President’s Report for 2016-17 – Adam Bisits

Report of president to the annual general meeting

 of the HR Nicholls Society for 2016-17

held on 8 February 2017 at

Trust, 405 Flinders Lane, Melbourne

 

  1. Appointment of Executive Director

This year our Executive Director John Slater is reporting on the operations of the HR Nicholls Society for the last year. We are lucky to have for the first time an executive director. I am grateful to the committee led by Kyle Kutasi who recommended John Slater. We can be grateful for John’s work in organising the society, speaking for it and researching and reporting on the great employment problems, eg in the construction industry for the Commonwealth Games.  He does this despite being in Brisbane and while also studying.

The decision to appoint an executive director was taken at a strategy meeting of the board at the CWA rooms, Toorak, on 13 February 2016.

My report will be on industrial issues themselves.

  1. New legislation re-establishing the Australian Building and Construction Commission, and for stricter reporting by unions and employer bodies

It is not surprising that the present and the last government have been half hearted in the industrial field, for the industrial relations bureaucracy and the industrial relations club are well entrenched in Australian commerce, in public administration and in politics, and the government is scarred by Work Choices.

Any legislation to dismantle the present system would ordinarily be futile because of the non-government majority in the Senate.  There is also the risk that dismantling legislation would be mishandled, in the way that Work Choices was not preceded by public analysis and when made was a tedious piece of legislation the benefits of which were not self evident.   Industrial legislation has, more so than other law, to speak directly to the worker.  The government is not to be criticised for presently not actively legislating or attempting to legislate for greater freedom of employment.

However today’s announcement that the transition to the new federal building code is to be shortened from two years to nine months and that non-compliant federal tendering is to be limited[1] shows a government needing to distinguish itself – before industry and from the Labor party.

The prime minister Malcolm Turnbull has already said he wants “an agile economy”, a nation that is “innovative, that is creative”.  He has said “(W)e have to recognise that the disruption that we see driven by technology, the volatility in change is our friend if we are agile and smart enough to take advantage of it.”[2].

So far he has not applied this openness to change to industrial relations.  This is odd even though increasingly, for years now, industry, including BHP Billiton[3], has been critical of the Fair Work system.  The prime minister has merely stuck to the two very tame proposals of his predecessor.

The first of these is a no brainer, namely restoring the Australian Building and Construction Commission, which has been a successful policer of an often corrupt industry.  The other proposal, the establishment of a new body to oversee unions and employer bodies, the Registered Organisations Commission, is a bureaucratic way of dealing with their privilege and their protection from competition. Requiring ‘registered organisations’ to report on their finances and affairs more candidly could have been achieved by applying company reporting obligations.  The future does not look good if you allow for regulatory capture.  The recent example of the Wheat Export Authority, also a very specific regulator of a monopoly sector of the economy, was that it did not control the rort-prone AWB Ltd which had the wheat export monopoly.

However it is an achievement that both proposals have now been legislated[4] and that the ABCC was established within about a day of royal assent and is now to be strengthened.

 

  1. Minister for Employment should speak up on the defects of the Fair Work system.

What is to be done if the government cannot legislate?  How can it be ready for Derryn Hinch and Nick Xenophon, when they are willing to support the government?

The answer is that the Minister for Employment should speak up on the defects of the present system.  This should not be the preserve of Australian Mines and Metals Association or of Andrew McKenzie or Tony Shepherd.  The minister has the resources to do this.  If our executive director John Slater, with the support of the Menzies Research Centre, can research the rorts, cost overruns and delays under CFMEU arrangements for the construction of the Commonwealth Games stadium on the Gold Coast, the minister’s officers could do much more.

The minister should speak up on wrong decisions, costly proceedings, delay, on the minimum wage and on the conduct of Fair Work Commissioners. There is no shortage of topics.  One is abstruseness.  A decision of a tribunal for workers should be addressed to workers.  A decision as to apprentices should be addressed to apprentices. This was not the Fair Work Commission’s approach in a very recent decision of the full bench of the commission[5].  In that decision the conclusion as to how an enterprise agreement for apprentices in Queensland was to be judged “better off overall” was expressed as follows:

We therefore consider that the relevant NAPSAs relied upon by ATQ terminated on 1 January 2014, and consequently do not cover any of the employees covered by the 2016 Agreement. Coverage by the associated transitional APCSs ceased on the same date. The Commissioner’s conclusion on this score was correct. Item 18 of Sch.7 of the Transitional Act has no application to the approval process for the 2016 Agreement, and the BOOT must be applied in accordance with s.193 of the FW Act using the relevant modern awards as the comparator instruments.

Why not say to the reader that the apprentices’ terms have to be better off than what is in a particular award of agreement and illustrate how the test is met and what it means to apprentices or their employers?  The commission’s using a language understood only by the most seasoned lawyers or officials is a pandering to the exclusiveness for which the IR club has been properly criticised.

  1. Minister for Employment should compare performance of Fair Work system with industrial regulation in successful countries

A further topic is performance.  Why not research the wage setting regimes of successful countries and compare them to the outcomes under the Fair Work system?  This is what Professor Bernd Fitzenberger, now of Humboldt University, did for this society in his speaking tour of Australia two years ago. His findings were given to the then minister, Eric Abetz, and he was introduced to the minister.  The professor’s findings should have been placed on the Department of Employment website. Instead the minister ignored everything that was put to him.

Minister Cash’s Department of Employment website and her media releases website provide ideal platforms for reasoned analysis of the Fair Work system and the content on both could be greatly improved.

  1. Department of Employment website out of date

Take the Department of Employment website.  It is out of date, eg it only has reference to a national minimum wage made almost three years ago; it still spruiks the Moore/McCallum/Edwards review of how good the Fair Work Act is, though that was a very confined review, a not well regarded review and one designed to serve then minister Shorten; it has nothing on the registered organisations legislation, although the government regards this as a major success. The “latest news” on the Fair Work system is given as the “Government submission to the Fair Work Commission’s 2014-15 annual wage review”!!

 

 

  1. Minister should take back the website and use it for analysis and ideas on the Fair Work system

The minister should take back the website, update it and make it a platform for analysis and ideas on IR. The minister and the website should also say what is to happen to the recommendations of the Productivity Commission on the ‘workplace relations framework’ and of the Royal Commission into Trade Unions, both given 14 months ago.  To have such detailed work sit on the shelf jars with the image the prime minister has set his government.
On the minister’s media site there was no response to the national minimum wage decision given on 31 May last year, despite the importance of the decision and the government making a submission to it.  People need an assessment of the reasoning in the minimum wage decision and of the impact of the decision.

  1. Bland and inaccurate commentary on employment figures not required

The Minister for Employment regularly claims credit for increases in employment but she ignores the huge population increase partly responsible for this[6].  These bland releases can be challenged.  They offer no comfort to the unemployed.  The minister’s media releases have to be more topical and more accurate.

 

  1. Fair Work system undermines the prime minister’s anti-protectionist and pro-export agenda

The prime minister’s address to the National Press Club on 1 February 2017 on the government’s program for the coming year covered many topics, from compassion to the coal industry. He said:

Political opportunists want us to turn inward, and revert to higher barriers to trade and investment. But they are doing nothing more than playing on the fears and hardships of those in the community who feel they have not shared in the benefits of globalisation and technological change. They offer the false promise that subsidies and trade barriers, under the banner of Australian first, are the answer to protecting jobs.

Those who oppose our export deals are really calling for less opportunity, diminished prosperity and fewer jobs.

He supported lower business taxes:

The reality is that we are part of an intensely competitive global economy, …. We cannot afford to get left behind and let Australian jobs go offshore.

He said “We cannot retreat into the bleak dead-end of protectionism” which he said was the policy of the opposition.

What the prime minister said was absolutely right.  The Fair Work system is one of these forms of protectionism that he has criticised.  It is one of those barriers which he criticises for denying opportunity, prosperity and jobs.

We commend to minister Cash and to the prime minister that consistently with the government’s philosophy they dismantle the Fair Work system and that they start this by a proper analysis of the defects of the Fair Work system.  By so doing the government will distinguish itself from the opposition.

  1. HR Nicholls Society’s example for the government

The HR Nicholls Society has shown that the defects of the Fair Work system can be demonstrated and analysed. It invites the government to do the same.

A Bisits

 

 

 

 

 

 

 

[1] “ABCC win after Derryn Hinch flip”, The Australian 8 February 2017

[2] Words attributed to him around the time of his taking over the prime ministership from Tony Abbott in September 2015 and reported inter alia in an undated article by R Merkel in The Conservation online.

[3] “BHP boss calls for tax, workplace reform”, 16 March 2016, In Daily (Adelaide).

[4] Fair Work (Registered Organisations) Amendment Act 2016, assented to n 24 November 2016; Building and Construction Industry (Improving Productivity) Act 2016, assented to on 1 December 2016.
[5] All Trades Queensland Pty Limited v Construction, Forestry, Mining and Energy Union and ors [2017] FWCFB 132

[6] Eg Minister Cash’s release of 14 July 2016 said that employment increased by 225,000 in the year to the end of June 2016 and she said that the “Australian economy continues to create jobs and demonstrates encouraging resilience”.  But according to the Bureau of Statistics the population increased by 337,800 in that financial year.  The minister should explain how the population increase directly or indirectly increases job numbers, and whether it means jobs for the already unemployed.

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