The impact of the soon-to-be-passed industrial relations laws has yet to be seen. If some of the Labor premiers and political commentators are to be believed, it may take some time and a great deal of wrangling in the High Court before some effect is felt at all. And while there remains widespread speculation about the economic and social benefits that may or may not flow from the passage of the Bill, one thing is clear: the Bill has given rise to widespread anxiety within the workforce. Even though the proponents of the Bill are somewhat dismissive of the rally of November 15, the weight of evidence supports a view that many workers are worried about job and income security.
The government has failed in both the legislation and its rhetoric to assuage that anxiety. In spite of constant assertions and an expensive media campaign, now augmented by peak industry groups, few workers believe that they will be better off or that the deregulation of the workforce will offer them much in the way of protection.
The government has also failed to mount an argument that supports any of the assertions about growth in jobs or productivity. The vast majority of academic analysis suggests otherwise. The IR Report Card , published by the University of Sydney, supports most of the claims made by the ACTU over recent months. The submission (pdf file 506KB) by the “150 academics” to the Senate inquiry does the same. In one of the only pieces of economic analysis I have read, and that was by economist Saul Eslake in the pages of this journal, he contends that the economic data lends “some” support to the government's case, but the data is neither unequivocal nor incontestable.
So in spite of some, but not much, doubt about the impact these laws will have, one thing remains clear. These laws have made people very nervous indeed. Job security will be threatened, as will wage rates and conditions. Whether rates rise or fall, or whether we see mass sackings, is in many ways immaterial. The structures will be in place to permit dismissal at managerial whim and for wages and conditions to be eroded. The effect of that kind of insecurity cannot be underestimated.
The issue of certainty of employment is central to productivity, perhaps even more so than issues centred upon rates of pay and conditions. As much as business needs to, and indeed expects to, operate in an environment of legislative certainty, so too do employees expect and deserve to work in an environment of relative security. The extension of the provision for probationary employment, together with the weakening of laws relating to unfair dismissal, do little more than inject an air of chronic uncertainty into the work place.
The sad paradox in all of this is that businesses, above all things, demand a stable legislative and policy framework within which to operate. In a submission to the senate in relation to senate reform, Hugh Morgan from the Business Council of Australia asserted with some authority that there was a need to apply some reforms to the senate in order that they give rise to “… business certainty and stability to plan and invest in the long term”. These comments were reported on the BCA’s website on January 11, and later in the Sydney Morning Herald (14/1/05). Again on the BCA website, a Booz Allen Hamilton/BCA study found that longer tenure for CEOs was associated with greater value creation.
It does not take a huge leap of logic to assume equivalent propositions holds true for the average worker. A stable employment environment is as important for them to operate in, as is a stable legislative one for business. These parallel forms of stability allow both groups to plan and invest in their respective futures. Businesses may want to grow and invest in their future: workers probably just want to know they have a good chance of meeting their mortgage commitments.
Security of tenure or the prospect of a reasonably long period of tenure for both CEO and the average worker will enhance value creation in both the boardroom and on the shop floor. It would seem, however, that while business feels it is a prerequisite for their operations, it does not hold true for those they employ. Uncertainty of tenure and an uncertain operating environment would seem to be the way forward for the worker of the new age. The hope that these changes will bring about renewed productivity would seem to rest on some extremely brave assumptions indeed.
And finally, with the minister for work place relations, Mr Howard, peak business organisations and to a lesser extent Peter Costello, telling the electorate there is a pressing need for these changes, one should visit the webpage of the Department of Foreign Affairs and Trade and read the glowing reports they give of Australia’s potential as an investment site. In a banner page, headed Australia: Competitive Asia Pacific Investment Location, the site describes Australia as being Asia’s economic dynamo; in recent times, according to this site, Australia has undergone an economic revolution with an open, stable and reliable economy. Not only that, it goes on to describes our workforce as committed and stable with low rates of industrial disputes and states that Australia’s strength is resting on the quality of its 10 million strong workforce.
If we are doing so well, one wonders why this government is injecting so much anxiety into a work force largely responsible for the stability, the revolution and the reliability.
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