Scotching the fallacies surrounding workplace reform

Polling confirms that, as expected by those seeking substantive reform, the Coalition has lost the debate over its Work Choices legislation. This is not because Opposition leader, Kim Beazley, has identified an issue (Australian Workplace Agreements) he thinks will cure his low polling and union undermining of his leadership. Rather, it reflects the Coalition's inadequate identification of possible benefits from the legislation and its weak and defensive rationale of the need for reform.

Hardly a day goes by without Prime Minister John Howard or Workplace Relations Minister Kevin Andrews responding to case studies trotted out by unions and allegedly resulting in some existing benefit being reduced or some employee being made redundant. With help from the media, the Opposition is naturally lapping this up. And, in defending his wicket off the back foot, the Prime Minister almost seems as if he is defending his earlier guarantee that no employee would be worse off.

What, then, is the Coalition missing in the debate?

First, among all the talk of the rights of workers, it seems to have almost forgotten about the rights of employers, let alone their position in an economy with less than 5 per cent unemployment. Employers operate businesses whose survival in a highly competitive economy depends on the satisfactory performance of its employees. If employers judge such performance to be unsatisfactory, they should have the right either to change the conditions of employment or sack the offenders. As one of the objects of Work Choices was to make it easier to effect such adjustments, why isn't the Government promoting this as a desirable feature of the legislation?

No doubt it fears this would buttress the scare that such changes lead to wages and working conditions being driven to the bottom. Hence, it is suggested, the reduction in legislative protection of employees will be disastrous because employers hold all the bargaining power. But surely our ministers are capable of answering such a claim?

In reality, there are more than one million employers competing with each other for labour and in a competitive economy they exercise no monopoly powers over levels of wages or conditions of employment.

Also, the idea that employers are just waiting to sack employees or reduce their wages is a myth the Coalition should be able to answer quite simply.

Surprise, surprise, employers actually need employees to run their businesses and will not get rid of them unless they become poor performers or the business gets into difficulties. Indeed, employees with experience in working in a business become vital assets employers will be anxious to retain.

Another truth seemingly overlooked is that employees who do not like the conditions provided by a particular employer are, in most cases, able to change jobs without difficulty. Indeed, Australian Bureau of Statistics surveys show that large numbers of employees change jobs every year, many voluntarily. In times of strong economic growth and low unemployment their ability to obtain well paid jobs or change existing jobs is naturally increased. And, by the way, the heavy regulation of workplace relations has not prevented loss of jobs in times of past economic slack; it has almost certainly exacerbated those losses.

Thus, while a few employers may be bastards to work for, employees do not necessarily suffer if they have to switch jobs. However, while we hear about the bastard employer, little is said by Canberra about the bastard union or the general effect that unions have in keeping many out of jobs. Unions have a legitimate role but, where they seek working conditions with that effect, they should be fair game in the debate about workplace relations.

ABS surveys show that, in addition to the 500,000 or so unemployed, there are over 800,000 who say they would like a job but who do not qualify as officially unemployed and over another 500,000 who are working part time but would like to work more hours. But, as many of these are unskilled, their capacity to obtain jobs is primarily dependent on employers being legally able to offer working conditions commensurate with their lower productivity.

Unions opposed to employers offering less costly employment should be exposed as unemployment creators.

The point also needs to be made that allowing employers to offer less costly working conditions would not necessarily result in existing employees having to accept such conditions. If such employees have the requisite productivity, they will continue to be worth employers providing work on the existing basis. In short, union concerns are, for the most part, groundless: the capacity to offer reduced working conditions will create new, not substitute, jobs.

It is surely time for Coalition ministers to grasp the nettle and expose the many fallacies being promulgated in the Work Choice debate.