Industrial relations is back on the agenda and the Fair Work Act review, due out this week, has created contested terrain. Among the big questions in the review, which began in 2009, is whether the right to strike — virtually unchanged since the WorkChoices legislation — should be further wound back.

The Fair Work Act restored a much wider range of minimum entitlements when compared to WorkChoices — including the restoration of industry-wide awards. The No-Disadvantage Test was replaced with the more pro-employee Better-Off Overall Test.  The Act abolished Australian Workplace Agreements (AWAS), made it easier for workers to claim unfair dismissal, unions were given more power, agreements are now more regulated and lower-paid workers are now specifically protected.  However, the act virtually retained all the WorkChoices amendments that limited right to strike, a point made in many of the 200 submissions to the current review. The use of casuals, agreement making, union rights and unfair dismissal were also regular themes.

Many submissions also called for a new co-operative-styled approach to industrial relations, others proposed “solutions” that look less like problem-solving and more like strategies for winning a war.  Unions, with 18.4% of the workforce, and big mining companies, with about 100,000 employees, have tended to frame the debate with a predictable, adversarial, increasingly out-dated and ultimately irreconcilable set of issues. The concerns of small business and non-unionised workers are by contrast vastly under-represented.

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Big business argues the Fair Work Act is increasing their costs through disputes and extra regulation, saying that unions have more power than members and are creating costly disputes that lead to less foreign investment, lower productivity and therefore, a lower quality of life.

Unions say a higher-paid, happier workforce is cheaper, more productive and less likely to create industrial disputes. Neither side provide comprehensive evidence to back their claims.

There have not been since 1995 any long-term, comprehensive, independent surveys of what Australians want from their workplace.  The limited studies/surveys seem to suggest workers also want flexibility — to be more in control of their work schedules. International research tends to show Australians are more interested in a stimulating job rather than the size of their salary. Skills development, opportunities for advancement, better working relationships, job security, less workplace conflict and fair incentives also play a part. Not many of these matters were discussed in submissions. It seems they are areas that sit uncomfortably somewhere in the middle of the union/big business debate.

Rates of unfair dismissal are up under the Fair Work Act — a fact that could potentially support both sides of the argument. Industrial disputes are on an overall downward along with some recent spikes. Workplace bullying and s-xual harassment complaints have risen in recent years — although they now appear to be evening out and derive from different legislation. Worker compensation claims through the various state and national compensation laws are on a downward spiral, but the costs of mental stress injury continues to skyrocket.

The economic impact of Labor’s Fair Work laws is much more uncertain. Most of Australia’s economic indicators have basically kept trending in same direction over the past 10-15 years, save the GFC.  This includes overall improvements in wage-to-price ratio and real wages along with low inflation and unemployment, solid GDP growth and overall decline in industrial disputes. National income, wealth and household well-being have all improved in the past 10 years and have continued to improve under the Fair Work Act.

The impact of labour market regulation is regarded as one factor in many that has contributed to the lull.  Business has tried very hard to tie their key issues such as union power to Australia’s lagging productivity. Although neither WorkChoices nor the Fair Work Act seems to have made much of a difference.

Saul Eslake, former ANZ chief economist and head of the productivity unit at the Grattan Institute, has suggested the slow is partly the result of a hangover from a period of significant reform.  He says this includes recent workplace relations reforms. “In particular … (those) reforms introduced by the Howard government under the title WorkChoices in its last term in office were not, primarily, ‘productivity enhancing’.”

At the most progressive end of the review are those calling to see a wider discussion of Australian workplaces issues. Many lawyers and academics say the issues facing Australian workers go further than free-markets versus red tape. They say greater emphasis is needed on providing businesses and workers with the resources needed to improve management practices, productivity, skills, and innovation — rather than simply framing the discussion over Australian workplaces around a zero-sum battle for rights.

Some have forwarded the idea of a statutory workplace body that fulfils this very purpose — more of a workplace well-being economics and research centre than another regulator.


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Peter Fray
Peter Fray
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