How politicians are creating IR uncertainty

You could be excused for thinking it was an election period, with state and federal governments appearing to be scrambling to undermine business confidence and certainty around occupational health and safety and IR law.

One wonders whether anyone in government realises that most businesses operate on a three- to five-year plan and look, as a cornerstone of that planning, to certain and reliable OHS and IR laws.

During the past two years businesses throughout Australia have spent millions of dollars bringing their businesses up to a compliance standard required under the model Work Health & Safety Act (WHS Act), which was to become law throughout Australia on January 1 next year.

There could not have been more consultation on a piece of legislation than what has happened for that Act yet various states – most recently Victoria – have hinted that they may not make the WHS Act law on January 1. What that means for Australian business is:

1. 1. If businesses cross state boundaries the present complexity will continue and the new IT and reporting infrastructure built for the WHS Act will not be relevant. Millions of dollars wasted!
2. 2. The benefits for a unitary system delivered across Australia by a lesser number of people will be gone. Instead there will be various pieces of legislation (including the new WHS Act) which will govern different states, causing additional cost, reporting structure, IT platforms and high level training required to deliver safety throughout Australia. Again millions of dollars added to the cost of doing business in Australia.
3. 3. The various governments’ meddling in OHS will lead to a loss of confidence and primacy given to safety regulation and delivery of the WHS Act objectives. That will lead to a drop in safety performance throughout Australia, loss of lives and injuries and millions of dollars of cost.

It is hard to fathom why the government can’t simply get it together. We hear governments suggesting, hinting and even arguing for drops in payroll tax, stamp duty and other tax concessions to assist business in these dire economic times but what is their response?

Instead of providing a unitary system that will delivery safety to a higher level, reducing compliance costs, labour costs and improving safety (hence massive savings around workers’ compensation liability), for reasons that can only be political states like Victoria and Western Australia are resisting, delaying or rejecting the kick-off date of January 1 next year. One wonders whether politicians understand that business is part of their constituency.

The debate about what the IR system will look like under a federal Liberal government remains equally unclear. Mr Abbott’s suggestion that there will be no individual contracts can probably best be described as a mid-term rubbery statement of policy, which may be revisited if the numbers are right before the next election.

What we do know is that the Coalition, if it wins government at the next election, wants to make major IR changes. One would expect those changes to be:

1. Removing mandatory rights of representation to unions.
2. Revising the rights of entry law.
3. Returning the rules around prohibited clauses in enterprise agreements such as control over contractors on sites.
4. Rolling back some anti-discrimination parts of the current Fair Work Act found in the National Employment Standards.
5. Lifting the threshold when small businesses become subject to unfair dismissal.
6. Removing the reverse onus of proof around general protections type claims.
7. The return to non-union/union enterprise agreements.
8. The recalibrating of the enterprise bargaining process.
9. Perhaps even the review of the test for transfer of business.

The above list is a best guess. There is no doubt that the Coalition support for an aggressive IR policy will increase as it gets closer to the election if the public’s distaste for Labor stays at similar levels.

The problem for business is that it wants certainty in industrial law. It wants to develop an industrial strategy which will take it forward for the next two, three, four and five years. It wants to make strategic decisions around its engagement with third parties such as unions.

Without becoming the first pundit to pick the result of then next federal election it appears likely that Labor will lose. I suspect that is an assumption that a lot of people in business are making so the question is what should be my industrial strategy?

The answer is I don’t know, because the Federal Opposition at the moment refuses to say what its strategy will be. All we know is that it will fall somewhere between what Abbott is saying now and what Reith is suggesting.

There is no doubt that the world is facing difficult financial circumstances and there is no doubt that Australia will be consumed by difficult times and that will have an effect on Australian business and on the Australian people. 

This is a time where we seek and need maturity in government

This is a time where we need to see a co-ordinated approach between federal and state governments and oppositions to protect Australian business and the people who work in it.

The approach of state governments around the WHS Act and the federal government and opposition to industrial relations leaves much to be desired. Governments must cease acting for political tactical advantage and must invest strategically in building and growing Australia.

The senseless uncertainty that has engulfed Australian OHS and industrial relations during the past six months must stop.

Please, on behalf of Australian business, step up and endorse the WHS Act that begins throughout Australia on January 1 and federally let’s see what the strategy is industrially so that we can all plan, manage our risk and develop appropriate IR infrastructures to go forward into the future.

Andrew Douglas is a Principal for Macpherson + Kelley Lawyers. He is the Editor-in-Chief of the loose leaf publication, The OHS Handbook, and writes on workplace law issues such as Industrial Relations, Employment law, OHS, Equal Opportunity, Privacy, Surveillance and Workers Compensation. He appears in courts, tribunals and Commissions throughout Australia.