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How the FWA was a miserable failure — at justifying business hysteria

Last year was the second lowest year for industrial disputes since records began. So much for business claims it would lead to industrial chaos.

At Crikey we’ve often noted how the Fair Work Act, which we were told would undermine workplace productivity, has resulted in a rise in labour productivity and low wages growth, when we were told it would lead to a wages breakout.

How about industrial disputation? The FWA was bad for industrial disputes, we were told, because it would give unions an unprecedented right to interfere with matters that were rightly “management prerogative”. “The fair-work laws extended the right to strike because they extended the right of unions to take strike action over contracting and outsourcing disputes,” complained Peter Anderson of the Australian Chamber of Commerce and Industry in 2011.

In fact, as Crikey showed a couple of years ago, the FWA merely restored the status quo ante of Peter Reith’s Workplace Relations Act before the 2004 Wesfarmers case, but don’t let’s fixate on detail. There were plenty of other claims about the impact of the FWA on industrial disputation. It had “unleashed an adversarial culture which has resulted in a rising number of disputes and unreasonable claims by some unions,” according to the Business Council’s Jennifer Westacott in December 2011. Australian Industry Group industrial relations manager Stephen Smith in March 2012 said the level of industrial disputation “hasn’t been this bad for quite a few years now, not since 2007,” and claimed workplace relations had become more adversarial as a result of an expansion of the matters that would now be bargained upon under the FWA.

[N]ew union powers in the Fair Work Act have had a damaging economic impact,” Anderson said in late 2011. Industrial disputes were “a sign that Australia is returning to a culture of strike first, talk later,” he said. “The Fair Work Act has extended workers’ right to strike, contrary to commitments by the Labor Party in opposition in 2007,” he argued in March 2012.

Then there was Australian Industry Group chief executive Innes Willox, cited in December 2012 telling The Australian that, in the journalist’s words, “the further increase in working days lost highlighted the need for the government to change the laws to more tightly define the issues that can be the subject of bargaining claims”. “Provisions which have no place in a modern workplace relations system need to once again be outlawed, such as restrictions on the engagement of contractors and labour hire,” Willox said.

The Australian itself lamented in September 2012 that “the increase in working days lost to industrial disputes and the impact of restrictive labour market policies on Australia’s economic competitiveness demand closer scrutiny of the effectiveness of the Gillard government’s Fair Work system”.

How vindicated ACCI, and the Business Council, and AIG, and The Australian must feel after yesterday’s industrial disputes figures from the Australian Bureau of Statistics, which allow us to compare 2013 with previous years and see how much time was being lost due to disputes. This is average across the year of quarterly days lost per 100,000 workers, the best guide to the overall level of industrial turmoil, and look at the havoc that the FWA wreaked in workplaces across the nation in 2013:

Last year was a real bloodbath, huh? Thank goodness we’re having a Productivity Commission inquiry into all this. Last year had the second-lowest average level of days lost since the ABS began collecting data; the lowest was 2007, when unions kept a low profile to avoid doing anything to derail Labor’s chances of victory (and quite what AIG’s chap meant when he said disputation “hasn’t been this bad for quite a few years now not since 2007” is anyone’s guess). Compared to even the Howard era, industrial disputes are at a remarkably low level.

Why? A soft labour market has undermined both wages growth and the level of industrial disputes, and contrary to the claims of business, the FWA has done nothing to prevent those market outcomes. Where are all those unions exploiting their “unprecedented” rights by bringing on disputes about management prerogatives? Where’s the more adversarial industrial relations climate created by Labor? In the same place as the lost productivity and the wages explosion, in the minds of business groups and their cheerleaders.

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  • 1
    Steve777
    Posted Friday, 14 March 2014 at 4:30 pm | Permalink

    Really, AIG and ACCI functionaries should be challenged whenever they lament the level of industrial dispution or difficulties in dealing with their employees. They should be asked: What is the basis of their case? Can they prove what they are asserting? The numbers clearly don’t support their whinging.

  • 2
    Dogs breakfast
    Posted Friday, 14 March 2014 at 8:03 pm | Permalink

    BK, you have some of the name wrong. It’s the Australian Industry Union, and the Aust. Union of Commerce and Industry, and the Business Union.

    Apart from that, yes, it’s very rude of you to point out that none of their bone-headed arguments rely on actual facts. It’s an ongoing concern that the great corporate geniuses that run Australia don’t know that productivity is not a function of wages, and that lowering wages does nothing to productivity, except possibility de-motivating staff who may just work that little bit slower.

  • 3
    The Hood
    Posted Friday, 14 March 2014 at 9:22 pm | Permalink

    Well let’s talk about the ever repeating formula here. A chairman, CEO or industry spokesman gets up and gives a speech to the converted at a tax deductible piss up like the Australian minerals or mining or energy industry group love in and he tells them what they want to hear with zero facts to back up his own personnel prejudices. News Corp press swallows it word for word and the AFR puts it on the front page with human interest photo etc and some days later will have one of their commentators pull the whole bullshyte story apart piece by piece in an analysis piece on page 64. But who reads that?

  • 4
    condel
    Posted Saturday, 15 March 2014 at 1:39 am | Permalink

    No laws can ever be passed to stop right to strike, just do it.

    But as is right - you take your chances and do not believe anyone - it’s 50/50.

  • 5
    fredex
    Posted Saturday, 15 March 2014 at 9:50 am | Permalink

    I would love to see, on the same graph using the same scales, “Working days lost per 1000 employees, quarterly average from work-related injury and disease”.

    And then compare to the graph for days lost to disputes.

    You would think that would be easy to do, just look the numbers up at the ABS.
    I couldn’t find them - might be my fault but if they are there then they were hiding from me.

    I did find out how many people suffer from work related injuries and disease in recent years - around 700,000 per year.
    Seems a helluva lot to me, I wonder why all those worthies quoted in the article aren’t up in arms about that.

  • 6
    tonyfunnywalker
    Posted Sunday, 16 March 2014 at 4:28 pm | Permalink

    If it ain’t broke why do we need to fix it? The Work-choices alternative preformed poorly in comparison. Its ideology versus facts again. There is a need for the Labor party to start putting a ” truth the lie ” that Abbott is getting away with - same with Climate Change, Health, Education. The acquiescence to the unelected “Soviet like” Liberal Praesidium of the Institute of Public Affairs - the faceless men that drive policy for their own self serving ends.

  • 7
    Tyger Tyger
    Posted Monday, 17 March 2014 at 11:24 am | Permalink

    You have to love the way attacks on workers and unions are always led by groups such as the ACC, the BCA and the AIG:
    “Employer unions good, employee unions bad.”

  • 8
    bluepoppy
    Posted Monday, 17 March 2014 at 8:01 pm | Permalink

    Agree with Tyger Tyger. Employer unions looking out for an elite group ie. the minority. They don’t get that growing gap between rich and poor ultimately has consequences for everyone.

    Labor really poor at getting across the failures in Coalition argument on many fronts including mineral wealth taxes, workplace, climate change etc. Shorten proving to be a poor choice.

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