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Labour Market Regulation

Below is an HR Nicholls Society press release, drafted by me, commenting on an address by labour lawyer Josh Bornstein of Maurice Blackburn to a (reportedly) closed door business conference on 23 October. The address is both astonishing and concerning – astonishing because it reveals the preparedness of representatives of such firms to attack businesses which are primarily responsible for Australia’s economic development and well-being. Concerning because it suggests the absence of any understanding by prominent members of such firms of the way in which private enterprise functions in the market economy and the potential benefits if we had a deregulated labour market.

I am including a copy of Bornstein’s address because it illustrates ignorance and, at the same time, it reveals the increasing difficulties businesses confront in having to deal with trade unions (my apologies to those who may have already received a copy from the HR Nicholls secretary, with the press release). Those unions have been considerably empowered by the Fair Work Australia legislation and the arrangements surrounding its administration. They are also advised by firms which are highly skilled in using the legislation in support of unions under the cover of “we fight for fair” - but which undoubtedly reduces employment particularly of the lesser skilled.

Relevant also is the likely considerable influence the firms have on the present government. We have heard a considerable amount recently about the role of Slater and Gordon – and we are likely to hear more. As to Maurice Blackburn, it will be recalled that the current Attorney General Roxon was employed in this firm before becoming a member of Parliament and that Prime Minister Gillard appointed then firm chairman Bernard Murphy to the Federal Court, the first Victorian solicitor to be so honoured. We may well hear more about that decision too.

It goes without saying that labour market reform should have a high priority for the Coalition.

Des Moore

HR Nicholls Society


Bornstein Surprises Nobody

It is hardly remarkable that, even in addressing a business conference, labour lawyer Josh Bornstein accused business leaders of being unable to understand that a minimal regulation of the labour market produces no benefits.

After all, business leaders only have experience in running their businesses with costs that allow them to compete. Labour lawyers, on the other hand, are primarily concerned with advising their principal clients - trade unions - with how best to extract unwarranted additions to wages and conditions.

His address reveals a failure common amongst lawyers to understand how a deregulated labour market operates in the best interests of both employees and businesses. This is illustrated by his absurd statement that “most people on individual contracts ... have no bargaining power” and his support for collective agreements with trade unions that previous Labor leaders have not supported.

The reality is that Australia has more than 800,000 employing businesses operating with a workforce of well over 11 million and those businesses compete actively with each other in the labour market.

In his 20 years as a practising lawyer Bornstein has apparently not been aware that, even under the excessively regulatory system, a large number of employees (currently over 2 million pa) have had the flexibility to change jobs each year. So much for his claims that individual contracts do not offer employees flexibility and that employers “unilaterally determine terms and conditions”.

“In modern competitive conditions employers cannot lay down the law on remuneration and conditions in a deregulated market: if they tried to do so they would soon lose staff”, HR Nicholls President, Adam Bisits pointed out today.

Bornstein also overlooked the benefits for workers from the much lower regulatory arrangements applying during most of the Howard Government period. Not only was there a strong growth in real wages but unemployment fell from 8 to 4 per cent and the proportion of Australia’s working age population who were employed increased from 66 to 73%.

It would benefit Bornstein to enrol in an economics course that examines the functioning of the labour market instead of kow-towing to the union movement.

Inquiries: Des Moore 03 9867 1235

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