What Price National Regulation

1
What Price National Regulation?

• Professor Andrew Stewart
• Flinders University
• IR Society of Qld, 17 June 2005

2
An outline

• Some points on which the PM and I might agree
  and some points on which we wouldnt
• The problem of complexity in labour regulation
  and why its not about to get any better

3
Some points of agreement

• Single, national system preferable
• Traditional arbitration system can be complex and
  alienating
• Awards need to be simplified (more intelligible,
  less detail)
• Expanded floor of minimum conditions

4
Some points of difference

• Individual agreement-making for most workers
  (esp unskilled/semi-skilled) means
• unilateral imposition of terms by management
• standardised rather than individualised terms
• reduced labour costs, but not necessarily greater
  commitment or productivity
• No evidence that minimum wage rises or unfair
  dismissal laws cost jobs

5
More points of difference

• Small businesses should be accommodated, not
  privileged
• Unions and collective bargaining have a
  legitimate and often productive role
• AIRC is flexible and responsive, with a positive
  role to play in resolving disputes
• Integrity of labour regulation should be
  protected against disguised employment
• cf genuine independent contracting

6
What ought to be common ground

• Labour regulation should
• be clear and easy to understand
• minimise transaction costs
• empower rather than restrict

7
but apparently isnt!

• Two claims
• the trend to unnecessary complexity, detail and
  uncertainty in federal regulation under both
  Labor and the Coalition
• using the corporations power to create a
  national system wont make for a simpler system
  unless some hard decisions are taken

8
Legislators as control freaks

• Since 1992, federal regulation has been marked by
• ever increasing quantity and complexity
• lack of trust in the AIRC (and to some extent the
  courts)
• lack of trust in (and hence less autonomy for)
  employers and unions

9
A couple of examples

• Modifying the effect of transmission of business
• the 1988 model s 149(1)
• the 2004 model s 170MBA
• Electrolux and the need for every clause in an
  agreement to pertain to employment relations
  why isnt it for the parties to decide?

10
More examples of regulationgone mad

• The protected action provisions
• The hoops for certifying an agreement
• The unfair dismissal provisions
• The FOA provisions
• Multiplying agencies (OEA, BIT, ABCC, AFPC, FMC,
  etc)

11
Why does it matter?

• Because ordinary people (including most workers
  and managers) cannot read and understand the WR
  Act
• Because the more detail regulators add, the more
  uncertainty is created
• Because legal advice is required at every turn,
  adding cost to what should be simple transactions
  or processes

12
Is it going to get any better?

• Not judging by the backlog of evolutionary
  amendments, or further reforms announced by PM on
  26/5/05!
• But will use of the corporations power allow
  creation of a simpler regime?

13
Corporations power advantages

• Allows direct regulation of employment conditions
• No need for interstateness, logs of claims, ambit
  doctrine, respondency issues (or indeed awards or
  an independent tribunal)
• Potential for corporate employers to be subject
  (almost) exclusively to federal regulation

14
How it might be used

• A possible model for a corporations-based federal
  system
• corporate employers precluded from coverage by
  State awards, agreements or legislation (except
  workers comp, OHS, perhaps LSL)
• minimum statutory conditions for all employees of
  corporations, plus Victorian and Territory
  employees
• to be extended to all other employees as and when
  States refer powers

15
Would this be constitutional?

• Scope of power to legislate with respect to
  corporations
• no definitive decision by High Court
• but probably wide enough to support laws
  specifically directed to corporations employment
  relationships and related matters
• High Court has traditionally not treated one
  legislative power as being limited by scope of
  another

16
The gaps

• Unable to cover State government departments and
  unincorporated statutory authorities
• even for State government agencies that are
  trading corporations, some limitations
• Many small businesses are not corporations
• And a few corporations arent trading or
  financial corporations

17
A partial answer?

• Retain use of the arbitration power (and perhaps
  other powers) in parallel with the corporations
  power
• But then any chance of simplicity goes out of the
  window!
• an example the proposed Fair Pay Commission
• And still scope even then for State regulation
  around the margins

18
The conundrum

• What matters more to the government?
• regulation that satisfies its urge to control
  every last detail?
• regulation that brings as many employers as
  possible into the federal system, regardless of
  how complex that system must become?
• or regulation thats practical, straightforward
  and easy to understand?
• Which would you prefer?