Australian Financial Review
March 25, 1999
Radical: Reith's new IR plan
By Chelsey Martin and Nina Field
The Federal Government has unveiled a radical
new plan to reform the industrial relations
system which could severely reduce the role of
unions and sideline the Australian Industrial
Relations Commission.
Under the sweeping plan announced yesterday
by the Minister for Workplace Relations, Mr
Peter Reith, companies would be regulated by
minimum award standards set through the
corporations power of the Constitution rather
than that of arbitration and conciliation.
Mr Reith outlined the new proposal in a speech
to the National Press Club and said the plan
built on ideas he had presented in the letter to
the Prime Minister, Mr John Howard, that was
leaked to the media last month.
"This would not just be a theoretical change of
interest to lawyers or academic experts ... in
short, it would create a new foundation on
which workplace relations could operate in the
new century," Mr Reith said.
The speech creates the prospect of a
fundamental shift in the regulatory framework
for industrial relations which would see simpler,
more uniform awards and which could lead to a
more integrated State and federal approach to
workplace relations.
Since the Howard Government was elected in
1996, Mr Reith has campaigned for State
governments to hand over their industrial
relations powers to the Commonwealth. To
date, all but one have resisted.
The proposal could see the Federal
Government assume by stealth greater control
over State jurisdiction. It could also give
Parliament the scope to set minimum wages
and employment conditions.
But Mr Reith yesterday stressed the proposal
was not government policy at this stage, but
was being released for public debate. Industrial
relations are regulated by the constitutional
power that covers interstate industrial disputes.
This power enables the AIRC to set awards
through the judgements it makes on disputes.
Over time, Mr Reith argued, this power had
become distorted and had given trade unions
extraordinary power to create artificial or
"paper" disputes.
"The ... power confers rights on third parties
over and above the rights of actual employers
and employees, promotes dispute creation
rather than settlement, forces extreme and
artificial demands to be made on workplaces
and adds layers of complexity and cost," Mr
Reith said.
Mr Reith cited as an example of a "paper claim"
a Liquor Hospitality and Miscellaneous
Workers Union claim against a small family
hotel business for wages of between $1,000
and $2,500 a week, which was not initiated by
the hotel's employees but was pursued by the
union.
He said the Shop Assistants Union had
launched 35,000 similar claims in Victoria last
year. He also attacked unions' exploitation of
technicalities of the Workplace Relations Act.
The shift to the corporations power, Mr Reith
said, would remove the unions' capacity to use
contrived disputes with the aim of roping a
large number of employers across particular
industries into award claims.
Mr Reith insisted the changes would not spell
the end of the AIRC. However, the effect of
the move would inevitably sideline a key plank
of the commission's traditional regulatory
power base and require new powers to be
legislated for by the Parliament.
ACTU assistant secretary Mr Greg Combet
yesterday branded the Reith plan as a
"backward-looking attack on workers' rights"
that was without substance and unlikely ever to
be translated into legislation.
"This is about Reith looking for limelight by
dressing up backwards ideas as some kind of
employment strategy," Mr Combet said.
The business community welcomed the
proposal yesterday and said it acknowledged
existing institutional arrangements were not
sacrosanct. But representatives warned there
were technical issues arising from the proposal.
"They are raising issues of concern to the
Australian Chamber of Commerce and
Industry, in particular the effects on small
business of logs of claim, but there are a lot of
issues of practicality that would need to be
worked through," an ACCI spokesman, Mr Reg
Hamilton, said yesterday.
The executive director of the Business Council
of Australia, Mr David Buckingham, backed up
these comments and said the proposal would
enhance flexibility, reduce costs and establish a
basis for a more competitive company
environment.
But he warned of potential problems. "The first
and probably most important is that not all
business entities are corporations and that
accordingly there would not be universal
coverage under these arrangements and that
would clearly need to be handled," he said.
"The other issue is the degree to which a
universal award system of the kind that's
implicit in this model would potentially limit the
flexibility that is available under enterprise
bargaining arrangements."
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