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Sunday Age Debate
28 November 1999


Should the Australian Industrial Relations Commission be abolished?

YES Des Moore Company Director

NO Natalie Sykes Trades Hall Council

Dear Des,

Having read many of your criticisms of the Australian industrial relations
system over the years, I can imagine that your dreams at night must be
filled with visions of deregulated workplaces, with workers that will work
any time of the day for any amount of money and no courts of law to govern
unscrupulous employers. Unfortunately for dreamers like you, there are
people like me to cause you nightmares by defending the great and unique
industrial relations system Australians can be proud of. I admit defending
a court of law is not the most exhilarating of debates, however, I will
attempt to remind readers of the important role the Australian Industrial
Relations Commission plays in keeping Australian workplaces balanced.

The Industrial Relations Commission determines and maintains Australia's
award system, which in the main governs the wages and conditions of
employment of the lowest paid and most vulnerable workers.

The AIRC also assists, and in some cases determines, industrial disputes
between employers and employees, thus playing a vital role in keeping time
lost due to industrial disputes at a minimum.

We are currently facing new legislation introduced by the Minister for
Workplace Relations, Peter Reith, which looks at stripping the
effectiveness, independence and authority of the Industrial Relations
Commission. This legislation has not only been strongly opposed by unions
and community organisations but even by some employers.

Abolition of the Industrial Relations Commission is an attack on the award
system which in turn is attacking health and safety, pay equity, job
security, livable wages and many basic workplace conditions. For millions
of workers Australia wide the availability of an independent and impartial
court of law with wide powers is fundamental to the protection of existing
conditions and future advancement in the workplace.

Dear Natalie

My dreams are quite different to what you imagine. I envisage less regulation of employer/employee relations would provide employment for many of the 700,000 unemployed and million or so who would like to work but who are deterred from actively looking for work under existing arrangements. Those arrangements are now probably unique in the world in the extent of third party intervention in employer-employee relations.

The additional risks and requirements faced by employers is a significant deterrent to employment compared with less regulated countries overseas. If Australia employed the same proportion of its working age population (15 to 64 year olds) as (for example) the US we would have another 750,000 employed. True, some of those employed in the US work for low wages. But the majority who work for low wages in the US (and Australia) actually live in higher income households. Anyhow, isn't it better to have working poor than unemployed poor as we do?

Naturally, less regulation does not mean no regulation. Employment relationships would continue to be governed by the common law and normal courts, and would be the subject of agreements between employers and employees. Employers would not be able to drive down the general level of wages and conditions because there are 1.1 million businesses in Australia all competing with one another for labour.Also, with the alternative sources of income available in modern societies, workers have much more bargaining power than is commonly thought.

The AIRC has actually been an utter failure in protecting both workers and employers. Low wage earners now rely on social security benefits for the bulk of their incomes and employers have experienced higher rates of disputation than the OECD average. The AIRC should be converted into a voluntary advisory/mediation service.


Dear Des

Do you have any family or friends who earn under $400 per week? Friends or
family members who work a forty five hour week with no paid overtime because
they're trying to 'get ahead' in the company, who have weekly expenses
that outstrip their income and that have no opportunity to negotiate a wage
increase one on one with their employer. It is these people who make up the
majority group of wage earners of our community and are the ones who need
the safety wage increases governed by the AIRC. Whether it be $12, $14 or
$24 increase per week for some working families this could be the difference
as to whether the children get to go to a school excursion or not. Your
statement that the AIRC is an 'utter failure' is wrong; the governance of a
livable wage is one of the most important roles played by any court of law
in our society.

On your comment 'Isn't it better to have working poor rather than unemployed
poor?', better for who, Des? According to some sections in our society it's
acceptable to be poor as long as you are bloody working for it, so watch out
all you unemployed readers. As to the argument that less regulation of the
Australian workforce will create hundreds of thousands of jobs for those
unemployed people currently 'deterred by the system'- I challenge you to
name a small business that would take on new workers if the AIRC was to be
abolished tomorrow. I think you would find employers, particularly small
businesses, would be more likely to take on new employees if their overheads
in relation to payroll tax and associated government premiums were lowered.

The Australian Industrial Relations Commission has traditionally been given
the power to protect those lower wage earners from being entrenched as
Australia's working poor; let's not change that level of protection.

Dear Natalie

No wonder trade union membership has fallen below 30 per cent if they are all as unaware as you about basic facts! First, only about 5 per cent of adult employees are on the minimum wage of about $385 per week, not "the majority" you claim. Of course, juniors earn less but, as they gain experience, their wages increase. Second, as most low paid live in higher income households, there is clearly no need for anyone to determine a "livable" wage for them. Third, the minority of low paid workers living in low income households generally also benefit from social security and other government assistance. Indeed, wages decreed by the AIRC do not assure a "livable" income for the low paid - it is those benefits that do. Fourth, most low paid move up the income scale over time.

Thus, as the combination of a relatively high minimum wage and prescriptive employment conditions imposed by the AIRC clearly deter employment, it should be to left entirely to the social security system to protect the living standards of existing low paid workers and to the much less intrusive common law to protect employer-employee relationships. The AIRC's role as a protector is now obviously redundant, indeed counter-productive.

Natalie, I can't believe you are seriously asking whether it is better to remain unemployed than to be working. The unemployed are actively looking for work because of the higher income and the opportunities for advancement from the experience even a low wage job provides. Also, you agree that businesses would likely take on more employees if indirect employment costs were lower so they would surely do the same if direct costs of employment were lower. Let us celebrate the new century with a new regulatory system that encourages rather than discourages employment.

Natalie Sykes is assistant state secretary at the Trades Hall Council

Des Moore is director of the Institute for Private Enterprise