The Free Markets Solution to the Smoko Workplace Dilemma

(Article first appeared in the Daily Telegraph- Rendez View ) ( Picture is from Pexel-Splitshire )

Recent news out of Japan has proven, yet again, innovation and creativity stem from private individuals and businesses, not unions, and not forced government intervention. Even under the heavy hand of the Australian government smoking rates have begun increasing “despite plain packaging and the most expensive cigarette prices in the world.” In Japan a conflict between smokers and non-smokers came to a decision point at the Japanese Company of Piala.

Smokers faced a 29-story or 15 minute journey to smoke outside. Non-smoking employees began taking issue with increase time smokers were on break. At Piala, smokers made up 35% of the company’s 120 employees, and management acknowledged these trips were not wastes of time but often used to discuss business.

Rather than anger one side by implementing a ban or punishment, the company made a value proposition to its employees. Those who smoke can continue with their breaks, but the other 65% who do not smoke could utilise a new value, 6 extra days of holiday.

Looking to keep the talent they have acquired and balance customer needs, Piala found a creative solution ensuring talent was not going to leave, perhaps to a 1st floor company.

Notably, this policy has a lot in common with the creation of shorter work weeks, eliminating child labour, and shorter work days. They are all products of a free voluntary market, not unions via government force.

Shortened work weeks are a result of increased productivity via voluntary markets. As production increased, an hour of labour began creating a considerable excess in value beyond basic sustenance. Factoring in training costs and turnover issues, skilled and even so called “unskilled” workers acquired leverage for pay, safety, aesthetics, and leisure. Employees began valuing leisure time far more than income, resulting in time off and weekend benefits. Unions pushed legislation long after this became common place in the workforce.

It should be noted on the short work week debate, even as Australia began penalising a 7 day work week employers began offering higher pay than the actual penalty rate. Thereby Incentivising additional work. Government quickly shut that down in 1947 putting a cap on how much someone could be paid forcing all employees to value time off the same.

Eliminating child labour is also a result of free voluntary markets. It wasn’t greedy parents that put children to work, it was the necessity of survival. Once regions industrialised and production began rising, unskilled children were pushed out of the workforce replaced by machines and adults who were more valuable. Additional pressure grew as parents started making disposable income. The insignificant income raised from children became negligent in supporting a household. In the United States It wasn’t until most children were already out of the workforce in 1930 (6.4% 10-15 year old’s, with 74.5% of that number in Agriculture) were child labour laws then passed in 1938. In all reality only hurting the poorest in the community.

If weekend laws are the solution, I challenge a government to force a substance farmer to take 2 days off a week. After a few weeks, there won’t be any left to force.

What a 6 day holiday proposition shows is private business owners are finding unique ways to attract and keep talent in a competitive world that Australian businesses are competing with.

What is more striking is nearly 10% of Piala’s smokers decided to immediately quit smoking! 10% of Piala’s smokers suddenly valued 6 extra days of holiday rather than smoking breaks. As for the other 90% smoking and the associated breaks were still considered more valuable than all their alternatives. Besides increased moral, there may be additional long term benefits the employer and customers will benefit from, perhaps not.

Government, and unions could learn a thing or two from this moment. Creating a one size fits all proposal, or squelching all other values does nothing to resolve conflict and creates unintended consequences. Look no further than Australia’s prohibition for vaping. While the free market is finding solutions elsewhere, Australia has banned further innovation.

Allowing a more free and flexible environment where employers and employees can voluntarily negotiate their relationships will allow each Australian to prosper to their highest potential. Even the unintended consequences can be more productive. If I could bet on it, its going to be the free market that eventually pushes the tobacco industry the way of the horse drawn carriage industry.

 

Greg Pulscher is the current Executive Director of the H.R. Nicholls Society.

Gillard’s Unanswered Questions

In September, 2014, His Honour Justice Dyson Heydon delivered his Interim Report into the AWU Workplace Reform Association. Julia Gillard’s incurious cheer squad breathed a sigh of relief, trotted out the old ‘no smoking gun’ meme and retired smugly to their chardonnay and tofu. I may be tilting at windmills but I am not satisfied.

Ms Gillard appears to have been exonerated by the Trade Union Royal Commission of any wrongdoing in relation to the AWU Workplace Reform Association scam. Certainly, her judgement in various matters has been called seriously into question, but don’t expect that to deter her cheer squad, which steadfastly maintained for years that she ‘had no questions to answer’.

Most will be familiar with the central facts of the case, but many will not be aware of the intricacies of what was, in effect, a quite sophisticated deception.

There is no question that a fraud was perpetrated and that Gillard was involved. But what was her culpability? Gillard was exonerated by the Royal Commission primarily because there was no ‘smoking gun’. That may be true but it is quite possible for an offender to be convicted on the basis of circumstantial evidence alone. And circumstantial evidence we have in spades.

Just for starters, Bruce Wilson’s AWU Workplace Reform Association scam depended upon three things. Firstly, he needed a legal entity that was, on the face of it, an official AWU body. It had to have the words ‘Australian Workers Union’ in its title. This was so it could issue invoices, for services purportedly rendered, in the name of the AWU. Secondly, it would be necessary that the articles of association make no reference to fund-raising for re-election because that would alert the putative victims that this was not an official AWU body.   And thirdly, its existence needed to be concealed from the AWU for obvious reasons. Ms Gillard’s actions (whether inadvertent or not) in

  • providing advice on the incorporation of the association and drafting articles of association describing it as an official AWU entity designed to promote workplace training and safety, even though she thought it was a re-election slush fund,
  • failing to open an official Slater & Gordon file, and
  • failing to charge the AWU for her work

effectively achieved Wilson’s pre-requisites for him.

That may be just co-incidence and Gillard may, as she claims, have been an entirely innocent pawn. But on the other hand, these could also be construed as a prima facie case of aiding and abetting. One might wonder – indeed, it is almost impossible not to be moved by curiosity — how it could be possible for an experienced industrial lawyer to put these pieces so neatly into place,much to her lover’s advantage, and yet remain blissfully unaware that there was something dodgy about the whole arrangement.

Justice Heydon, in evaluating the testimony elicited by Counsel Assisting Jeremy Stoljar QC, was able to forensically examine each one of these issues, which he did in isolation. Gillard had a plausible answer (if you can call the frequently invoked ‘I don’t recalls’ plausible) for every apparent anomaly.

Let’s look at them in detail.

Misleading Title

The first is the misleading use of ‘Australian Workers Union’ in the title of the association. Gillard claims the title was given to her by Bruce Wilson. As far as this matter is concerned, Slater & Gordon had two clients, the AWU and Bruce Wilson. Justice Heydon points out that:

Where a solicitor acts for one client (here AWU), and the interests of that client may be affected by the conduct of another client (Bruce Wilson), for example, by the second client using the name of the first, the solicitor is in a position of conflict. The solicitor has a duty to protect the interests of the first client and also a duty to protect the interests of the second.

Gillard did not check if the AWU had given approval for its name to be used in the title of this association, despite the fact that its use was likely to be misleading. She stated that she was entitled to infer as much because, as Wilson was an elected official of the AWU, that approval was a given. She claimed that she did not believe, at the time, that the use of ‘AWU’ in the title could be used to mislead and its prominence gave her no cause for concern.

Justice Heydon concludes (emphasis added, as in all subsequent quotes):

Julia Gillard’s conduct in this respect must be regarded as a lapse of professional judgment, but nothing more sinister. In the events which have happened, her conduct could not have led to any legal or equitable remedy.

The bolded sentence appears to be a non sequitur. One supposes it is meant to support the conclusion, but what does it mean?

Misleading Articles

The second is the misleading description of the association in the articles drafted by Gillard as being for the promotion of workplace safety. Gillard admitted that she knew (or rather thought) that the association was designed to support the re-election of a team of union officials – a ‘re-election slush fund’ as she called it. When she was questioned as to the discrepancy between the purported aim of the association (workplace reform, as per the articles she drafted) and the ostensible aim (re-election slush fund) she stated

the objects are broadly drawn about promotion of change in workplaces, the sort of things that a team of officials might well be promising in a campaign for election.

When queried as to why the articles didn’t just say the aim of the association was to raise funds for re-election, Gillard responded:

at the time I obviously thought it should be broadly drawn and go to the types of things that might be issues that officials came together to campaign on.

As I have stated earlier, the omission of any reference to raising funds for re-election was essential for the scam to work.

Gillard was subjected to further questioning (a series of nine questions) regarding this discrepancy but stuck to her theme.

On this, Justice Heydon observed:

Those nine answers of Julia Gillard were not satisfactory. Certainly Bernard Murphy (Gillard’s mentor at the time) testified that it was not clear to him on reading Rule 3(1) ‘that there was an election fund built into this association’. The idea that the election purpose fell within the purpose stated in rule 3(1)(f) is a wrong idea. However, a person could honestly believe that wrong idea. The statement of objects in the rules was so broadly drawn as to obscure what she actually saw the purpose of the Association to be.

He then, however, goes on to exonerate her of any knowledge of the true purpose of the association based on the basis of her Left wing leanings:

But Julia Gillard did not know it was fraudulent. Had she known the truth, she probably would have been shocked. She would have terminated the retainer – and not only the retainer. In 1992 she was a young woman. She had ability. She had honourable ambitions. One ambition was professional – to become a leading light in Slater & Gordon, in which she had already risen fast, and which had been growing fast. Another was political – to enter Parliament. It is notorious that she had had a long and successful career in student politics…..

Both her professional ambitions and her political ambitions would have suffered a severe setback if she became involved in fraud. She had every reason, professional and political, to avoid being involved in fraud. Further, her counsel urged that her reputation be taken into account. She had the reputation, merited or not, of being very left-wing……

People with a left-wing reputation are usually keen to preserve it by avoiding involvement in fraudulent conduct. If she had known of Bruce Wilson’s and Ralph Blewitt’s frauds, it would have been an act of insensate folly to have gone along with them. It is quite improbable that she committed that act of folly.

 

Failing to Open A File

Justice Heydon deals with this issue as follows:

One criticism of Julia Gillard has been that her failure to render a bill to the AWU for the work she did in relation to the Australian Workers’ Union – Workplace Reform Association Inc. prevented the AWU from finding out about an unauthorised use of its name. However, she did not think her client was the AWU. She thought the clients were Ralph Blewitt and Bruce Wilson (my bolding). And her evidence that it was common for that type of work not to be charged for is to be accepted. While she did not inquire about how Ralph Blewitt had been authorised to proceed and about whether consent had been obtained from the AWU, there is insufficient evidence to justify a finding that she knew there was no authority or consent. Her decision not to charge cannot be seen as a step designed to cover up an unauthorised use of a name.

Fair enough. But this finding begs some questions.   If Gillard did not think her client was the AWU, why did she claim that she believed the establishment of the AWU Workplace Reform Association had the imprimatur of the AWU by virtue of the fact that Wilson was an elected official? By this logic she must accept that Wilson was acting as an agent of the union and therefore it was the union that was really her client.

 

 

Failing to Charge for Work

Justice Heydon opines:

Another criticism is that Julia Gillard was in breach of duty to Slater & Gordon by using the time for which she was paid as a salaried partner, by using Slater & Gordon’s resources and by causing Slater & Gordon or the AWU to pay disbursements, all for a private purpose of Bruce Wilson, with whom she was in a personal relationship. It is not clear that the time Julia Gillard spent was Slater & Gordon time or her own time. There is no reason why it should not have been the latter. The only resources of Slater & Gordon she may have employed were a small amount of stationery and perhaps a little typing.

 

Again, fair enough, but the real point at issue here is not whether Gillard ripped off her employer, but how yet another of her actions contributed to the success of the scam.

 

 

WA Corporate Affairs Commission Letter

We now come to another issue which is clouded in mystery. When the original application was lodged by Ralph Blewitt to incorporate the AWU Workplace Reform Association, the WA Corporate Affairs Commission initially balked at the registration because it appeared to them that the entity was a union, in which case it would be governed by different legislation.   A letter was sent, presumably to Blewitt, requesting clarification. Gillard responded on behalf of Wilson/Blewitt but the exact contents of the letter are unknown because no copy of it has been found.

The WA Corporate Affairs Commission file on the registration of the association, now held in the WA State Archives, should contain a copy of this letter, but the file has been found to be empty of all documents.

 

What does exist is the reply from the Corporate Affairs Commission to Gillard agreeing to incorporate the association subject to the inclusion of an additional rule as follows:

The Interpretation of Objects of the Association. The objects specified in sub Rule 3(1) must not be interpreted as meaning that the Association aims to seek to regulate the relations between workmen and employers, or between workmen and workmen, or between employers and employers, or aims to impose or have imposed by others any restrictive conditions on the conduct of any trade or business.

 

There is some doubt about who drafted that rule. Counsel Assisting suggested that Gillard drafted the rule and proposed it in her letter. Gillard denies this and suggests that it was proposed by the Commission.

 

In any case, Gillard wrote to Blewitt advising him to amend the rules accordingly. Had he actually done so, that would have made clear to anyone who read the rules that the association was not an official AWU body entitled to issue invoices for services rendered. Whether he did or not doesn’t matter because the Commissioner obligingly agreed to incorporate the association, subject to the following condition:

 

In order to avoid any unnecessary costs and delays … the Commission is prepared to incorporate the association with the existing rules annexed to Mr Blewitt’s application subject to receiving a written undertaking that the association will amend its rules to include new rule within 30 days of being notified of incorporation.

 

The import of this is two-fold. Firstly, it makes it clear that, despite Gillard’s earlier nonchalance regarding the use of the name AWU in the title of the association, its use was, in fact, confusing. Secondly, she was again asked by Counsel Assisting, in order to clarify why did she not just state that the purpose of the association was simply to raise funds for re-election? Gillard’s answer was obfuscation, as was pointed out by the Commissioner, but he made no recommendation or judgement on this point. This point is addressed in more detail below.

 

My question: should this letter from the Corporate Affairs Commissioner have given Gillard pause and to perhaps cause her to reflect that she had been less than diligent in her initial handling of the matter?

 

 

Other Matters

There were two other substantive issues covered by the Commission – the purchase of a property in Ralph Blewitt’s name using funds from the AWU Workplace Reform Association account and renovations to Gillard’s house, some of which appear to have been paid for by the association.

 

I return to my initial proposition, that, taken individually, each of Gillard’s omissions or errors of judgement may be overlooked but collectively they comprise a credible circumstantial case against her. It is the sheer number of these ‘lapses of judgement’ that stretches credulity.

In particular, Gillard’s determination to avoid making any mention whatsoever in the official paperwork of ‘supporting (or raising funds for) the re-election of a team of union officials’, even after it became apparent that the WA Commissioner for Corporate Affairs was confused as to the purpose of the association, strikes me as perverse and counter-intuitive for someone trained in the law.

 

Indeed, Counsel Assisting addressed this issue, as per the following exchange:

 

Q: Why not just write back and say, “Well, it’s not going to be a trade union because it’s going to raise money for elections”?

A: Mr Stoljar, sitting here, I don’t know, but can I suggest to you that one thing that may be worth looking at is whether or not this is a form of words somehow associated with the state industrial relations legislation at that time. I think it’s that clarification that was being sought. Should this be an association or a state registered trade union? Those words looked to me like they may have come from state regulation of some nature. Now, I don’t have a direct recollection of it, but that is what, piecing together from these documents, I think I was dealing with at the time.

Q: But if the concern that had been raised with you was that the Association could be confuse for a trade union, isn’t the simple answer, it’s set up outside the union and it’s going to raise funds for election purposes and operate a bank account to hold those funds?

A: Well, in the letter of 15 May what’s being asked for by the corporate affairs people is the inclusion of a new rule.

 

Tellingly, Heydon noted:

 

Those two questions were not answered.

 

But, surprisingly, he made no comment or judgement as to the significance of this non-responsiveness. The significance, to my mind, is that Gillard could not come up with a convincing reason as to why she did not take the suggested course. The fact that she was in a personal relationship with Wilson also, in my mind, reinforces the impression of guilt. That said, some may take the alternative view: her relationship may have contributed to the slipshod nature of her professional conduct. Justice Heydon appears to give Gillard the benefit of the doubt on many occasions. For example, Page 126 para 66, he states:

 

Of course, unknown to her, the purposes envisaged by Bruce Wilson and Ralph Blewitt were quite different and much more sinister. ………….. Bruce Wilson set up a scheme which enabled him fraudulently to obtain funds from Thiess on the false premise that the Australian Workers’ Union – Workplace Reform Association Inc. had a connection with the AWU. But Julia Gillard did not know it was fraudulent. Had she known the truth, she probably would have been shocked.

 

‘Of course, unknown to her’? How does he know that ‘Gillard did not know it was fraudulent’? Surely one of the purposes of this enquiry was to determine if Julia Gillard was complicit in this fraud. Heydon seems to be assuming her innocence right from the get go. Isn’t this taking the ‘presumption of innocence’ (a duty imposed upon a jury but surely not upon an investigating body) rather too far?

 

Again, on page 134 para 77:

 

What of Julia Gillard? She did not know what the true purpose of the Association was to be. But she did know that there was no Association and therefore no members. The evidence is insufficient to make a finding about whether she knew what was in the Certificate. If she did, as with the false statements in the Application, the better view is that she did not turn her mind to whether the statements were false. She had no motive to deceive the Commissioner.

How does Heydon know that Gillard had no motive to deceive the Commissioner? If she was, in fact, complicit in the scam, she would have a strong reason to do so.

 

There are numerous examples like this. In fact, as early as page 101, para 33, in relation to another (minor) issue, he states:

 

There is no reason to doubt any of this evidence. Like almost all her evidence, it should be accepted.

Another question which puzzles me: why didn’t Counsel Assisting examine the nature of Gillard’s personal relationship with Wilson, not for any prurient reason but simply to establish how it might have affected her professional conduct? For example, were they living together in a de facto relationship or was it just the odd amorous encounter? Did she love him? Did she see the relationship as long-term? Did she imagine that Wilson would divorce his wife and live permanently with her? If the latter, the infamous Kerr Street property listed as having been purchased by Blewitt, rather than her lover, would have placed it beyond dispute in the event of marital assets needing to be divided.

 

 

Renovations to Gillard’s House

 

We now come to the second major issue addressed by the Commission that concerns Julia Gillard.

Despite conceding, in her ‘exit interview’ from Slater and Gordon, that she could not rule out that some of the work carried out at her house had not been paid for by the Workplace Reform Association, her position since then has been staunchly to insist that she paid for all the work herself. The Commission examined a number of claims to the contrary. The most significant of these involved a tradesman, Athol James (see page 48) who testified Gillard had told him on a number of occasions that Wilson was paying for the renovations. He also testified that, on two occasions, he had seen Wilson hand Gillard a ‘wad of notes’ and that, as a result of she told him (James) she would ‘be in a position to pay his bill’. (Page 48)

 

Without going into details, Justice Heydon, in a departure from his previously unquestioning acceptance of Gillard’s evidence, held the view that, in this instance, the evidence of those who claimed that money from the Association had been used, was to be preferred over that of Gillard.

In summary, his position seems to be that Association money was provided to fund part of her renovations. In this respect, he makes no criticism of Gillard other than that had she turned her mind to the facts, she should have realised that to be the case.

 

The inference I draw from this is that Gillard did benefit from the scam, knowingly or unknowingly.

Furthermore, when confronted by Peter Gordon in her exit interview, her claim that she ‘could not rule out’ the possibility of Association funds being used, was disingenuous to say the least. If there was ever an opportunity for her to ‘turn her mind to the facts’ this was it. Yet subsequent to that interview her position has been that she paid for all the renovations herself.

 

The Aftermath

We now come to the other issue that troubles me. What happened when Slater & Gordon became aware of the problem? Specifically, why did neither that law firm nor Gillard alert the AWU to the existence of an association that bore the name ‘AWU’ in its’ title and which appeared to have been used for fraudulent purposes? The Royal Commission seems strangely incurious about this. Its interest in the affair appears to end at the time that the fraud came to light and Gillard was sacked by Slater & Gordon. Here is what is known.

 

Sometime in mid-1995, the AWU became aware of another fraudulent bank account known as the AWU Welfare Account No 1. Bruce Wilson was identified as the malefactor and the AWU proceeded against him. He sought legal advice from Gillard, who referred him to Bernard Murphy. After an initial conference, Murphy declined to represent him.

 

At about the same time, according to evidence given to the Royal Commission, ‘rumours began swirling about Slater & Gordon’ regarding illegal use of the AWU Workplace Reform Association and, eventually, Gillard was interviewed regarding her role in these matters. The upshot was that she was prevailed upon to resign. It is not clear exactly what either Slater & Gordon or Gillard knew of the fraud’s extent — but they did know, apparently, that funds had been drawn against the Associations’ bank account for illegitimate purposes. They must also have known, from the tenor of questions put to Gillard by Peter Gordon, that the Association itself was dodgy. It seems that, at this point, Gillard and Slater & Gordon management wiped their hands of the whole affair. Despite the fact that they now knew the AWU Workplace Reform Association was a sham intended only as a vehicle for fraud, they took no steps to apprise the AWU of its existence.

 

Gillard, upon being asked if she had given ‘consideration to alerting the AWU to the fact that moneys had been travelling in or out of the Workplace Reform Association account?’ responded:

 

For my state of knowledge and for what I was doing was not the partner – well either of the partners, any pf the partners. I was not amongst the partners who were making enquiries about this matter.

 

She was then asked if she had raised the matter with Bruce Wilson and she replied:

 

Subsequent to these events I had a discussion with Mr Wilson where he was evasive and I formed the view that I had not been fully in the picture about the nature of his conduct and I took steps to end our relationship.

 

The question of client privilege obviously comes into play here and, for me. this is definitely a grey area. Bruce Wilson can clearly claim client privilege in regard to what he told Bernard Murphy in relation to the AWU Welfare Account No 1. But can he claim privilege into what he told Gillard in relation to the Workplace Reform Association if his sole intention was to deceive her into assisting him in perpetrating a crime? I would have thought not. Did Gillard have a duty to inform the AWU of the existence of the AWU Workplace Reform Association? Did Slater & Gordon have such a duty? After all, the AWU was their client. From the perspective of the man in the street, I would regard such a duty was incumbent.

 

Documents in the public domain show that, at that time, what was under investigation was the AWU Welfare Account No1 and that the AWU did not become aware of the existence of the AWU Workplace Reform Association until May, 1996, when it was revealed to them by the Commonwealth Bank.

 

When Gillard was asked in Parliament why neither she nor Slater & Gordon alerted the AWU or the police about the AWU Workplace Reform Association, which she had helped set up and which was subsequently found by Slater and Gordon to have been so dodgy that they required Ms Gillard to leave the firm. The then-Prime Minister’s response to this was that at the time of her interview with her managing partner (September, 1995) ‘these matters were already under investigation’. That is not correct. What was under investigation was the Welfare Account. Even if Ms Gillard genuinely thought that the AWU Workplace Reform Association was under investigation, would this absolve her of her duty to volunteer whatever assistance she could to the investigation?

 

Did either Gillard or Slater & Gordon seek advice from the Law Institute of Victoria or some other governing body about their rights and obligations in this case? I find the Royal Commission’s lack of curiosity on these questions to be disappointing. Surely there were further issues to be explored.

 

Conclusion

I postulated earlier that, viewed in total, Gillard’s actions, while possibly excusable individually, collectively represent a very compelling circumstantial case against her. As we all know, to be convicted of a criminal offence one must be found guilty ‘beyond reasonable doubt’. It seems that, in cases based on circumstantial evidence alone, there is a form of guidance.

 

In a circumstantial evidence case, the jury should be directed that the inference of guilt must be the only one reasonably open on the facts before the jury can return a verdict of guilty: Chamberlain. In other words, there should be no conviction unless there is no reasonably possible explanation consistent with the innocence of the accused: Hodge (1838) 168 ER 1136, Plomp (1964) 110 CLR 234, and Peacock v The King (1911) 13 CLR 619, Grant (1975) ALR 503, Knight (1992) 175 CLR 495.

 

So the question here is whether or not the series of actions and inactions that facilitated the perpetration and concealment of the AWU Workplace Reform Association scam admit an alternative explanation (alternative to guilt, that is) that is reasonable?

 

I would submit not, purely on the basis of Gillard’s actions in initially drafting articles of association that bore no relationship to the putative aim of the Association and then failing to be more explicit when queried by the WA Corporate Affairs Commissioner, who was clearly confused. To me those actions do not seem ‘reasonable’ on the part of a qualified lawyer.  In fact they seem downright suspicious. As noted earlier, under questioning from Counsel assisting, Gillard herself could come up with no reasonable explanation.

 

And failing to alert the AWU of her suspicions is hardly ‘circumstantial’.

 

Were I on a jury in this hypothetical case, the prosecution’s case would resonate. I freely admit to partisanship, as I despise Gillard and the damage she wrought upon the country, but I believe I believe it is worth pointing out that serious questions still hang over Gillard’s head.

MEDIA RELEASE: Unemployment Up – But Employment Increases

The unemployment rate of 6.3% (s adj) has reached a 12-year high, increasing slightly from the previous month.

However, data reveals a modest improvement in the labour market as employment rose by 42,700 (0.4%) in November 2014. Despite this, the growth of 1.5% in demand for labour over the past 12 months is still failing to keep pace with the growth in the working age population of 1.8%.

Youth unemployment has also continued to increase significantly. In November 2013 the unemployment rate for persons aged 15 to 19 years was 16.5%. The latest figures show the rate to have risen considerably to 20.1%. February 1997 was the last time that youth unemployment was greater than what it is today. Such a record high level indicates poor employment prospects for first-time job seekers.

Additionally, the Australian labour market is also faced with the issue of growing underemployment. The labour force underutilisation rate for November 2014 is 15.0%, the highest rate since November 1997. This increase is largely due to the growth in part-time employment in comparison to full-time employment. The latest figures show that while part time employment increased by 40,900 in November whereas full time employment increased by 1,800.

These developments in the labour market emphasise the need for deregulation of workplace relations and the establishment of a much more flexible market.

Publicity Officer: Des Moore (9867 1235)

 

Royal Commission Submission

The HR Nicholls Society Submission to the Royal Commission into Union Corruption is now availiable for download, together with a cover letter by Publicity Officer Des Moore HERE:The Effect of Regulation on Union Governance and Corruption (covering letter by Des Moore) and you may click here for the media release.

Des Moore wishes to note that:

Firstly, the HR Nicholls submission is to an extent limited by the terms of reference which do not refer specifically to the economic effects of existing arrangements. As the Abbott government has indicated that the Productivity Commission will at some stage be asked to undertake a comprehensive economic review, our submission does not attempt to cover all the adverse economic effects of the regulations, such as the minimum wage. That will be for another day. But there are both legal and economic implications in the Commission’s identification of “criminal conduct which includes widespread instances of physical and verbal violence, cartel conduct, secondary boycotts, contempt of court and other institutional orders, and the encouragement of others to commit these contempts”.

 

Second, my covering letter argues that the absence of any specific mention of economic implications in the terms of reference should not stop the Commission referring to them in its report(s). There is in a sense an interconnection between the legal and economic effects. The importance of having regulatory arrangements which stop or markedly reduce secondary boycotts is but one example.

 

Accordingly, it is suggested that the Commission should in fact give more attention than appears so far to be the case to the adverse economic implications of the existing regulatory arrangements. The provision in the terms of reference to “the adequacy and effectiveness of existing systems of regulation” seems relevant and the identification of restrictive practices in the labour market indicates that adverse economic effects occur. Hence it is recommended that the Royal Commission draw attention to the likelihood of such effects in its report.

 

Media Release: Royal Commission Submission Calls for Minimal Regulation

MEDIA RELEASE
3 November 2014
Royal Commission Submission Calls for Minimal Regulation

The HR Nicholls Society submission to the Royal Commission on Trade Union Governance & Corruption calls for existing regulatory arrangements under the Fair Work legislation and the Fair Work Commission (FWC) to be replaced with minimal regulation of employer/employee relations.

The submission, acknowledged by Commissioner Heydon, particularly addresses the reference on ‘the adequacy and effectiveness of existing systems of regulation and law enforcement’ (a)(j)

Analyses in the submission by two prominent lawyers show advantages conferred on trade unions which are unnecessary and unjustified. These include entry to work premises, ability to disrupt work performance, engagement in protected industrial action and forcing parties into regulated bargaining. Read more

ABOUT RAY EVANS

The following is a recent address given by Des Moore, Publicity Officer of the HR Nicholls Society, to Turk’s Head (one of the organisations created by Ray Evans) on October 8, 2014″:

Although I am a bit concerned about talking to a “prickly” group,  I feel honoured to be invited by Patrick Morgan to offer a few words on our good friend, the late Ray Evans. I welcome the opportunity to do so in the presence of his wife, Jill.

I say only a few words because the importance of Ray’s contribution to our society really warrants a book. Yet despite the enormous number of PhDs being written are any of them offering to do what would be a fascinating one on Ray? Ray himself would doubtless be saying from his grave – that is exactly what you would expect from our universities!

However his death did produce extensive praise from certain quarters on his enormous contribution to the debate on a wide range of public policies spread over about 25 years. It is almost sufficient to simply recall that he played major roles in establishing and developing the HR Nicholls Society, The Samuel Griffith Society, The Lavoisier Society, The Bennelong Society and The Galatians Group. It is quite remarkable that he had the capacity to run these groups with only limited financial and other help.

Importantly, he did however receive help from the courageous decision of Hugh Morgan to take him on board at Western Mining as a speech writer and from Chairman Arvi Parbo for agreeing that he should continue framing the 200 speeches he drafted for Hugh. One of those – titled “Yellow Cake Bob” after the Hawke government banned uranium mining – probably cost Hugh his position on the board of the Reserve Bank. Needless to say it was a serious risk for shareholders and a Chief Executive Officer to  agree in 1982 to employ Ray when he wrote in his job application  “The culture wars I now believe to be embedded deep in Western Civilisation … are fought out in every institution. We see them in the churches, within political parties, in the media, in the universities and in corporations”. Read more

Employment News is All Bad

Using the unadjusted labour force data, the September figures show an unchanged unemployment rate of 6.1%. But this apparent “stability” disguises the deterioration in the labour market.

Not only did employment fall by 30,000 but those not working or seeking to work increased by 45,000. In effect, those who lost their jobs did not even try to get back into the work force.

This is not a one off development. While over the past 12 months employment did increase by 46,000 or 0.4%, those not working or seeking to work increased by 242,000 or no less than 3.7%.

In short, the demand for labour has not kept pace with the growth in the working age population (15 years and over) and retirees and the youngees with no work prospect have increased. This is reflected in the fall to 64.5%  in the participation rate from 65.2% a year ago.

How has Australia got to this parlous situation?

While the end of the mining boom has contributed, the main reason is that Australia has a highly regulated labour market which will not allow temporary downwards adjustments in employees’ conditions in other industries. These conditions deter employers from risking additions to investment and jobs.

Unless early action is taken to remove the Fair Work arrangements, the Abbott government will not only fail by a long way to achieve the employment growth of 1.5% in the 2014-15 budget, but also the election jobs target of one million over 5 years.

Publicity Officer: Des Moore (9867 1235)

Media Release: Unemployed up by 15%, Employment Falls Too

The increase in July unemployment to 6.4% seasonally adjusted rate (from 5.6% in July last year), and the accompanying small fall in employment since last month, highlight the need for reduced regulation of workplace relations in circumstances where the economy is growing below trend.

Unless regulations are reduced the Abbott government’s budget forecast of a 1.5% increase in employment in 2014-15 will not be achieved and productivity growth will remain sluggish.

The regulatory problem is highlighted by the fact that the growth in the working age population (WAP) is twice as fast as the growth in employment over the past 12 months – employment up by only 0.9% while the WAP increased at double that rate (1.8%).

Before the Fair Work legislation employment was growing faster than the WAP and the participation rate was growing. Over the past three years that rate has fallen from 65.4% to 64.8%.

On top of the twelve months increase of about 15% in numbers unemployed, this indicates continued large increases in those who have given up actively looking for work – the so-called drop outs

Labour Force – Increases Since July 2013 (Original Data)

000s               Percent

Employment                                1,041                0.9

Working Age Population              3,421                1.8

Unemployed                                   96                14.9

WAP is civilian population aged 15 years and over

It is now abundantly clear that urgent changes must be made to the existing regulatory legislation, and the administration of it, just to reach the “sensible centre” and remove the bias evident in the existing arrangements.

Sufficient evidence of the monopoly position of unions has already been given to the Heydon Royal Commission to warrant immediate reforms and allow employers much greater freedom to determine employment conditions. It is anomalous, for example, that the MUA has to be taken to the Federal Court in an attempt to reduce its monopoly powers.

The proposals to reform the ABBC and other minor reforms are welcome but have yet to be implemented and will not themselves change the behaviour of militant unions.

Publicity Officer: Des Moore (9867 1235)

 

Employment Grows –But Faster Growth in Drop Outs

The June ABS Labour Force figures show  employment continuing to grow but at a much slower rate than the growth in the working age population (WAP) – over the past 12 months employment rose by only 0.9% while the WAP increased at double that rate (1.8%).

This indicates further large increases in those who have given up actively looking for work. And these partly reflect the adverse effects of the regulatory system.

Labour Force – Increases Since June 2013

000s             Percent

Employment                                           1,042                0.9

Working Age Population                        3,774                1.8

Unemployed                                            51                    7.5

Although the unemployment rate is up only 0.1 percentage point to 6.0% (S Adj), the labour market is much weaker than this suggests. The failure of the growth in employment to keep up with the working age population increase means continuing high drop outs of the labour force. Before the Fair Work legislation employment was growing faster than the WAP.

Unless there is a major improvement in labour demand the Abbott Government will not achieve the budget forecast employment growth of 1.5% in 2014-15. And Abbott’s pre-election jobs target of a one million increase within five years will fall well short.

The revelations at the Royal Commission show that urgent changes must be made to the existing regulatory legislation, and the administration of it,  to remove the bias evident in the existing arrangements and stop  militant unionism. The proposals to reform the ABBC and other minor reforms are welcome but have yet to be implemented and will not themselves change union behaviour.

Publicity Officer: Des Moore (9867 1235)

 

IR Reform key to easing unemployment

The development of this trend does not mean higher unemployment but a much greater increase in those who have given up actively looking for work (you can’t be counted as unemployed unless you are actively looking).

You say that Kent mainly attributes this  development to an increased desire to retire and that only about 25 per cent are discouraged workers. But the sudden increase in drop outs coincides with the introduction of the greatly increased regulation of workplace relations and the accompanying employment deterrent effects experienced by employers, such as the absurd penalty rates.

The marked slowing in the  growth in employment to only 0.9 per cent over the past 12 months suggests that the budget forecast for 2014-15 of 1.5% growth will be very difficult to achieve unless major changes are made to existing regulations which markedly reduce deterrent effects. Read more