Industrial Relations Minister Peter Reith was crowing last week.
The High Court had just ruled that a key provision of his Workplace Relations Act was valid. It was a “”crushing blow” for the unions, he crowed. The provision was his award-stripping initiative.
It was typical of the testosterone-charged, win-lose mentality that characterises Australian industrial relations. Indeed, Reith’s reaction was exactly the opposite of the mentality that employers want to engender in the workplace. Employers want win-win arrangements. They want to remove the us-and-them mentality. True, they also want, quite reasonably, to end monopoly union power in the workplace, but it is no good replacing that with a let’s-crush-the-workers attitude. Crushing workers crushes business.
While Reith was greeting last week’s decision like a supporter of a winning Aussie rules team at siren time, employer groups were a little more subdued, but probably for the wrong reason, as we shall see. Even so, last week’s case will still put a bit of a dampener on Reith’s award-stripping project for other reasons, as we shall see.
First, some background to last week’s case.
The Constitution gives the federal Parliament a limited power over industrial relations. It is not a blanket power which would let the federal Parliament deal directly with all industrial relations matters. Rather it is a power to make laws with respect to “”conciliation and arbitration for the prevention and settlement of industrial disputes”.
So the law has to be for conciliation and arbitration of disputes. It means Parliament has the power to set up a process and tribunals (umpires) to help conciliation and arbitrate. But it does not have the power to settle the dispute itself. Not does it have the power to set terms and conditions of employment itself in order to prevent or settle industrial disputes.
Before the Workplace Relations Act, there were lots of awards with very detailed provisions. Then the new Act provided that within 18 months awards could only have a limited number of matters — “”allowable matters”. Importantly for Reith, all the provisions giving unions rights to be informed and to negotiate would be stripped away, so would provisions about last-on, first-off and provisions giving preference to unions. Any such provisions still left in awards when the 18 months was up were automatically cancelled.
This automatic cancellation of some existing provisions was challenged as beyond the federal Parliament’s power. The union challenging said that it amounted to the Parliament itself directly setting work conditions and was not a law providing for conciliation and arbitration. The minority (Justices Gaudron, McHugh and Kirby) accepted that view.
The majority (Justices Gleeson, Gummow, Hayne and Callinan) said the law was within power. Gummow, Hayne and Callinan argued that if Parliament has the power to enact some things (that the Industrial relations Commission can include a huge number of things in awards) it can also repeal some of those things (all those things bar a limited list). Gleeson argued for validity on a slightly different ground, but that need not concern us here.
The fact that the High Court allowed the Workplace Relations Act to clean out in one sweep hundreds of award provisions that require employers to inform and negotiate with union representatives, rather than deal directly with their own workforces was the basis of Reith’s “”crushing blow” comment.
Employers did not immediately share that view. In fact, they viewed the decision with some concern about its potential. They thought that if it enabled a conservative government to meddle so directly in the workplace, it might enable a Labor Government to meddle the other way. They thought that a Labor Government might be able to legislate to impose all sorts of pro-union conditions in awards. But the employers need not worry on that score. All seven judges made it fairly plain that it would beyond the constitutional power of the Commonwealth to insert clauses of its own making into industrial awards. The Commonwealth can legislate for arbitration of disputes, but it cannot legislate to impose its own solution to industrial matters.
They also all agreed that the Commonwealth could back off altogether and repeal awards totally. They also all agreed that the Commonwealth could limit matters which could go into an award in future. The only matter in dispute was whether it could partially repeal awards retrospectively.
But there is a sleeper in this. At least Callinan and McHugh (and most likely Gummow, Hayne, Gaudron and Kirby also) thought that there was a limit to award-stripping. There would come a point at which the Commonwealth had so restricted the items the commission could put into any award that the Parliament was itself legislating an industrial resolution, which would be beyond its constitutional power, instead of providing for conciliation and arbitration of the resolution of industrial disputes which necessitates some sort of discretion and power on the part of the body doing the conciliation and arbitration.
At present Reith has whittled the allowable matters to just 20. He might be pushing his luck if he thinks he can whittle down that much further without inviting another constitutional challenge.
That invites the exercise of another option – the use of the corporations power to regulate industrial relations. By and large the Commonwealth has got power to legislate in the form, “”A corporation shall/shall not to X, Y or Z”. It means the Commonwealth could regulate employment by corporations to reduce union power. It would not include partnerships and other unincorporated small businesses, but they have less trouble with unions anyway.
Of course, it would have to pass the Senate and the tempering influence of the Democrats.
In the meantime, the industrial relations divide and the resort to legalism will continue with the Coalition full of businesspeople and lawyers and Labor full of ex-union officials and lawyers.
Incidentally, the divide on the court itself was interesting. The minority three judges who found against Reith’s legislation were all Labor appointees. Three of the four who found for his legislation were Coalition appointees. And the fourth, Gummow, was a Labor appointee, but remember he was appointed by Labor after Labor had been affronted by the temerity of the court to find an implied freedom of speech in the Constitution preventing a Labor MP from winning a defamation action. So Labor thought it would balance things up by appointing someone seen as a black-letter law judge. Well, they shot themselves in the foot – as so often happens when Governments attempt to stack the court.
Industrial relations will always provide fertile ground for dispute in Australia. There seem to be conflicting elements in the national character which invite it. Individualism, always support your mate, never scab, never aspire to the best, the desire to win a contest, and the willingness to pick a fight.
Perhaps people like Reith and some of the hothead union leaders need to mature a little.