Labor can't fight an IR ghost any more

Are the shenanigans at the ACTU just another sign that Australian politics is veering hard Left?

There is speculation in today's papers that ACTU secretary Jeff Lawrence has been pushed out of the top job, which he has held for five years, by union leaders who have lost confidence in his advocacy skills.

The theory is that Lawrence has been too moderate is negotiating unions' position on labour market reform, and has therefore lost the support of all but two union chiefs in Australia.

Lawrence denies this and, with one or two supporters backing him, says he would still be re-elected at the ACTU congress in May. He says he can't commit to another three year term mainly because he's getting closer to retirement age.

Hmm. Many business leaders will see this as just another chess piece being moved into position to stop Queen Julia (and King Shorten behind her) from doing anything rash to make the Fair Work Act more business-friendly.

Australian Manufacturing Workers Union boss Dave Oliver is being widely reported as most likely to be the next ACTU boss.

If Oliver starts a three-year term in May, he could end up squaring off against an incoming Abbott government in the way Greg Combet did with the Howard government – albeit with much, much smaller IR issues to be fought over.

Last night I asked ACCI chief executive Peter Anderson what he thought of the end of Lawrence's tenure. He was full of praise for one aspect of Lawrence's performance – namely, "keeping the lines of communication open".

Anderson wisely refuses to make predictions of a more hostile future between ACCI and the ACTU but is mindful that there's "always the risk the union movement will [once again] see itself as an activist and agitator against the forces of capitalism".

Anderson says he is not "starry eyed" about the differences that will exist between unions' and employers' ambitions in the period ahead, but stresses the need to continue the kind of open dialogue fostered by Lawrence. There are signs of this disintegrating already – Anderson points out that some union leaders have recently "boasted" of winning wage rises in enterprise bargaining negotiations without productivity trade-offs.

Anderson cautions unions to remain focused on the spirit for enterprise bargaining envisaged when it was introduced by Paul Keating in the early 1990s. "Enterprise bargaining conceptually is very sound," he says. "It's union intervention that can make it unworkable."

Under the Fair Work Act union organisers are enjoying improved right-of-entry to worksites and, in some sectors, are gaining the upper hand due to shortages of skilled labour – particularly in the resources and energy sectors (though, it must be said, great swathes of workers in those sectors work on common law contracts rather than EBA-based pay scales). When there are large profits to be made, and a shortage of skilled workers to help make them, union reps can walk into negotiations with all the menace of a Schwarzenegger action hero.

Lawrence has urged journalists not to view the latest development through the "prism" of Labor politics. Fat chance. The political reality is that unions have about 18 months to shore up key aspects of the Fair Work Act before important IR arguments are made during the 2013 election campaign.

There is no sign at this stage that the Coalition is planning to move outside the enterprise-bargaining framework – for political reasons the Coalition won't return to individual workplace agreements – but in a speech yesterday shadow treasurer Joe Hockey made the strongest statement yet that the Abbott team will not be rolling over on IR again, as it did at the last election.

Hockey said: "It is becoming clear that the government’s changes to industrial relations have made the system less flexible and more bound by regulation ... It also appears increased union power is again leading to increased levels of industrial disputation". However, he added, we won't know what the Coalition plans to do about that until closer to election time.

In the meantime, the government's Fair Work review is being overseen by workplace relations minister Bill Shorten who has promised ACCI and other peak business groups that he will not unreasonably limit the issues under consideration. Anderson welcomes Shorten's promises, but says with a kind of menance of his own, "we will hold Bill Shorten to his word".

There is no doubt that some unionists, emboldened by new bargaining powers given to them by the Fair Work Act, are lazily returning to the kind of adversarial IR thinking of yesterday - a battle between labour and capital. That kind of thinking, if expressed through the ACTU, would do much to damage Australia.

That puts a huge responsibilty on Dave Oliver, if he takes the reins at the ACTU, and on Bill Shorten. Together they must keep a lid on hard-left agitators and seriously examine the demands of employer groups to bring the IR system back to a win-win process of both rising wages and rising productivity.

That'll be no mean feat, but if they fail in that task they only leave more undefended territory to be seized by the Coalition at the next election. WorkChoices died nearly five years ago - an election strategy based on fighting its ghost won't be enough this time.

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