IR bill is a train wreck for small business – and a vote loser

Graeme Haycroft Contributor
I fear the Morrison government’s new omnibus industrial relations bill is going to be a train wreck for small business and a vote loser for the Coalition that may cost Scott Morrison the next election.The Prime Minister and his Minister for Industrial Relations, Christian Porter, might not realise that the bill will deliver a bonanza for big business, big unions, fat-cat union bosses and the ALP.

ACTU secretary Sally McManus: a master at the IR game of wheeling and dealing. Alex Ellinghausen

I have worked in the industrial relations sphere for more than 40 years with my own labour hire firms, and more recently as the founding director of a set of independent unions with no links to political parties.

The industrial relations realm is mainly about money, and sometimes power.

How that translates from legislation and regulation into practice is a mystery to most people who are not full-time professionals in the field.

There is wheeling and dealing. So much of it is counterintuitive. ACTU chief Sally McManus is a master in this game. She knew exactly what she wanted for her team; orchestrated it brilliantly and ended up with nearly everything she wanted. It’s hard to imagine a more comprehensive victory.

The private industry ACTU unions such as the SDA, AWU and TWU were dying (down to 9 per cent of the private sector workforce), and so too the revenue stream they provide to the ALP.

McManus needed a mechanism to allow big unions and big businesses to complete enterprise bargaining agreements that reduced unit labour costs for the businesses in return for compulsory union membership. She got it.

She needed a new employment mechanism to replace “casual” that could be made to work with big business EBAs but would be largely inoperable in their small business competitors, thereby giving big business a huge competitive advantage. She got it.

She needed a mechanism to stop the competition to her ACTU unions which threatened to dry up all the income to them and subsequently to the ALP. She very nearly got that too.

McManus needed a mechanism to allow big unions and big businesses to complete enterprise bargaining agreements (EBAs) that reduced unit labour costs for the businesses in return for compulsory union membership. She got it.

So how did the Liberal-National government let this happen? To be fair, they simply made a miscalculation. They perceived that the consequent damage from the recent Skene and Rossato court decisions would be greater than the cost of giving McManus everything that she and her team wanted in return for her support for retrospective legislation that the Coalition mistakenly thought was the only possible solution.

This cosy arrangement was well orchestrated by McManus and her big business colleagues from powerful industry associations who can sway governments.

The recent Skene and Rossato decisions retrospectively changed the definition of what a “casual” actually was. For esoteric legal reasons, “casuals” who had already received a component for holiday pay in the 25 per cent casual loading, under certain circumstances could double dip and claim holiday pay again. Quite bizarre, and quite unpredictable.

But to make it worse, the effect was retrospective. The Morrison government was right to think this needed to be fixed, but not the way McManus wanted. About 20 per cent of the total workforce, mainly concentrated in the small business retail, hospitality, tourism and transport sector all worked as “permanent casuals” and many could have been affected by these decisions.

But both employers and employees prefer these arrangements. Forget the nonsense spouted by the unions. Small business likes the flexibility that came with the “casual” arrangements because it has enabled them to compete with their larger firms like Coles and Myer who had lower unit labour costs as a result of questionable EBA deals done with the unions.

The Coalition’s goal should have been to retain this system, not destroy it.

It is always a mistake to naively rely on advice from your political opponents.

It could have all been fixed for the future with a couple of paragraphs of legislation which the Senate crossbenchers would have supported. Admittedly, it would not have solved the retrospective consequences, but it would have drawn a line in the sand and enabled the government to work out any number of equitable solutions for the unintended past consequences without the electoral poison of retrospective legislation.

Australian workers are inherently fair. The vast majority of parties would have been able to sort out a deal. Yes, it would have been messy, but we would have muddled through.

Instead of trusting the workers, the Morrison government has done a dirty retrospective deal with big business and big unions at the expense of small business. Big mistake.

There are now three elephants in the room.

The first is that the mechanism of small business employment in the retail, hospitality, tourism, service and transport industries miraculously expected to change from “casual” employment status to part-time work. And don’t forget unfair dismissal will soon apply.

This is not going to end well. The second elephant is that all the money that is going to be made from this new EBA regime, including from “greenfield” sites, will all go to ACTU unions and the Labor Party. Why make them rich? Why not let “greenfield site” developers choose truly independent unions like ours that do not drain members’ money to the ALP and green-left causes?

The third elephant is retrospective legislation. Of course the ALP will vote for this. That is the deal. They effectively wrote the bill. But that will all be forgotten at the next election. Voters will see that it was ScoMo’s legislation that deprived workers of their entitlements.

A train wreck appears inevitable. And the Prime Minister and Mr Porter can not see it coming.

Graeme Haycroft is the founder of Nurses Professional Association of Queensland, a non-political-aligned trade union.