Getting it right on industrial relations

If the 2020 summit were to set the aim of coming up with ways to solve almost intractable issues, such as Indigenous disadvantage and the state of the health system, the proverbial brilliant ideas might be necessary. But in the fields of industrial relations and the workplace - central to both the lives of most Australians and to the country’s prosperity and competitiveness - rocket science or a Eureka moment aren’t necessary. Most of what needs to be done is already in the public arena in the form of policy proposals or academic research. The problem, though, is that relationships at work are one of the key policy terrains actively contested politically - even in a post-industrial society.

It’s been little noticed that Julia Gillard and the Rudd Labor Government are already trying to do something quite profound with industrial relations - achieve its effective depoliticisation.

The movement towards business positions over the course of the election year wasn’t just about mollifying powerful interest groups or presenting a centrist face to the electorate, though it was about that. Along with the argy bargy which led to the Coalition discarding WorkChoices as electoral poison, it’s part of a long term strategy to entrench Labor’s IR plan as the template for workplace regulation far into the future - a new Deakinite settlement, if you like.

This is an ambitious objective, and certainly laws which follow the swing of the political pendulum are inimical to the much touted “certainty”, but it also reinforces the urgency and importance of getting policy right.

To ask a Kevin-style rhetorical question, has the government got it right? If the answer were plotted on a spreadsheet with the metrics the PM is so fond of, the answer would be a mixed one - the general principles are there, but there’s still a lot missing (and possibly wanting) in the all important detail. It’s easy enough to come up with slogans like “Forward with Fairness” or to agree that workplace regulation should balance efficiency and equity, but harder to translate those ideals into reality in the face of what is still a very adversarial environment.

In truth, the best ideas for the workplace are also simple ones - keep the system simple, and make sure we’re tapping all the talent we need to. Equity and justice are in fact a key component of both objectives, as I’ll seek to argue. And a straightforward and flexible framework will also contribute both to maximising productivity and to maximising the chances of designing a system that will have broad and long term support.

Former Prime Minister Paul Keating, whose 1993 industrial relations reforms really did represent “fresh thinking”, got it right last year when he argued for a move away from the legalism and over-regulation that has long characterised the IR system. The last thing Labor should do is present Parliament with a 1,200-page monster akin to WorkChoices. But the goals of transparency and simplicity also have policy implications.

The government is on the right track with an emphasis on common employment standards and modernising awards. But industry awards should reflect what they have been intended to do since Keating and Kelty reframed the direction towards bargaining and away from centralised determination of wages and conditions - minima.

Industry awards should be just that - setting a minimum wage for a sector - but they should not attempt to stipulate in minute detail either workplace conditions or pay and classification scales. There shouldn’t be any need for complicated transitional arrangements to move away from AWAs and complex flexibility clauses in awards. Rather, industry awards should seek to establish a template for work practices in each sector, and for providing incentives and rewards for innovation, skills acquisition and training. The minutiae are best left to collective bargaining at enterprise level.

Similarly, the overall minimum wage should be set transparently. The AIRC did this better than the Fair Pay Commission - it may have been more legalistic, but it was an open process. Nor should the minimum wage be a residual form of wages policy, enlisted in the war against inflation when the rest of the soldiers have gone missing in action.

As I’ve argued in New Matilda, the government could very usefully reach out to employers to enlist their support in calling a halt to a bidding war for labour in favour of entrenching conditions that matter more to employees than oversized pay rises - such as autonomy, work-life balance and job satisfaction.

This flexible form of corporatism - government as mediator and facilitator - rather than as enforcer of wages bargains - could also be usefully applied to the issue of equity, particularly gender equity. In a number of ways, we’re going backwards when it comes to equity between women and men at work. It was much easier to work towards the goal of equal pay for equal work when the wages system was far more centralised. In particular, horizontal gender inequality - where female dominated occupations receive less than male dominated - could be addressed by work value cases heard in the Industrial Relations Commission.

This possibility slipped away under WorkChoices (child care workers were among the last to benefit). It needs to be revived, but revived in an innovative way - assessment of work value could be a major task for the AIRC in the award modernisation process, and the resulting templates could have both legal and exhortatory force for employees outside the award system.

The government needs to work with a number of partners to emphasise equity at work not just as an issue of social justice, but also as an economic imperative. It would be very worthwhile, here, as well, to look at the continuing barriers to full time work in the tax-welfare mix - rather than just proceed with the photocopy of Costello’s tax policy after this year’s budget.

Readers may have noticed I’ve not yet mentioned unions - perhaps a surprising omission in an article on industrial relations and the workplace. But that’s a deliberate omission - from a policy perspective, the government should take a truly neutral stance towards unions in terms of the framework for bargaining.

Unions can be useful social partners, and need to focus their efforts on issues of productivity and equity as well as wage justice. But the legislative framework should provide for genuine freedom of association - and genuinely free collective bargaining (which includes an obligation on all parties to negotiate in good faith).

Unions have been in many ways held back by the twin obstacles of nostalgia for the good old days of closed shops and compulsory arbitration and by a perception that they’re not responsive to their members. Neither of those faults is true of the best unions and the most effective unionists - but unions will achieve most when they take control of their own destiny rather than rely on the state for survival.

It’s probably a tad utopian to expect that workplace regulation will cease to be an arena of major political conflict. But everyone would benefit from a more settled and flexible framework, and a major focus of the new government’s efforts should be getting this right.