Fair Work panders to unions

Australia has more than 800,000 businesses competing with each other and bargaining with a workforce of more than 10million employees. Moreover, 90 per cent of those businesses have workforces that have judged it unnecessary to seek protection through union membership.

No valid argument can be mounted that today's employers as a group would force wages down or impose unfair conditions. When working conditions are unacceptable to either party, each side has alternatives, albeit not necessarily their first best option. Employees have the capacity to readily quit jobs and more than two-thirds of the nearly two million employees who left their jobs in 2005-06 did so voluntarily. Suggestions of potential extensive exploitation overlook that businesses need competent staff.

Nor is there any basis for giving unions the proposed relatively favourable treatment. During the period of reduced regulation and union activity in recent years, average hours of work and industrial disputation fell while real wages increased, which scarcely suggests employees' bargaining power was weakened in the less regulated labour market.

Although a small minority of workers employed under Australian Workplace Agreements did experience reduced working conditions, those conditions reflected awards by the AIRC. But that body created more than 4,000 awards that now require modernisation. The AIRC was a poor judge of the economic and employment basis for awards and the reduced conditions under AWAs may well have been fully justified. The Government's proposed continued resort to awards is thus archaic: in Australia's economy of frequently changing conditions, market forces rather than regulators should determine wages and conditions.

The attempt to assist workers through protective workplace relations legislation also reflects a fundamental misunderstanding of the respective roles of employment and social welfare policies. By contrast with circumstances faced by disadvantaged workers in earlier times, Australia's now extensive social security system provides a protective bulwark for those at the bottom end of the social spectrum.

Accordingly, with more than half of low-wage earners in the top half of household incomes, it is absurd for the Government to (in effect) prescribe minimum (and other) wages as a protective mechanism. These unfairly limit the job opportunities for about onemillion unemployed and under-utilised workers with lower skills. In short, Gillard's thesis that the legislation would ensure fairness is fundamentally flawed.

Australia's existing economic and social framework, along with ordinary law, already provides protection for workers and the proposed legislation is both unnecessary and counterproductive. It is in the Government's own interests to rethink the whole exercise by instituting an independent inquiry into the need for regulatory legislation that can only add to unemployment levels.