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Labour market reform - some simple solutions

By Graeme Haycroft - posted Thursday, 14 April 2005

It's time to inject reality into the labour market reform debate. With the Treasurer weighing into the debate by calling for more individual workplace agreements (called AWAs) I have to tell him that unless the government changes the legislation to substantially reflect marketplace realities then his call will be just be a lot of hot air. And it's not just him. The current debate being sponsored by The Australian about this issue seems to be dominated by people who either have never actually ever employed people, had significant people management experience, or ever worked as an employee under the myriad of "blue-collar" awards.

Accordingly when we hear impassioned pleas to amalgamate the six separate State and Federal industrial relations system into one you can only wonder which shower these people came down in. All of these IR systems are almost equally dysfunctional because their core assumptions are at odds with the marketplace. Not just a little different, but diametrically opposed. Unless these core issues are addressed an amalgamation or federal take over simply produces just one big dysfunctional system.

First, in the real world of small - or more appropriately defined “privately owned” - businesses, employers and employees have a common vested interest in the success of the business. They are not opposed in practice.


Second, workers primarily want money in return for their labours. Sure they will take the sick pay or the redundancy entitlement if it’s on offer. But if you actually give them the choice between the benefit and a cash value, they’ll take the money every time. Employers prefer that as well, because it gives them some certainty.

Third, most workers and employers want continuity of their workplace arrangements. We have major skill shortages in this country and not just in the traditional trades. Recruiting and training new people costs employers a great deal. Workers have ongoing needs like mortgages, families to feed and educate and living to do. Their interests are mutual in this respect.

Fourth, no employer or employee actually believes that people shouldn't work at nighttimes or on weekends if that's what the job takes. And no one believes that anyone shouldn't work longer than 7.6 hours in a day or 38 hours in a week if the work is available and that's what they want to do.

And finally all employers and employees know a job only exists if it is economically viable. Every employee knows that if the boss pays more to the worker than the worker generates, then that job won't last too long. Workers aren’t silly.

It's no surprise then that somewhere between 25 and 40 per cent of the non-government employees are "permanent casuals". Factor in the number of independent contractors and you then have over half the workforce being paid “just money” for what they do, working at times that suit themselves and their employers or principals. That often means at night or on weekends. The term "permanent" in the employment description is relevant because in no sense are these people "casual" employees employed by the day for the day. They all have relatively predictable and regular hours, although rarely are they 7.6 hours each day from Monday to Friday.

Recently published research (pdf file 510KB) done by Professor Mark Wooden of University of Melbourne in the ongoing HILDA surveys shows that most are happy in these arrangements.


Now let us look at our six IR systems in relation to these above realities.

Of all the Commissioners who run them, with the exception of a few former solicitors, not one has ever owned a business which ever employed anybody. Less than 5 per cent of them have ever had proper management experience. Would it also even be 5 per cent that have ever been employed "on the tools" under Awards and have had first-hand experience of the conditions that they now preside ever? However nice, caring or competent they may be, almost none of them have had any first hand experience of workplace realities.

The primary assumption of all these Industrial Commissions is that employers and employees interests are fundamentally opposed and they are inherently in dispute or disagreement over working conditions. They mistakenly believe that is because employers are powerful and are seeking to pay workers as little as possible because they are weak. It’s simply not true.

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About the Author

Graeme Haycroft is the executive director of the Nurses Professional Association of Australia.

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