AusPol / Policy

Cross-post: ABCC row a distraction from the main game

Aaron Lane’s recent piece in the Sydney Morning Herald argues the ABCC row is a distraction from the main game of industrial relations policy. We’ve copied the text below for your enjoyment.

ABCC Worker

Prime Minister Malcolm Turnbull has shown courage and ambition by threatening a double dissolution election if the Senate fails to restore the Australian Building and Construction Commission. But the debate over the ABCC should not be the substitute for advancing a positive industrial relations policy that promotes employment through the entire economy. On this front, the government is sorely lacking the same courage and ambition.

The only task of this industrial relations system is to provide a security blanket for those already with a job. It provides no warmth to over 700,000 Australians currently out of work.

The re-regulation of the labour market that occurred under the previous government saw unfair dismissal laws imposed on thousands of previously exempt small businesses. Now an employee that is fired for swearing at their boss, stealing, consistently showing up late for work, performing poorly, or physically assaulting their colleagues, can take their employer to the Fair Work Commission – and win. Even if the employee’s claim is without merit the commission almost never awards costs.

The laws protect those already with a job, but it makes it riskier – and more expensive – for employers to take on new employees. Simply put, unfair dismissal laws are unfair on those out of work. The best protection against unfair dismissal is full employment and a competitive labour market.

Another example is the re-regulation of wages levels throughout the economy. While there might be an argument about the desirability of a minimum wage for unskilled workers, there is absolutely no justification for the union-stacked Fair Work Commission setting a national minimum wage for professionals such as doctors, lawyers and pilots. It’s puzzling as to why wages for a job in Hobart must be the same as that in Sydney – especially taking into account cost of living differences. Orders issued this month by the Road Safety Remuneration Tribunal (another wage-setting body) will force owner-drivers to charge inflated rates, rather than being allowed to compete on price against unionised employee-drivers.

This price fixing would never be legal outside the labour market. Perhaps the government should impose an effects test of substantial lessening of competition to its own regulations.

Add on top of this the minimum shift requirements that prevent students from working after school, and weekend penalty rates being so high that businesses prefer not to open. Of course, double time means nothing without a shift in the first place.

These examples are systems of a framework that strips away the right to work. It is a system that presumes that people are incapable of making good decisions for themselves and their families. A job is about more than a pay cheque – there is dignity in work. Yet, the current system prefers people remain unemployed. This must change.

With youth unemployment continuing to track above 12 per cent, a novel solution is crossbench senator Bob Day’s suggestion that young workers could “opt out” of the Fair Work Act. The standard rebuff to this idea is “but they might get exploited”. Senator Day answers this by asking “where is the outrage when these same young people end up on drugs, get involved in crime, suffer poor health, become pregnant, get recruited into bikie gangs or even commit suicide? No, there is only outrage when they want to take a job that suits them but does not suit the government.”

There is no shortage of sensible reforms that could be taken to an election. We all know what Labor’s policies will look like, but it is genuinely unclear what the next term of a Liberal government would do on industrial relations apart from beating up the union movement. With the recalling of Parliament we will hear a lot about the need for the ABCC, and other issues arising out of the royal commission into union corruption – but these are distractions from the main game of promoting employment for those currently without it.

Aaron Lane is a Legal Fellow at the Institute of Public Affairs.

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