The Productivity Commission’s draft report on the Workplace Relations Framework has certainly generated a lot of attention as expected and as it should. There is something to be said for the commentary that suggests the report is a disappointment for those who have argued for even more radical deregulation of the workplace relations system. Essentially the draft report argues the system is fine. From the Commission’s perspective “repair not replacement” is the policy imperative. In many ways it vindicates the authors of the previous review into the Fair Work Act, who similarly found that the legislation was operating broadly as intended and also, significantly, that there was no convincing evidence that the Fair Work Act impedes productivity growth.
There is a lot of value in reports like these. The Productivity Commission has the capacity to investigate and interrogate an enormous amount of evidence and argument. The draft report’s almost 1000 pages provides detail and considered responses to the issues it chooses to cover. But such reports must always be read with their limitations in mind. The Productivity Commission approaches its task from its “economic rationalist” perspective that values economic efficiency over social values. AIER, of course, takes a different approach, grounding our work in a rights-based approach as elucidated in our Charter of Employment Rights.
The Productivity Commission’s draft report can be seen as yet another step on the well-worn path of restricting and eliminating the collective interests of workers from the industrial relations system, in contravention of international standards. But this is not so radical. It is a project that has been underway for 30 years.
The regulation of workplace relations has a profound social role, along with an economic one. The Productivity Commission acknowledges this in its report but then makes recommendations and findings at odds with this notion. There are some worrying elements to the report that have been widely noted.
The proposed new enterprise contract is the latest in a series of proposals to disenfranchise workers in the interests of making things easier for business. In contrast to the findings of bodies such as the IMF and OECD that highlight the importance of collective bargaining and union representation in addressing growing wage inequality, the Commission is instead recommending another mechanism for employers to avoid bargaining with their workers.
The recommendation for reductions in additional compensation for unsociable hours in the hospitality and retail industries combined with the recommendation to keep the minimum wage low again leaves the poorest, least skilled and under-unionised workers set to take a hit.
The report is at times scornful of history but in the past Australia appreciated the broader social role of industrial relations. The recommendations for changes to the operation of Fair Work Australia and the emphasis placed on economic expertise is another step away from a system that can encompass the perspective of working people, along with employers and independent experts.
It is unfortunate the Commission did not consider the notion of decent work or the importance of the nature and quality of work as the AIER suggested. The nature of work is changing and will need to be grappled with at a policy and political level in a way that recognises workplace relations laws as socially beneficial laws that should respect the dignity of the people engaged in work.
The recommendation to make unlawful agreement clauses that limit the engagement of labour hire, contractors and casual workers or to regulate the terms of their engagement, and thereby limit the rights of workers to take action in pursuit of job security, shows the Commission places little value on the implications of the changing nature of work.
So far, apart from re-stating its position that the Fair Work Commission should review penalty rates, the Government has shown little inclination to pursue any significant changes to the workplace relations system. Instead the Government is focusing its attacks on the union movement with the probability that legislation to re-establish the Australian Building and Construction Commission and put further unnecessary and intrusive obligations on unions will be back before the parliament in the current session.
The Productivity Commission is now seeking submissions on its draft report and holding public hearings around the country before finalizing its report by the end of the year. At that stage the parameters for any further reform will be clearer.