Focus on weekend prices, not wages

Instead of letting the perfect drive out the good with overambitious IR reform, the government and businesses should find a way to offset the impact of weekend penalty rates.

The Productivity Commission last week put out three issues papers on the workplace relations framework and missed the biggest issue of them all: WorkChoices.

There was no reference to the 2005 legislation in the papers at all, but this is now the industrial relations issue that trumps all others.

Nine years after WorkChoices came into effect and eight years after it caused a change of government in a landslide, it is still the most powerful force against even a sensible discussion of industrial relations reform, especially anything proposed by the Coalition.

Aha! It’s WorkChoices again! The ghost/zombie/kraken/four horsemen of the apocalypse/alien invasion is back! Tony Abbott is trying to raise the monster, having said it’s dead, buried and cremated.

Treasurer Joe Hockey, who was given the manure sandwich of selling WorkChoices as Employment and Workplace Relations minister in January 2007, was out yesterday explaining that any changes to the system would be taken to the next election.

Which means that whatever the Productivity Commission proposes, nothing will happen. The last thing the Coalition will want to do is spend the next 18 months talking about wages and weekend penalty rates, and then turn the 2016 election into another WorkChoices referendum.

The reason the Workplace Relations Amendment Act 2005 (WorkChoices) was such a mistake was that it tried to do two big things at once: remove the no disadvantage test and cut the unions out of the system.

It allowed the unions to campaign about penalty rates and going backwards while actually protecting their monopoly on bargaining. If John Howard had simply legislated to allow non-union agreements to be certified but had kept the no disadvantage test to protect penalty rates, and put off that one for another day, he might have gotten away with it.

He might have even gotten away with removing the no disadvantage test if unions’ position as negotiators and workers’ protectors had been preserved, and if that had been put off for another day.

But trying to do both together was a big mistake that has set back the cause of workplace reform for decades (it’s now one decade, and the ground is still toxic).

As minister in 2007, Joe Hockey tried to recover the disaster by adding the “Fairness Test”, but it was too late.

The ALP won the election, John Howard lost his seat, and the Fairness Test was later replaced by the ALP with the “Better Off Overall Test” (BOOT). Not just “no disadvantage”, but better off.

The Productivity Commission identified a lot of issues that it will inquire into and report on in November this year, but this is the main one.

It will essentially be an inquiry into minimum standards – that is, the minimum wage and whether a worker can be allowed to go backwards in a new agreement.

It’s possible, but not certain, that the PC will recommend that sort of flexibility, but very unlikely that any political party would go to an election with that as part of their policy. “Vote for us and get paid less”. I don’t think so.

The restaurant industry has long since given up on getting rid of penalties and has been focusing on weekend surcharges instead. In 2013 they were exempted by the ACCC from printing separate menus for the weekends or showing two lists of prices on the same menu if surcharges apply.

Retailers need to work on something similar. The problem with weekend penalty rates only arises if the price is the same on Friday as on Saturday and Sunday, when costs are higher.

Businesses and the government might be better off just focusing on weekend prices instead of wages, and not let the perfect drive out the good.

And if wages and conditions are preserved in legislation, then perhaps the Coalition could get a streamlined, non-union negotiating system though the 2016 election, although even that might be a little too courageous, Minister.