Jeff Lawrence opinion piece: Fair Work Act review needs to be based on evidence

We are a week into a new year but the coordinated Liberal Party-employer group attack on workers has continued with the same fervour we saw in 2011.

It came as absolutely no surprise that this alliance spent much of 2011 whining about the legislation that gave workers back the rights taken away by WorkChoices. The only real surprise was that the Liberal Party’s IR policy vacuum was virtually unquestioned, despite vocal and consistent cheering for a return to individual contracts by party elder Peter Reith.

It’s disappointing to say the least that employer groups have begun 2012 like they ended 2011 – criticising workers’ rights and bandying around hearsay to add weight to their claims for a return to the bad days of IR, when bosses wielded big sticks and took away workers’ rights.

After champing at the bit for a review of the Act, as soon as the details were announced, they leapt to express disappointment that the terms of reference had not been written to suit their own narrow agenda, where workers have no say over their job conditions, no collective bargaining, no safety net and no independent industrial tribunal.

The review is not an opportunity to dismantle the hard-fought protections for Australian workers. It is an analysis of legislative reform and its impacts, as promised when it was first introduced in 2009.

It is essential that it is based on facts which will once and for all dispel the myths being propagated by business about the Fair Work Act.

It will show that in reality, the outbreak of employer militancy we saw last year, particularly since the Qantas grounding, shows that business has little to complain about.It’s time we had some facts to counter the Liberal Party-employer group claims.

Let’s start with their economic assertions. They say the Fair Work Act has been bad for productivity. However, ABS data shows that productivity growth started to slow in the late 1990s, and continued falling during the WorkChoices era. In any event, evidence shows workplace laws play only a marginal role in driving productivity growth. Investment in new technology, and the adoption of better management practices, are far more important.

Employers have claimed the Act has led to a wages breakout, especially in areas with strong unions. Yet ABS data shows that wage costs rose just 3.6% in the last year, compared to a rise in employee living costs of 3.9%, implying a fall in real wages. And while wages rose more strongly in sectors like mining and construction, these industries can certainly afford to share the benefit of record profits.

Employers claim that strikes have risen under the Fair Work Act. Yet working days lost to disputes have steadily declined from around a million per annum during the late 1980s and early 90s, to an average of around 400,000 during the Howard years, to an average of just 172,000 since the Fair Work Act commenced. In any event, the Fair Work Act provisions on strikes are almost identical to the pre-2009 laws, so the legislation cannot be credited or blamed for these changes. And let’s not forget that many of the days lost recently have been due to employer lock-outs and the actions of conservative state governments.

The truth about the Fair Work Act is that it has restored some of the balance in industrial relations that was taken away by WorkChoices. However, there are three main areas that still require improvements to worker rights.

The problem of insecure work is getting out of hand in Australia. Around 40% of workers are casual, contractors, labour hire or fixed-term-contract workers, most of whom lack certainty about their pay, working hours and job duration, and most of who miss out on key entitlements like sick leave, annual leave and superannuation. No IR system can be fair if it leaves 40% of workers without adequate protections.

We also need a better bargaining system. The law still puts restrictions on who workers can bargain with, and what they can bargain about. The state should not seek to interfere in these choices. On the other hand, the state needs to provide more assistance to parties in resolving bargaining disputes. At the moment, the state intervenes in the interests of large companies (for example, to stop strikes at Qantas), but refuses to intervene when employers refuse to make agreements with low-paid workers. We need to re-examine the issue of when the state should and should not intervene in industrial relations.

The truth is that many employer groups simply do not accept the right to collective bargaining. For them, WorkChoices was the fulfilment of a long-term project to undermine collective bargaining, and they hanker for a return to those days. At least Peter Reith is honest enough to say so.

This article originally appeared in The Australian on Wednesday, 11 January 2012.