Industrial Relations

I’ve been meaning to do a post on the whole industrial relations issue for a while. Both the Government and the ACTU have spent an awful lot of time and money trying to convince us that they’re right, even though not one word of the legislation has been released. I think one thing is certain – it definitely will not be the doom and gloom which the unions will have us believe.

One the centrepieces of the Government’s proposal is that the Industrial Relations Commission will be replaced by a new Fair Pay Commission to set minimum wages. The FPC will set the minimum wage based on ‘parameters set in legislation to ensure minimum wages operate as a genuine safety net for agreement making’. Whatever this means, and how this differs from the current IRC, I don’t know. I gather that both the unions and business groups will continue to make wage submissions to the FPC, as they have done so in the past.

The other ‘big’ change being touted around is the elimination of unfair dismissal laws for businesses with less than one hundred employees, although it turns out that firing someone on discriminatory grounds such as race, sex, union membership, pregnancy and so on will still be illegal. Fair enough I guess, but then what other forms of dismissals are ‘unfair’? If you’re lazy, can’t handle the job, or steal from work, then surely the employer has every right to sack you. I’d imagine that even under the current unfair dismissal laws, these are not considered ‘unfair’.

There was a similar, if not much bigger, scare campaign against the Government before the introduction of the GST. These days, no one’s bothered. Although having said that, I suppose the difference with the GST and industrial relations is that people knew what they will gain directly with the implantation of the GST (income tax cuts, removal of a dozen or so other taxes etc.), but no one can really pinpoint how exactly the IR reforms will benefit them.

I don’t think anything will change drastically. Australia’s low unemployment is due to its healthy economic growth over the past decade or so, not its current industrial relations laws. Friendly IR laws will not help save jobs if the economy goes in the shits. I don’t think the current proposals will do change much at all. If the Government really wants to make its mark on IR, it may as well abolish unions and do away with the minimum wage. But that wouldn’t be very politically smart now, would it?


10 Responses to Industrial Relations

  1. Mark says:

    The difference with unfair dismissal seems to be one of burden of proof: at present you have to have a good reason to sack someone, and can’t just do it at short notice with no reason. A case in point is a friend of mine who got compensation earlier this year after threatening to take her employer to court for cancelling her casual shifts with very short notice before Christmas last year, leaving her fucked, with no reason. This is now illegal, even though employers generally get away with it in casualised workplaces. This will, I think, no longer be illegal in the future. Rather, those employers can do what they want as long as it is not expressly discriminatory.

    The arguments against both the IR legislation and the GST are really class-based arguments that are not about economics, but protecting the worst off.

  2. Jimmy says:

    What do you mean when you’re talking about protecting the worst off? I’d imagine the worst off in society are those who are unemployed, many of whom may be priced out of employment due to high minimum wages and dismisal laws in the first place.

  3. Mark says:

    I don’t think there’s much evidence that many of these people exist, but on the other hand I’m not really au fait with the relevant evidence.

    Significant numbers of unemployed who actually want work seems to me in Aus to be problem of regional economics. If the concern was really to protect the unemployed, they’d abolish Work for the Dole and give them more money. Broadly, I disbelieve the rationale that IT reform is necessary for job creation, for I variety of reasons that I’ve already blogged myself.

    In any case, the worst off are definitely illegal migrants, but no-one cares about them in either case.

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