Labor inflexibility in non-union deals

Australian Financial Review

Letter

16th November 2007

Paul Gollan's "Unions will relish life inder Labor" (Opinion, 14 November) points outs that the union dominance of the ALP has created doubts over Kevin Rudd's ability to contain inflation and manage the economy. He also raises the important question of whether the provision in Labor's proposed workplace relations changes allowing non-union collective agreements will work in practice.

It is relevant that, although such agreements were first allowed in 1993 by the Keating government, the continuation of highly regulated requirements, imposed centrally, prevented (as the Keating government's IR department reported in 1995) "radically different outcomes in terms of workplace relations" under either enterprise or non-union agreements.

When the coalition's legislation came into operation in 1997 only 261 such agreements existed (now 2441) and most enterprise agreements had varied only one condition in the award determined by the centralised authority, the Australian Industrial Relations Commission.

In short, Mr Keating's recent claims to have established a major reform is a myth.

Under Labor's proposed new industrial relations system, centrally imposed regulations would be even more extensive than in the immediate post 1993 situation.

Thus, although Shadow Minister Gillard says it would be possible to have non-union collective agreements, the obligation to bargain in good faith (which does not exist under WorkChoices) would undoubtedly create greatly increased opportunities for unions to obtain union collective agreements.

Moreover, all collective agreements - union or other - would have to comply with 10 minimum legislated standards and a further potential 10 that could be arbitrated under the proposed industry awards to be determined annually by Labor's new central authority that would replace the AIRC but have even more power to intervene in workplace arrangements.

Even if under Labor non-union collective agreements were able to be concluded, they would be subject to a much more complicated and inflexible system of regulation that would undoubtedly be conducive to higher increases in wages (nominal but not real) and reduced growth in employment.