When Labour Lawyers Get Together

Des Moore Write:

As some will already be aware, Workplace Express (WE) is an organisation which publishes daily reports on decisions made by the Fair Work Commission and by courts on workplace relations. It also publishes reports on events where presentations are made on workplace relations issues.

On 22 July WE published reports on the annual labour law conference held at the Hilton in Sydney under the auspices  of the University of Sydney’s Workplace Research Centre.  One of the eleven speakers was Josh Bornstein, a Principal of Maurice Blackburn and a  self-described “employment lawyer”. Bornstein is well-known  as a strong supporter of the regulatory system and as a critic of any who oppose that approach. On this occasion he did not hold back.

Below are the WE report of the speech by Bornstein and of my critique (made after forcing myself to read the full text). WE agreed to publish my critique after I contacted it and pointed out that Bornstein had made an error in his calculation of the increase in productivity over the past year. An AMMA official, Scott Barklamb (just back from a spell at the ILO), apparently also complained to WE about aspects of the Bornstein address and he (Scott) makes some very useful additional criticisms.

Given the current state of our universities, it is not surprising that even though the University of Sydney has a Workplace Research Centre, it appears to have arranged this conference without inviting speakers who advocate a deregulated system. Almost all the speakers appear to be regulator advocates or sympathisers, although the title for this year’s conference  “Beyond ‘Groundhog Day’: Can productivity and fairness be improved without further ‘labour law reform’?” suggests that even those advocates may be thinking it has gone far enough.

Critique of Bornstein Address, as published by Workplace Express, 24 July 2013.

Maurice Blackburn partner Josh Bornstein’s address to a labour law conference on Monday has drawn fire from the HR Nicholls Society and AMMA, with both organisations taking aim at his claim that IR regulation had no current impact on productivity levels.

In his speech to the Sydney University conference, Bornstein talked up recent increases in productivity but said they were not influenced by the Fair Work Act (see Related Article).

Long-term HR Nicholls Board member Des Moore told Workplace Express that as an employment lawyer it was “not surprising that Bornstein reiterates his long standing support of highly regulated arrangements to govern relations between employers and employees”.

“He apparently still perceives this as needed to protect employees against the unwarranted exercise of the powers of private interests and he sees advocacy by the HR Nicholls Society of a deregulated labour market as coming from a body on what he sees as ‘the far right’,” Moore said.

Moore added that Bornstein had incorrectly claimed that labour productivity had increased 3.6% over the last year, when the actual figure was only 1.55%.

“His claim of a 5.2% increase since March 2011 is correct but that is rather a short a period over which to judge whether labour productivity is performing,” Moore said.

Moore said that since March 2009 labour productivity had increased 6% in four years, “an average of about 1.5% a year”.

“This may sound quite good but recall that under the 11 years the Coalition was in office the annual rate of growth was a considerably higher 2 %,”Moore said.

Moore said that while productivity growth “is not determined solely by labour market regulatory arrangements, it is difficult to avoid the conclusion that the extensive regulation imposed under Labor has had an adverse effect”.

He said that despite Bornstein’s “false” boasting about productivity growth, he maintained that “labour laws remain largely irrelevant”.

“If so why not abandon them?” Moore asked.

Bornstein described the HR Nicholls society as a “far right fringe group” in his address, prompting Moore to respond that the expression “far right” should be reserved for “those who want to dictate how life or parts of it is to be lived”. He said, in contrast, the society’s main aim was to minimise controls over the working lives of both employees and employers.

“As there is a very large number of employers competing for workers, any imbalance of bargaining power is minimal and there is no need for extensive regulation. Of course, less regulation would make life more difficult for employment lawyers.”

AMMA’s executive director for industry, Scott Barklamb, said Bornstein’s comments that the IR system had no impact on productivity were “destructive to meaningful policy debate”.

He also took aim at Bornstein drawing on his own experience as an employing partner to make conclusions about the impact of the Fair Work Act.

“Experience managing a law firm is scarcely reflective of operating under the collective bargaining system of the Fair Work Act. Mr Bornstein’s experiences in no way invalidate the very negative wider experiences of employers in the mainstream of the economy,” Barklamb said.

He said Bornstein should speak to resource employers around the country, “with four out of five surveyed AMMA members reporting that productivity has been pushed off the bargaining table by the Fair Work Act”.

Barklamb said employers were facing demands for clauses in agreements that restricted their use of contractors, labour hire and other business-critical arrangements, and had endured increased strike and right of entry activity.

“While privately-held employment law firms might live in the industrial utopia of Lonsdale St, real concerns are being faced by major resource projects around the country worth billions of dollars of investment,” Barklamb said.

Productivity Claims by Lawyer as published by Workplace express, 22 July 2013
Prominent labour lawyer Josh Bornstein has drawn on his own experience as an employing partner at Maurice Blackburn to argue that IR laws are neither a driver of, nor an impediment to, productivity improvement.

Speaking at the University of Sydney’s 21st annual labour law conference today, Bornstein said the aim of his firm – which employs 700 employees nationally – to “compete and improve” was not in any way affected or influenced by the Fair Work Act.

Not for the first time, Bornstein lamented the standard of IR debate in the nation, arguing that contrary to those who continued to point to a productivity “crisis”, Australia had experienced an “economic miracle” during the life of the Act.

“Since 2009, the Australian economy has achieved spectacular macroeconomic outcomes: low unemployment, low inflation, low interest rates, a AAA credit rating, increasing labour productivity, low debt and solid growth,” he said.

“In addition, the Australian economy has enjoyed 21 consecutive years of economic growth and is one of the lowest taxed in the OECD. Industrial action remains at historically low levels. What’s not to like?”

Bornstein told the conference parallels could be drawn between media reporting and political debate on climate change and IR laws.

“At times, both have involved an assault on rationality, facts, data and science. Private interests have invariably driven the assault with prominent business leaders, think tanks and media outlets all playing a part. Each new day can feel like a struggle for the values of the Enlightenment,” he said.

He said the recent update from the Productivity Commission (see Related Article) revealed that there was no reliable measure of productivity in sectors like aged care, education, training, healthcare and social assistance, and that what drove changes in the measure was “highly complex”.

Bornstein said productivity did not become a “crisis” until “a concerted political campaign emerged after the 2010 federal election”.

“The campaign asserted that the key to resolving the crisis was urgent reform of the Fair Work Act. The campaign was vigorously pursued, primarily by business and industry groups with the support of Australia’s only two national newspapers, The Australian and The Australian Financial Review,” he said.

Bornstein said the response of The Australian to his speech to an AiG conference on October 24 last year (see Related Article) was “immediate and predictable”.

“In the days that followed, I was vigorously criticised in no fewer than five articles and 3000 words in the newspaper. At times, so was my argument.”

He said recently released ABS data showed that labour productivity had risen 3.6% over the last 12 months, and 5.2% in the last two years, while multi-factor productivity remained flat.

But he was quick to add that in his view the Fair Work Act was not behind this increase, and that labour laws remained “largely irrelevant”.

Bornstein said Prime Minister Kevin Rudd had in recent days urged the achievement of a productivity number of at least 2%.

“Curiously, he seemed unaware that this target had been comfortably exceeded in the last two years,” he noted.

The Coalition’s policy to have the Productivity Commission review the Fair Work Act was driven by the “myth” that “our existing IR laws have engendered or contributed to a productivity crisis”, Bornstein said.

“The debate about IR laws has become tiresome and counter-productive. As the culture war over IR regulation rages, the legislation is overhauled every few years and becomes increasingly complex,” he said.

Legislation not the answer for productivity

Referring to his experience as a director of Maurice Blackburn Ltd over the last 10 years, Bornstein said it wasn’t until 2012 that he undertook a serious management training course.

He said his management experience was not unusual, in that many managers “rely on instinct, improvisation and learning by mistakes”.

“Many of these mistakes often generate work for lawyers like me and emanate from a lack of skills and training. For example, there is a skill in having a tough conversation with a staff member; whether it be about under-performance, disciplinary issues or termination of employment.”

Bornstein said two of Maurice Blackburn’s main competitors were listed on the ASX, and the firm operated in a competitive environment.

He said it had sought to answer the productivity challenge almost accidentally – “not because we detected any problem with productivity but because we are keen to compete and improve”.

Bornstein pointed to “the many measures available to the private sector to improve workplace performance and productivity: involving education, skills, training, innovation, managerial capacity and experimentation”.

“These sorts of measures can’t be legislated. A productive, fair and dynamic work place can’t be legislated,” he concluded.

“Is there life after the IR wars?” Speech to University of Sydney labour law conference, July 22, 2013

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