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Rock against WorkChoices

March 30th, 2006

Some of our more impatient bosses have moved fast to take advantage of the additional power given to them by WorkChoices, and it’s encouraging to see lots of signs that workers are fighting back. Along with marches and job actions, music has always been part of such protests, and the ASU is putting on a Rock for Your RIghts at Work event at the Zoo in Ann St., Brisbane on 6 April

(via Mark Bahnisch

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  1. March 30th, 2006 at 08:06 | #1

    There’s the presumption here that the sackings were unwarranted. Even Combet says the facts aren’t in.

    But I guess a march and a rock concert will help to clarify things.

    Two points:

    (i) Employers might not always want to dismiss workers who are productive and pulling their weight.
    (ii) As the cliche goes “Making it expensive to fire makes it expensive to hire.”

  2. wilful
    March 30th, 2006 at 09:02 | #2

    It’s a pity that the modelling done by Treasury on this has to be kept secret as ‘not in the public interest’.

  3. Hal9000
    March 30th, 2006 at 09:08 | #3

    “There’s the presumption here that the sackings were unwarranted.”

    Since no court has jurisdiction to try the matter, we’ll never know. Note that workers now have fewer rights in respect of termination than they enjoyed under the common law of contract back pre-masters and servants acts. Unilateral termination of an employment contract is now non-compensible for many workers, and you can’t even contract out of the non-compensibility.

  4. March 30th, 2006 at 09:40 | #4

    I was pleased to support Righty conservatives against Lefty “constructives” in the Culture War. I am equally pleased to support Lefty progressives against Righty regressives in the Class War. I just wish the Terror War would go away.

  5. still working it out
    March 30th, 2006 at 10:49 | #5

    As the cliche goes “Making it expensive to fire makes it expensive to hire.”

    Being expensive to hire makes them more valuable.

    One of the problems of a casualised workforce is that companies have less incentive to invest in education and training. I see it in my workplace. The newer employees are all on contract, and as such are exempt from training programs. The older employees are permanents and still have access to training. Presumably this is because my employer knows they will be around longer, if only because they are harder to get rid of, and as such has an incentive to invest in their human capital.

    I don’t suppose its actually a problem for my employer as it might be cheaper to hire staff with the necessary education already rather than paying to train their own staff up. But it could be a problem for the economy as a whole with an overall reduced incentive by business to invest in human capital.

  6. Paul Norton
    March 30th, 2006 at 10:53 | #6

    Further to Jack’s point, under Workchoices the real class struggle (between workers and bosses) will marginalise the Crass Struggle (the cultural struggle and faux class struggle fomented by the Right and its unwitting allies in the labour movement over issues like the respective tastes in beverages of “battlers” and “elites”, same-sex marriages, “bloody greenies”, etc.).

    Today’s Australian reports that the employer of 98 workers in Devonport welcomes Workchoices as it gives him the chance to implement a preconceived policy of sacking ten per cent of his workforce. Hopefully cases like this will give the battlers of Bass a clearer understanding of who the real class enemy is and where their interests as workers lie than they displayed at *that* rally in Devonport two days before the 2004 Federal election.

  7. still working it out
    March 30th, 2006 at 10:57 | #7

    Scratch “Being expensive to hire makes them more valuable.”

    Its glib, incorrect and not what I am trying to say. Sorry.

  8. Katz
    March 30th, 2006 at 12:26 | #8

    I agree with Paul’s observation.

    The Right is so besotted by their fantasies about industrial relations that they have lost the capacity to perceive the possibility that a majority of Australian voters don’t agree with them.

    This perceptual infirmity is similar to the results of neo-cons fantasies about the hopes and desires of the people of Iraq.

    How to explain these forms of perceptual dissonance?

    For almost twenty-five years the Right has comprehensively trumped the Left with their spin and management of perceptions. However, what begin as disposable debating points have a tendency, with reptetioin, to be promoted into the canon of “truth”.

    Thus, the “battler” comes to be perceived as a firm proponent of deregulation, market forces, entrepreneurialism. This is because the “battler” has voted for the Coalition on a range of other issues: multiculturalism, strong borders, “traditional values”.

    This confusion of hopes and realities will prove to be a very troublesome missidentification for the Coalition.

    However, the long term institutional result of the misadventure will be a proliferation of IR tribunals with overlapping functions, a lawyers’ picnic, and a confusing thicket of government dirigisme. An ugly and unprepossessing spectacle.

  9. Spiros
    March 30th, 2006 at 12:41 | #9

    ” *that* rally in Devonport two days before the 2004 Federal election. ”

    Paul raises an interesting point about whether WorkChoices will drive the socially conservative working class away from John Howard’s bosom, but his example is a poor one.

    That rally was about the threat (real or perceived) to their jobs from Labor’s forestry policy. It had nothing to do with cultural issues. If the fear of unemployment isn’t the essence of the class struggle, what is?

  10. Paul Norton
    March 30th, 2006 at 15:22 | #10

    “That rally was about the threat (real or perceived) to their jobs from Labor’s forestry policy. It had nothing to do with cultural issues. If the fear of unemployment isn’t the essence of the class struggle, what is?”

    True enough, as far as it goes. But part of the class struggle is also the fomenting by capitalists of divisions between workers and potential allies such as environmentalists, to enable capital to continue with business as usual to the detriment of workers and the environment.

    In the case of forestry this has entailed misleading forestry workers and their families (and the wider community) about the actual employment impacts of forest conservation decisions, the prospects for retraining and re-employment of affected workers in good jobs (which Latham’s $800 million adjustment package would have done much to bring about), and the expansion of economic activity and employment which has occurred in other regions of Australia which have experienced an environmentally driven restructuring of the regional economy.

    The class struggle also assumes that the relevant unions and union leaderships have (a) a position and analysis which is at least independent of, and where necessary in conflict with, the agenda of the employers and (b) a sense of solidarity with the wider working class who could be affected by the political and economic consequences of their actions. There has not been much of (a) in the positions of the forestry unions in industry/conservation conflicts over the past three decades, and there was not much of either (a) or (b) in the conservative sectionalist stupidity exhibited by the forestry union during the 2004 Federal election.

  11. Jill Rush
    March 30th, 2006 at 20:22 | #11

    Women have supported the conservatives but many who will be disadvantaged in the workforce through loss of wages and conditions may well rue that day. To get rid of the principle of equal pay for equal work and to have employers who will be effectively able to sack women who get pregnant or have caring roles will be to challenge those who have firmly supported the coalition because of promises over interest rates and sound economy. It is not of much benefit to have low interest rates or a sound eceonomy if you don’t have time or money to play with the kids or to pay the electricity bills. Not many women are keen on the barefoot and pregnant look.

  12. Dogz
    March 30th, 2006 at 21:11 | #12

    Any small employer who capriciously sacks good workers is not going to be competitive in the marketplace, for the simple fact that the good workers will go and work for his competitors, and he’ll be left with the dross.

    So, by and large, most sackings are well-justified. The new laws just mean I no longer need to jump through hoops to remove the dross, and no-longer have to pay the hush money to get those people to walk away.

    For those who like to paint it as a class war: I get some of the biggest push to fire from the good employees themselves. Short of dropping payroll, keeping bad workers around is about the worst thing you can do for morale.

    For those who want it both ways – a guaranteed good income but freedom from the risk of being fired for poor performance – the public service might be a better destination.

  13. March 31st, 2006 at 05:00 | #13

    “Women have supported the conservatives but many who will be disadvantaged in the workforce through loss of wages and conditions may well rue that day.”

    Why would women be disadvantaged? Are they worse workers than men? If so are they really disadvantaged by being sacked more often? If not what do they have to be worried about?

  14. Pingu the penguin
    March 31st, 2006 at 06:36 | #14

    You know yobbo, your parents may not have had the “birds and bees” talk with you, but women get pregnant and men don’t.

  15. Crispin Bennett
    March 31st, 2006 at 07:36 | #15

    Dogz: “Any small employer who capriciously sacks good workers is not going to be competitive in the marketplace … So, by and large, most sackings are well-justified”

    A priori nonsense, resting on hilariously false rationality assumptions, as anyone who’s done a variety of jobs in a number of different places will attest. Capricious sackings were already a daily reality in those situations that permitted them under the existing IR laws. The new laws simply extend that permissible capriciousness over a larger domain.

  16. Katz
    March 31st, 2006 at 07:43 | #16

    “For those who like to paint it as a class war: I get some of the biggest push to fire from the good employees themselves.”

    Verily, you are a model employer Dogz. I doffs me cloth cap to yuz.

    Has it occurred to you that not all employers are as enlightened as you are, and that maybe, just maybe, these employers may bear some responsibility for conflictual relationships and atmosphere of mutual suspicion that pervades industrial relations?

    And has it occurred to you that Howard’s legislation may have served to rip the scab off that steadily healing wound of class war whose existence you so glumly deplore?

    To put it another way, perhaps under the previous IR regime, over time, there was a process of healing the old injuries of class war. But now, because of Howard’s unnecassary and provocative actions, class war is back on the agenda.

    Just how smart was Howard on this issue?

  17. Hal9000
    March 31st, 2006 at 08:25 | #17

    I know a parking attendant here in Brisbane acked on Tuesday just one week shy of the tenth anniversary of his starting the job – at which point he would have become eligible to have his long service leave paid. Methinks Dogz’s analysis is based on wishful thinking.

  18. Spiros
    March 31st, 2006 at 08:51 | #18

    “Any small employer who capriciously sacks good workers is not going to be competitive in the marketplace”

    “Capricious sackings were already a daily reality in those situations that permitted them under the existing IR laws”

    I heard of a case recently when a boss was having an affair with an employee, and while she had his attention she got him to sack some of her colleagues she didn’t get on with. The boss himself was sacked when his boss found out (with a big payout) but the people he sacked got no compensation.

    Perversely, this kind of thing is far more likely to occur in small business, who are now free to sack almost at will, than in big business, who are still subject to unfair dismissal laws, yet there are far more internal checks and balances to stop capricious behaviour in big business.

  19. Dogz
    March 31st, 2006 at 09:01 | #19

    Crispin Bennett, I am also one who has “done a variety of jobs in a number of different places”. I’ve been an employee and now an employer. I talk to other small business employers all the time, and their views are similar to mine.

    So my statements are based both on experience and rationality. Rationality of the market that is; I am not impugning rationality to all employers, just the market, which is very good at sorting out the rational employers from the irrational ones. So your assertion that my opinion is “A priori nonsense, resting on hilariously false rationality assumptions” is both rude and unjustified.

    It is noteworthy that no left-wing commentator even counseled the possibility that the 10 sacked workers referred to by JQ were fired for legitimate reasons. Not JQ himself, Greg Combet, the ABC interviewer, Labor, you name it. If this argument was about a “fair go”, I would have thought those attacking the decision would first attempt to determine whether the workers were capriciously fired. But this argument has never been about a fair go. It is about power. Union power.

  20. jquiggin
    March 31st, 2006 at 09:16 | #20

    “It is noteworthy that no left-wing commentator even counseled the possibility that the 10 sacked workers referred to by JQ were fired for legitimate reasons. Not JQ himself, Greg Combet, the ABC interviewer, Labor, you name it.’

    The whole point is that we will never know. Since the workers have no right of redress for unfair dismissal, the employers can’t prove they were acting fairly. So they shouldn’t squeal when the opposite is assumed, especially when they take advantage of the new rules on the first possible day.

    Taking the government as the collective representative of employers the fact they prohibit contractual provisions against unfair dismissal can only be interpreted as representing a desire to act unfairly, without labour market competion from employers who might be willing to guarantee fair treatment.

  21. Dogz
    March 31st, 2006 at 09:38 | #21

    The whole point is that we will never know. Since the workers have no right of redress for unfair dismissal, the employers can’t prove they were acting fairly.

    The employers shouldn’t have to prove they were acting fairly. In how many other areas of your daily activities are you required to prove that you are acting “fairly”? If you cut someone off in your hurry to get to work, should they be able to unilaterally summons you before a “fair driving” tribunal to defend yourself? That’s the problem with unfair dismissal – it is such a rubbery concept that the only practical way for a small employer to deal with it is to pay the dismissed worker to go away.

    One of the problems with the introduction of these laws is that Australians currently attach unnecessary social stigma to losing their job. That’s not to say being fired is not extremely stressful, but in places that have more flexible labour laws (eg US), there is far less social stigma attached to being “pink slipped”. The effect is that people find new jobs more readily.

    One probable effect of these laws will be to reduce the social stigma attached to the loss of your job. So we have a transient problem: you can’t change the culture without changing the laws, hence the new laws must necessarily have a greater impact in the present Australian workforce culture than they will have in the culture they will engender.

    the fact they prohibit contractual provisions against unfair dismissal can only be interpreted as representing a desire to act unfairly, without labour market competion from employers who might be willing to guarantee fair treatment.

    I did not appreciate that the legislation prohibits unfair dismissal clauses in employment contracts. If that is the case I will gladly write to my local MP objecting to it. Are you able to point me to the relevant piece of the legislation?

  22. Crispin Bennett
    March 31st, 2006 at 10:11 | #22

    Dogz: apologies if my comment was rude. But in all honesty I literally find that kind of ‘logic of the market’ reasoning funny (ie. I didn’t use ‘hilarious’ as a term of abuse) and I call it a priori because it is prescriptive, not descriptive of reality. The notion that employers behave according to the abstract rubric of economic rationality is false. They’re various human beings with the same mixes of messy psychological factors at play as the rest of us. If economic rationality says that the ‘irrational’ (as defined by the crude model) employer ‘should’ be eliminated by competition, then it needs adjusting, because that is not what happens in the real world.

    The last couple of examples I remember: sackings because the son of a restaurant manager masturbated into the soup, and because a new young employee objected to being whacked on the head by a supervisor. The employer in the first case is most definately still in business, not sure about the second. The notion that the market necessarily punishes bad employers with enough regularity that we can dispense with justice is an utter fantasy.

    The point is that those of us who believe in protection for employees think that the sackings in the kinds cases I’ve mentioned are unjust enough that they should be illegal. Fundamentalist hire-and-firers think that the market makes them unusual enough that they don’t really matter, so employers should be allowed to get away with them where they ‘irrationally’ choose to. Which just shows that they don’t have even an elementary understanding of what ‘justice’ is.

  23. avaroo
    March 31st, 2006 at 10:11 | #23

    What would be the benefit to a company of sacking employees who are both needed and doing a good job?

  24. still working it out
    March 31st, 2006 at 10:16 | #24

    “I get some of the biggest push to fire from the good employees themselves. Short of dropping payroll, keeping bad workers around is about the worst thing you can do for morale.”

    I agree with that completely. Nothing sucks the life out of good employees faster having to work with lazy or incompetent co-workers.

    But I might add that the reason they are not fired in large organisations is as often due to managerial laziness or incompetence as fear of unfair dismissal laws. It takes work to find and train a replacement and a small amount of work to properly track poor performance. I have seen a number of situations where staff who really should have been removed have not been because their manager just does not want to deal with the problem. And unfair dismissal is not a factor because they are contractors. I have even seen contracts renewed for staff who should have been fired because the manager does not want to deal with the situation.

    Makes me a bit cynical of complaints about unfair dismissal, for large organisations anyway. Seems to have more to do with HR departments complaining about their workload than actual impediments to firing staff.

  25. still working it out
    March 31st, 2006 at 10:25 | #25

    “What would be the benefit to a company of sacking employees who are both needed and doing a good job?”

    Increased bargaining power over the remaining employees. You can demand unpaid overtime with the implicit threat of dismissal.

    Removing potential whistleblowers on unsafe work practices.

    Individual managers protecting themselves at the expense of the company by preventing employees from escalating problematic first level management further up the chain.

    etc etc….

  26. avaroo
    March 31st, 2006 at 10:46 | #26

    “Increased bargaining power over the remaining employees. You can demand unpaid overtime with the implicit threat of dismissal.”

    You’re saying that a company, in business presumably to make money, would see it as a benefit to get rid of people who are doing a good job and who the company actually needs? Does this make sense to you?

  27. avaroo
    March 31st, 2006 at 10:52 | #27

    We really need these employees, our busines is doing well enough that we need their labor, they’re doing a great job, but let’s get rid of them anyway?

    seriously?

    How long would a business that made such bone-headed decisions actually BE in business?

  28. Dogz
    March 31st, 2006 at 11:12 | #28

    Crispin Bennett,

    The last couple of examples I remember: sackings because the son of a restaurant manager masturbated into the soup,

    … I feeel ill …

    and because a new young employee objected to being whacked on the head by a supervisor.

    Whacking employees on the head is simply illegal.

    The notion that the market necessarily punishes bad employers with enough regularity that we can dispense with justice is an utter fantasy.

    I agree entirely. No one is proposing that we dispense with justice. There is still unlawful dismissal. Only unfair dismissal has been removed, and the bar set higher for employees to bring actions against their employers.

    The old system that allowed any dismissed employee to easily bring an action against their employer was far too skewed in the employee’s favour. It was a brake on hiring.

  29. Terje
    March 31st, 2006 at 11:32 | #29

    People fire their employer without good reasons all the time. Several times I have lost valuable employees simply because their needs or inclination have changed. They did not even ask for us to change anything at our end (like pay or conditions or attitude). There is no court process to assess whether they were being fair to the company that had nutured, motivated and mentored them.

    If people want employers to guarantee them a job then they should be compelled to guarantee that they won’t resign. Especially in the small business sector.

    We used to offer employees contracts with 4 weeks notice on both parties. When employees left they rarely honoured the arrangement so we ditched it on new contracts. It now says 2 weeks.

    When we started in business it annoyed me endlessly that two people could not make an agreement and both be treated equal before the law.

    I welcome the new IR reforms. They bring some long overdue balance to the labour market.

  30. still working it out
    March 31st, 2006 at 12:15 | #30

    avaroo,

    What kind of fantasy world do you live in where bad companies are instantly driven out of business? Or large companies don’t have both poorly performing divisions along with the successful ones? I know that in the small business world survival is not easy, but as anyone who has ever related to a Dilbert cartoon would agree, there is a hell of a lot of sub-optimal business practice in the real world.

    The economy is not so ruthlessly competitive that it has no place for second rate companies.

  31. avaroo
    March 31st, 2006 at 12:27 | #31

    And what kind of fantasy world do you live in, still, that you honestly believe that companies get rid of people they actually need who are also doing a good job? One of those conditions must not be met for it to make any sense for a company to get rid of people. And if either of those conditions are true:

    1) the company doesn’t need the employees, or
    2) the employee isn’t doing a good job,

    it’s entirely reasonable to get rid of the employee. If you’re in a poorly performing division and the company cannot afford to keep you, then you ought to be gone.

    Are you TRYING to have the kind of problems France has?

  32. still working it out
    March 31st, 2006 at 12:38 | #32

    “You’re saying that a company, in business presumably to make money, would see it as a benefit to get rid of people who are doing a good job and who the company actually needs? Does this make sense to you?”

    Sack one person in a 100 employee workplace for complaining about unpaid overtime.

    Get 2 hours of unpaid overtime per week per employee as a result.

    Gross benefit to the company @ $15/hour = $15/hour * 100 * 2 = $30,000/week.

    Obviously there are costs such as lower morale and higher turnover with the associated extra training so the above would be a net loser for most businesses. But there are no doubt places where those costs are less than $30,000 a week, so sacking a decent employee would make them money.

  33. avaroo
    March 31st, 2006 at 12:43 | #33

    “Obviously there are costs such as lower morale and higher turnover with the associated extra training so the above would be a net loser for most businesses.”

    Bingo! And companies aren’t in business to LOSE money. Companies keep employees they 1) need and 2) are doing a good job. You can probably think up any number of examples of a company not needing an employee. If that’s the case, the company ought to be able to get rid of the employee.

    Sack one person in a 100 employee workplace for complaining about unpaid overtime.

  34. avaroo
    March 31st, 2006 at 12:44 | #34

    The last sentence in my post above was copied by mistake from still’s post.

  35. still working it out
    March 31st, 2006 at 12:52 | #35

    that companies get rid of people they actually need who are also doing a good job?”

    I am seeing it happen fifty feet down the corridoor from me.

    The managers responsible will probably get promoted for making some cost cuts, even though in the long run its going cost more. It won’t send this business broke because it is so big that you could not find the reduced productivity in the company accounts with a team of forensic accountants, but its happening none the less.

  36. avaroo
    March 31st, 2006 at 13:01 | #36

    “I am seeing it happen fifty feet down the corridoor from me. ”

    Then either

    1) your company didn’t need the employee(s)
    or
    2) the employee(s) was (were) not doing a good job.

  37. Terje
    March 31st, 2006 at 14:07 | #37

    Avaroo,

    There is a third option which is that managment is stupid. This is not that uncommon.

    However a company is entitled in my view to employ stupid managers. And until somebody other than managment is responsible for making managment decisions there is no getting around this problem of bounded rationality. Managers should manage and if they do it badly then that is the companies problem.

    Regards,
    Terje.

  38. still working it out
    March 31st, 2006 at 20:50 | #38

    Dogz, Terje and any other employers,

    I know I am defending the unfair dismissal laws, but I must admit that it is really in the abstract rather than the practical sense. I have never employed anyone and hence am ignorant of the costs of unfair dismissal and I am curious exactly what they are and how those costs play out.

    With unfair dismissal being such a problem why not just hire contractors and casuals? About a year ago my workplace got rid of over 50 contractors. No redundancy payments or any other such complications. Or perhaps put another way, how much extra would you pay to hire someone if they came with an exemption from unfair dismissal? Perhaps that would be an accurate market based reflection of the cost of unfair dismissal?

  39. Pinguthepenguin
    March 31st, 2006 at 21:52 | #39

    Avaroo…define ‘need’

    A company may be able to ‘do without’ certain employees in the short term, although in the long term it is detrimental to the company. Is that need or not?

    You ascribe far too much rationality to these decions. Not to mention the fact that these are people’s lives we are talking about, sacking people should not be so easy that it can be taken too lightly by incompetent, vindictive or stupid management.

  40. Terje Petersen
    March 31st, 2006 at 22:06 | #40

    Pinguthepenguin,

    Employers have lives also. And yet employees are allowed to quit their job on a whim for stupid misguide reasons. Or just because they decide they don’t like the boss this week.

    The fact that stupid decisions happen does not mean we need a law to complicate decision making.

    Regards,
    Terje.

  41. April 1st, 2006 at 04:44 | #41

    The unfair dismissal laws are/were a completely stupid idea dreamt up & implemented by craven fools. A more idiotic and one-sided law I cannot think of.

    To bring a semblance of fairness into such laws, there should also be an unfair resignation law, with similar financial penalties for those who resign unfairly.

    Some of the posters here seem to be disconnected from reality.

    NOBODY who was in the marketplace dealing with such laws, either employer or useless bum bludging off such laws, was under any illusion that the laws were anything but a legalised shakedown of hardworking and honest employers by vindictive, vexatious, sour tempered harpies.

    Note for those with limited reading comprehension: EVERY employee who used, or threatened to use the unfair dismissal laws to “get” an employer, knew the laws were wrong.

    This product of a jealous and disgruntled union mind has deservedly been struck from the books. It should never have been law in the first place. The changes were waaaay overdue. The comprehensive abuse of the unfair dismissal laws meant they would never last.

  42. avaroo
    April 1st, 2006 at 05:32 | #42

    “There is a third option which is that managment is stupid. This is not that uncommon.”

    Nor is it illegal. If you own the company, you get to be as stupid as you want to be. If you can stay in business while being stupendously stupid enough to get rid of employees that you need AND who are doing a good job, well, that ought to be legal.

    “A company may be able to ‘do without’ certain employees in the short term, although in the long term it is detrimental to the company. Is that need or not?”

    If they don’t need you today, they ought to get rid of you. Who gets to make the decision as to whether a company needs someone today or next week or next year? The courts? The employees?

  43. Dogz
    April 1st, 2006 at 06:29 | #43

    SATP,

    The comprehensive abuse of the unfair dismissal laws meant they would never last.

    Unfair dismissal would have lasted just fine if the Liberals had not gotten control of the Senate.

    The “modern” ALP is wall-to-wall union, public service, and party apparatchiks, whose preselections are controlled by backroom factional union bosses. There’s no way the ALP would have a policy of removing unfair dismissal.

    Check their website. ALP policy is to introduce a residential-tenancy-like tribunal and to favour reinstatement over compensation. There couldn’t be better evidence that the ALP is out of touch. I’ve been on both sides of the Landlord/Tenant relationship – those Residential Tenancy Tribunals are heavily skewed in favour of the tenant.

    And reinstatement in a small business?? Right. We’ve got 10 people, one of whom was fired for being a lazy shit, his co-workers hate him, but now after a shake-down at the Unfair Dismissal Tribunal we’ve been ordered to reinstate him. That’s gonna work real well.

    Clearly the ALP drew on the extensive small-business community within its own ranks when formulating this one (sarcasm alert).

    Still working it out: casual is only suitable for certain jobs in certain kinds of industries (those where demand is intrinsically variable). Contractors are useful to service short-term demand spikes for commoditized tasks, but if the job requires a lot of training specific to the role then it is not so easy to do that with contractors – you need to train and retain employees.

  44. Ernestine Gross
    April 1st, 2006 at 07:38 | #44

    Avaroo, “if you own the company, you get to be as stupid as you want to be.” Is this the reason why some people prefer a legal system where owners of a company and have unrestricted rights to hire and fire?

  45. avaroo
    April 1st, 2006 at 08:53 | #45

    why shouldn’t the owners of a company have unrestricted rights to hire and fire? should you be able to tell a company that someone else owns who they have to hire and who they may not fire? and if so, why should you have that kind of power over someone else’s company? if you want to hire and fire, start your own company.

  46. Katz
    April 1st, 2006 at 08:55 | #46

    Any post that contains the word “should” is prima facie a sermon in disguise.

    Do a “find” on this thread for “should” and you’ll find many sermons.

    Now the interesting thing about sermons is that they are usually directed at people who don’t want to hear them.

    Thus, the supporters of Howard’s IR changes tell the workers how they “should” think and behave. The opponents of Howard’s IR changes tell the bosses how they “should” think and behave.

    All very catharic for the posters, but mostly a waste of effort.

    The salient truth that remains unrecognised in this welter of prescription is that this thread is only the most recent and among the least memorable of a centuries-long debate about the rights of labour.

    It began with master craftsmen having the first and last word about who could work and and having much control over how that work was done.

    Ever since, employers have attempted to seize control of the shop floor. It is true that, on average, the employers have won. But even in the era of laissez-faire economics and the Masters and Servants Acts they never achieved complete control. And there has been a patchy but measurable wresting of control by unions since the heyday of laissez-faire.

    And when either side demanded too much, often the counterstroke proved to be successful. In the present case Howard’s IR changes may well provoke a counterstroke that won’t be welcomed by employers.

    The most noteworthy example of the counterproductive effects of extremism is the Taff Vale decision in Britain at the turn of the 20th century. This decision looked like dealing the death blow to legal unionism. Its effect was to spur its development. Employers took a huge hit.

    The trick is to boil the frog without waking it up. I believe that Howard may have scorched the frog, making it very angry.

    And any number of your sermons about how the frog “should” feel about being scorched will make not a blind bit of difference.

  47. April 1st, 2006 at 11:44 | #47

    Katz,
    The growth of unionism in Britain also gave a huge hit to the employees, in the long run. Britain went from being both wealthy and powerful at the start of the century to be poor and powerless in the 1970s, requiring a bailout from the IMF to remain ‘solvent’. The people of Britain were similarly getting relatively poor.
    I agree that these changes may help the union movement, but possibly not in the way you are expecting. Perhaps they will start servicing their members, rather than trying to make political points to their detriment. Their increasing relevance to their members may reverse their decline. Just a thought.

  48. April 1st, 2006 at 11:45 | #48

    Naaaaah, just hold a rock concert and a march. It requires less work.

  49. Tony Healy
    April 1st, 2006 at 17:17 | #49

    avaroo and Dogz, employers and company owners benefit hugely from state intervention, as follows:

    * the legal abstractions called corporations let company owners capture profit without risking their personal assets

    * property law enlists expensive police forces to protect the assets of wealthy people

    * business law enlists the aparatus of the state to assist company owners in forcing customers to pay bills, even to the extent of foreclosing on the customer’s residence, which is staggering, really

    * contract law prevents workers providing their labour freely in the market. For example, in a completely open labour market, a worker who found a new customer or was about to close a large sale could just resign and take the new business with him. As we know, the state protects company owners against this.

    Accordingly, there is nothing wrong with the state ensuring workers have fair arrangements.

  50. April 1st, 2006 at 23:38 | #50

    Excellent points Tony, are you aware how few of those apply to small businesses?

    * Point 1 does not apply to me. My personal assets are very much at risk, as are those of every other small business in my town. Neither is profit sitting there to be “captured”. We have to work like donkey and remain ever vigilant to keep in the black.

    * Point 2. Ever tried to get the police interested in a property crime? The court system however, in practice protects street thugs and those who beat up/burgle small businesses from the natural justice which would otherwise prevent re-offending.

    * Point 3 applies to banks corporations etc. In practice I cannot collect a bill unless the debtor willingly pays me. Ever tried to pursue through the courts a debt against a debtor who is bigtime? Eg an RSL club or a big corporation? Courts will listen like a hunting dog on a leash to a submission from a bank regards foreclosing on a householder, but will demand 10 times the proof from small businsses who are desperately trying to collect a debt from a large scale operator. Chances are remote the court system will be anything but an expensive waste of time for a small operator trying to collect from anybody, the chance of failure is logarithmically increased if the debtor is a large scale operator or institution.

    * Point 4 is breached every day. I am trying to think of a case where a contractor has NOT started up business with clients taken from the previous employer. Of a case where drinkers do not follow a bar manager from pub to pub, of shoppers who don’t follow a decent consultant around.

    I do the same, regardless of where my favourite fridge mechanic is working, I follow him with my business, the same for computer equipment and service etc etc.

    I am trying to think of a law which does NOT side against me when it comes to dealing with staff….

  51. Tony Healy
    April 2nd, 2006 at 00:23 | #51

    Steve at the pub, they’re good perspectives too. My main point was that it’s silly for employer interests to use state intervention as a differentiator in their attack on worker rights legislation.

    Personally I’m a big fan of small business and see it facing many of the same problems as workers. A special interest of mine is the problems farmers face in dealing with corporate power.

    If small business looked more closely at Work Choices, it would see that this type of legislation favours big business, not small. By making workers cheaper and more disposable, it helps larger interests compete against more knowledgeable and more hard working small firms and contractors.

    Re debt collection, surely you could use one of the debt collection firms? And as to personal experience, I’ve had the experience of chasing debts from the big boys.

  52. April 2nd, 2006 at 03:31 | #52

    I’m afraid I haven’t investigated workchoices any further than notice the unfair dismissal has been scrapped.

    This is the best news I have heard in ages. I cannot think of a redeeming feature of the unfair dismissal laws. Their removal is good for all concerned. *yippee*

  53. Dogz
    April 2nd, 2006 at 08:02 | #53

    SATP says pretty much everything I would have said against Tony Healy’s points, although I would add a generic statement that commercial litigation is almost never an option for small businesses, given that a protracted dispute can easily cost more than $100,000 in legal bills and be a huge distraction. Beyond setting the rules and providing the umpires, the state does very little to help you out: private property protection is mostly a privately funded affair (as it should be).

    That’s why you don’t see small business owners clogging up the courts. At the end of the day, if someone won’t pay there’s not much you can do but suck-it-up. A debt collection agency can’t force them to pay – only a court order (with the threat of jail for non-compliance) can do that.

    By making workers cheaper and more disposable, it helps larger interests compete against more knowledgeable and more hard working small firms and contractors.

    I don’t follow this argument. I doubt most workers are going to get cheaper in the current market, and the greater “disposability” only favours small business (wrongful dismissal has only been scrapped for businesses with less than 100 employees).

    It is true that big business will gain a practical advantage from some of the union-busting provisions, since big businesses will more easily be able to unshackle themselves from standover union tactics, and big businesses are much more likely to be unionized in the first place. But I doubt that’s going to make much difference to the small businesses.

  54. avaroo
    April 2nd, 2006 at 09:02 | #54

    I think we have to wake up to the realities of today, Tony. Most people, at least most people in the US, are owners as well as workers. How many of us do not own stock these days in public companies? Either directly or through mutual funds. Long gone are the days when one is either a worker or an owner; we’re often both.

    We have plenty of examples of what works where. In France and Germany, with strong unions and “worker” protections, you have corresponding high unemployment, low ownership of the means of production and general malaise in the business sector.

    Compare that to Britain and the US, where you have weaker unions, fewer “worker” protections, low unemployment, high levels of stock ownership and vibrant business sectors. It’s well past time to recognize that what works in practice also works in theory.

  55. Ernestine Gross
    April 2nd, 2006 at 09:54 | #55

    Avaroo,

    1) “if you own the company, you get to be as stupid as you want to be.� Is this the reason why some people prefer a legal system where owners of a company and have unrestricted rights to hire and fire?

    2) The beauty of your preferred scheme is that the managers of corporations may be able to get a little bit of wealth from those whom you refer to as ‘we’ in wages and in profits. And, if ‘caught by the debtholders’, a little bit of taxpayers money is appropriated too. Happy to hear you understand all this.

  56. avaroo
    April 2nd, 2006 at 09:58 | #56

    “Is this the reason why some people prefer a legal system where owners of a company and have unrestricted rights to hire and fire?”

    no

    “2) The beauty of your preferred scheme”

    Low unemployment, ease in finding a job, vibrant economy?

    “is that the managers of corporations may be able to get a little bit of wealth from those whom you refer to as ‘we’ in wages and in profits.”

    ah, us vs them, the siren song of those still living in 1850.

    “And, if ‘caught by the debtholders’, a little bit of taxpayers money is appropriated too. ”

    Yes, companies NEVER go out of business, right.

  57. Ernestine Gross
    April 2nd, 2006 at 10:07 | #57

    1850: True, slaves were always fully employed.

  58. avaroo
    April 2nd, 2006 at 10:27 | #58

    Should you ever want to join the rest of us in 2006, let us know.

  59. Katz
    April 2nd, 2006 at 10:41 | #59

    The rights of property and the rights of labour are central to the ways in which societies define themselves as civil societies. These social practices define more powerfully than any other form and structure of everyday life.

    The law can say whatever the lawmakers want it to say about the rights of labour and the rights of property.

    It is a fact beyond dispute that there is no wide consensus in the Australian community about what that law should say about the IR practices imposed by Howard’s IR legislation.

    Any law makes no concession to the fact that there is widespead disagreement about the rights of property and the rights of labour is an unsustainable law.

    I believe that Howard’s IR changes are an example of unsustainable law similar to Thatcher’s poll tax disaster in the late 1980s. Thatcher seemed unassailable until she exposed herself as an unapologetic supporter of the rights of property. Her own party, fearing an electoral holocaust, dumped her. The poll tax was repealed by a thoroughly cowed Tory Party, who haven’t been heard of since.

    Assuming Australia continues to adhere to the principle of majority rule, the Coalition will be punished severely for supporting Howard’s IR changes.

  60. still working it out
    April 2nd, 2006 at 12:18 | #60

    “casual is only suitable for certain jobs in certain kinds of industries (those where demand is intrinsically variable). Contractors are useful to service short-term demand spikes for commoditized tasks, but if the job requires a lot of training specific to the role then it is not so easy to do that with contractors – you need to train and retain employees.”

    But why can’t you do that with employees on contract or on casual conditions? My workplace is majority contractors and the level of training specific to the role is enormous. People aren’t really productive until they have been there a few months. There are other contractors that have been around for more than 5 years. And its not about the annual leave and things like that, as alot of the contracts have those written in just like a normal employee.

  61. Jill Rush
    April 2nd, 2006 at 12:20 | #61

    Even if it is accepted that the right to fire at will will have a business advantage – it has the potential to be so abused tht those rights which are protected will never have to be discussed. For instance the ability to discriminate against people on notions of race, sex, religion etc will never be tested as employers don’t have to state their reasons.

    The power that this confers means that there will be a race to the bottom. There are good employers who will be forced to reduce wages, conditions etc to stay in business. The values that they hold to treat people fairly will be trashed in the process.

    The problem with the discussions above is that we need to believe that good employers will continue to behave in ethical ways – whereas history shows that even people who hold ethical values can be brought to a point where they behave badly.

    Women will be badly affected as their bargaining power is reduced by the potential to have children and to care for children and elderly parents. When bargaining power is reduced and there are no protections then it follows that wages and conditions will be reduced. This is good for employers who have wages as a major cost. It is not good for the women who are looking to have work which allows them to have a family and pay the bills.

    Coincidentally on July 1 Sole Parent Pensioners will be required to enter the labor market – these are manly women. What good planning on the part of the government. To increase labour supply at the same time as the new NoWorkChoice legislation will be running strongly – and anyone who refuses to take a job no matter how badly paid will not be entitled to benefits.

    No wonder employers are feeling happy.

  62. avaroo
    April 2nd, 2006 at 12:32 | #62

    How could any employer ever be “forced to reduce wages”?

    “Women will be badly affected as their bargaining power is reduced by the potential to have children and to care for children and elderly parents.”

    Millions of women work in jobs all across the US. How is this possible with no “worker” protections? And why would it be any different for women in Australia?

  63. Stephen L
    April 2nd, 2006 at 14:48 | #63

    Avaroo: “How could any employer ever be ‘forced to reduce wages?’”

    Well not literally forced perhaps, but forced if you want to stay in business. I co-run a small business. We compete primarily with a much larger business. Our advantages are lower (management) costs and specialty skills in a niche market. Their’s are a name established from working over a much larger market and a marketting budget that dwarfes ours.

    We try to adhere to a philosophy of paying our staff a liveable wage for the period they are working for us (because our work is seasonal we can’t pay people a living wage year round). Our competitor pays the lowest rate they legally can.

    Up til now we have been able to pay our staff more, but through greater efficiency we usually underbid the competitor when tendering for jobs. I expect that under the new legislation they will pay their staff even less. The question for us is whether we can continue to underbid them, or whether we will have to start paying our staff less as well, which we don’t want to do.

    BTW, the whole notion that bad companies will be driven from the market looks a bit of a joke to us. We frequently hear horror stories from clients who used to use our competitor about how much worse a job they did, but they continue to have a much larger share of the market than us – the inertia provided by thier size, capital, marketing budget etc means that they sometimes get jobs when charging up to 40% more than us, even though they have a much longer list of disastisfied ex-customers.

    PS – I’m only speaking for myself and two of my partners here. The fourth partner has a somewhat different view.

  64. April 2nd, 2006 at 15:46 | #64

    He who writes a paycheque is compelled by law to continue to write the same cheque each week forever? What a ridiculous law!

    How many of those who are mourning the demise of this law have ever walked the walk & had a permenant employee? A dose of reality usually changes ill-formed opinions.

  65. stoptherubbish
    April 2nd, 2006 at 16:17 | #65

    Satp your are a whiner and a whinger.

  66. April 2nd, 2006 at 17:14 | #66

    Stop the rubbish, to make that statement with any accuracy, you could only be looking into a mirror.

    I am guilty of not having a jealous union mindset. I am guilty of not being a soft handed left winger (as opposed to those who have got their hands dirty and had blisters from working for a boss)

    After many years of living with, and adhering to, the unfair dismissal laws, I do not see any benefit in them for anybody.

  67. Seeker
    April 2nd, 2006 at 21:13 | #67

    SATP says: I am guilty of not being a soft handed left winger (as opposed to those who have got their hands dirty and had blisters from working for a boss)

    Anymore cliches? I am a left winger who is very familiar with dirty hands and blisters, and oven-like roof spaces, and diggin ditches in tropical sun, etc. Done plenty of that. Didn’t complain either. (Didn’t love it either.)

    I agree with you that the unfair dimissal laws at least needed serious reform, but having been on the receiving end of incompetent, arrogant abusive bosses more than once on my life, I think some version of unfair dismissal has a place. Though I agree with whoever it was that made the point about unfair resignation.

    Abuse, incompetence, dishonesty and sloth are found everywhere in society. Which is the point, workers don’t have a strangle hold on it. And the market often doesn’t always really hold bosses/owners to account, sometimes it even rewards them, especially at the big end of town. Hence the need for a bit of civilising regulatory oversight and restraint.

    And bosses are also sponging hypocritical whingers just as often as workers. It’s a human thing, not a worker/unions v. bosses/owners thing.

  68. aspro
    April 2nd, 2006 at 21:38 | #68

    ‘Millions of women work in jobs all across the USA.’ What for? Three bucks an hour plus tips? Sorry, it’s illegal to discuss wages and/or conditions now (breach of contract)

  69. avaroo
    April 3rd, 2006 at 06:55 | #69

    “Millions of women work in jobs all across the USA.’ What for? Three bucks an hour plus tips?”

    Yes, every American woman works for $3 an hour plus tips.

  70. avaroo
    April 3rd, 2006 at 07:02 | #70

    “We try to adhere to a philosophy of paying our staff a liveable wage for the period they are working for us (because our work is seasonal we can’t pay people a living wage year round). Our competitor pays the lowest rate they legally can.”

    And yet they continue to be able to find people to work for them?

    There’s nothing preventing you from paying your employees whatever you want to pay them, no matter how many times more it is than your competitors pay. Now if you want to stay in business and win contracts, then you’ll likely either have to eat the excess wages yourself or pay people less, but it’s still your choice. No one is forcing you to pay less.

    Your notion that you must pay your employees more than the going rate for the job is as silly as saying that whoever you are providing a bid to for a job should select your compay even though it’s not the low bidder. That you appear to understand would be a poor business decision on their part. Yet you don’t make the connection to your OWN business decisions.

  71. Tony Healy
    April 3rd, 2006 at 11:07 | #71

    avaroo, surely that’s the point? If legislation lets employers reduce wages, then those who do will be able to drop their prices and win more business at the cost of employers who might wish to pay better wages.

    Thus legislation like the IR changes actually deprives employers of the choice to continue paying fair wages, all things being equal.

  72. Tony Healy
    April 3rd, 2006 at 11:08 | #72

    By the way, Howard and Andrews are all over the papers today in damage control mode.

  73. April 3rd, 2006 at 12:51 | #73

    “avaroo, surely that’s the point? If legislation lets employers reduce wages, then those who do will be able to drop their prices and win more business at the cost of employers who might wish to pay better wages.”

    And if everyone reduces wages across the board, then prices come down too, meaning that purchasing power doesn’t change, and people are no better or worse off.

    ” For instance the ability to discriminate against people on notions of race, sex, religion etc will never be tested as employers don’t have to state their reasons”

    You assume that unfair dismissal laws help minorities for some reason. I am not sure why.

    You don’t have to give a reason why you hired somebody. Why would you hire a minority or a woman when you know full well that sacking them could cause you to be taken to court for discrimination?

    The safe course would be to never hire anyone except straight white males, because as they cannot be the victim of “discrimination” of any kind, that at least eliminates one way that you could be stitched up at later date.

    You also won’t have any problems with sexual harassment laws if you only ever hire men.

    The sad thing is that these sorts of regulations which are supposed to help people end up hurting them instead.

    “Women will be badly affected as their bargaining power is reduced by the potential to have children and to care for children and elderly parents.”

    Again, you have it exactly backwards. Women are hurt by the current regime, especially young women in relationships who are considered a risk to have children in the near future.

    Why take a risk on hiring her knowing if that she gets pregnant and can’t work for 6 months, not only can you not fire her but will be responsible for paying her to take an extended leave of absence?

    With the removal of unfair dismissal laws, employers will again have the confidence to employ women without having to worry if they will become a future financial burden.

  74. Ernestine Gross
    April 3rd, 2006 at 13:08 | #74

    Avaroo, the point is that equilibria (solutions) of economic systems depend on the institutional framework (rules of the game) and the solutions have different properties. For example, it is possible that under some ‘rules of the game’ everybody is worse off. Your apparent mental model (consisting possibly a list of statements to be published again and again all over the cyber space without regard as to the negative externality created in the form of unbelievable bordom generated in the minds of the readers) does ot seem to allow for this.

  75. Katz
    April 3rd, 2006 at 14:01 | #75

    Yobbo,

    1. “With the removal of unfair dismissal laws, employers will again have the confidence to employ women without having to worry if they will become a future financial burden.”

    Which golden age of sexual equality in the workplace are you referring to here?

    2. “And if everyone reduces wages across the board, then prices come down too, meaning that purchasing power doesn’t change, and people are no better or worse off.”

    This is called debt deflation. Try telling Howard’s “battlers” that they’ll be paying their pre-WorkChoices’ debts with post WorkChoices incomes. Given the fact that Australians are the world-champion debtors, this confrontation between rhetoric and reality is bound to be a very explosive one.

  76. StephenL
    April 3rd, 2006 at 15:19 | #76

    Yobbo, its also entirely possible for wages to come down a lot faster (or rise more slowly) than prices. This happens if most of the falling costs are swallowed in profits (in a business to business transaction this could be the profits of the contractor or the contractee or both). The result is that those who own shares in businesses become richer, while those who live on wages become poorer. This has been going on (at least relatively speaking) for decades in the US.

    As someone who gets almost half their income from the company I run, and a little more than half from working for other people in our off season, I’ll probably come out about equal if this is the way things go. But it makes for a society I don’t really want to be part of.

  77. April 3rd, 2006 at 19:50 | #77

    I presume somebody has already said… but just in case: people get fired all the time. Just because these people were fired after the new laws came in didn’t mean they weren’t going to be fired anyway.

    Further, just because some people got fired doesn’t mean that the laws are bad for total employment.

    The real test of these laws isn’t in whether 10 people got sacked yesterday… it’s in the long-term consequences. Sackings are always big news, but the slow constant process of job creation never makes the front page. This news-bias might help lefties to get angry, but it is the total story that matters to the unemployed.

  78. Roger Wegener
    April 3rd, 2006 at 21:15 | #78

    The real issues of the day are highlighted in the Australian today – inadvertently Rupert has informed the great unwashed:

    (1) On the front page – hidden inside another story – “16% of all Australian men in the age group – 25 to 44 – are unemployed or not in the labour force”. Isn’t this of concern to anyone? Apparently not.

    (2) According to the latest NEWSPOLL, John Howard has a SATISFIED rating of 48% and a DISSATISFIED rating of 43% in NSW. Here we have the current Prime Minister – the one who is regularly taking the official Opposition party to the cleaners – and who is supposedly invincible – getting a dissatisfied rating of 43% in our most populous state! Doesn’t this say something about how he dominates the political landscape? In his dreams.

  79. Ernestine Gross
    April 3rd, 2006 at 21:34 | #79

    John Humphreys,

    Indeed, the real questions are:
    What is the theoretical and empirical foundation of the IR laws?
    Who were the advisers?
    Are the advisers going to take the financial responsibility for the private and social costs?

    None of the foregoing questions have anything to do with ‘lefties’, ‘righties’, ‘uppies’, or ‘downies’.

  80. avaroo
    April 3rd, 2006 at 22:27 | #80

    “avaroo, surely that’s the point? If legislation lets employers reduce wages, then those who do will be able to drop their prices and win more business at the cost of employers who might wish to pay better wages.”

    Ys, there are no guarantees that you’ll win business. Ever. That’s life. Still, my point was, you may continue to pay your employees whatever wages you’d like. No one, and no law, is “forcing” you to lower anyone’s wages.

  81. avaroo
    April 3rd, 2006 at 22:29 | #81

    Yobbo, your post at 12:51 is excellent.

  82. avaroo
    April 3rd, 2006 at 22:47 | #82

    “”The result is that those who own shares in businesses become richer, while those who live on wages become poorer. This has been going on (at least relatively speaking) for decades in the US.”

    Most Americans own shares in businesses either directly or through mutual funds/retirement plans. Is stock ownership that much of a rarity in Australia that one is either an owner or a “worker” and never both?

  83. April 3rd, 2006 at 23:40 | #83

    Ernie… I don’t think it matters who the advisors are as much as what the advice is. The theoretical foundation for more flexible IR laws is beyond doubt, except in the more ideological circles of the left.

    Denying the effectiveness of flexible labour markets is up there with young-earth creationism, believing the US government about Iraq and denying global warming.

  84. Tony Healy
    April 4th, 2006 at 00:19 | #84

    John Humphreys, are you, as a libertarian, comfortable with the government forbidding employers from deciding how they will employ people?

    And with the government forbidding people from deciding to negotiate their working arrangements jointly, or seeking appropriate professional representation?

    And to top it off, with the government imposing $33,000 fines for even trying to include certain types of arrangements in contracts?

  85. Ernestine Gross
    April 4th, 2006 at 02:20 | #85

    John Humphreys

    Please do provide at least one reference for the theoretical foundation for “flexible IR laws”.

    Are you saying that in practice you want IR laws to be bent – forward, backward, sideways – to achieve ‘flexibility’?? Surely, for that purpose any arbitrarily chosen set of laws would be ‘good enough’. So, why do you bother to advocate a particular set of laws that are to be bent?

    “Denying the effectiveness of flexible labour markets is up there with young-earth creationism, believing the US government about Iraq and denying global warming.”

    Sure, ‘everything’ is “effective” in one way or another. Hence any arbitrarily chosen IR laws would do. I suppose you know where “up there” is where one can find young-earth creationism, etc. I have no idea where such a place is.

    What are “more ideological circles of the left”??

  86. Dogz
    April 4th, 2006 at 06:20 | #86

    John Humphreys, are you, as a libertarian, comfortable with the government forbidding employers from deciding how they will employ people?

    This is a very good question, so I’d like to hijack it for myself (as something of a libertarian).

    Governments already forbid certain kinds of owner behaviour in order to ensure greater efficiency and fairness in the market. For example, anti-cartel laws – I am not allowed to collude with my competitors to set prices.

    To a certain extent the prohibitions in workchoices on employee/union bargaining behaviour can be viewed as cartel-busting but on the labour-supply side. These should also result in a better operation of the market. Why should labour be allowed to form cartels but employers not?

    [I understand that once-upon-a-time labour cartels were the only way for workers to force change. But we're in the 21st century now. In addtion to far greater class mobility, we also have an enormous state welfare apparatus ensuring no worker is 100% beholden to their employer anymore.]

  87. Tony Healy
    April 4th, 2006 at 10:02 | #87

    avaroo, on the subject of this legislation forcing fair paying employers into a race to the bottom, observe the comments by a partner of one of the law firms that helped draft the law, reported in The Australian today:

    Anthony Longland, a partner with Freehills, advised employers to watch for competitors who abolished penalty rates and allowances and eased restrictions on working hours.

    “They might be able to get a significant advantage over you in terms of labour costs,” he told a Sydney legal conference.

    Mr Longland was reported as saying protected conditions for workers were really “smoke and mirrors”. They were “protected but not protected” because the safety measures could be forgone if they were overridden.

    Mr Combet said Freehills had kept a “to-do list” so it could help the Government close off a range of protections in the laws.

    http://www.theaustralian.news.com.au/common/story_page/0,5744,18703103%255E2702,00.html

  88. avaroo
    April 4th, 2006 at 10:05 | #88

    Tony, nothing in that quote or link shows that any employer is “forced” to pay anyone less. Legally, you may pay people as much as you like.

  89. StephenL
    April 4th, 2006 at 10:43 | #89

    Avaroo: “most Americans own shares in businesses either directly or through mutual funds/retirement plans. Is stock ownership that much of a rarity in Australia that one is either an owner or a “workerâ€? and never both?”

    True, but not all that relevant. If someone draws 95% of their income from their wage and 5% from dividends and capital gains in companies they will be seriously disadvantaged if profits rise and wages fall. The vast majority of Australians are in approximately this position – much fuss is made over the proportion that own shares, but for most their holdings are so small as to be a truly minor factor. Owning $1000 worth of Telstra shares does not make one a major benificiary of a rising stockmarket.

    Obviously Avaroo also takes a narrow definition of the word forced – apparently it means “must comply or will face legal consequences”, rather than “must comply or will go out of business”. Most people would believe the word was applicable in either circumstance, but maybe that is evidence of decline of the English usage.

  90. Katz
    April 4th, 2006 at 10:49 | #90

    “[I understand that once-upon-a-time labour cartels were the only way for workers to force change. But we’re in the 21st century now. In addtion to far greater class mobility, we also have an enormous state welfare apparatus ensuring no worker is 100% beholden to their employer anymore.]”

    Very big of you to acknowledge these things Dogz.

    Let’s let the dogs loose on your concessions and see where they lead us.

    1. In the egalitarian meritocracy of the 21st-century Australia of your imagination, what is the relevance of class? How do you identify class in a meritocracy?

    2. Further, if there are no classes how can there be class mobility?

    3. On the other hand, if classes still exist, then there must be class interests. A free society would maximise the scope of the expression of legitimate interests, including class interests. But as it has been widely acknowledged, Howard’s IR changes represent government dirigisme and social engineering in that they are designed to undermine class interests.

    4. And still virtually unacknowledged in our discussions is the long-standing defence of the rights of labour. One of the most potent elements of that debate since before the Industrial Revolution is wage-earners’ objection to having their labour and expertise regarded as indistinguishable in quality to finance capital. The workplace has always been viewed as an extension of the community and culture of workers. And workers have very often defended this aspect of the shop floor.

    Now this this last fact may be deplorable to meritocrats and libertarians such as myself. But as a political and social reality it cannot be wished away. There are many examples in the history of IR that demonstrate that to mishandle this issue is to buttress the determination of workers to defend their view of workplace culture.

    Howard’s IR changes have done just that.

  91. Terje
    April 4th, 2006 at 10:50 | #91

    Obviously Avaroo also takes a narrow definition of the word forced

    Many arguements are semantic. ie futile.

  92. avaroo
    April 4th, 2006 at 10:55 | #92

    “True, but not all that relevant. ”

    Actually, it’s the whole point. It’s living in the past to suggest that people are either owners or workers. At least in the US, Australia may very well be different.

    “Obviously Avaroo also takes a narrow definition of the word forced”

    We’re talking about the law here, are we not? WorkChoices and it’s likely effect? There’s not a thing in WorkChoice, as far as I can tell, that would force anyone to reduce any employees wages. If there is such a provision in the law, let’s see it.

  93. avaroo
    April 4th, 2006 at 10:57 | #93

    Here’s what Tony had to say:

    “avaroo, on the subject of this legislation forcing fair paying employers into a race to the bottom”

    Is he NOT talking about being forced in connection to this legislation?

  94. Dogz
    April 4th, 2006 at 11:08 | #94

    StephenL:

    The vast majority of Australians are in approximately this position – much fuss is made over the proportion that own shares, but for most their holdings are so small as to be a truly minor factor. Owning $1000 worth of Telstra shares does not make one a major benificiary of a rising stockmarket.

    Every working Australian has super. Average weekly earnings is now around $50,000 (?). 9% of $50,000 is $4,500 per year. Therefore every working Australian is, on average, putting away $4,500 per year into their super. Every (public) super fund is invested in the stockmarket. Ergo, nearly every working Australian has an awful lot more than $1000 invested in the stockmarket.

    Then there’s property investments.

    Whichever way you cut it, we’re an ownership society.

  95. Tony Healy
    April 4th, 2006 at 14:12 | #95

    avaroo, I think you’re pushing it a bit. Forcing doesn’t mean compelling by legislation unless it’s qualified to convey that meaning. Especially in business, forcing often means compelling by financial or other reasons.

    But what do you think of this problem? If market conditions force employers to reduce pay generally as a result of this legislation, do you think that’s good?

    yobbo, this gets back to your point too, made earlier. If wages get pushed down, the full discount is never returned to consumers, so the effect is to exacerbate gaps in society.

  96. Katz
    April 4th, 2006 at 14:28 | #96

    “Whichever way you cut it, we’re an ownership society”

    Dogz, this cannot be gainsaid.

    However, before we take to beat our collective chests too robustly, it is important to acknowledge that, at least since the first decade of the 20th century, this has always been the case.

    Home ownership has always been the major repository of equity in for Australians.

    Moreover, the old mutual provident societies like AMP and The Australian Natives Association provided investment opportunities to huge numbers of Australians. These funds were also largely invested in real estate. Thus, your mental picture of an erstwhile proletarianised Australia is incorrect. (For more on this see my previous post, which had been automoderated into invisibility).

    And two further points need to be made:

    1. Australia’s identity as an ownership society followed the establishment of a highly prescriptive arbitration system that set minimum wages on the principle of “fairness”. Just how much of an ownership society would Australia be without that juridical intervention?

    2. Australia is no longer a thrift society. A rising proportion of Australians’ equity guarantees burgeoning debt. There’s nothing wrong with this until income falls below the point at which the debt can be serviced.

  97. Ernestine Gross
    April 4th, 2006 at 14:37 | #97

    Hm. The superannuation enduced ‘ownership’ happens to be compulsory.

  98. StephenL
    April 4th, 2006 at 14:39 | #98

    Every working Australian does not have super, or at least not super equal to 9%. If you earn less than $400 per month from a particular employer they do not need to pay you super. I know this because one of my employers very carefully only pays me super in the months where I do more than $400 worth of work. The calculation (at least at this employer) is based on when I am paid, not when I did the work. Consequently it is sometimes in my interests to delay a pay request so that it counts in a month when I will earn over $400.

    An increasing number of people work several low paying jobs, and it is quite possible for some or all of these to be below $400 a month much of the time. That is of course besides the people in contract jobs who don’t always get paid super either.

    It’s true that there are few people who are purely owners or purely workers. However, for most people one dominates the other, and their interests are not evenly divided.

  99. Dogz
    April 4th, 2006 at 15:11 | #99

    Katz, StephenL, you’re moving the goalposts. I was addressing this specific point:

    much fuss is made over the proportion that own shares, but for most their holdings are so small as to be a truly minor factor. Owning $1000 worth of Telstra shares does not make one a major benificiary of a rising stockmarket.

    This is simply not true anymore. Most younger Australian workers will retire with somewhere between 7 and 10 times their final annual salary in equities, in addition to owning their own homes (prudence suggests that over the final 5-10 years of their working lives they will have actually shifted their super holdings from equities to less volatile securities, but given the lower returns of the latter, most of their gains will still have come from the stockmarket).

    These days life seems to be very roughly divided into thirds: one third getting an education, one third working, and one third in retirement. Most people earn nothing in the course of getting their education, so the amount accumulated for retirement during the middle third is just as important as the amount spent in the middle third.

    In other words, very roughly speaking, investment returns are now almost as important as income for most Australians.

    This is the radical difference between today and even 50 years ago: back then a male was expected to live no more than a few years into his retirement, hence it mattered little what investments he accumulated during his working years.

  100. April 4th, 2006 at 15:22 | #100

    Making it illegal to define certain provisions in an individual contract makes no economic sense. If you have employees who are risk averse (to unemployment), it might be cheaper to include unfair dismissal rules in an AWA rather than pay the employees their risk premia to offset the uncertainty.

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