Shortening Labor's IR odds

The appointment of Bill Shorten to the workplace relations ministry is a clear sign that Labor thinks IR will be a major election issue – but can he fix Fair Work?

The forests of column inches examining the way Julia Gillard’s reshuffle has rewarded supporters, delivered payback for white-anting and dissent, and shored up her precarious position seems to have overlooked one important development: the elevation of Bill Shorten to Workplace Relations.

Let’s cut to the chase here: by putting someone touted as the future Labor leader into the job, Gillard is effectively signalling that industrial relations will be the big election issue. As I mentioned in a previous article (On the verge of an IR deluge, November 24), we will be seeing more strikes and disputes next year because enterprise agreements covering some of Australia’s biggest companies are up for renewal. The timing of Shorten’s appointment is all part of Gillard’s election and personal career strategy. By giving him the hardest portfolio, Gillard will make or break him.

True, Shorten is a better salesman than his predecessor Chris Evans, who was criticised for his handling of the Qantas dispute, and he is likely to do a better job isolating Tony Abbott, who has remained silent on industrial relations for fear that WorkChoices, like Banquo’s ghost, will return. All this turns the next election into a replay of the 2007 poll where WorkChoices was the key issue. It also has echoes of the 1993 Keating campaign on Fightback where Labor used an Opposition policy to get itself back into the game.

But a far-reaching review of the Fair Work Act in 2012, something he describes as a "first order priority”, looks impossible. True, Shorten has a well-known ability to cut compromises. He also has about as good a relationship with business as a Labor politician can ever have following his work on superannuation and his time negotiating and networking with business leaders as Assistant Treasurer. Business has already welcomed the appointment with the Australian Chamber of Commerce and Industry chief executive Paul Anderson telling The Australian: "He is certainly someone we can do business with ... he has a business antenna and sensitivity.”

He shouldn’t get his hopes up. Unions are set to get even more bargaining rights with the ALP national conference, on the back of Qantas, voting in favour of changing the party's policy platform to include a requirement for enterprise agreements to provide for 'last resort' arbitration. Employers are worried that the 'last resort' stance is a step towards a return to compulsory arbitration, winding the clock back to the 1970s. Business leaders, including even the more moderate ones like Westpac chairman Ted Evans, now say that the pendulum has swung too far and that the Act has impacted negatively on productivity at a time of economic crisis, market volatility and new competitive pressures.

With polls pointing to a Labor wipe-out, the unions’ political agenda is clear: lock in more power before the Coalition takes office so that it can’t be undone. This is not the progressive and ground breaking partnership that existed between Labor and the unions in the Hawke-Kelty years of the Accord.

Shorten insists he is middle of the road. "I have a union background, I am a union member, I still am proud of it. But I don't see my job as being to automatically pick a side in every claim,'' he told the ABC.

Shorten helped broker a truce in the waterfront dispute last week but that’s a walk in the park compared to the task ahead of him overseeing next year’s review of the Fair Work Act where he will have to look at a number of difficult and politically charged areas. Both sides refuse to budge, it’s hard to see any middle of the road approach.

These would include those good faith bargaining provisions where unions and employers have to battle it out with no arbitration unless it has an impact on the economy. Setting a time limit on disputes would be a good start, although the last thing we need would be to give unions and employers a tool to sit out a dispute, and then get what they want at the other end. Perhaps allowing the tribunal to attach weight to the bona fides of the bargaining processes undertaken by both parties would help.

Another crunch issue lies with the adverse action provisions where employers cannot take action against an employee when that employee is exercising a workplace right. Employers say it has become an alternative to unfair dismissal claims where the claims are unlikely to get up. Workplace rights are broadly defined but can include anything from the right to be a union delegate to the right to request flexible work arrangements, the right to make complaints about employment, the right to make enquiries about pay and the right to request information about further disciplinary action.

There has been a spike in the number of employees taking action under these provisions. Also, the onus is now on employers to show they did not act unlawfully (e.g we sacked him because of breach of company policies, not because of his role as a union delegate).

Employers should take note, with the High Court set to hear an important appeal on the meaning of adverse action provisions of the Fair Work Act involving Bendigo TAFE which has appealed against a decision of the Full Court of the Federal Court of Australia that the TAFE had taken adverse action against an employee. It will be the first time these provisions are tested in the highest court and there is pressure on the government to act.

Labor’s claim that the Fair Work provisions have made unfair dismissals easier to resolve and less legalistic have been anything but. Claims are continuing to rise with employers complaining they are being caught up in costly time consuming litigation. What’s needed is some sort of provision that would give the registrar the ability to eliminate claims without merit.

Business has also been campaigning against the transfer of business provisions which effectively make outsourcing impossible without them passing on their costs to contractors. Then there is the content of agreements which now can include matters like security of employment, something goes against management prerogative. We also need some mechanism in the law that would tell small business owners what their obligations are under the Act. At the moment, they are confused about awards and levels, sending to their Fair Work help line, employer association and lawyers.

Shorten takes on his new portfolio at a time when industrial relations has turned toxic and both sides are locked into intractable positions. His ability as a salesman and compromise grafter will be tested as never before. Still, if he actually succeeds to create greater productivity, better workplaces and more wealth creating businesses, easing back the polarisation of both sides, his future looks definitely assured.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles