Richard Marles, Assistant Secretary, ACTU examines the question as to how radical the industrial relations reforms are what has motivated them. Address to the ACT Industrial Relations Society Annual Conference. Australian War Memorial, Telstra Theatre, 16 June 2005.

what has motivated them

The much anticipated reforms to industrial relations have now been announced by the Howard Government.

As we examine the question as to how radical these reforms are its worth considering what has motivated them.

I think that this government since 1996 has acted in a way which can only be described in terms of hatred for unions. From the initial changes to the Industrial Relations Act back in 1996, to the Maritime Dispute, to the Second Wave and to the endless list of bills which are constantly put before the parliament all seeking to make life harder for unions and easier for employers. And of course we now have this package of reforms.

This hatred of unions is essentially based on the fact that unions have had the temerity to give political expression to their constituency through the Australian Labor Party. So when the government looks at the trade union movement they see the opposition.

All of us in our lives manage to balance various hats and various sides to our existence. This is also same in relation to the union movement. While it is true that we seek political expression through the Australia Labor Party it is also true that day in, day out the bulk of our work is about representing working people within the economy and within their workplaces.

While other conservative governments have been able to acknowledge the duality of our existence that when we participate in the ALP we enter the field of political combat and are fair game on that field; but that in our role as representing working people within their workplaces we represent a legitimate interest group within society this current government has been utterly blind to these subtleties and simply rests on a position of hatred.

these reforms primarily hurt Australian workers

Given that, the government have missed their mark. They have missed their mark because these reforms, far more than hurting trade unions, hurt ordinary Australian working people. They hurt all the Australian workers who are employed by companies with less than 100 employees who will now be the subject or arbitrary dismissals. They hurt the ordinary Australians whose minimum safety net will be dramatically reduced and who can now be signed up to individual contracts on the basis of a half-baked no disadvantage test. They hurt the ordinary Australians who have benefited from wage cases within the Industrial Relations Commission over the pass few years but had they only been awarded the amounts that the Commonwealth government had sought in those cases would now be $44 a week worse off on the minimum wage.

All these reforms primarily hurt Australian workers. It is not so much the damage they do to unions which is critical its the damage that they do to ordinary people.

And if there is a silver lining to this cloud it is this fact: that as bad as these reforms are they will actually have the result of pushing people toward the union movement for there has never been a better time than now to be a union member in this country.

To be sure the reforms will hurt the union movement as well. In neutering the Industrial Relations Commission these reforms will hurt employers and unions who have used this great institution to mediate their disputes. And so while the neutering of the Industrial Relations Commission will hurt employers it will hurt unions too. Unions will be hurt through the laws which make the taking of industrial action almost impractical. And unions will be hurt by preventing any realistic form of bargaining at an industry level.

Workers and unions within state systems will be hurt as the government seeks to implement their laws across the entire country and thereby override fairer state systems which have been built up over many decades.

But perhaps the most significant change mooted is the one that was not stated in the recent announcement by the Federal Government. And that reform is to make Australian Workplace Agreements the centrepiece of our industrial relations system. To put AWAs in a position where they would be available to any worker at any time including during the currency of a collective bargaining agreement.

Were this to occur you would have a situation where it would be impossible to conclude an even handed collective agreement in this country. Collective agreements would still exist and the obligations on unions and employees when they reach such agreements would be maintained. Accordingly, a union that signed up to a collective agreement would be bound for the duration of it not to take any industrial action.

However, the corresponding obligation on the employers to pay the terms and conditions of that agreement to each of the people covered by it for the duration of the agreement would not be maintained. Instead an employer could go out and offer Australian Workplace Agreements throughout the life of that agreement.

In this way the collective could be gradually undermined. It could represent 100% of people in the first year, 80% by the next agreement and 50% after that. If it is allowed to happen it is a proposal which fundamentally undermines collective bargaining and will change this country forever.

So is this package of reforms radical? You bet it is.

So is this package of reforms radical? You bet it is. The proposal to base a system upon the individual relationship between an employee and an employer with complete disregard for collective bargaining goes against a century of tradition in this country.

There is an inherent imbalance in the power relationship between an employer and an employee. It is not always the case. James Hird has power and a gun lawyer will have power in the employment relationship. But in the majority of cases where the employer has the right to hire and fire and the right to direct what work is to be done they are innately more powerful in the relationship than an employee.

For this reason employees band together to negotiate a single agreement which applies to them in the form of collective bargaining. And the legitimacy of collective bargaining based on these fundamental principles underpins every industrial system in the Western World. It is the foundation of the ILO Conventions to which we as a country are a signatory. It is the foundations of the laws in East Asia, in Europe and North America. It is a proposition which was not challenged by Ronald Reagan nor Margaret Thatcher.

Indeed, collective bargaining has only once before been disregarded in such an astounding way and that was in New Zealand in the early 1990s. The experiment in New Zealand failed and it will fail here too because this is public policy which is bad for the country, which is a low road to productivity and which is fundamentally un-Australian.

the low road

Rather than having a smarter economy driving productivity the Government is trying to sweat productivity out of the economy.

The basic formula is to give employers total control which will allow them to demand more work for less money. And this simple formula is what the government hopes will give rise to greater productivity in this country.

Well it may do that. But it will do that at the cost of generating a working poor. It will do that at the cost of an enormous social division within our society. It will do that at the cost of increasing the gap between rich and poor which is already growing faster in this country than in any other within the OECD.

It is a formula adopted in the mistaken belief that this is the secret to success in the US. And while it is true to say that this does represent part of the US landscape, it in fact represents the worse part of the American economy, the part which Americans themselves lament.

In truth the American economy has been so productive because of that countrys spirit of enterprise. It is a spirit which was born from carving out an existence in the New World in the harshest of circumstances. That is a history which we share with the United States. It is a history which has given us the same spirit of enterprise which is alive and well within our own economy today. We need not import it. It is already here.

And this spirit of enterprise ought to be a guiding light to achieving productivity in a different way. To achieving it via the high road.

John Hannah who was the President of BHP Iron Ore at the time that that company decided to take the low road and introduce individual contracts amongst its workforce in the Pilbara acknowledged that in making that decision they were indeed taking the low road.

In evidence that he gave in the ensuing litigation around that decision, he indicated that BHP had taken into account research which oddly came out of America. This indicated that the most productive companies in the United States were those that had a highly unionised workforce and where there was a high degree of co-operation between the workforce and management. The research indicated that individual contracts were a second best option. So John Hannah, in the heat of battle, acknowledged that the high road to productivity occurred through a co-operative relationship between unions, the workforce and their employers.

But co-operation is hard. It takes time. It involves lots and lots of consultation. It involves compromising between the ambitions of the employer and the needs of the workforce. And in those compromises it demands imagination and innovation.

When all of this is done co-operation achieves productivity which is not driven by low wages but is driven by people on dignified wages taking a pride in their jobs. It is driven by all employees having ownership in the total corporate effort: being as concerned about the companys welfare and prosperity as the employers themselves. It is achieved by employees sharing in the spirit and wealth of enterprise by contributing to the productivity of the enterprise. This is the high road to a productive economy.

It is a road which drives productivity based on social cohesion.

By contrast, exploitation is easy. It eschews consultation. It is about unilateral, single-minded action. It does not encourage either innovation or imagination. And ultimately it disenfranchises working people from the productive, enterprising, wealth-creating spirit of a market economy.

Australia has lost its way

By going down this path Australia has lost its way.

In the 1890s there was very significant disputation throughout the entire decade in this country. This disputation taught us an enormous lesson. That lesson was the productive value of employers and employees working together. The lesson manifested itself in the compact that was reached between labour and capital. It manifested itself in such significant institutions as the Industrial Relations Commission. It manifested itself in a co-operative culture of industrial relations which has characterised Australias history since Federation. And this co-operative spirit has contributed much to the productivity of our economy since that date.

When you look at the history of the United States there is simply no corresponding event. There is no period of industrial disputation which lead to a national compact around this issue. Unions never held the position of authority within society where a compact needed to be reached. And so accordingly the lesson of working together and developing a co-operative spirit of industrial relations was never learnt in America. I think it is arguable that the productivity of the American economy is actually despite their industrial relations culture rather than because of it.

This spirit of co-operation lead Australia to become the fairest country in the world. Around 1970 Australia had the smallest gap between rich and poor of any country in the world. The spirit of co-operation lead to the fundamentals of what it is to be Australian, an egalitarian spirit. Indeed, I think even the Prime Minister, who is the author of this round of reforms, acknowledged this spirit in his own way when he thought mateship was such and important Australian principal that it ought to be contained in the preamble to our constitution.

But where is the mateship in exploiting people? Where is the mateship in leaving large chunks of our society behind? Where is the mateship in developing a significant underclass within our society?

The last dozen years has seen industrial relations become increasingly unsettled. In 1993 the Keating Government introduced enterprise bargaining. In a deregulated economy which needed to find its way in the international competitiveness of the global environment it was essential that there be a new system of enterprise bargaining.

That said, this system was one which fairly placed collective bargaining at the centre of the industrial landscape. It was a system which acknowledged the great principles that apply throughout all industrial countries and indeed which are asserted by the ILO.

However, it also has to be said that an enormous mistake was made in the establishment of the collective bargaining right in 1993 which was ultimately found to be ineffective. There can be long debates about why this mistake was made but ultimately the Asahi Case decision made it clear that the collective bargaining right as it was envisaged in this legislation would not apply.

This was an enormous mistake because through this hole the current government has jumped with gay abandon. It meant that in 1996 when the coalition reformed the Industrial Relations Act it had no need to make concepts such as good faith bargaining a part of it. And it is the absence of any meaningful collective bargaining right in the current law which is the single biggest complaint that the ILO has of our industrial system. The current proposed legislation takes it all a big step further.

the division which has been incited within the Australian workplace

Will the ALP change this legislation when they get into office? Of course they will. I think there is a greater division between the political parties on industrial relations now than there has been at any time in our countrys history. The election of the Howard Government in 1996 really represented an end to the bipartisan recognition of all the industrial players within the system including trade unions.

But far more significant than the debate between Labor and Liberal is the division which has been incited within the Australian workplace today. Employers are being told they dont have to co-operate with their workforce. Alternatives have been provided to them to the requirement to consult with their employees and instead they are being encouraged to operate with an authoritarian version of the managerial prerogative. After all the US dont have a culture of co-operation and they seem to do OK, dont they?

Yet as I said earlier this blind mimicking of US practices totally fails to appreciate the industrial history of the United States and its applicability in Australia.

This debate about how we all relate to each other at work is undermining our culture. The proposed abandonment of the co-operative principle is not only felt by working people but it is felt by a range of other people in different circumstances throughout our society. It is felt by Muslim Australians in the Western suburbs of Sydney as they face significant prejudice which is being whipped up against them. It is being felt by Indigenous Australians who look at the small mindedness of this government and its failure to apologise to them. And it is felt by refugees who have seen Australia as a beacon of hope in the world and have come here only to be met by the worst example of how mean the human spirit can be.

The government has over played its hand

But I do believe there is a silver lining to this legislation.

The government has over played its hand. As I said earlier it will push people into trade unions. And even amongst trade unions now I notice a distinct renewed spirit of unity and belief in the fundamentals which gave rise to the trade union movement in the first place.

That when two people sit across the table from the boss they do so with more strength than one. That when a hundred people sit across the table from the employer they have power. And when 100,000 people combine in a trade union they have the power to determine their lives. And no matter what happens, the government cannot legislate against people working together and helping each other.

Most significantly this legislation will place the question before corporate Australia about what kind of country they want Australia to be and what kind of path they want to take towards a productive economy. Do we take the high road or do we take the low road? Is it OK to be an economy based on exploitation or do we want an economy based on co-operation? Are we in this together or is it OK to use these laws to leave masses of our people behind?

The answers to these questions are not in us becoming a pale imitation of another people.

The answers to these questions lie in what makes Australia special. The answers to these questions lie in what makes us special as Australians. The answers to these questions lie in the principles of egalitarianism, of fairness and of mateship.

These are the principles that the world used to know us for and, I very much believe, the world will know us for once again.