Labor’s IR raises business ire

by 04 Sep 2007

EMPLOYERS WILL face higher labour costs, increased union power and more workplace regulation under Labor’s recently announced industrial relations policy, according to business groups.

Michael Chaney, president of the Business Council of Australia, said the practical result of the ALP’s policy will be a two-tiered workplace relations system that will reduce the scope for flexibility, choice and incentive for the vast majority of employees.

“In turn, it is inevitable these added measures will create unnecessary complexity, confusion and increased costs for all businesses, large and small,” he said.

“In particular, despite recognising the need for flexibility in the workplace, only applying this to those earning more than $100,000 a year will, in effect, only benefit around 10 per cent of the Australian workforce.”

Chaney said the changes demonstrate the difficulties and unintended consequences of trying to retain some elements of the current system, while winding back many of its core features.

Heather Ridout, chief executive of the Australian Industry Group, was disappointed with Labor’s policy to abolish AWAs and said there would also be strong opposition to the slashing of the threshold for unfair dismissal claims.

“Companies will be very nervous that it will be a return to the bad old days despite assurances to the contrary,”she said.

Ridout also questioned Labor’s ‘compulsory’ collective bargaining model, especially with regards to how compulsory collective bargaining is triggered, what good faith bargaining will look like, what can be bargained for and whether there will be compulsory arbitration.

“We have long held that Labor’s proposed collective bargaining system would overturn the successful existing bargaining regime which has been in place since the inception of the system,”she said.

Peter Hendy, chief executive of the Australian Chamber of Commerce and Industry (ACCI), was more aggressive in his criticism of Labor’s industrial relations policy, claiming it would add further red tape with more complexity over transition and implementation.

For example, Hendy said abolishing AWAs also abolishes current restrictions on union right of entry during the term of AWAs. Common law contracts may allow union entry for a wider range of purposes than was permitted under AWAs, he said.

Hendy also said Labor was heading into dangerous territory in abolishing unfair dismissal laws for SMEs. “Governments writing the rules about when a business can dismiss staff has not been legislated before,” he said.

“While well-intentioned, this change could backfire with governments regulating management decisions before dismissals. Previously governments only regulated unfair dismissals, now government would be making rules covering all dismissals.”

Steve Knott, chief executive of the Australian Mines and Metals Association, said Labor’s policy to remove individual AWAs does not satisfy the needs of Australia’s resource sector and represents a rollback to the IR union controlled environment that existed in the ’70s and ’80s.

The use of a $100,000 threshold to access common law contracts will deny the majority of mining workers access to these arrangements, as 65 per cent of resource sector staff earn less than this, according to Knott.

“The resource sector has been using statutory individual contracts since 1993 (in WA) and 1996 nationally. AWAs have become the employment arrangement of choice, with the majority of miners currently engaged on an AWA,” he said.

“AWAs have facilitated the introduction of flexible work practices, a highly valued, productive workforce which is engaged with business objectives, and historic low levels of industrial disputation. Simply put, the flexibility these agreements allow employers and employees is valuable and should not be allowed to disappear.”

While the union movement supported Labor’s commitment to get rid of WorkChoices, Sharan Burrow, president of the ACTU, said she did not support elements of Labor’s transitional IR arrangements.

In particular, the ACTU wanted AWAs to be abolished sooner, opposed the current restrictions on union right of entry as well as the continuation of the Australian Building and Construction Commission (ABCC). The ACTU also opposed limits of the application of the award safety net to workers earning over $100,000.

See our next issue for a full rundown on what a Labor government’s industrial relations policy will mean for HR


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