What constitutes a fair industrial system?


The current Australian industrial system has evolved from societal and constitutional acknowledgements of the conflicting interests of workforce participants and their collective organisations and the establishment of a quasi-judicial regulatory process. The provision in the Australian Constitution for the prevention and settlement of industrial disputes by conciliation and arbitration is based upon an egalitarian value and principle. The system of arbitral and conciliative intervention was seen from the outset of last century to be a revolutionary measure embedded by the Australian Constitution in the Commonwealth Federation. Literally and by necessary implication S. 51(xxxv) of the Constitution connotes the existence and recognition of participants in disputes, including employers, employees and their respective organisations within industries. It ordained a relatively well-understood process and associated principles for dealing with the conflicting interests at stake. The Coalition government's planned modernisation of Australia's workplace relations system [The Plan] is a counter-revolutionary strike. The Plan intends the overthrow of the existing system for resolution of conflicting interests. Joe Isaac and Stuart Macintyre (The New Province for Law and Order. 100 Years of Australian Industrial Conciliation and Arbitration) argue that the genesis of at least part of The Plan can be found in the views and resentments formulated by John Howard as far back as 1983. As Treasurer in 1982 he introduced a 12 month legislative pay freeze on the wages and salaries of Commonwealth employees and advocated the general pay freeze later instituted by the Conciliation and Arbitration Commission. The troubled aftermath of and retreat from the pay freeze measure in 1982, and the unrest and inherent instability of the centralised wage fixing system that had led to the imposition of it, were influential factors in the reform measures that were implemented after 1983 by the incoming Hawke government. An echo of the 1982 government led wage freeze can be heard in the rationale for the Fair Pay Commission, (the FPC), and the likely arrest of movement in minimum rates to be associated with its delayed formation and operation. When formulating and evaluating what is a fair industrial system, it is necessary to look primarily to the evolved form of our peculiarly Australian system. It changed most markedly from 1993, when the Keating-Brereton legislative package changed the methodology, but not the principle of Australia's approach to industrial relations (Isaac and Macintyre). That legislation and subsequent amendments to it consolidated the shift to bargaining at the workplace level within a framework of minimum standards provided by arbitral tribunals. The 1996 amending legislation of the Howard-Reith period substantially varied the methodology but did not abandon the principle. But now The Plan undermines the established Australian system and substantially abandons the principle of it. The Plan removes the independent arbitral tribunal from the most substantive determinative function in respect of safety net minimum and classification pay rates. An ad hoc agency of hybrid exotic origin, the FPC is to be installed in its stead. The rationale contradicts the FPC's capacity to be accepted as having either the independence or the standing of the arbitral predecessor whose function it cannibalises. The removal of the AIRC is a constitutionally arriviste destruction of the arbitral process and principles. For the FPC to survive constitutional challenge, the High Court will need to contort precedent to accept that the FPC, a non-arbitral body, should as it were, hold the lantern whilst its' mother, the AIRC chops the wood. The other more significant measures by which The Plan undermines the principle inherent to the established Australian system are that: it shreds the safety net by excluding from consideration numerous entitlements formerly embedded by award as established conditions of employment; it disconnects the agreement approval process from the oversight of the AIRC, the body that had responsibility for maintaining the safety net; it exempts from remedies for unfair termination of employment the majority of private sector employers and their employees, which in effect installs a fire-at-will capacity by an ostensible exception to the general rule; it conclusively excludes quasi-employment of dependent workers by badging them as independent contractors, thereby widening an existing gap in the regulatory system and shepherding them away from industrial regulation; and finally, it displaces industrial regulation and looks to long unused common law judicial jurisdictions for resolution of many workers' disputes. Not having been used much for that purpose in recent times, such jurisdictions are framed around language and doctrines founded upon property right holders' and master-servant relationship values. In my view, the result of The Plan being implemented cannot be a fair industrial system. The Prime Minister's catch cry, fairness begins with a job, is an article of his ideological faith: to him, employment will be created because: minimum rates, the safety net floor generally, will drop and employment will become relatively cheaper; or, employers, reluctant to recruit because they fear liability for unfair termination actions, will be disinhibited from those fears by enhanced powers to fire at will. Overwhelmingly, academic studies and independent tribunal determinative analyses dispute the existence of evidence that supports either of those propositions. In my view a fair industrial system is one that gives recognition to, and allows as effective as practicable a voice to all participants reasonably concerned. As far as is practical, much should be left to an independent Authority operating openly and accountably, within the statutory powers entrusted to it. Generally, the administration and modification of the processes and principles of adjustment between participants should be the responsibility of that Authority. Independence of mind and capacity in the individuals who perform those functions is best fostered by a sound and balanced pattern of appointments. Independence and capacity, or the appearance of it, is compromised when any appointee is not manifestly well-qualified, or not manifestly well-suited to perform without fear or favour, the actual duties of the office which he or she accepts the commission to discharge. A fair industrial system is one in which reasoned positions are solicited from participants interested in the industrial matter or issue, and are supplied by them, to the Authority, which reciprocates by addressing them in detail. It is one in which reasoned determinations are made, or the obstacle to providing a reasoned determination about particular outcomes is explained. It is a system in which there is a safety net or floor below which market forces, when seeking advantage in the supply of labour, will not generally be allowed to prevail. It is a system in which processes are available to restrain or offset unreasonable imbalances of power or to remedy practices that emerge in the market setting, including the damaging effects of collective bargaining. It is a system in which there is an effective connection between the administration of the safety net, and the application of it in agreements, and at workplace level. For a long time, we have had the benefit of such a system, more or less. We are about to witness a deliberate, essentially misconceived and misrepresented destruction of it. Key principles, processes and the institution discharging them will be almost irreversibly damaged or cast aside. The achievement of a majority in the Senate is not much of a direct mandate to implement The Plan. The majority came about through a general election in which the Coalition parties' Policy Speeches made no substantive reference to any such plan of the magnitude now committed to legislative drafting. The pre-election commitments, all of which were specified in a separate section of the Prime Minister's Statement announcing The Plan, made no reference to the main elements of it. The rationale now given for The Plan lacks persuasive force as justification for changes of such counter-revolutionary character. This article is a precis of a paper delivered to the Community Forum on 29 June 2005.

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