Long after Australia has hung up on the Telecard affair, our horribly inefficient industrial relations system will continue to taunt us. This week the Minister for Workplace Relations, Peter Reith, issued two discussion papers on industrial relations. At the press conference no journalist took the slightest interest in them. Pity.
For a century, industrial relations in Australia have been dogged (literally, sometimes) with unnecessary conflict, complexity, procedural madness, federal-state overlap hand high costs.
Tax, corporate law, trade practices, financial institutions and nearly all family law have been brought into national schemes, but industrial relations remains fractured between the state and the Commonwealth, with the twin sins of overlap and voids. There are four main reasons. The first is that the constitutional base is flawed. In the 1890s Australia was hit by a series of prolonged major strikes. Those framing the Constitution saw a need for a system of compulsory, independent conciliation and arbitration to avoid them. However, states rights still ran strong. The Commonwealth was not given full power. The states could have their own systems. The Commonwealth could only have power to set up arbitration bodies to deal with interstate industrial disputes. So Section 51 (xxxv) was put into the Constitution:
“The Parliament shall have the power to make laws with respect to conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state”.
Secondly, the High Court dealt with jurisdictional disputes legalistically (as it had to), so the Commonwealth’s power was limited and hamstrung.
Thirdly, all attempts to the change the Constitution to give the Commonwealth a more general ambit power met with defeat. Six referendums were defeated: 1911, 1913, 1919, 1926, 1944, 1946.
Fourthly, there has been a huge amount of suspicion in industrial relations. Any move for reform instigated by the conservatives has been seen as handing power to employers to do sack, exploit and maltreat workers. And any reform instigated by Labor has been viewed as a handover of power to union mates. So all reform has been blocked.
In the present climate, it is likely that half the population will view this week’s discussion papers as utterly tainted. They will see them as the equivalent of setting the dogs upon saintly workers by the Telecard wielding demon Peter Reith. Not so. Astonishingly the two discussion papers seem as if they have been put together by independent, neutral public-service policy advisers (and I thought they were an extinct species). The papers put forward a lucid appraisal of the defects of the existing system – that based on Section 51 (xxxv).
Section 51 (xxxv) does not permit Commonwealth legislation to fix directly minimum working conditions. The Commonwealth is limited to setting up an Arbitration Commission to fix working conditions. And the commission can only do so after a “”dispute” that is “”interstate” in nature, and a dispute can only arise between “”parties”.
As a result a lot of legal fictions have been created. First, workers and employers have to engineer a dispute. You have to artificially create a dispute in order to settle it, and only as a side effect do you do the main business of industrial relations – agreeing to working conditions.
It is a bitter and inefficient system. Unions spend a huge amount of time finding and serving logs of claims on employers so they are “”parties” to disputes an attract federal jurisdiction. Then obvious ambit claims are served so a dispute is inevitable (even if artificial). Moreover, to ensure that disputes are “”interstate”, federal unions are created so that a dispute in one enterprise will involve members of the same union working interstate. Such unions by necessity have to be occupation-based. Further, the Parliament cannot set minimum conditions itself. The Constitution requires that only an arbitration commission can do this.
The upshot is that many workers are missed and those enterprises that are hit are hit in a big way. Also, the state systems (up to six of them) run in parallel. Also individual business have to work with several unions all with different award conditions, some state some federal) making uniform management across a company impossible. Moreover, federal and state awards overlap.
In short, history and the Constitution have left Australia a fractious industrial-relations legacy which is not good for workers or employers.
The discussion paper suggests new legislation based on the corporations power. It would apply to all people working for corporations. It could directly lay down minimum conditions and set up a structure for additional conditions to be set by an arbitration commission, irrespective of whether workers were members of unions or whether a union had served a log of claims on an employer. Unions would be freed of the burden of roping in employers. It would mean 85 per cent of non-farm employees would be embraced by the new federal system, 800,000 more than at present The remaining 15 per cent (those employed by partnerships and sole traders and state governments would be covered by the state system and there would be no overlap of workers covered by both or a void of workers covered by neither.
Ambit claims and artificial disputes would disappear. It would still not be perfect. The corporations power is limited to financial and trading corporations, not all corporations, so there would still be some jurisdictional arguments – but that would be a mere frying pan compared to the present industrial-relations-law fire.
Once in place, a corporations-based system could attract partnership and sole-trader employment contracts on a voluntary basis where worker and employer agree to be bound by federal conditions and the federal arbitration body. Once you get a coherent system, even state governments and their employees would be attracted to it. Whereas the present system is a turn-off.
The important thing now is to get cross-party support for a corporations-based system as one which will benefit both workers and employers, and for it not to be seen as an employer agenda just because it is put out during a Coalition Government’s term. A system based on the corporations power should be ideologically neutral. Having changed the ground rules, either side can score as many goals as under the old system, it’s just that the grass should be softer and the medics better if there were any clashes.