minister.

 

I look forward to the Australian people expressing an opinion at the next election about whether they want their industrial safety net set by Mr. Reith or an independent commission.

 

Use of the corporation's power also raises the possibility of regulation of certain non-employee contractual arrangements. Just as some states extend their industrial relations laws to cover certain contractors, notably dependent contractors, the Commonwealth could likewise regulate this area using the corporation power.

 

The real question that Mr. Reith doesn't want anyone to ask though is whether he sees any role for the use of the corporation's power to effectively replace the existing state systems. Corporation's power being used to establish national common rule federal awards could force the Howard/Reith standard onto every state. Again, we know courtesy of the Ministers' December 1998 leaked letter to the Prime Minister, that he is attracted to the elimination of state industrial relations system. He even raised with the former NSW leader of the Liberal Party, the prospect of a Collins Liberal government doing a Kennett and handing over those State powers to him.

 

Under that scenario though, when the wheel turns, there is a major shake up throughout the nation.

 

I have no objection to the use of any particular head of power to produce good laws - laws that protect and advance the interests of ordinary Australians. From where I sit though, this government has done the opposite with every piece of industrial relations legislation to date. A different head of power used by the same people will simply be more of the same - just more widespread and applied more rapidly.

 

Employers, unions and state governments will want to think long and hard about the direction in which the use of corporation's power will take us. The defacto abolition of state systems might appeal to Mr. Reith's ambitions, but it would make the state's rights debate over mandatory sentencing look like a kindergarten picnic.

 

The society our industrial relations system is building

 

We need to take stock of the social impacts our nation's industrial relations policies are having. As longer, flexible hours, and greater amounts of unpaid overtime are combined with increased travel and become almost compulsory, what assessment is being made of the effect this has on family, on children's education, on voluntary group work - in short on those things that make us a community rather than an economy. More often than not, these factors are not even considered:

 

• by workers worried about future job cuts or competing for a job or promotion;

• by employers trying to improve this years bottom line;

• by unions focused on the latest round of bargaining or wave of legislative change; or

• by a government pursuing its ideological and narrow plans.

 

We all have to stand back and have a good look at the consequences of current industrial relations policies.

 

Some of the consequences of this were identified in your ANOP survey.

 

These issues have serious immediate implications for managers and unions. It has very significant implications for our nation.

 

The focus on individuals rather than groups, the insecurity from wave after wave of downsizing and restructure and an industrial relations system that tries to isolate workers from their fellow workers and their union has produced a workforce that no longer feels loyalty to their work mate or their boss.

 

There is awareness even in our mainstream media of the importance of balancing work and personal life. Earlier this month in the midst of the industrial disputes in Victoria, The Melbourne Age editorial had this to say;

 

• The Prime Minister, Mr John Howard, recently called for more family friendly working hours; it is time that his Workplace Relations Minister, Mr Peter Reith, took some steps to achieve that objective. A start would be to drop his usual knee jerk obstructionism to anything put forward by the union movement. Ultimately what matters are economic growth and an equitable distribution of opportunities in that growth ... The number of standard hours in an industry is not an immutable end in itself.

 

I agree.

 

The changing lifetime employment pattern of men and women requires the industrial relations system to increasingly adapt itself to actively balance work and family responsibilities. In particular greater attention needs to be given to the growth in casualisation of the workforce, home based work, and dependent contractors.

 

Failure to balance the increasing pressures of work and personal life can result in loss of productivity for firms, increases in stress and related problems for workers and their family, and a worsening of social problems.

 

Just this month Health Minister, Michael Wooldridge gave an excellent example of the costs we bear in failing to address these issues. Talking about the problem of depression related illnesses he told parliament;

 

• there are as many days lost through depressive illness in a fortnight in Australia as there are through industrial disputes in any 12-month period.

 

Minister Reith would do well to take some notice of the Minister for Health.

 

Good industrial relations have an important role to play in retaining well-qualified and highly motivated workers.

 

I'm keen to work with industry and unions to pursue effective and viable solutions to these important issues.

 

Conclusion

 

We are now approaching the half way mark of the Howard government's second term. We will be in the countdown to the next election when you hold your 2001 conference.

 

In a few months, Labor's national conference will debate and adopt our industrial relations platform for that election. It will reflect the sentiments I have expressed today and be based on the same principles that underpin our current policy.

 

As we develop those policies and our specific election commitments, I look forward to working with the AIG and exchanging ideas about the future direction of Australian industrial relations.

 

I have a high regard for the AIG and its work. That doesn't mean that I always agree with what it says nor that I expect it to agree with me. It does mean I value your advice and that together, I believe we can create a more balanced and co-operative system that promotes, in the words of the Melbourne Age, "economic growth and an equitable distribution of opportunities in that growth".

 

Thank you.

Authorised by Gary Gray, 19 National Circuit, Barton ACT 2600.