Building capacity in Australian industries

The Howard Government’s changes, according to their rhetoric, is about bringing employment law into the 21st century. In reality it is taking us back to the 18th and 19th centuries.

Basic concepts such as agreements have to be made by more than one party right? Not any more. The Howard Government has created a concept of an employer greenfield workplace agreement.

This is an arrangement where before a business is established the employer registers a workplace agreement.

Who are the parties to the agreement? Well the employer is one party but there are no other parties. It is an agreement with one party: it is the equivalent of the sound of one hand clapping. So this agreement is not negotiated with the workers, it is not negotiated with the unions, it is not even negotiated with a bargaining agent for the future workers.

With the removal of the no-disadvantage test against all award conditions, new employers entering an industry can dictate the employment conditions wholly and solely.

Some might say what’s the fuss? There are provisions for greenfield agreements now where employees had no say in their conditions. However these were at least bona fide agreements between the employer and a union that represents workers. They also had to pass the no-disadvantage test scrutinised by an independent umpire.

It is an Orwellian concept to introduce a new system under the heading of WorkChoices when agreements with one party can be registered that destroy working conditions.

Now turning to the unfair dismissal changes, the legislation will remove the rights of workers to pursue unfair dismissal cases where there are less than 100 workers. It will still enable workers to initiate proceedings for unlawful termination. But this definition is very narrow; for instance, it is not unlawful to terminate someone for refusing an illegal direction.

That’s right, a boss can give you an unlawful direction and if you refuse and there are less than 100 workers you cannot get your job back if you are dismissed. For example, if you are a truck driver and your boss says he wants you to get this delivery to the next town 400km away in three hours and you say this is impossible as you would have to break the speed limits, you would have no redress if the boss sacked you on the spot. So next time a family member is killed by a speeding truck, don’t complain to the Federal Government because you, the people of Australia, voted for this bunch.

How can anyone think this is good for society?

Imagine this - you work in a food outlet and a product has passed its use-by date and you go to throw it out but your boss directs you to serve it to customers. What do you do? If you refuse, you could be sacked and have no chance of getting your job back if there are less than 100 employees. If you are sacked, then the Federal Government’s rules mean you can’t get immediate access to unemployment benefits. So you have the choice of keeping your job and hoping you can live with your conscience about causing someone to get ill, or facing the sack.

You might say, “Come on, people aren’t like that”, but the whole point of regulation is to protect the majority from the rotten few. If all employers and employees were angels there would be no need for any regulation. However, that is not reality: there needs to be regulation not to control the actions of the majority but to temper the excesses of the minority who can cause so much damage.

What these changes are going to is undermine all the advances of the last century and bring back the master/servant as the underlying theme to the employment relationship. It will be the greatest social tragedy that this nation has seen and will cause irreparable damage to our cultural worship of the fair go.

The tragedy of this legislation is it focuses attention away from the real issue. That is the underlying fault of the Anglo-American Liberal Democratic model. If we look at the United States and the Australian economies we see crippling current account deficits. Approximately 7 per cent of GDP is the level of the current account deficit. This is occurring at a time when we see a coal and mineral boom occurring at unprecedented levels.

What would the deficit be without this boom? Probably 8 or 9 per cent. We see advanced manufacturing at historically low levels. The focus on individual enterprises and deriving policies to atomise industry has thrown out any benefits for industry accruing from collective action among employers. We see in isolated examples, and with the support of the state Labor governments, efforts from enterprises to form clusters (ie, Gladstone) to compete for major contracts: but this goes against the grain of industrial policy advocated by the Business Council of Australia.

The focus is on competition as some sort of holy crusade. Previously we saw large enterprises training more apprentices than they would require for their own operations. It guaranteed a sufficient skills base for their industry and ensured volume of work was maintained across the industry. But now large enterprises only train sufficient numbers for their own needs, hence we face skills shortages across all facets of industry and all regions.

Coupled with ideologically driven policies of outsourcing maintenance and service functions, the Australian manufacturing industry has lost all capacity to control its own destiny.

Sure you can reduce costs by having your six or seven fitters form their own company and then contract their services to you. You don’t have to pay the costs of training new apprentices. But there is no free lunch: the contractors have no desire to provide a service into the next generation, hence they won’t engage apprentices.

This strategy commenced in the 1980s and has a limited lifespan. And we are now seeing the consequences. The age profile of tradesmen who were outsourced in the 1980s would lead you to conclude the vast majority of them are now reaching retirement age and this is one of the major reasons for the crippling skills shortage.

When will Australia learn that we cannot achieve the optimal result by simply copying overseas models for industry structure.

What is needed is a policy direction that focuses on industry development which encourages co-operative capacity building to enable Australian enterprise to bid and obtain work. This will not be achieved when company after company is locked in battles to drive the workers’ conditions down. Many enterprises do not have the size to undergo workplace reform, niche market-building and research and development. The government’s focus on workplace reform will mean Australian enterprises focus not on the issues that challenge their capacity for growth and survival but will focus their attention on third and fourth rate issues.

Building the skills base along with research and development are the key issues to drive productivity, not taking penalty rates or smokos off workers.

It is time for the institutional investors in our public corporations to discard decrepit ideology and stand up and demand that management devise strategies to increase the skills base of the workforce and increase research and development activities.

It is time that the Federal Government focused on building capacity across industries instead of frowning upon collective action among employers.