Read The Times Australia

Daily Bulletin

Morrison wants unions and business to 'put down the weapons' on IR. But real reform will not be easy.

  • Written by: Ray Markey, Emeritus Professor, Macquarie University

In a bid to repair the economy, Prime Minister Scott Morrison has announced an industrial relations overhaul.

Business groups and unions will be brought together to try to change a system that Morrison says is “not fit for purpose”.

This is a positive step after years in which industrial relations has substantially divided interested parties. As Morrison told the ABC on Wednesday, “we’ve got to put down the weapons”.

But reaching meaningful agreement will not be simple or straightforward.

Accord 2.0?

Morrison’s move has invited comparisons with the Accord between the Labor Party and the ACTU when Bob Hawke became prime minister in 1983.

This was the basis for economic reform built on wide consensus between employers, unions and government.

However, there are many differences between the special circumstances of the Accord and now, which may indicate the chances of success for the current initiative.

Read more: Australian politics explainer: the Prices and Incomes Accord

Hawke had the advantage of high levels of trust from both unions and employers, based on his years as a successful negotiator as ACTU president and industrial officer.

While Morrison talked positively about to the “constructive approach” between unions and employers during the coronavirus pandemic, he does not have any such record of trust to build on.

Another difference with the Accord is that in the 1980s, the industrial relations system was more centralised. So, employer organisations and the ACTU enjoyed greater coverage and authority among their own constituents to bring them to an agreement.

One indication of that difference now is the recent Jobs Protection Framework negotiated between the National Tertiary Education Union and the Australian Higher Education Industrial Association.

It has fallen over as a sectoral agreement because many universities have refused to participate and it has attracted criticism among some union members.

What needs to be fixed in 2020

Unions, business and government all agree that reform of the current system is needed. Finding common ground on what those changes are will be more difficult.

Morrison wants unions and business to 'put down the weapons' on IR. But real reform will not be easy. ACTU secretary Sally McManus says she wants to make jobs more secure for workers. Joel Carrett/AAP

Morrison has announced five working groups, to be chaired by Industrial Relations Minister Christian Porter. The groups will look at award simplification, casual and fixed-term employment, greenfield projects, and compliance and enforcement for wages and conditions.

Most of the working group topics relate to employer groups’ reform agenda. The Business Council of Australia has advocated for greater flexibility and simplification of the award system for the economy to successfully rebuild.

Employment relations professor David Peetz warns that this is code for shrinking the award safety net. Unions are likely to interpret this similarly.

Unions may be more interested in simplification of the enterprise bargaining system to benefit workers. They are concerned with the ease with which employers have increasingly terminated agreements and moved employees onto lower paid awards.

Casual workers

The casual workforce is likely to be a contentious area for discussion.

The Australian Industry Group has called for tighter legislative definition of casual worker status, after recent court decisions granted leave for long-term casuals.

Morrison wants unions and business to 'put down the weapons' on IR. But real reform will not be easy. Ai Group chief executive Innes Willox is concerned about the definition of workers. Lukas Coch/AAP

Meanwhile, the ACTU has long sought a general right of conversion to permanent employment for long-term casuals of six to 12 months standing, whom they consider to be exploited.

Read more: Australian economy must come 'out of ICU': Scott Morrison

Notwithstanding the casual loading for casual workers, they earn less on average than permanent employees.

There may be grounds for agreement on this issue. Employers would need to concede a formula for long term casuals’ easy conversion, if they choose, to permanent employment. Unions would need to concede no leave entitlements for employees who choose to remain casuals.

Greenfields sites

Greenfields sites - which involve a genuine new business, activity or project - have been a battleground in the Fair Work Commission for years.

Greenfields agreements on large construction sites have enabled employers to reach enterprise bargaining agreements with a small number of employees before most workers are hired. Workers who are hired when the project gets fully underway are then bound by the agreement.

Compliance and enforcement

There may be more common ground over improved compliance and enforcement for wages and conditions. Employers and unions have condemned major cases of underpayment recently uncovered by the Fair Work Ombudsman.

However, better compliance may be difficult to reconcile with the government and employers’ desire for less regulation.

Where to now?

Unions and employers have indicated willingness to participate in good faith, despite the huge challenges they face. But the omens are poor.

There is already disagreement over the Fair Work Commission’s annual minimum wage decision, due in July.

The ACTU is arguing for a 4% increase, angering business groups.

Morrison wants unions and business to 'put down the weapons' on IR. But real reform will not be easy. Industrial Relations Minister Christian Porter will chair five working groups to try and overhaul the IR system. Joel Carrett/AAP

The Australian Chamber of Commerce and Industry has argued the minimum wage should remain frozen until at least mid-2021. It has even cited a precedent of the 10% reduction awarded on the basis of capacity to pay during the Great Depression.

The fact that wages growth had been at record lows before the COVID-19 crisis will not help matters.

Read more: View from The Hill: Can Scott Morrison achieve industrial relations disarmament?

There is also a serious question as to whether industrial relations reform is the right place to be looking to reboot the economy.

Former top public servant Michael Keating was head of the Employment, Finance and Prime Minister’s departments during the Accords era.

Writing last month, he said Australia’s industrial relations regulation was more flexible than that in the United States, and the reforms of the past 25 years have had little substantial impact on productivity, labour market adjustment, wages growth or industrial disputation.

Keating also warned that industrial relations reform is mainly “camouflage for lower wages, which is the last thing this economy needs right now”.

Authors: Ray Markey, Emeritus Professor, Macquarie University

Read more https://theconversation.com/morrison-wants-unions-and-business-to-put-down-the-weapons-on-ir-but-real-reform-will-not-be-easy-139462

Business News

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

When Should You Speak to a Lawyer About a Legal Issue?

Legal issues can begin with a simple question, then become harder to manage once formal steps are involved. Many people wait until a matter feels urgent before seeking guidance, even though earlier ...

Daily Bulletin - avatar Daily Bulletin

The strategic rise of Bali as Australia’s next essential healthcare support hub

As Australian healthcare providers grapple with unprecedented operational bottlenecks, a new nearshore model is quietly transforming patient care delivery. Forward-thinking organisations,  including...

Daily Bulletin - avatar Daily Bulletin

Cost Savings and Benefits of Using Used Pallets in Logistics

In today’s competitive logistics and supply chain industry, businesses are constantly looking for ways to reduce operational costs without compromising efficiency and reliability. One of the most prac...

Daily Bulletin - avatar Daily Bulletin

How Fulfilment Services in Australia Help Businesses Scale Efficiently

The growth of e-commerce and modern retail has transformed customer expectations. Consumers now expect fast shipping, accurate order processing, and seamless delivery experiences regardless of where...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Moving Out of a Rental in Melbourne? A Practical Moving Checklist

Moving out of a rental in Melbourne is one of those things that always feels further away than it ...

Why a Cordless Rebar Tying Machine Is a Smart Investment for Australian Construction Projects

Tying reinforcing steel by hand means spending hours bent over while making the same twisting moti...

How to Get a Document Notarised in Sydney: What to Bring, What It Costs and How Long It Takes

If an overseas bank, embassy, university, employer or land registry has asked you for a notarised ...

The 2026 Used-Car Market

For a few strange years, the used-car market rewrote its own rules. Supply shortages sent second-h...

Why CCTV Alone Is Not Enough for Modern Business Security

Cameras are usually the initial step that companies take to strengthen their physical security. If...

Why Every Workplace Should Take Emergency Preparedness Seriously

Emergency planning is one of those things many workplaces know they should think about, but it oft...

Why Clearer Communication Still Matters in a Digital-First Business

It’s never been easier for businesses to communicate, but that doesn’t mean they’re always communica...

What Happens After You Lodge a BYDA Enquiry? The Step Most Excavation Projects Miss

Every excavation project in Australia — from a backyard deck footing to a multi-storey commercial bu...

How to Choose the Right Dentist on the Gold Coast

Finding a dentist you trust is one of those decisions that quietly affects your health for years, ye...