Saturday, August 22, 2009

Saturday Morning Musings - problems in Australian industrial relations

I was thinking the other day that one big difference between the Hawke and Rudd Labor Governments can be summarised in one word, complexity. In the name of reform, the Hawke Government moved to simplify and de-regulate. Equally in the name of reform, the Rudd Government is moving towards complexity and re-regulation.

The trigger for my musings lay in a number of stories over the last week dealing with the new industrial relations system.

The Hawke Government inherited a complicated industrial relations system that was clearly impeding Australian economic development. Supported by the Union Movement, they moved to simplify it. Later, the Howard Government took the process further. However, in its desire to de-regulate the labor market the Government triggered a response - the work choices debate - that played a major role in its defeat.

Despite the de-regulatory tone of the Howard Government, Mr Howard became strongly centralist whenever he or the Government wanted to do something. He was prepared to intervene using whatever lever might be available. In industrial relations, the Government's attempt to bring about national change triggered a High Court challenge.

I reported on the Court's decision in Australian Constitution & the High Court Decision on Work Choices. The decision affirmed the powers of the national Government, marking another major shift in the balance of power within the Australian constitution between the Commonwealth and the states. There is a delicious if somewhat dreadful irony in the way that the Liberal Party and its ideologues, proclaimed defender of the Federal system, delivered such a strong increase in central control.

The Rudd Government came to power with a clear mandate to replace Work Choices with a new national system along with the now clearly defined power to do so. The key words that the new Government chose to use to describe its new approach were "national", "modern" and "simplified". Who could argue with the idea of a simplified, modern, national award system? The reality has been a little different.

The new system came into effect from 1 July 2009. The old and soon to be abolished Australian Industrial Relations Commission (AIRC) will continue in effect until the end of December to complete the creation of the new system. In the meantime, its place is being taken by Fair Work Australia, a new body named in the modern tradition of Government speak.

The problem faced by the Government and the AIRC is that Australia is not uniform, nor is the economy simple. The replacement of the Howard system by the new system has therefore generated a whole series of unexpected and complicated side effects. According to newspaper reports, Deputy PM Gillard has already been forced to intervene no less than nine times to direct the AIRC to take the special circumstances of particular industries into account.

There are no winners for the Government in this one. It's direct payback came at the election when Work Choices played a key role in delivering Government. Now it has just the pain. Nor, I suspect, will the Union Movement win. Yes, it has increased Union relevance for the present. However, this has come at the cost of a whole range of potential new disputes.

At a personal level, I am a supporter of the Union Movement even though I have often been on the other side of the fence on particular issues. Call me a traditionalist if you like, but I am always conscious of the role that the Movement has played.

From a purely practical perspective, I suspect that the Movement may come to wish that it had not won on Work Choices. Looking at the way the process is evolving I am not sure that the Unions have a real role. It's distracting them from other matters.

Still, in all this there is a winner. Industrial relations consulting is back and in a big way!

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