Problems with Existing Regulation of Workplace Relations

Des Moore, former Deputy Secretary of the Federal Secretary, and member of the Society’s Board of Management, has prepared the following position paper for the Society discussing Problems with Existing Regulation of Workplace Relations. It has been emailed to all Federal Members of Parliament and Senators.


The HR Nicholls Society takes the view that there is no substantive imbalance of bargaining power between employers and employees and the relationship does not require detailed regulation. This view is based on the fact that there are over 800,000 employing businesses which operate with a workforce of over 12 million. These businesses compete actively with each other and employers as a group cannot force wages down or impose “unfair” conditions on employees as a group. In these circumstances it is virtually impossible for employers to impose “unfair” conditions on employees on any sustained basis. Read more

Media Release: Qantas Chairman to Address HR Nicholls Society

I am delighted to announce that the Chairman of Qantas, Leigh Clifford, will make the annual address at this year’s meeting of the  HR Nicholls Society on Thursday 5 December. Mr Clifford has agreed to talk about the need for reform of workplace relations in order to improve productivity and international competitiveness.

Adam Bisits, President of the HR Nicholls Society, said that from his experience as Chief Executive of Rio Tinto from 2000 to 2007, and since then as Qantas Chairman, Mr Clifford has first-hand experience of the difficulties facing companies in negotiating with unions on claims which often relate to issues that are largely peripheral to conditions employees can reasonably expect employers to provide. It is anomalous that, under the Fair Work legislation and its administration, conditions of employment are effectively determined by members of tribunals who have little or no experience in running a business. Those conditions should be determined primarily by direct negotiation between employers and employees and it should be recognised that, in a less regulated labour market, there would no underlying imbalance of bargaining power between employers and employees.     Read more

Let’s fix youth unemployment once and for all

The latest youth unemployment figures are startling. The highest percentage of 15-24 year olds in a decade is jobless.

The evidence is in. Mandatory minimum wages have locked a significant portion of an entire generation out of the workforce. Surely these latest figures must shock the Federal Government into action.

It is unacceptable to have a youth unemployment rate more than double that of the overall figure. Employment Minister Eric Abetz is quoted in The Australian today saying that the rising youth joblessness is his greatest concern with the latest labour data from the ABS. The solutions he proffers today are further government subsidies to and a renewed commitment to “Work for the Dole.”

The time is long past due for a meaningful solution to out of control youth unemployment in Australia. Government subsidy after government subsidy and increasing the burden on the taxpayer will not address the problem. It has been tried for decades now, the problem persists.

Government can only be the solution in one way, by removing the shackles from business. Only by removing the disincentive to employ youth will the jobless figures shrink. If the Federal Government is serious about fixing the problem, it must cease tinkering around the edges with subsidies and welfare programs. Now is the time to rectify the underlying problem and remove the shackle that is the minimum wage. Do we want a small few being paid what the government tells businesses they can afford? Or do we want the great many earning a fair and competitive wage that business can actually afford? Unless we are content with permanently locking youth out of employment, something has got to change. If youth unemployment really is a great concern to the Federal Government and it wants to reduce joblessness, the best thing it can possibly do is get rid of the regulatory barriers it has put in place. The minimum wage isn’t helping our youth; it is hurting them quite badly.

James Duncan is Administration and Research Officer at  the H. R. Nicholls Society


Fall in Employment Confirms Urgent Need for Action by Abbott Government

Fall in Employment Confirms Urgent Need for Action by Abbott Government

The fall in employment of nearly 11,000 in August confirms the earlier call by the HR Nicholls Society’s to Tony Abbott (see release of 25 Aug) to  make the major changes to the existing legislation that will be needed just to reach the “sensible centre” to which he committed the Coalition.

The foreshadowed restoration of ABCC powers and other minor reforms are welcome but will not change the behaviour of militant unions outside the construction industry. Read more

Election Result – Senate Result to Help Abbott

Are you sick to death of seeing, hearing and reading that Labor lost because of disunity? Watching the TV interviews on the election night had me switching from one t’other (with a bit of footy in between!) trying to find any substantive discussion of policy differences.

As I have suggested below, provided Abbott holds his side together Labor is stuck in a union rut which is likely to keep it there for some years. If unionist Shorten is elected as Labor’s new leader that could only extend its time adrift. Read more

Excessive Powers of Unions Confirmed

Confirmation of the HR Nicholls Society’s view that  the existing workplace regulations are damaging productivity has emerged with yesterday’s revelation that crane lifts on wharves in the East Coast are about 20% higher than in Fremantle. The lower rate there reflects the go-slow tactics adopted by the Maritime Union of Australia in its attempt to obtain from the $52 bn LNG Chevron project in Western Australia a 26% wage increase over 4 years including a claim for personal toilets. It is little short of a disgrace that the MUA, one of Australia’s most powerful trade unions (which has  a long standing “history” of  creating low productivity working environments), is able to operate without fear of the Fair Work Commission imposing a penalty sufficient to force it to stop action that disrupts business activity and lowers productivity. Read more

An Important Lecture on Econ & Political Problems

We are in the midst of an election campaign where much concern is justifiably being expressed about the paucity of serious policy announcements by either major party – not to mention the paucity of most of those that have been announced. Perhaps the most important serious announcement has been by Abbott – if elected the Coalition will not increase the burden of taxation (that is, the proportion of tax to GDP) – but this has hardly been discussed.

Nor has much attention been given to the excellent Stan Kelly lecture given on 15 August by the former head of the Productivity Commission, Gary Banks. The occurrence of that during the election campaign is entirely coincidental. Even so it deserves much more attention because it identifies the need for major policy changes, both economic and political, to reverse the trend in recent years for government policies to become much more accommodative to special interest groups. Protective arrangements of various kinds now extend to a wide range of industries and these arrangements are reducing productivity and economic welfare generally. Just as importantly, it identifies a major problem with the political process now prevailing in Australia. Read more

Out with the old in Fair Work Act

Uncompetitive wage rates – whether imposed by modern awards, for instance after-school wage rates for a country hardware store, or imposed by muscle-in unions and hapless employers in the greenfields of the recent mining boom – cause unemployment, or send jobs overseas, as with the processing of Browse gas on a remote floating plant to avoid high Australian wages.

Modern awards are centrally imposed wage terms divorced from any dispute or settlement between employer and employee. In their pervasiveness they continue the antiquated award system. To be really modern the awards should only apply if the parties want them. Greenfields agreements now involve negotiations with unions before even the first worker has appeared on site. However, the arriving workers should be allowed to decide how they will deal with the greenfields conditions offered them. If these changes were made, two significant obstacles to employment or to competitive wage rates would be removed. Read more

Voters Emphasise importnace of Jobs

As the Australian Financial Review notes that jobs is the number one concern of voters (see below), it is useful to remember that The Reserve Bank’s latest analysis in its August statement on monetary policy shows that under the present government “wages growth has dropped to its slowest pace since the early 2000’s” and that the “increase in the unemployment rate over the past year or so indicates that there are more people actively looking for work”. Indeed, this has occurred with “employment growth remaining below the growth of the working age population” ie people have been dropping out of the work force because of the difficulty of finding jobs and despite slower growth in wages.

The performance of (real) wages and employment growth is much worse than under the Howard government. Something wrong with the existing industrial relations policy?

 Des Moore is a member of the HR Nicholls Society Board of Management 

Union Activity During the Election Campaign

Although unions appear in this campaign to have less funding to help Labor (and themselves) than in 2007, union criticism of Coalition policies (or supposed policies) is increasing and there is precious little analysis in the media of such critiques. The AFR report (below) on union advertising is basically descriptive and, while my attempt to draw attention to the internal contradictions was published (see letter below), the editor chose to omit the important last sentence.

The acknowledgement in the PEFO that the economy may grow at a much lower rate than the official forecast adds weight to the need for structural reforms that would help lift investment, employment and productivity, such as IR and regulatory (particularly environmental) reforms. It almost takes us back to the early 1980s when Hawke called a meeting of business leaders and Wran ran with “a jobs, jobs, jobs first” agenda. Today, we don’t have the inflation problem that existed then but, with people dropping out of the work force, we need a reforming program to help/encourage business to create jobs. The steady downward trend in business confidence (the latest NAB survey is almost down to levels reached in the GFC) highlights the many regulatory problems faced by business, but which have so far received little attention in the election campaign. Important as the budget figuring is, the micro reforms are being overlooked.

It is of some importance that Holden workers appear to have accepted some kind of wage freeze. With our unit labour costs now being much higher than most other countries in the OECD, the case for changing out award system is very strong.

Des Moore is a member of the HR Nicholls Society Board of Management Read more