Four major attempts have been made by Federal Governments to change the constitutional base of industrial relations in Australia. All failed, mainly because they were pursued through referendum.
This week Workplace Relations Minister Peter Reith proposed another major attempt. His attempt is more likely to be successful because it does not involve a referendum to change the Commonwealth’s power. Rather it goes down the path of so much expansion of Commonwealth power – artful legislation that pushes the envelope of the heads of Commonwealth power listed in the Constitution.
Reith wants to abandon the present structure built up around the industrial-relations power. That section has a sorry history. It says the Parliament has the power to make laws “”with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of one state”.
The power was deliberately limited because the colonies would object to federating if the Commonwealth were given complete power over all industrial relations. The Commonwealth was restricted to “”disputes” and only interstate disputes at that.
In practice, it has been a bad for economic development and efficiency and bad for many workers.
The main problem has been that the Commonwealth, under both Labor and conservative governments, has been keen to stretch its power as widely as possible. Two artful methods were used to ensure that the Commonwealth got power over as much industrial relations as possible. In effect, a lot of ordinary industrial-relations matters were artificially constructed around interstate disputes. Industrial relations matters involving small workplaces with no interstate element were made interstate by having a system of registering federal unions who had a foot in workplaces in all states. A dispute in a shop with a couple of employees in Mount Isa would be an interstate dispute because it involved members of the federal shop workers union. Further, peaceful industrial relations matters such as bargaining for higher wages were artificially turned into disputes by the logging of outlandish claims that no employer could accept. Once an employer refused a claim for a $5000-a-week payrise there was a “”dispute” which would then be arbitrated.
The net result has been the removal of industrial relations as a matter for employers and employees to a battleground between unions and employer bodies. Blanket, detailed awards were imposed irrespective of local conditions or local wishes of employees or employers and often irrespective of national or local economic conditions or productivity.
Further, unions (like all bureaucracies) and their officials had to justify their existence by involving themselves as much as possible.
Things have changed a little since the big national strikes of the 1960s and 1970s, but the system is still cumbersome and still involves unions and employer bodies as actual parties rather than as representatives called in when wanted.
Moreover, because the system gave unions such strength, governments of both sides rarely did anything about workers who were not in unions and not part of the industrial-relations system. In any event, the limitations of the industrial-relations power probably prevented them from doing so, at least until recently when the foreign-affairs power was used to support general unfair dismissal legislation and other workers’ rights contained in international conventions, such as freedom of association.
In Australia there has been no significant development of a general body of industrial-relations law setting out workers’ and employers’ rights and obligations. Outside the industrial-relations system, Australia remained an island of 19th century common law which was not very friendly to workers.
So everything was stacked towards people getting into the industrial-relations system, but the system was badly flawed as a hotbed of disputes and power struggles remote from workers’ real concerns.
Reith has now suggested a major change. Of course, it might be seen as just another in a long line of union-bashing exercises. (Indeed, it might be better if a Labor Government introduced his reforms free from a climate of suspicion, just as it is better that a conservative government is better trusted with the Republic.)
In any event Reith’s idea has a lot of merit. He wants to use the corporations power as the basis for industrial relations. It has the immediate advantage of not requiring disputes or any interstate element before some general principles of employment and industrial law can be laid out.
The High Court has allowed greater latitude to the corporations power recently. It is almost permissible to write virtually any law in the form “”A company shall (or shall not) do X, Y or Z.”
It means you can set out the principles giving any individual employed by a company certain rights. A union may or may not represent individuals in enforcing those rights. The industrial relations commission could still be used to arbitrate on those rights. But you don’t have to artificially create a dispute nor impose awards across a whole industry or to whole union memberships where they might not be appropriate just to get an interstate element to satisfy a silly constitutional requirement.
There are some drawbacks. The corporations power would not support an industrial relations scheme that sought to bind sole traders, partnerships and other non-company businesses. Reith proposes co-operation with the states to overcome that. But there has been precious little co-operation in industrial relations hitherto, especially when state and federal governments are of different complexions.
But that problem might be of much less magnitude and pose less threat to efficiency and fairness than the present system.