Australian Industry Group warns of job losses if Gillard government fails to get flexible on workplace reform

The Australian Industry Group has warned more jobs will go offshore and more businesses will close unless Australia’s industrial relations system is urgently reformed. However, Prime Minister Julia Gillard says the Federal Government deserves some credit for what it has done for business.

In his speech to the Annual Workforce Conference in Melbourne this morning, AIG chief executive Innes Willox said the industrial relations system was worsening.

“Business owners and managers are resilient and up for a challenge, but if things are made too difficult through ill-conceived legislative and other changes the inevitable result will be more business closures, more offshoring and less Australian jobs,” he says.

Willox calls for a workplace relations system which does not impose unnecessary barriers upon productivity and flexibility, and which encourages flexible and innovative workplace arrangements but said “unions recoil every time we mention this F-word.”

He says the key to fixing the challenges to Australia’s competitiveness, and to putting the country in stronger shape to adjust to lower commodity prices and lower levels of investment in the mining sector, is not to slash wages, working conditions and living standards but to lift productivity.

However, Willox says bargaining laws, which have encouraged unions to pursue restrictions on the use of contractors and labour hire, have led to more disputes and reduced flexibility, while transfer of business laws and redundancy provisions have made it hard for workplaces to restructure and outsource work.

“General protections laws, which have encouraged speculative termination of employment claims, have increased their costs and reduced [businesses’] ability to maintain a high performing workforce,” he says.

Willox says the government has implemented an “extraordinary series” of changes in response to union claims over the past few years.

He points to changes including the implementation of the Fair Work Act, which Willox says increases union power in over 120 areas, and “extremely generous” amendments to the General Employee Entitlements and Redundancy Scheme (GEERS) which protects redundancy entitlements of up to four weeks per year of service upon insolvency.

“It is not surprising that industry feels that, so far, employers have not been given a ‘fair go’ on workplace relations,” Willox says.

“The traffic over the past two years has been all one way and it has gone in the wrong direction.”

Willox calls for the government to reject the “retrograde” proposals being pursued by the unions “under the banner of job security”.

“We are not asking for the Fair Work Act to be scrapped but for a series of sensible changes to be made to address problems which have been widely identified by industry groups.”

However, at the Business Council of Australia dinner last night, BCA president Tony Shepherd sought to ease tensions between business, unions and government by saying all sides should stop seeing each other as “combatants”.

Prime Minister Julia Gillard used her speech to the dinner to call for some credit to be given to the government on its economic management and said delivering a budget surplus cut business costs by $18 billion a year as a result of keeping interest rates low.

“We’ve cut badly targeted subsidies, means-tested benefits, reformed the tax and transfer system to lift participation and now we’re sustaining spending below 24 points of GDP for the first time since the oil shocks,” Gillard said.

“Take away the politics, look at what the market is saying about us.”