Ideas@TheCentre
IR debate needs historical perspective
Alexander Philipatos |
07 December 2012
It’s easy to forget that Australia’s industrial relations framework has transformed over the past two decades, and it’s important to put industrial relations reform in historical perspective.
Australia’s labour market is far more flexible today than it was before the reforms of the 1990s. Many more workers are covered by workplace agreements, as opposed to industry-wide conditions.
The unique and rigid award system has been repeatedly simplified. Whereas in 1990, roughly 65% of workers had their pay and conditions set by highly prescriptive awards, by 2010 that figure was 15%, and the awards less onerous.
Contrary to public perception, industrial action today is at historically low levels. Thanks to successful reforms under Paul Keating and John Howard, Australia’s strike rate has declined by 75% from its pre-reform average (from 54 to 13 work days lost per 1,000 employees). Thankfully, the Fair Work Act has retained most of the changes in previous reforms (including the main changes of the Work Choices reforms), and as a result, industrial disputes are at historically low levels.
It is not all good news, though.
Unfair dismissal coverage has broadened under the Fair Work Act, and predictably, claims have risen. But more problematic is the impact on small business, where employers are increasingly complaining about the need to pay ‘go-away’ money to avoid a costly court hearing, regardless of the merits of the case.
Also, changes to the bargaining regime, including the abolition of statutory individual agreements and new bargaining rules, have made the bargaining system much more cumbersome. The Act ensures unions a place at the bargaining table, even in workplaces with few union members.
Unions ought to have the right to represent workers where there is broad support, but in an economy where only 18% of workers are unionised, their privileged position is not warranted.
The trend of labour reform over the past two decades has been towards greater liberalisation. Although this trend has been somewhat reversed under the Fair Work Act, claims about a return to industrial chaos are an exaggeration.
Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies and author of the report Back to the Bad Old Days? Industrial Relations Reform in Australia released yesterday.
