Tag Archives: industrial relations system

As odd as it may sound, Australia has the best industrial relations system in the world

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I have an article at The Drum, Industrial reform: ignore fairness at your peril. There are many political traps for a right-of-centre government in trying to improve the operation of our industrial relations system, but the most dangerous is thinking that the most important reform is the removal of the role of our system of industrial tribunals. This was the central point in my article:

All too often, the core issue about industrial relations reform is not about outcomes, but about the structure of the system itself. Australia has developed its own unique and largely successful system of tribunals that has been the perennial target for elimination by economists since it was first formed.

And so it worries me that we are there once again. This is the basic outline of what is being investigated according to the Productivity Commission website:

In undertaking this inquiry, the Commission has been asked to review the impact of the workplace relations framework… [my emphasis]

If the continuation of industrial tribunals were off the PC agenda, and instead the issue was how our existing industrial relations system could be made to function for the better, I would be much more confident that the PC inquiry might come up with something of genuine value.

So my prime recommendation to the PC is this. If you start from the premise that industrial tribunals are here to stay, there is a possibility that the inquiry might do some serious good. But if that is not your premise, I would expect little good to come from this inquiry.

I, of course, go much farther. I think that industrial tribunals are a positive benefit to the smooth operation of this economy. I don’t think trying to remove them would be bad only because the politics are wrong. I think they should be left alone because the economic consequences of trying to remove them would be so damaging.

In the UK, The Times required Fortress Wapping to introduce new technology. At The Australian, it was IR as usual and a relatively smooth transition. Recognising the nature of the difference will help you understand how important our industrial relations system is to our economic prosperity.

Plain speaking on IR reform

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It’s opaque, not all that clearly stated, somewhat roundabout in getting to its point, written mostly in tongues in the form of an analogy, 100% ironic in its tone, but if you ask me, Grace Collier’s opinion piece in The Australian today – Fair work lessons in the real world – was written in defence our current industrial relations system. It describes a projected guided tour to the land of free enterprise with specific focus on its industrial relations system. And while it is hard to find a straight out quotable quote, let me mention just this one [bad language alert!]:

I am delighted to announce my “Harden the ­F–k Up Industrial Relations Discovery Luxury Extravaganza” to the industrial relations leader (and top shopping destination) of the world, the United States of America. This tour, in March, is aimed at the high-end traveller who thinks the main reason for Australia’s productivity and union problems is the Fair Work Act. It should be noted — and this limits the target market somewhat — the tour is strictly “no grumps allowed”.

There are then a series of vignettes about various aspects of the American IR system, with this the last one which is her grand finale:

Since 1973, union officials have enjoyed exemption from the Hobbs Act, a law that makes obstruction of commerce by robbery or extortion a crime. Union officials can use union violence free from criminal prosecution provided they are seeking to advance “legitimate union objectives.” Union violence is reportedly, since this time, responsible for at least 203 deaths, 5689 incidents of personal injury, more than 6435 incidents of vandalism and tens of millions of dollars in property damage.

The point she is making, but written in code so as not to upset her readers at The Oz who, she suspects, are unanimous in their desire to rip the present system down, is that we have a pretty good industrial relations system already, and we would be mad to try to put in place something like the system they have in the United States. That is exactly so. With every other national government literally the political wing of the union movement, we would be mad to pull down the one piece of social machinery we have designed to contain union power. It’s not perfect, and it can be made better, but there are a lot that are far far worse.

MORE ON THE AMERICAN INDUSTRIAL RELATIONS SYSTEM: It’s titled, “Superman Joins a Union” which gives you some idea about labour relations in Metropolis. At least if he were here he might be able to take his case to an industrial tribunal. The union official you see here is a universal type, known to one and all. It’s funny, but it’s no joke.