Workplace flexibility is needed

The Australian, August 10, 2017

Martin Ferguson’s experience on both sides of the industrial relations fence and in government makes him ideally placed to recognise the shortcomings of Australia’s centralised workplace relations system and its impact on productivity and prosperity. The former ACTU president was resources and energy minister in the Rudd-Gillard governments. Mr Ferguson now chairs Tourism Accommodation Australia and lobbies for the resources industry. Few Australians in business would disagree with Mr Ferguson’s view that it’s time to take “workplace relations reform out of the deep freezer”, as he told the Sydney Institute this week. He has worked with the Minerals Council of Australia for the past nine months to develop a package of reforms. If chief executives, business owners and small businesses in other areas want reform, however, they need to make the case and explain why, at a time of low wages growth, the pendulum has swung back too far in favour of unions in key areas.

Without concerted, broad backing from business, the Coalition will be unwilling to risk any of its scant political capital on further reforms, especially with an obstructionist Senate. For a decade, the Coalition has trodden lightly on the issue after the devastating “Your Rights at Work” campaign against the Howard government’s Work Choices that helped push it from government in 2007. The Turnbull government’s restoration of the Australian Building and Construction Commission and passing of registered organisations legislation were important steps in the right direction.

The reforms proposed by Mr Ferguson include allowing workers earning over an income threshold of, say, $142,000 a year to opt out of enterprise agreements and enter into individual deals. Union membership across the workforce has fallen to a record low, with fewer than one in 10 private sector workers — just 9.3 per cent — paying dues. Even public sector membership has fallen to 38 per cent. Despite their limited base, unions continue to exert disproportionate influence in workplaces.

As Mr Ferguson said, the Fair Work Act has ­expanded the content of enterprise agreements beyond matters such as wages and working conditions. This has opened the way for collective bargaining to extend into management areas. Right-of-entry rules, he said, were too rigid, allowing entry even where a union was not party to an award or agreement, and had resulted in significant disruptions in the mining industry. Such rigidity is a brake on productivity and competitiveness.