Recently in New IR Category

I stayed up late on Thursday night to watch Paul Keating interviewed on Lateline. I wasn't disappointed.

Keating's discourse was somewhat rambling and egotistical, but he hasn't lost the art of producing the 'quotable quote.' Here's some lifted from the transcripts.

On the effect of Work Choices on productivity ...

If you go to 200 or 300 people in a factory or 200 or 300 people in a workplace and come to a three or four year bargain to the improve productivity and share it between wages and profits you've got a good chance of getting productivity from the whole enterprise. But if you just take one person at a time, bring them into the boss' office and cut their wages there's no chance of getting any productivity. That's why trend productivity is now rapidly on the way down. It was 3 per cent under me. It's now under 1 per cent.

And this in the same vein ...

The great lie of the Howard Government in respect of workplace changes, they are simply a set of arrangements to keep unions out of workplaces. They've got nothing to do with productivity and the quicker we move away from that kind of discriminatory structure to a truly trust based co operative sharing of work and workloads, then we get back to reasonable levels of productivity and again, reasonable rates of growth in real wages. It's no accident as you saw in today's front page of The Sydney Morning Herald and other places that the wage share in the economy has gone down, and the profit share in the last four years has gone up because wages are now in real terms, are declining.

On using the Corporations Powers to regulate IR ...

Let me make this clear, the Liberals decided that they wouldn't use the conciliation and arbitration power.

Under that power of the constitution you always needed a commission who tested capacity to pay and comparative wage justice. They've now used the corporations power and the High Court for the first time as validated its use. That means a Federal Government can now legislate the wage and the conditions.

On the real reason why the economy has boomed without the traditional wage blowout ...

Everything in those national accounts yesterday, everything, that is the growth in the economy and the low unemployment, the reason the system is not blowing, the tinder box has not taken off is because of the float, because of the tariff changes and because of [the previous Labor government's] IR changes, structural changes. That's why they're there. Not because of any superior management by Mr Costello. You know this pat line tonight about you wouldn't put an L plater. God, he's the greatest L plater of all time.

And finally, best til last. This on poll based policy. Could be true for any political organisation these days ...

The Labor Party is not going to profit from having these proven unsuccessful people around who are frightened of their own shadow and won't get out of bed in the morning unless they've had a focus group report to tell them which side of bed to get out.

Keating makes the current pollies we're lumbered with these days look very bland. I look forward to his next media forray.

Petrol excise, Medicare safety-net, David Hicks, now Work Choices. John Howard is a master at successfully defusing unpopular election year issues. This particular example demolishes his "I make tough choices even if they're unpopular" persona (more here about that), but the real question is whether the new measures will make a difference when the weakest in society apply for a job.

The "Safety Net" is more about perceptions than substance. There's three aspects of the new regulations that fall short in providing any long term protection.

The first is the arbitrary wage / salary level under which the new laws become effective. At $75k, the new regulations cover a large section of the workforce. Without indexation, this amount will erode over time, and more employees in the middle income bracket will find themselves outside "the net." This government is reluctant to alter threshold levels once set, as shown by the Medicare surcharge example.

Secondly, the "no disadvantage" test allows non-monitory offsets to compensate for lost conditions. A particular "offset" will have differing values to different employees. Unless the value of the offset can be easily calculated, I can see employees being coerced to accept dubious "benefits" in lieu of cash.

Thirdly, the "no disadvantage test" doesn't apply to companies that are under financial difficulties. Some clever accounting may be all that's needed to prevent the application of the "no disadvantage test" for new employees.

The changes will take the heat off the government and stymie Labor when it comes to IR. Combined with a giveaway budget, it may be all that's needed to give the government momentum during the run up to the election.

However, there's one last, important issue.

The new regulations aren't retrospective. If you've already been sold a dud AWA, bad luck! Don't be surprised if the government's taken to task on this and there's yet another change to Work Choices in the next few weeks.

The mining industry has hinted at a compromise regarding their objections to Labor's recently introduced IR policy ...

There are signs the mining industry and the Labor Party could find some common ground in the stand-off over industrial relations.

Opposition workplace relations spokeswoman Julia Gillard insists Australian Workplace Agreements (AWAs) will be scrapped if Labor wins office but the Mines and Metals Association (MMA) says it is important to keep AWAs because of the flexibility they offer.

MMA chief executive Steve Knott says the association would be prepared to accept a return to the 'no disadvantage test' if Labor agreed to keep AWAs.

The miners elaborated their position on the ABC's PM program tonight ...

STEVE KNOTT: We've said all along that if [Labor] had something that gave us similar benefits to what we've got now, we'd look at it. Even if they returned to the old no-disadvantage test that was in place 12 months ago, which was a global test based on a comparison with the award, we'd be comfortable with that.

But of course the people in the mining industry are way, way, way over and above the award rates. So the old no-disadvantage test that was in place pre-WorkChoices wouldn't bother the resources sector one iota.

Being a pragmatist, I don't think this an unreasonable ask. Defusing this issue would make Labor's journey to government a lot easier. With the mining lobby on side, they could concentrate on the much easier task of pointing out the real inequities of Work Choices.

It was inevitable that the industry lobby would start loudly complaining about Labor's IR policy once details started to emerge. After all, the government's revamped AWA framework under Work Choices put all the power in the employers' hands when dealing with unskilled and disadvantaged workers. They were never going to let that go without a fight.

Perhaps Labor would have been better not to state they'd abolish AWAs. As suggested elsewhere, it may have been more sensible to just reintroduce the 'no disadvantage' test, as was the situation before Work Choices. Labor could have developed an even handed policy that allowed employees to decide which type of agreement they want and whether unions should be involved. The days of the old IR system have gone forever, for better or for worse.

That being said, the arguments put forward by the mining industry for the retention of AWAs is nonsense. Labor's proposed changes to the IR system is not a threat to the rampent mining boom. There's a labour shortage, the mining companies need employees and are willing to pay high wages and provide good working conditions to get them. This hasn't changed through mining booms over the past 30 years, regardless of whether the workers were under collective agreements or individual contracts.

Employer criticisms are not going to end soon, and Labor needs to fight hard to sell their policy. For a start, they should emphasise that employers organise themselves into associations to strengthen their bargaining position, while pointing out the same group's hypocritical stance of preventing employees from doing the same thing.

They should emphasise the difference between in demand workers in boom industries and those with less saleable skills who are the real victims of "Work Choices."

They should remind the electorate that good times don't last forever, and that employees working under AWAs have most to lose in a downturn.

They need to keep hammering the government about their refusal to release any information about the makeup of new AWA agreements.

Finally, they'll have to hope that the hostility regarding Work Choices in the eastern states more than offsets votes lost in Western Australia. It could be a close run thing.

On the "7.30 Report" last night. Neither scored a knock-out, but Gillard landed more punches, in my opinion.

It's a long argument, but Gillard's theme is best summed up by the following ...

Most AWAs are not individually negotiated on the basis of how can ... [management] structure it for you. They are given to workers. You want the job, sign the AWA. You want the promotion, sign the AWA. You want to keep your job, sign the AWA.

countered by Hockey ...

So I think if people have the capacity to negotiate to buy a house, to buy a car, if people have the individual capacity to raise children, why don't they have the individual capacity to be able to negotiate employment terms and conditions ...

Everyone knows that "Work Choices" is designed to cut wages and conditions of the weakest section of the community, ie, those that don't have unique experience or skills. Hockey's assertion that these people negotiate their employment conditions on the same footing as buying a car is absurd.

Don't you love this?

John Howard comments on changes to the Immigration Act to send all unauthorised boat arrivals offshore...

"It has nothing to do with listening to Indonesian politicians."

And the Immigration Minister backs him up!

"It is indisputable that we have taken into account the concerns of Indonesia."

Tomorrow we can expect Kevin Andrews to toe the party line when he states that Work Choices really was about cutting wages. (Oink, Oink, Flap, Flap)

Kim Beazley promised, if elected, the scrapping of Australian Workplace Agreements (AWG) during a speech to the NSW State Labor Conference yesterday.

This move ranks with the stupidity of Mark Latham's promise to "bring the troops home from Iraq before Christmas." That comment allowed the Government to portray Labor as a "bunch of quitters," a position that weighed heavily on the population despite their dislike of our involvement there.

Will they ever learn?

To the punters, many of whom are union averse, Beazley's promise will seem like he's handing control of IR to the unions. The government and employer groups have already started to push this line.

There's no doubt that a large percentage of the population are worried about the 'Work Choices' legislation. However, many people are working under AWGs made before 'Work Choices' abolished the 'no disadvantage' rule and are quite content doing so. What they want is the 'no disadvantage' rule reinstated. Beazley would have been much more sensible in stating that they'd remove the worst excesses of 'Work Choices,' and allow workers the option to engage a union if that's what they want.

There's nothing wrong with the practice of allowing parties to negotiate more flexible work arrangements. The system just needs safeguards in place to prevent unskilled workers from being exploited.

Beazley has given the government a free kick with this badly thought out announcement.

Later: Beazley was on The 7.30 Report tonight and he made a good fist of explaining his position. Although I still think his announcement plays into the hands of the government, he did give a good account of his party's position.

KERRY O'BRIEN: Well let me ask you that Mr Beazley. You've asked the Government's record on productivity, but what is your fail-safe formula for improving productivity? Going back to the policies of the previous Labor government?

KIM BEAZLEY: Look, the productivity that we gained in this country by going over to a system of enterprise-based agreements, moving away from the centralised wage-fixing system to that, but still collective agreements, is what produced the productivity boosts.

KERRY O'BRIEN: And that, in your mind, is the end of labour market reform?

KIM BEAZLEY: No, that is not the main, necessarily the only - I should say - not necessarily the only factor underpinning productivity. The other factors are innovation and skills. And the fact that productivity has gone off the boil over the last few years under this Government - in that first tranche, if you like, of industrial relations that you talked about - has got everything to do about the Government dropping the ball on things like innovation and skills. Productivity is not only about how the workforce works, it's about what the businessmen invests in and it's about the character of the workforce and the state of its skills. So there's nothing in Howard's legislation which does anything about those things, but insofar as industrial relations impacts on it, it is the collective agreements that produce the productivity outcomes. It's as simple as that.

It's worth reading in its entirety, but the bit above does spell out the difference between the government's and Labor's positions. Labor wants to increase productivity by improving processes, work practises and training, while the government wants the same effect by cutting costs at the employees' expense.

Beazley will have to do a lot more of this to counter the Government's scare campaign.

It would be ironic if the High Court watered down the new IR laws to the extent that Labor lost their perceived electoral advantage.

I suspect there are a some government backbenchers who'll be hoping the High Court challenge to the validity of the new IR laws will be at least partly successful, and some hopefuls in the Labor party who hope they won't.

Proposing changes to legislation when in Opposition is dangerous, even to laws as unpopular as "Work Choices." Badly thought out responses will form the basis of a government scare campaign, and it's heartening that Labor seems to have realised this, judging from recent comments by Kim Beazley.

From the ABC's AM program:

KAREN BARLOW: Kim Beazley says the new laws have given employers too much power and are cultivating a culture of workplace bullying and intimidation.

The Labor leader says the Government has not been able to give any evidence that the new laws increase productivity. And he says the Minister for Workplace Relations, Kevin Andrews, has not been able to exactly define what the legislation allows and disallows.

KIM BEAZLEY: We can't even get a straight answer about whether or not Australians are still entitled to public holidays, like Good Friday, Easter Monday or Anzac Day.

The legislation says that if they're told to work on a public holiday, employees must have reasonable grounds to refuse. It has to be said, there may be a great impetus here to religious conversion, because when you ask what reasonable grounds actually means, you just get another torrent of legalese. So you'd better want to go to mass on Christmas Day, that's all I can say.

KAREN BARLOW: Under the new laws, the Workplace Relations Minister can declare elements of workplace agreements to be prohibited content and have them struck out.

Kim Beazley says a Labor Government would do away with that ministerial interference.

KIM BEAZLEY: Already they have implemented regulations the can fine an employer $33,000 just for including protections from unfair dismissal in workplace agreements.

What kind of choice is that? How ridiculous that this legislation was called WorkChoices.

KAREN BARLOW: Mr Beazley says sympathetic employers may be reluctant to commit to childcare and family-friendly terms of employment in writing, out of fear of prosecution.

He's promised to give employers and workers flexibility to negotiate and agree on the terms and conditions that they want in their agreements.

KIM BEAZLEY: That could mean practical provisions to help them with family life, like working from home when childcare is not available, moving to a work location closer to school or childcare, and assistance with locating childcare, out of school care and elder care.

KAREN BARLOW: Labor would also establish in every state and many regional centres, an unfair dismissal tribunal, along similar lines to the Small Claims Tribunal.

The unfair dismissal tribunal would allow both bosses and workers to be heard and it would be required to resolve 90 per cent of claims within 90 days of lodgement.

These comments are a change from the previous "we're going to rip-up the legislation" line that Beazley previously stated. It's recognition that the new IR legislation framework will stand after the election of a Labor government, if for no other reason that Labor will never have a majority in the Senate.

It's unlikely that the majority of the population wants (or really cares) to return completely to the old system, but they do want safeguards. They want some protection from unfair dismissal, guarantees of public holidays, and having the option to collective bargain and being represented by a union.

The IR changes are bringing mountains of bad news for the government. Sensible handling of the issue by Labor is their best opportunity in a decade. Let's hope they don't stuff it up!

Footnote: To my three regular readers, have a safe and pleasant Easter.

Workers shouldn't take too much comfort from the recent events at the Cowra Meatworks. Sure, the company backed down, but the issue of whether the action they were taking is legal has yet to be resolved. I don't think this will be clarified by a court case for a while yet.

The company must have been subjected to a lot of pressure to reverse its decision. Government inspectors investigated the matter, but I suspect the lobbying of employer groups (prompted by the government?) had more to do with the company's decision to back down. The employers know had badly this issue is playing with the public at large, and are mindful that the measures won't survive if the government loses the nest election.

What this matter has shown is that employees who are covered under current agreements are relatively safe for now. The real action will start when those agreements are up for renegotiation, as new agreements only have to contain the minimum conditions.

Most EBAs and AWAs won't expire until after the next election, and the employers will be on their best behaviour until then. The real difficulty for the Labor Party and the unions is to keep the issue alive in the minds of the voters over the next 18 months.