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Return to bad old IR days
letter published in The Australian Financial Review, 20 February 2012

Keith Hancock says it is “conceivable that changing IR arrangements could affect productivity” and “acknowledges that strong unions may inhibit management” but leaves open the question of whether productivity improvement possibilities are significant (“IR offers no panacea for Productivity”, Opinion,
February 16).

Given his experience as a deputy president of the Australian Industrial Relations Commission (AIRC), and his acceptance in the 1985 Hancock committee report that unions should effectively be treated as above the law, it is surprising that did he not deal with arbitration cases in which unions acted as productivity inhibitors.

The story of Robe River in the Pilbara region of Western Australia in the late 1980s and early 1990s provides just one among many examples of improvements in output per employee from management success in overcoming “inhibitions” caused by union actions involving inter alia absenteeism, false occupational health and safety stoppages, the stopping of dismissal of inefficient workers and so on (see my 1998 report to the Labour Ministers Council). But unions weren’t the only inhibitors. The AIRC provided more than its fair share.

Of course, productivity improvement requires more than changing workplace relations arrangements. But Australia is clearly now returning to the bad old days of union and regulatory institutional inhibitions on productivity.

Des Moore
Institute for Private Enterprise
South Yarra Vic

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