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Courts no place for pay fights

(Herald Sun 4/9/01)

Many will welcome as a sign of more decisive management the withdrawal by the Bracks Government of its large pay offer to police. But, given the reputation of industrial tribunals for bias against the employer side and their generally poor understanding of the workings of the labour market, the Government’s decision to pursue the matter in the Industrial Relations Commission is unlikely to produce a better outcome.

Indeed, Minister Haermeyer has already sold the pass by indicating he does not rule out reinstating the 12 to 24 per cent offer there.

A major problem with industrial tribunals is their implicit assumption that a major imbalance of bargaining power exists between employers and employees. This fails to recognize the competitive conditions actually existing in modern labour markets.

Equally, the explicit employment conditions they lay down cannot take account of the many implicit factors determining whether an employment relationship works.

The potential adverse effects on the unemployed have also been overlooked, as have actions by both sides of the political fence to create a more flexible labour market.

Significantly, even AIRC President, Mr Guidice, has recently complained that the uncertainty generated by the mixture of laws which impact on employment relationships..constitutes an erosion of freedom and impacts on the quality of our society. He said that the outcome of particular cases is of very little predictive value in similar cases.

This extraordinary situation, when combined with the long periods taken to reach some decisions, deters employment and investment even when employers receive more reasonable treatment, as in yesterday’s Yallourn Energy (eventual) outcome to allow contractors.

The adverse social and economic effects from judicial interventionism in the employment relationship makes a strong case for reducing by legislative means the capacity to exercise legal discretion.

This is reinforced by the marked contrast between interventionism in the corporate and industrial relations areas. Those thought to have infringed corporate law are pursued and, if caught and convicted, are fined or jailed and the companies they have operated may be made insolvent. Some are even barred from operating a business.

But, while this is appropriate, there appears to be less comparable action in relation to behaviour by unionists or employees that is either unlawful or deliberately obstructive. Repeat offenders seem to reappear undeterred.

This apparently soft approach presumably reflects a fear that jailing a unionist or causing union insolvency is socially unacceptable while providing the same treatment to a greedy capitalist is not. The reluctance of the police to pursue complaints against intimidation and coercion by unionists is part of this syndrome.

One response might be to establish a body charged with ensuring competition in the labour market and with prosecuting those who behave unlawfully, just as the Australian Competition and Consumer Commission prosecutes anti-competitive behaviour by businesses.

There is also a need to reduce the role of the Federal Court in industrial cases. Although its interventionism has moderated somewhat after public expressions of concern, it remains excessive and it seems absurd that compositional changes in a court should be a determining influence.

Of course, Labor’s effective adoption of the ACTU’s industrial relations agenda, would mean that its attainment of government in Canberra could even exacerbate the interventionism and the accompanying adverse employment effects.

Labor was, of course, responsible for many of the Federal Court appointees.

The continued support for a highly interventionist industrial system in a modern economy reminds one of Dr Johnson’s observation of an acquaintance: "such an excess of stupidity, Sir, is not in nature".