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.The unemployment rate has ceased to be a useful indicator [of the state of the labour market]. A more important test is whether the growth in employment is keeping up with the working age population increase. Before the Fair Work legislation employment was growing faster than the working age population.

Tony Abbott needs to reform industrial relations at a much faster pace.

Des Moore is a member of the HR Nicholls Society Board of Management. This is a letter published in AFR, 19 June 2014, Square brackets shows deletion by Ed

1 reply
  1. Michael McLean
    Michael McLean says:

    Labour productivity was +2.2% in 1 QTR 2014. However, Multi-factor Productivity was negative due to Asset and Capital Productivity marked decreases. Likewise, wages growth is overall, decreasing compared to GDP. So Labour/Labor would not seem to need reform but higher within the organisation.

    The recent [12 June 2014] world ‘Strategy&/PwC’ CEO Survey provides some guidance to the drivers for such perception of labour productivity –

    The narrative is on Productivity is clearly made by those with the remit to deliver >80% of its performance – management.

    By way of example – the Fair Work Commission only registers ‘Enterprise Agreements’ not Enterprise Bargaining Agreements.

    One questions the reason for the thankfully fading use of “bargaining” in the IR space to that of other terms can better reflect a new Workplace Culture. The IR operating environment where companies register “EA’s; Workplace Agreements; Team Charters or the “Company Way” etc.


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