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Mar 14, 2014

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.

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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.

Bernard Keane — Politics Editor

Bernard Keane

Politics Editor

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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