The Guardian 29 June, 2005
IR changes disastrous say the experts
Bob Briton
Seventeen leading labour market and industrial relations researchers from nine Australian universities released a series of papers last week dealing with the Howard government’s looming industrial relations onslaught. The "report card" on the legislation gives the proposed changes a failing grade and concludes that they will not alleviate the country’s labour market problems such as the skills shortage, the productivity slowdown, work-family tensions and the growth of precarious, low-paid employment. In fact, precisely the opposite will occur.
The group of academics (convened by Prof. Russell Lansbury of Sydney University) insist the legislation will:
Undermine people’s rights at work
Deliver a flexibility that is one-way, favouring the bosses
At best will do nothing to address work-family issues
Disadvantage the individuals and groups already most marginalised in society
Have no positive impact on productivity
In fact, on the question of productivity, one of the papers shows that, after the introduction in New Zealand of the Employment Contracts Act, 1991 (which similarly enforced individual contracts) the NZ economy began to lag behind Australia in productivity growth. For the 14 years prior to the legislative changes, NZ had kept pace with Australia in rates of growth.
The paper concludes that individual contracts may actually lead to reduced productivity because of employee mistrust.
Clearly, class interests other than profits are also at issue in the Australian and NZ legislation. Control and the destruction of working class organisation are major objectives of the changes.
In NZ, the full-time participation rate in employment fell by 11 per cent and workers lost long-held entitlements such as overtime and penalty rates. Individual contracts often contained straight out pay cuts. The number of families with no adult in work increased dramatically and income inequality widened. Kiwi workers are still reeling from these changes.
Researchers Bray and Waring agree with the trade union movement that, contrary to the claims of the government, workers will not have effective "freedom of choice" regarding individual contracts. Australia is moving into dangerous new territory with the IR changes. "The right of employees to choose to bargain collectively and to require employers to recognise this choice is not protected in Australia — unlike all other OECD nations (including the USA)."
Coinciding with the release of the papers was the news that workers in Kevin Andrews’ own Department of Workplace Relations have been fighting a nine-month battle to stay out of their minister’s favoured Australian Workplace Agreements. Andrews claims that 53 per cent of DEWR employees are now on individual contracts and are being paid more. The workers resisting the government’s carrots and sticks clearly agree with researchers that "Australian evidence shows that collective agreements deliver better wages, better employee ‘voice’ in the workplace and better working conditions than individual agreements".
Another paper deals with the desire of the government to establish a single, national industrial relations system through the use of the commonwealth’s corporations power. According to a paper by Professor Ron McCallum of the University of Sydney, labour law will become a subset of corporations law in which "employees will be viewed as but one aspect of the productive process in our globalised economy".
Yet another paper challenges the government to produce the evidence that the removal of most workers from consideration under unfair dismissal legislation will create jobs. Professor Rowena Barrett of Monash University argues that a far more likely outcome will be a drop in the numbers of highly skilled workers available to small and medium sized enterprises.
Baird and Todd explain that there will be fewer incentives for women to participate in the workforce as they confront the prospect of lower pay, fewer entitlements and greater job insecurity. "Evidence already shows that individualised employment arrangements result in lower work and family benefits", the Report Card points out.
The extensive research undertaken by the academics backs union claims that the minimum wage "safety net" is actually being rolled up and taken away, that only a meaningless shell of the award system will be left and that further deregulation of the labour market will greatly widen the income gap among Australian workers. ABS statistics are used to demonstrate how this trend started in the mid 1980s when the shift from awards to Enterprise Bargaining Agreements began.
Full papers and summaries can be seen on the University of Sydney, School of Business website at: http://www.econ.usyd.edu.au/wos/IRchangesreportcard/