A major review into the Fair Work Act (FWA) says the nation's workplace laws are 'working well'. Industry response has been predictable, uncompromising and perhaps even dishonest. Their critique produces more heat than light — a few good sound-bites heavy on rhetoric and light on substance.
The 'Towards More Productive and Equitable Workplaces' report by Professor Ron McCallum, the Hon. Michael Moore and Dr John Edwards and initiated by the Minister for Workplace Relations Bill Shorten says:
Industrial disputes are uncommon, overall wages growth has remained consistent with low consumer price inflation while wages growth between industries and regions is responding to supply and demand, unemployment has steadily declined while participation in the workforce has increased, wages after inflation have markedly improved, and at the same time the profit share of incomes has increased. These are considerable achievements, not to be put at risk lightly.
The 294 page report has made 53 relatively minor recommendations — my analysis suggests 21 of the 53 are neutral (they either cut both ways or are technical/procedural in nature), 15 favour employees and 17 favour employers (although they fall dramatically short of what employers actually called for in their submissions).
The Australian Chamber of Commerce and Industry has described the review as 'disappointing' and a 'missed opportunity' with 'alarming indifference' to productivity, competitiveness and unemployment.
The Business Council of Australia responded by saying 'Every day in Australia, jobs are lost, businesses are shutting ... We're just missing the point.'
What is clear is that industry has developed a definitive media strategy; piggyback broad economic concerns with calls for workplace deregulation. The business sector is yet to produce any real evidence that Australia's industrial relations laws are having an adverse impact on the economy.
By contrast, the review concludes:
Since the FWA came into force important outcomes such as wages growth, industrial disputation, the responsiveness of wages to supply and demand, the rate of employment growth have been favourable to Australia's continuing prosperity. The exception has been productivity growth, which has been disappointing in the FWA framework and in the two preceding frameworks over the last decade.
Many agree that the nation's productivity problems may well be related to our industrial relations system. However, diminishing productivity is a multi-faceted issue and the exact link with IR laws is genuinely unknown. There is also no avoiding the fact that lower productivity actually started during the Workchoices years.
What is missing is evidence of clear cause and effect. While some of the most productive countries in the world like Norway and Sweden have highly regulated industrial relations regimes, many other highly productive nations like the United States have among the most deregulated workforces in the world.
Simplistically conflating neoliberal reform of the workplace with productivity gains is a disingenuous, at worst insidious proposition that scapegoats Australian workers for the failings of our economy. In industry submissions to the review, many of the suggestions were aimed at increasing profits, not necessarily enhancing productivity.
If workers are to concede that industrial relations may have some causal relationship with flailing productivity, business also needs to take some responsibility. Poor management practices, a reluctance to innovate, group-think, workplace bullying, a lack of investment in skills, and 'old boys clubs' — where insiders are hired and promoted based on their position within a self-interested network — may contribute to the overall lull.
Red tape needs to be reduced, especially for small business — this has little to do with employment conditions. Tax reform as well as investment in technology, infrastructure and education will do far more to improve productivity than stripping back worker pay and conditions.
It is also a great shame that the efficacy of industrial relations should be framed in pure economic terms, whereby wage rises for instance would be evidence of a poorly performing industrial relations system — rather than one that is delivering important and equitable outcomes for Australian workers.
The same might be said for the rise in unfair employment termination rates; do they necessarily indicate our IR system is in chaos or do they merely suggest more unjustly terminated workers are now able to find justice?
Perhaps the question we should really be asking is: do the majority of Australians (not just bosses) think we have a fair, harmonious system which rewards hard work and productivity? The majority of working Australians work in small business, are not members of unions, do not have access to the media and are certainly not represented by the business elite — it's these voices we really need to hear.
The FWA may well have the balance right. It was in many ways a simple rebranding of the pro-employer Workchoices provisions with some important differences. While there is much talk of a spike in industrial disputes, levels are still far lower than pre-Workchoices days. Meanwhile wages growth has been lower and the growth rate of labour productivity has been higher in the FWA period than under Work Choices.
So why exactly do we need to reform our industrial relations system? If there is a case for change, it is yet to be properly made.
Luke Williams is a freelance journalist who is studying law at Monash University in Melbourne.