I worked more on the Industrial Relations reform issue last night and I have written a draft paper, which you can read and, hopefully, comment on.
IR is a very complex topic, and for that reason I’ve tended to shy away from detailed analysis in the past. But with major changes inevitable, there’s no alternative but to get immersed in the details. This is going to be a slow process, but at least I’ve now made a start. I’m pretty much flat-out at present, so progress on this is likely to be slow.
Anyway, you can read my analysis, for what it’s worth (PDF file over the fold).
John Quiggin 
An interesting paper. In my job in computers I have little to fear from the new IR as the computer industry as a whole is very much organised along these lines anway with a lot of contractors and very little union involvement. The last time I was in union was when Westpac outsourced it’s IT to IBM GSA and if you did not take the offer from IBM you lost all your enititlements to redundancy payments. The union here took Westpac to the IR and this resulted in people who declined the offer got half their normal redundancy entitlements.
It is the rise in inequality that I find hard to accept. Individual contracts etc are all very well when you are fit and well and able to work. You start to find the sting in the tail if you become ill – this is where a safety net is good. Most people that are fit and healthy only think of this when circumstances change but by then it is too late. A recent study in the US on personal bankrupcies found that a disturbing amount of them were due to medical bills that could not be paid.
I guess it is just the old truism – the rich get richer and the poor get poorer.
Thing is, Ender, like most truisms, it is not the case. Most of the poor of 50 years ago could not afford a car, TV, microwave, and the other modern things we take for granted – DVDs, videos etc. The poor have got richer in absolute terms.
In relative terms, what you hear most about on this site, they may have got poorer as the rich have got even richer, but I would argue that, provided they are not absolutely poorer, the economy is doing what it should.
On the safety net. It is really a question of ensuring that, if you agree to a contact without benefits, you have got your own insurance. Yes, it is trickier than relying on your employer for everything, but it is much better than an ‘iron rice bowl’ where you get no choice and no real ability to improve.
Everything is a trade-off and I am willing to trade security off for more freedom to choose.
One aspect of industrial relations that is often underestimated is the degree of “fit”, or consonance between industrial relations systems and the geographical distribution of labour.
Clearly, the outlines of the current industrial relations system were established in the late nineteenth century when the model of economic development was highly localised. Workers lived in Collingwood. Their employers lived in South Yarra. The market was highly localised.
National economic planning, beginning in the 1920s, and reaching a climax in the 1950s and 1960s, emphasised “national capitalism” wherein it was considered necessary from the point of view of nation-building to develop an economy that boasted certain economic activities, such as car manufacture, steel manufacture and as large a consumer durable sector as possible.
In line with these priorities, even Menzies was prepared to promote the development of such an economy with little heed to cost or short-term efficiency. The State was also deeply involved in direct ownership and operation of important elements of the national infrastructure: banking, power generation, sea and air transportation, oil refineries, etc. The pay-off for labour were subsidised wages and employment for life. In short, there was a good fit between the nation-building project and the industrial relations system.
These priorities proved in the 1970s and after to be more expensive than voters were prepared to accept. Perhaps many voters believed that it would only require the “rationalisation” of other people’s jobs. Regardless, the very occupations that employed the most militant and politically effective elements of the labour movement suffered significant eclipse during the 1970s and after. The consonance between economic policy and industrial relations systems broke down.
Howard’s reforms simply restore that consonance. But it is perhaps worth noticing that the economic substructure is already doing the job of ordaining the industrial relations system that operates in the workplaces of Australia.
Thus, the task for social democrats is less to attempt to salvage the remnants of a nineteenth-century industrial relations system than to confront Australian voters with the nature of the geographic distribution of labour and preferred places for Australia within this globalised system.
Just reading the article now. You state in your first paragraph that Coalition senate control was unexpected. To the contrary it was very expected with the Democrats and psehologists saying so. Like the fact that Iraq had no WMD and that Schapelle Corby was always going to be convicted, I think it was a very real threat that they would at least get 50% allowing them to block anything and also possible that they would get 50% +1, if you count Steven Fielding they got 50% +2.
Makes sense to me.
It raises the question of whether Australians think greater income inequality is a bad thing. I suspect the majority are so busy aspiring to be winners, they don’t have time to be concerned with losers.
The proposed IR changes should grammatically/definition wise be referred to as re-form rather than reform. Reform is change to decrease inequality whereas re-form is changing something significantly, I don’t think with any implied effect on inequality.
All things are relative however with the economic good times the gains have not been shared. The poor of today can still not afford the things that you mention. Most of their income is spent rent and food. Also with the poverty are the problems of increased domestic violence etc that come with the stress and hopelessnes of being poor.
This is from http://www.spinneypress.com.au/170_book_desc.html
“The real problem for the disadvantaged who are on the margins of poverty is that any small crisis, such as sickness, car breakdown or death in the family or broken appliances could drive them into abject poverty. (p.3)
• Over 5 million Australians (up to 30%) live at a distinct economic disadvantage compared to the rest. (p.4)
• 5.5 million people are in households with incomes less than $23,000 pa. Some of these would be single people and pensioners who can survive reasonably well at this level – but these would be offset by large numbers of working poor families having incomes higher than $23,000, but at levels that are still totally inadequate. (p.4)
• One in every five poor Australians now live in a family where wages and salaries are the main source of income. In Australia today having a job no longer guarantees that you or your family will not be in poverty. (p.4)
• The proportion of people living in poverty has increased by 30 per cent since 1973. (p.5)
• 55 per cent of disadvantaged families have one or several of their members suffering from the effects of trauma or chronic illness. (p.5)
• In 2000, 13 per cent of Australians (1 in 8) were living in poverty up from 11.3 per cent in 1990. The percentage of children in poverty has risen from 14.3 per cent in 1990 to 14.9 per cent in 2000. (p.7)”
It is not a small problem and to my mind making the IR system more dog eat dog with less safety nets is only going to make the problem worse.
John, on the interaction of awards, certified agreements and AWAs/common law individual contracts, you’re missing some very important changes:
(a) Many certified agreements (ie EBAs) prohibit the offering of AWAs to staff covered by them. Where this is not the case, the AWA is to be interpreted so as not to be inconsistent with conditions granted in the CA. As in the current changes in Higher Education, the intent of the government is to prohibit these arrangements (so although the argument is that AWAs can supplement CAs by offering higher pay and conditions, it could also work in the opposite direction).
(b) AWAs are currently tested against award conditions to see that the employee is not disadvantaged. The Federal legislation has a weak “no-disadvantage clause” compared to the Qld legislation but it nevertheless ensures that basic award minima are preserved. The new test will be against the minimum wage and other legislative minima. The effect of this is to render the award system irrelevant if the employer so chooses – in that the AWA can negate most of the allowable 16 award matters and offer a lower pay rate (or get rid of penalty rates etc) without any tradeoffs.
(c) The current legislation provides that the starting point for an AWA offer to employees doing substantially the same duties has to be the same. This is going out the window, I think.
(d) The secrecy provision in AWAs is very disturbing. Aside from making it difficult for researchers to judge their effects, it can also lead to the effective invalidation of provisions relating to gender equity, for instance. In some large corporations, men are being paid 10k more a year for doing the same work as women, and no effective legal recourse is available unless the employer or employee voluntarily discloses the pay rates prevailing under the award.
(e) The figures about the higher wages prevailing on AWAs touted by the Government are highly misleading as they don’t take into account the fact that two of the largest areas of penetration by AWAs are the relatively highly paid sectors of the public service and mining. Communications – which is also a sector where AWAs are common because the Government has put pressure on Telstra to offer them, and because Optus was established as a non-union company, would be a better test. Evidence on the use of AWAs in unskilled manufacturing and transport sectors suggests they usually are very unfavourable to employees.
(f) The Qld legislation prevents employers from converting employees into contractors if the intent is to reduce their pay and conditions or avoid payment of oncosts such as super, leave entitlements etc. However, the government’s legislation may lack effect here as the Courts have been using a test for who actually is an independent contractor and the thrust of the caselaw has been to suggest that claiming people working on an assembly line (for instance) are is illegal at common law.
It’s a good article, but I’d suggest a quick scan of relevant journals such as the Journal of IR, Labour & Industry, and the Australian Journal of Labour Law.
One aspect of the proposed ‘changes’ that has gone comparatively unnoticed is that Australia will probably be alone among industrialised countries in not giving effective recognition to the right to bargain collectively. As it is, an employer can already make it a condition of employment that new employees renounce their capacity to participate in collective negotiations with other employees. This is done by requiring the employee to sign an AWA, then including in the AWA a term requiring renegotiation of a new AWA once the first expires. A person can thus be indefinitely prevented from negotiating a collective enterprise agreement.
The new changes are likely to make it easier for employers to induce current employees, also, to sign AWAs.
COntrast this position with the UK (and Europe generally: see Wilson v United Kingdom [2002] ECHR 547), Japan (Trade Union Law) the United States (National Labor Relations Act) and New Zealand (Employment Relations Act). These schemes all have some form of procedure which requires employers to recognise employee representatives for the purposes of collective bargaining when a sufficient number of employees so wish.
It seems to me that employees at a firm should, if they so choose, be able to associate, exchange information about their conditions, formulate claims and approach an employer on a collective basis. They should also be able to approach an employer collectively about an employer’s failure to comply with contractual arrangements, or with representations in firm policy. These options should not be preempted and precluded by employer action.
I agree Sean – it’s entirely inconsistent with the ILO conventions on freedom of association, but then the current legislation is too. Which is ironic given that this is the principle usually cited by the Government as a justification.
I’m wondering about the glib general statement that unions abused their power in (or at the end of) the long boom. To be sure, no doubt some unions have abused their power, just as some employers have done the same. Yet I’ve just read The New Province for Law and Order (Isaac & Macintyre), which effectively reviews 100 years of arbitration from 8 different perspectives, and can’t recall anyone reaching this general conclusion. Are you just throwing a bone to the Tele mentality?
Mr Kevin Rudd said in yesrterday: “”If I was the Foreign Minister yesterday, and I was confronted with a question in Parliament which said that my department knew for 18 months that we had illegally deported an Australian citizen, I would be taking the axe out and making sure that heads roll. ”
I wonder if Mr Rudd is (now) actually supportive of unfair dismissal laws, that favour incompetents?
Further to what Alan Green posted above, we’re no loner the nation of the haves and the have-nots. We’re the nation of the haves and the I-think-one-dayI-might-haves. Nothing like easy credit to fuel a rise in consumer optimism.
Give it 10 years to go pearshaped…. a massive govt deficit (because consumer spending down = GST revenue down + larger spending to lessen recessional impacts = larger deficits/higher income taxes = higer intest rates….charming scenario.
Then we’ll find out who wants some protection….the haves will be laughing, and the rest of the nation, hocked to the hilt, will be carrying on about unfair workplaces, lack of quality public schooling, and why does the Medicare safety net resemble less of a net and more of a clothesline?
People say I’m an optimist, but I can’t see it myself.
Lizzie
Can you please point me to the specific law you are referring to.
Mark, thanks for these points, which will help me a lot. As I freely admit, I’m a novice on the basics of this.
Chris, abuse is in the eye of the beholder, but most Australians at this time agreed with propositions of the form “unions have too much power”. For a movement dependent on popular support, this implies an abuse/misuse of power contributing to the subsequent drastic decline.
John Q:
You brought up the 19th century (England) to support your thesis that employers at them time had the upper hand. There is nothing new in this theory of course as it was the fundemental argument of Das Kapital and remains central tenet of the Socialist left.
If “masters”at this time were so harsh, then why did people leave the rural areas in mass numbers to settle in the larger towns? When I was taught economic history, the reason given was that it was higher wages which attracted people to the towns. Is this wrong?
In other words, if things were so bad in the towns, should we not seen a much, much smaller movement than was witnessed?
AR, I would disagree with you about the poor being better off now than their earlier equivalents on the grounds that what counts isn’t your access to TV etc., but your access to your next meal. Price indexes that factor in luxuries are valuable for other sorts of comparisons, not this sort.
John, In a two-sided market where outcomes are determined by bargaining with one buyer and many sellers of a particular skill all surplus goes to the buyer. Isn’t this the basic rationale for labour to be organised when it deals with employers? The same reasoning provides a motivation for setting minimum wages to prevent (for example) desparate unemployed workers from being paid $5 per hour. Moreover, as is well-known, such minimum wage laws can restore efficiencies in labour markets where buyers of labour have monopsony power.
Is it as complex as you suggest?
Chris, perhaps John is thinking of the large wage claims in the mid 70s? I don’t know – the only other thing I can think of (depending on when we think the long boom ended) is the controversy over penal powers in the late 60s/early 70s, but I don’t know that I’d classify either as an abuse of power.
If “masters�at this time were so harsh, then why did people leave the rural areas in mass numbers to settle in the larger towns? When I was taught economic history, the reason given was that it was higher wages which attracted people to the towns. Is this wrong?
Up to a point, though wage differentials really only emerged significantly between rural and urban workers in the latter part of the 19th century in England. The prime cause was enclosure. As to why a larger movement didn’t form – it was savagely repressed in the wake of the French Revolution through mechanisms such as the Combination Acts and often overt state violence – criticised by our friend Adam Smith among others.
Mark and Chris, I’m referring to large wage claims in the 1970s, and to the willingness of (some) unions to call strikes for essentially frivolous reasons, most notably in relation to demarcation disputes.
PML,
The point with the material possessions is that they can afford them – if they are silly enough to go without food to buy a video they then no matter what a social welfare system or a union does then they are still going to be poor. Neither can protect you against your own stupidity – nor should they.
If someone cannot afford the price of their next meal then I would agree they are poor in absolute terms – but if that is the result of buying alcohol, cigarettes or DVDs then they can hardly argue that they are poor – just stupid. We cannot and should not be protected from themselves (unless mad).
John, demarcation disputes were a feature of industrial action throughout the period. What stopped them was two things – first the Accord and secondly the wave of amalgamations inspired by Kelty.
They’re not necessarily frivolous either – often it was a response to employers trying to deskill labour or cut labour costs. Another factor was the “callings” rules in State Awards and the way that Federal Awards name certain companies as respondents to the awards – meaning that if you had a particular occupation or (sometimes) worked on a particular site you had no choice other than to join the union which had “coverage”. This was a large factor behind the Mt Isa Mines strikes in the 60s – workers did not want to be represented by the AWU. Reith’s legislation tried to change this but the relevant provisions were watered down in the deal with the Demos.
I think it’s somewhat of a generalisation, and in some instances, an unfair one.
It’s an interesting argument. Certainly the number of disputes escalated enormously in the mid 1970s, yet their duration fell in about the same proportion, such that the increased frequency hardly shows up in the long view. There were large national wage increases in the early-mid 70s, but these were actively supported by the national (Whitlam) government, and ended with the introduction of indexation and then partial indexation. Of course, many conservatives talk about the wages explosion of the period, yet inflation and the end of full employment occurred around much of the world at the same time, and the subsequent elimination of the so-called ‘real wage overhang’ did not restore full employment, here or anywhere else, sugestinn that it is only improbably attributed to ‘union power’. In sum, while I agree there was a perception of unions becoming more powerful, as John says, whether this was in fact the case does not seem proved to me.
Management used to use strikes for their own purposes back in the day as well. In some industries you could buy some extra time by getting a delivery truck turned back.
I know a former Metalworkers’ shop steward who says the plant manager would sometimes come down to the floor and sack the first person they saw. Everyone would go out and a day or two later the guy would be reinstated without explanation.
“Up to a point, though wage differentials really only emerged significantly between rural and urban workers in the latter part of the 19th century in England. The prime cause was enclosure. As to why a larger movement didn’t form – it was savagely repressed in the wake of the French Revolution through mechanisms such as the Combination Acts and often overt state violence – criticised by our friend Adam Smith among others.”
Vast oversimplification.
The working and social conditions of the poor and dispossessed in nineteenth century Britain were so diverse and heterogeneous they almost defy description, let alone generalisation.
One important pointer to the condition of subordinated Britain is that there was no national political movement and there was no national trades union movement. Almost everyone lived and thought locally. Whenever a nationwide and determined movement looked like cropping up, the possessing classes made some incidental concessions, such as the 1832 Reform Act, or divided and conquered, as with the manipulation of the immigrant Irish. a theme touched upon in the recent dramatisation of “North and South”, or played the “Queen and Country” card, as during the Crimean War in the 1850s. And all the time the surplus and energetic part of the population were ncouraged to emigrate to the Empire or the the United States.
Violence played only a tiny role in disciplining the subjugated parts of British society, except in Ireland, and even there Dan O’Connell, the most determined exponent of extra-legal methods, baulked at direct confrontation with the State because the Catholic hierarchy withdrew support for his “monster demonstrations”.
John:
You may be interested in this column.
Dan Okrent, public editor of the NY Times had this to say about Paul Krugman in Okrent’s departing column. Okrent was appointed public editor by the publisher of the NYT after the Jayson Blair affair. Just thought you may be interested in knowing this after you have mentioned Krugman is someone you admire.
Oh, Dan Okrent creditials as a journalist and Manhattan Liberal (American use) cannot be questioned. How good is Okrent: well he was a senior editor of the New Yorker magazine before taking up the role at the Times.
“Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults”.
Devil in the Detail II
John Quiggin has written his promised analysis of the IR Reforms (in draft form). As John notes:
IR is a very complex topic, and for that reason I’ve tended to shy away from detailed analysis in the past. But with major changes inevitable, there…
S Brid
Did he provide any evidence? If so, did Krugman respond? If so, are you able to point out where that response was inadequate?
If you can’t answer these questions, what’s the purpose of this sort of comment? It’s infantile point scoring.
AR, you miss my point. For the poor it’s not a question of going without food in order to access the greater material things on offer these days. It’s going without food in order to access (say) heating. Think of Maslow’s pyramid; you are looking at the middle levels, supposing that today’s poor are not still on the bottom level. But they are.
Food is a priority the meeting of which is uncertain, even for today’s poor.
So your consideration of whether they are being unwise or not is on a par with the ignorance of the situation displayed in Marie Antoinette’s (fictitious) remark about “let them eat cake”.
Just to back up PML’s point there, I think a lot of middle class commentators and Liberal politicians do not have the faintest conception of what poverty means.
David Koch once pointed out that he had no idea until he discovered there were people who sometimes couldn’t collect their kids from school because they lacked money for petrol.
More tragically, who recalls the horrible fire in Sydney where a mother and three children died because, it seems, they couldn’t afford blankets? I think there was a similar case like that afterwards too. And these of course are just the tip of the icebergs.
In case the URL to that story is not sufficiently prominent, here is the story.
Sydney Morning Herald, 10 June 2004
James:
Go read it. Link is below. Honestly, After I read this I sent a donation to the RSPCA as I don’t like evidence of animal cruelty. Okrent destroys Krugman.
Oh by the way, if you are looking to take a shot at Okrent, don’t bother. His credentials as a Manhattan liberal are formidable.
http://forums.nytimes.com/top/opinion/readersopinions/forums/thepubliceditor/publiceditorswebjournal/index.html?offset=1&fid=.f779788/1
S Brid,
I’m no great fan of Krugman’s but that’s woeful. If you think that’s destruction I ‘ve got some real estate you should look at.
Your OT introduction of that pathetic article says so much more about you than it does about Krugman or JQ. Better luck next time.
Fyodor:
I will excuse your ignorance on this matter as I wouldn’t expect everyone to know whois Dan Okrent actually. Okrent was not an ordinary journalist at the New Times, he was the public ombudsman placed in that position by the board of NY Times. Think of him as an auditor if you like. Audit reports, even when qualified aren’t exrtemely comprehensive, however its importance cannot be underestimated.
S Brid,
No excuses necessary, old man. I knew who he is, what he was doing and why. The only mystery is why you think his opinion’s so important. Actually, there’s no mystery there either.
I would agree that not even the majority of unions abused their power in the heady days for unions of Hawke and Keating. But it does depend on who is in charge of driving the bus. And the ACTU and Kelty (who I think can be lined up as a critical factor in the decline of union respect) allowed themselves to be corrupted by the power they enjoyed. And the forced amalgamations lost vast numbers of union members, and when Labour was out and the public sector could no longer threaten employees into unions the leak turned into a flood.
It could be hypothesised that workers growing acceptance of contracts versus permanent employment is due, amongst other factors, because they can keep out of the unions reach.
Employers were trying to deskill labour. While the unions produced 100 page training manuals on how to refill a water tank, quite right, in some sense that employers that said this is rubbish were deskilling something. But fortunately there was always the compliant management that would make such jokes policy. And the consultants fervently feeding off this particular gravy train were certainly in favour of this recognition of skill.
There was always the problem that with increased technology there was a lesser need for coopers. But the union response of, if these workers are trained to do otherwise, each 1 day course will have a certificate and rate x dollars more per hour, may well have been a causal factor in deskilling rather than a compensating factor.
Some of you must have seen those wonderful competency statements for the public service. A detailed description of the knowledge and skill levels that had to be met for say a technician and the double spaced pages of piffle about being good communicators and team workers that were produced to justify equivalent pay for the base grade white collar
But on the other hand it was the Metal unions that wanted 7 years experience as a tradesman to be accredited with professional engineer status. The good old days of union responsibility where train drivers were given the authority and pay to decide if a rail track was safe after a derailment, and perway engineers weren’t just excluded from the decision making, they were excluded period. And this despite legal opinion given to certain organisations that if they chose to save money by making decisions based on advice from individuals who didn’t have the requisite and recognised knowledge they would be held responsible as if they had, and thus incompetent actions would be treated as negligent. Of course the train driver couldn’t be held responsible and the HR people wouldn’t, but there would always be an engineer somewhere that could be hung out.
The coverage issue is certainly still a live one, who can represent who is still fought out on the grounds of that is our traditional bit of the pie, freedom of association by workers can go to boot. The argument of workers that we think that this association has the knowledge to and can best represent us hardly intrudes on the horizons of some dinosaur unions.
The response of the Australian public to these changes, that is ho hum, would indicate that despite Greg Combet’s hard work to haul the union movement into the 21st century and relevance, they are going to be on a hiding to nowhere again That they will be as successful in influencing public opinion on this issue as they were at campaigning for Mark Latham to be elected.
The amalgamations could have been an opportunity for the unions to become important and valuable institutions within Australian society and the workplace, but the dominance of idiot power players who simply didn’t have the nous, flexibility and adaptability to respond to what was emerging means that what is coming they made possible, or are even responsible for. Though if Australians are the winners from these changes maybe we should be thanking them.
When I went to school and university in the 60s, and even when I did further studies in the 90s we had drilled into us that the Commonwealth had limited powers under the Constitution to deal with IR matters. I worked in IR from the 70s through to the 90s and always operated under this assumption.
The main power is:
Part V – Powers of the Parliament
51 Legislative powers of the Parliament
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth
with respect to:
(xxxv)
conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one State;
Each word of that power has been thoroughly tested in the High Court. In short, we have an industrial relations commission to exercise “conciliation and arbitration” concerning disputes over employment matters (industrial) extending beyond one state. I am sure lawyers will be happy to provide fuller accounts of this constitutional power.
Under the same section of the Constitution is the trade and commerce power:
(i) trade and commerce with other countries, and among the States;
Which was used to regulate employment on ports.
The Commonwealth could also so pretty well what it liked with its own employees and In Commonwealth territories.
Now the Howard Government apparently proposes to use the corporations power under the same section of the Constitution:
(xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth;
So where under the Constitution does the Commonwealth now claim a head of power to fix minimum wages.
What about employers (and their employees) who are not trading or financial corporations.
If the corpo
I can see High Court cases for about the next 20 years trying to sort this mess out.
It is understandable why Howard wants the States to cede powers to the C/wealth. If they do it, is game over. if they don’t it will be a lawyers picnic.
Howard was big on upholding the Constitution when it came to the Republic. Is he prepared to ignore the Constitution when it gets in the way of his ideology?
S Brid, I must say I’m puzzled by your assumption that I would automatically defer to someone on the strength of their “formidable credentials as a Manhattan liberal”. Whatever gave you that idea?
As regards Okrent’s noticeably non-specific attack on Krugman, you might want to check Brad DeLong
rossco,
I am an opponent of the current grab (as well as most others) by the feds, but their legal right to do it is not in (much) dispute.
They have two overlapping powers here – the power over conciliation and arbitration beyond one State and the Corporations power. The current system uses only the first power. The proposed system would use the second, so that only non-Corporations Act corporations trading within one State will not be caught by it.
There is probably only one way for the States to defeat this push, but that would involve using alot of political will and courage – not something that most of the Premiers are known for.
Ros, it’s misleading to describe the increasing prevalence of contracting as a growing acceptance of that arrangement by workers, with the implication it’s a choice made by workers.
Workers (including professional people) increasingly have reduced and often no choice as to whether they will work under contract arrangements. This is mostly due to the rise of labour hire firms and to employers’ preference for such arrangements, which displace conventional employment arrangements.
This lies at the heart of the contracting debate. There is a huge difference between contracting as an activity, and contractors as the people operating under contracts. Contracting benefits employers and labour hire middlemen but, generally, harms those creating the wealth – the contractors.
The labour hire industry actively exploits this confusion. When the government eventually understands this, perhaps we will see genuine progress.
In support of Rossco’s observations, it seems that there is black letter law in regard to the Corporations Powers of the Commonwealth, Section 51 (xx), stipulating that Commonwealth powers do not extend to regulation of non-trading corporations and to partnerships and privately-owned firms.
It is also possible that “trading” does not encompass “manufacturing”, “farming”, or “mining”.
If this is correct then the Constitution doesn’t allow much scope for Howard’s Brave New World of Employers’ Choice.
It is not only the States that can take this question of the application of the corporations power to the High Court. The ACTU and various unions could mount a case(s) and I would be very surprised if they don’t. By the time all the issues are sorted out, Howard will be long gone. By the way, can anyone provide an authoritive estimate of just how much of the work force won’t come within the scope of the corporations power. If they are outside the scope of the C/wealth jurisdiction, my guess is that they would come under State jurisdiction by default. That could even include unfair dismissal provisions.
Professionals understand the difference between a contract for services and a contract of employment. To start with they have to take out professional indemnity insurance if they are to provide services to an organisation, because as an independent contractor they are legally liable and self-directed to complete the job.
“Workers (including professional people) increasingly have reduced and often no choice as to whether they will work under contract arrangements.�
An area where the contract for employment is preferable for professionals is the public sector.
Areas of the public sector failed to recruit younger professionals and pushed out their older professionals which has caused some to be very short on for essential knowledge. They just cannot recruit into permanent positions in certain fields. Also they have the problem of having to pay HR the same as the professionals they need if they address the problem by increasing pay. Or attempt to persuade government, unions, current employees etc. to accept higher levels of pay for some. What a nightmare path that would be to choose to go down.
They can choose to contract for those services, but that would be extremely expensive and they don’t have direct supervision of the professionals providing the services. Or they can as some have, introduce employment contracts as an alternative to permanent employment to attract those people they need.
One example would be the younger professionals who are not attracted by permanent employment or the pay that accompanies it. The organisations can increase the amount paid if those professionals work for them under a specific contract. Think about why these professionals will take up the contracts but won’t accept permanent positions.
Older professionals who have left and taken their knowledge with them can also be attracted back by contracts, where they won’t take on permanent employment.
These workers are driving contracts of employment, not objecting to them.
My cousin was persuaded at 68 to accept permanent employment rather than contract as was his preference. It was clear why the (private sector in this case) organisation was keen to employ him as a permanent. They hoped to be able to keep him that way. He regretted it, but stuck it for 2 years and then claimed he was too old and had to retire. In fact he preferred the flexibility and the control he enjoyed as either an independent contractor or where the organisations insisted, as a short term contract for employment.
The offspring of my peers tends to prefer contracts of employment to permanent employment. They do not have a cradle to grave view of their working lives. They are seemingly greater risk takers than the baby boomer generation, they like to move around the world and it may be that it is less of a problem when they are trying to balance each others career needs. My experience is also, whatever their political bent they don’t figure unions as a relevant body in their management of their lives. Including the young woman who I actually liked as a hairdresser and from the sounds of reports from her ex-co-workers I am unlikely to ever see again. She is happily contracting herself around the world.
Can anyone provide an authoritative estimate as to how much it would cost the union movement to get into an long term legal battle the outcome of which they cannot know. The feds are saying that their legal advice is that they are on solid ground.
So what have we got, the possibility of a levy of union members to fund this battle, that should increase membership. States that will in the end be mainly interested in how competitive they are against each other when it comes down to what business goes where.
A workforce that appears to be comfortable with the nature of their employment and its directions.
A huge ideological and expensive battle to be fought and probably lost.
The best argument that I have heard against this centralisation of IR power is from Greg Craven, concerned with the checks and balances of power and the fact that the Libs may well be setting up a dog that bites them when the inevitable change of government occurs.
On the other hand wasn’t it Biggles that set the precedent for the use of Corporations power to interfere with the states authority.
Ros:
Rather then try to win a battle in the court, why don’t we all try to vote for the labor party in the next election (for both houses), where these things belong.
More details please about Biggles use of the corporations power – I am afraid that lost me.
Cheating here, 2 googled explanations, one a little more flippant than the other.
The erstwhile Minister of Foreign Affairs and Trade, the Hon Gareth Evans QC. He gained this name in honour of the legendary Captain WE Johns hero Biggles, the air ace of the Great War whose air stunts were amazing in his trusty Sopwith Camel. Segue to the Hon Gareth Evans QC as Attorney General who sanctioned a F111 spy flight over the terrorist state of Tasmania who were thinking about damning the Franklin River. When this flight was revealed in parliament the Hon Gareth Evans QC gained the name Biggles. After the laughter died down, the Hon Gareth Evans QC became Minister of Foreign Affairs and Trade where it was hoped that by sending him overseas, no one would hear of him again. So with steadfast purpose the Hon Gareth Evans QC commenced building palaces for his mandarins. See Gareth’s Gazebo.
And re the corporations power same event
The best example can be seen in the 1983 Franklin Dam case which the World Heritage Properties Conservation Act 1983 was upheld on the basis of two constitutional powers. Firstly, on the basis of Section 51(29)- the external affairs power. Secondly, section 51(20),the corporations power which gave the Commonwealth control over corporations. In many ways it is clear that the decision with regard to external power was not a particularly significant development, but that the decision with regard to the corporations is a very significant development.
Maybe I was showing my age with the Biggles comment
Ros,
There have always been elements of the workforce who have appreciated contract work. The government seeks to expand this sector – however for young people it has meant a delay in being able to invest in real estate and often an inability to commit in other aspects of their lives as well.
The radical restructuring of the workplace will have a range of unintended consequences. Young people have not joined unions as they don’t have regular work or they take the benefits that were often won in the past by sacrifice for granted. That is why they are often given away – it is not appreciated how difficult those things that are now part of the usual process such as Occupational Health and Safety were to achieve in the first place.
The government has already stacked the deck through the ability of an employer to offer non-union awards. We often hear about the safety net of the award system but without an umpire such as the Industrial Realations Commission awards will be whittled away. This is happening.
Whilst there are the arguments above which argue that the Federal Government is on sound ground this was a similar argument to that put forward when the Rann government took on the radio active waste dump proposed by the Federal Government for South Australia. The real danger of having one system which is so simplified is that choiceis reduced for employees.
What the government proposes in its Industrial Relations legislation is a system it controls – a little like having a cricket game where one team is required to tie their hands behind their back and catch the balls any way they can – possible but we know which side is most likely to win – especially as the umpire has been sent off the field and the other team says it will umpire instead.