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The review of the Fair Work Act is a non-event and has been widely criticised not only for seeming to dodge the main issue but for the appointees selected to undertake the review. It seems likely that, if the growth in union power is to be halted or at least slowed, businesses will need to seek possible alternatives to acting under the FWA. One possibility might be to use the Trade Practices Act to tackle restrictive practices by unions. My recollection is that this was used successfully on one or two occasions under the pre 1996 regulatory legislation. A report in this morning’s Australian suggests that BHP is in fact taking action against the CFMEU in the Federal Court under that act. Such action may develop further.

Below is my letter published in today’s Australian and an excellent analysis by Ian Hanke published in yesterday’s AFR (Ian is also communications manager for the HR Nicholls Society). Judith Sloan also published an excellent critique in yesterday’s Australian, entitled “Caught in the act, Gillard stuck with Fair Work review”.

It is also of some significance that the AFR published yesterday a critical editorial – “IR scrutiny falls woefully short”. There seems little doubt that the appointment of Michael Stutchbury as the new editor of the AFR is moving the philosophy of that paper in the right direction.

Des Moore

Fair Work Act divides
letter published in The Australian, 22 December 2011

It is difficult to know whether to laugh or cry about the announced review of the Fair Work Act. What it reveals is that Australia has a government which still does not understand how a labour market operates in a modern economy.

In such circumstances, employers are not determiners of job security and levels of wages and conditions. They are determined in the market and by economic policies pursued by the government.

The FWA, however, allows the imposition on employers of wages and conditions that are totally inappropriate to the operation of enterprises or to the Australian economy.

This set of arrangements unnecessarily divides society and acts as a deterrent to employment. This is antipathetic to the interests of Australians and, as Julia Gillard’s predecessors recognised, of the Labor Party itself.

There is no prospect that those appointed to undertake the review will propose the necessary reforms: that has to be come from the cabinet.

Des Moore, South Yarra Vic

Laborís FWA review a charade
Published as an Op-Ed in The Australian Financial Review, 21 December 2011

Analysis of the Fair work Act is designed to achieve very little, writes Ian Hanke

For those who were interested in seeing a genuine review of the Fair Work Act, the announcement by Workplace Relations Minister, Bill Shorten, is a damp squib.

Instead of producing an all encompassing and fearless review of the act, he has settled for a review that is limited in its scope to seeing whether or not the “operation of the legislation, [is] consistent with the objects of the legislation”

Yet these objects, for example, specifically rule out statutory individual agreements. Further the objects of the act in effect cement awards and good faith bargaining, which has brought an increase in industrial disputation and drawn out disputes.

Then there is the issue of Australia’s productivity crisis. Real unit labour costs have risen for the past six quarters and labour productivity has crashed over the past five years.

This is a devils brew; a fusion of economic data that bodes ill for the future. These are key issues that should be directly examined by the review but there is not one direct mention of them in Shorten’s comments.

What was needed was a broad economic framework for the review with an emphasis on productivity, flexibility and competitiveness, not just to see if its effects have “been consistent with the Government’s objectives.” In fact it is telling that Shorten, in his terms of reference, does not once mention the Productivity Commission as a source for the inquiry.

Perhaps this is not surprising as he has already rejected the PC’s workplace relations findings as they impact on the retail industry.

There is another key area that the Shorten’s review is studiously ignoring. That is the fact that the good faith bargaining requirements of the Act have effectively been rendered irrelevant because employees and unions can initiate protected industrial action without even an agreement being proposed or without even genuinely trying to reach agreement where bargaining has actually commenced.

As it currently stands good faith bargaining does not exist. Employees and unions are acting with impunity and ignoring the good faith bargaining provisions at their will.

This is a major failure of the Fair Work Act that needs to be remedied and fixed.

The government needs to tell the truth about what its real intentions were in respect to the practical operation of the Fair Work Act. If the government genuinely intended it to be the case that employees and unions could effectively jump straight to the threat of industrial action without any or minimal bargaining having occurred, then they have been dishonest with the Australian voting public.

However, if it did not intend this to be the case, then they should fix it immediately by amending the legislation and save us from charade and predictable tediousness of conducting a “review” of the Act.

These so-called good faith bargaining is being used to turn the industrial clock backwards, with clauses sought in agreements to restrict the use of contract labour, reinstitute “last on first off” rules, union right of veto over rosters and so on. Yet the government is standing firmly by these provisions with the Prime Minister herself supporting so-called ‘job security” clauses in agreements.

The review blithely ignores the growing industrial turmoil that has been brought on by the act. The latest data shows a staggering leap in the number of working days lost over the past year from 144,100 to 214,000 to the year ended September.

This review is a theoretical rather than a practical review, conducted mostly by people who populated the old industrial relations club.

What is needed, and the government has conspicuously failed to deliver, is a review that could focus on the broader economic issues, not whether the act’s “effects have been consistent with the Governments objectives” because those objectives are narrow and backward looking.

No, this review will achieve little.

The government by narrowing the terms of reference has ensured that it gets what it wants – more of the same.

At the end there will be more saccharine froth from the government and a few timid amendments, but forget the wholesale change that is needed if the Act is to be genuinely reformed.

This review won’t deliver it, because the government doesn’t want it. After all the “Fair Work Act is working well” – at least according to the government.

Ian Hanke is a political consultant and a former adviser to Liberal ministers.

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