The decision by the High Court this week to uphold the constitutionality of the Workplace Relations Act has been greeted with a lot more enthusiasm on one side and disappointment on the other than the case warrants. Workplace Relations Minister Peter Reith described it as a “”crushing blow” for the unions. Opposition Industrial Relations spokesman Arch Bevis said the real losers “”are the lowest-paid workers”. Neither proposition is right. The decision affected only some clauses in some awards.
In 1997 the Workplace Relations Act provided for a list of allowable matters to be included in future awards. In the future the Industrial Relations Commission would not be able to make award provisions for anything outside those core matters. It provided also that anything outside those matters in existing awards would lapse automatically after a period of 18 months. It was taken as read that the Commonwealth Parliament’s constitutional power allowed it to reduce awards to a limited list of conditions for all future cases. It could also cancel all existing awards if it were so minded. The only question at stake was its power to excise some clauses and not others of existing awards. Four judges ruled that it could. Three judges ruled that it could not.
The Commonwealth’s industrial-relations power is a limited one. It is to make laws with respect to “”the conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state”. That is not a general power for the Parliament to lay down the detail of working conditions itself. Rather it is a power to set up a system to conciliate and arbitrate on disputes. The differences between the majority and minority judges, therefore, was not earth-shattering. The minority ruled that Parliament’s attempts to mess about with existing awards was not a law conciliating or arbitrating a dispute. After all, the dispute had already been settled with the creation of the award. The majority ruled that messing about with existing awards was a law with respect to conciliating and arbitrating disputes, particularly because there was an 18-month time frame for renegotiating awards in the light of the future legislative removal of the non-allowable clauses. They are fairly theological arguments.
That the unions lost, was not a “”crushing blow” to them. All it meant was that Mr Reith’s award-stripping measures would apply immediately and would not have to await the expiry and renegotiation of every existing award. Mr Bevis, too, was off the mark. The case means very little for the lowest-paid workers. This is because rates of pay are one of the allowable matters and the lowest paid will still be able to argue for more. Further, there are other provisions for safety-net increases.
Indeed, the lowest-paid might breathe a sigh of relief at the court’s decision. It is often the case that on-costs caused by myriad, manifold and mind-numbingly detailed award conditions prevent employers from paying higher wages or from employing more people.
Employers, too, over-iced the pudding. They suggested that as this week’s case allowed Parliament (under a conservative Government) to strip conditions out of awards directly, it would conversely allow a Labor-controlled Parliament to insert conditions directly. That is a doubtful constitutional proposition. Nonetheless, the idea was enough for employers to urge Mr Reith to look at the corporations power as a base for industrial relations. This, they thought, would enable laws more favourable to employers. They failed to see that Labor could use the corporations power the other way. There would be good constitutional grounds for insisting that all corporations met certain labour conditions. The employers spoke too early.
Both sides failed to grasp the political reality that no significant changes can be made to industrial law in Australia without the consent of the Senate, whoever is in power, which means the Democrats must agree. That is a blessing. The Democrats have frequently prevented Labor from handing too much power to unions and prevented the conservatives from giving too much to employers.