Just Another Day in Paradise – The Union Boss Wonderland

JUST ANOTHER DAY IN PARADISE – THE UNION BOSS WONDERLAND

ADDRESS TO THE AUSTRALIAN INDUSTRY GROUP PIR CONFERENCE, CANBERRA 

Introduction

Just imagine, getting paid to go to the gym, followed by having a relaxing massage followed by a shower. Well you won't need to imagine for much longer. Thanks to the union bosses and the Fair Work Act those days might not be that far away. So, Innes, I think you applied for the wrong job albeit I for one congratulate you and wish you well on this, your  first official day on the ground.

Instead of dealing with the important issues of productivity, flexibility and confusion over the Fair Work Act, the industrial relations space has been tied up in new hangars, paid shower time, onsite gyms and two lockers for each employee for the last six months.

Indeed, if the union bosses were to get their way some workplaces would resemble more of a luxury day spa than an actual workplace...

...and while the union bosses are out fighting for these 'important' items from so-called 'militant employers', we are seeing people working fewer hours[1], despite wanting more hours and very  slow jobs growth in Australia[2].

If all of this isn't bad enough, employees can now claim compensation if they sustain injuries while engaging in rigorous horizontal activities after hours in their hotel room while on work trips.

In the workplace relations space, 2012 has quickly become something that not even Alice in Wonderland could have imagined!

The Government

There have been two workplace relations issues that have been front and centre in recent times; one on a union boss who allegedly used members funds for his own personal gain in Craig Thomson and an adverse action claim lodged just two weeks ago against one of the highest Parliamentary office holders in the land, Peter Slipper.

Just two days ago, after years of enjoying the full support of the Labor Party and the Prime Minister herself, Craig Thomson has suspended himself from the Labor Party and joined the cross benches.

We are expected to believe that after Bill Shorten having woken up last week after three years and come to the realisation that the Health Services Union was "dysfunctional", that the Prime Minister similarly woke up last Saturday and decided that despite Mr Thomson being "innocent", he should no longer be a member of the Labor Party.

I am sure Ms Gillard's decisive, principled action on Sunday was completely unrelated to the pending release of the interim Temby report that came out yesterday.

The culture of financial – let's be polite – mismanagement over many years was and is a disgrace.

Next time I see Barry Humphries, I will ask if his caricature of his union official character Lance Boyle was in fact based on the real life HSU. You may recall Lance Boyle was lecherous, corrupt and of course heavily involved in politics.

More seriously, Minister Shorten only decided to intervene in the Federal Court case involving the Health Services Union when it was clear that Kathy Jackson with the support of one of Australia's leading IR barristers Stuart Wood S.C. was likely to gain control of the union against Mr Thomson's faction. So Mr Shorten decided to apply to have an administrator appointed in the HSU. It seems as far as Mr Shorten sees it, the worst thing that could happen is for Ms Jackson to gain control over Mr Thomson and Mr Williamson. Therefore, the only option was for him to try to get an administrator appointed on the basis – that if his mates can't control the show, it is better that no-one does. 

And all the while we have Fair Work Australia refusing to cooperate with the police. We have Fair Work Australia taking over 3 years to finalise their report and Mr Thomson instructing his lawyers to suppress the report in the event it ever emerges.

In short, it is a mess. It is a disgrace and it reflects badly on the Government, the Health Services Union and Fair Work Australia.

And whilst on the Health Services Union, I could not help note the appointment of an ombudsman – one Mr Erroll Hodder – a former IR Commissioner no less we were told.

Thanks to Google, I learnt in a millisecond that Mr Hodder was also a predecessor of Mr Shorten as an Australian Workers Union Secretary. Talk about wheels within wheels.

Further, it's strange how criticism from the Opposition on Fair Work Australia's investigation into Craig Thomson and the Health Services Union is "intolerable as the authorities must go about their task unimpeded". Yet when there is an Australian Federal Police investigation into the Labor appointed Speaker of the House of Representatives, you have Ministers falling over each other to give a commentary and declare him innocent.

As did Mr Albanese in an interview[3] declaring Mr Slipper innocent on the CabCharge issue and questioning the sexual harassment claims. Consistency was never their strong suit.

Aside from these issues, it should not be forgotten that if Mr Ashby's claim is relying on the Adverse Action provisions of the Fair Work Act, it will allow the Government to experience the consequences of the reverse onus of proof.

They will also learn that even before a matter can be listed for hearing, Fair Work Australia must hold a 'conciliation conference', aimed at 'settling the dispute' to avoid a trial. Faced with the prospect of a trial, with a reverse onus of proof and the prospect of uncapped damages and fines, the great majority of employers throw buckets of 'go away money' to settle the matter. Additionally, if media exposure will embarrass the employer this generally guarantees a gigantic settlement will occur. 

Time will tell...

...and interestingly, it could settle without any admissions and with a confidentially clause. This leaves the Speakership... well who knows?

Union Leadership

But back to the HSU - I was astonished to hear the reasoning behind the suspension of the Health Services Union from the Australian Council of Trade Unions. ACTU President Ged Kearney and Jeff Lawrence said that they have a zero tolerance policy on corruption and on the misuse of members' money and that the ACTU condemns unions for acting outside the law[4].

I completely agree. Trade unions who engage in corrupt activities, who misuse members' funds and break the law should be suspended from the ACTU. But for the ACTU, this is all very hypocritical. Just look at the Cole Royal Commission or case after case prosecuted by the Australian Building and Construction Commission – where union bosses were found guilty of acting outside the law and ordered to pay up.

Why weren't these unions suspended also?

Indeed, were the Painters and Dockers suspended?

It's one test for the HSU, but another for the big unions like the CFMEU and the ETU. One wonders if perhaps this may have been a ploy to oust ACTU Deputy President Kathy Jackson from speaking at the ACTU National Congress in just a few weeks.

This sorry saga highlights that our announcement on Registered Organisations on Saturday was the right prescription.

JJ Richards

Now let's turn to some other matters:

The Federal Court judgement in the JJ Richards case has given a green light for union bosses to "strike first and talk later" and what's of significant concern is that it's due to Labor’s drafting of its Fair Work Act.

This just highlights the need for the current review of the Fair Work Act to be broader.   The narrow focus of the Terms of Reference engineered by Mr Shorten and Labor makes it difficult for stakeholders to advocate the sort of changes that may be needed in the light of the Federal Court decision in JJ Richards.

The Federal Court’s judgement seems to indicate that the argument advanced on behalf of JJ Richards was understandable and reasonable but for specific wording in the Fair Work Act which entitles unions to obtain protected action ballots in circumstances where most reasonable people would argue that should not be allowed.

The Court’s decision also puts the lie to Wayne Swan’s ignorant intervention when the JJ Richards case first came up, suggesting that this aspect of the Fair Work Act was no different to the previous legislative regime.  It clearly is different and Labor needs to recognise the difference and the consequences flowing from that difference.

This decision also clearly demonstrates that the Fair Work Act was not a faithful statutory embodiment of what Labor promised before the 2007 election. This is now worthy of detailed review as to whether there was a drafting error or Labor yet again deliberately misled the Australian people.

Needless to say, there is clearly a big problem here and Labor need to clean up their mess.

Bill Shorten is being ripped off by the Union bosses

While Kevin Rudd was a happy little vegemite as Foreign Minister, it seems we may have some others. In Bill Shorten's recent speech to the Sydney Institute[5], he spoke at great length about "happy workers" being productive workers. I agree.

But I pose the question - how can employees and employers genuinely be happy and in harmony when according to many, Labor's Fair Work Act has actively made negotiations more complex, vicious and protracted?

To make things worse, the Green-Labor Alliance in the last sitting period passed a number of pieces of legislation as a result of going through the union bosses' wish list: abolishing the Australian Building and Construction Commission; essentially establishing a separate workplace relations system for truck drivers; reclassification of textile, clothing and footwear industry workers and the list goes on.

So you'd think that after all Mr Shorten has done for the union bosses, the union bosses could return the favour. Right? Wrong.

The one small favour that Mr Shorten has asked for in return, from the union bosses was for them to consider the increase in superannuation from 9% to 12% in wage claims in bargaining over the next few years was immediately dismissed by the ACTU hierarchy.

But it isn't stopping Labor pursuing more changes to workplace relations by stealth. Labor have proposed amendments to the Equal Opportunity for Women legislation that will mean more red tape for employers without any genuine test to ascertain if more women will be employed in the workplace as a result.

While Senator Michaelia Cash, as the Status of Women spokesman, is taking the lead on this Bill, and doing very excellent work, allow me to get into some of the workplace relations issues.

It goes without saying the Coalition supports equal pay for equal work and supports getting more women into the workforce. But this is a bad proposal that gives the Minister the power to tell employers how to run their enterprises.

 The amendments introduce new reporting requirements on all private sector organisations with 100 employees or more to provide detailed information to a new government agency, as well as meeting new “minimum standards” by 2014 and beyond.

As an aside, I trust the figure of 100 was not stolen by Labor from WorkChoices!

The mandatory reporting system on a range of as yet unknown “gender equality indicators” which will be prescribed by the Minister at a future date, will mean that businesses which fail to meet these government targets, will be named and shamed in public reports, and may be locked out of government tendering contracts. This Bill is also one-sided in that it only applies to the private sector and not government employers. If it's so good for the private sector, why isn't it good enough for the public sector?

This Bill will also have enterprises not just reporting to the EOWA, they will also need to report to the union bosses and give greater power to them to exert muscle – no doubt around bargaining time to place more pressure on employers to fold to excessive demands.

The Review of the Fair Work Act

I want to just quickly touch on the Review of the Fair Work Act. I have been on the record for some months with my concerns about the review, the reviewers and the skewed terms of reference.

We now know, following a Freedom of Information request from my office, that the Department of Finance and Deregulation shared those concerns and advocated for the inclusion of productivity in the review – indeed they sent a brief to Minister Wong to that effect but it was completely ignored by Labor and left out. Having been told of the importance of including productivity in the Terms of Reference and being specifically warned that the government could look "silly" if it didn't, Labor deliberately chose to ignore the advice. Well, the Department was right. Productivity should've been included and Labor are looking "silly" for not doing so.

This is a review that serves the political needs of a desperate Labor Government rather than the genuine needs of workers and employers in Australia.

While we will look at the report, we won't be holding our breath and we are seriously considering a further review should we be given the opportunity of government after the next election.

In the meantime, I congratulate AIG on its submission. It refreshingly oozes robustness and commitment.

Productivity

I was very pleased hear Justice Ross upon his appointment as President of Fair Work Australia, say that he has decided to take a proactive role in ensuring that productivity is delivered.

It is a good thing to see the head of the Industrial Tribunal taking an interest in such an important issue and I hope that the Minister heeds any advice that the President may wish to offer him.

On productivity, I'd like to congratulate the great work that has been done by the Victorian Government on implementing a Code of Practice in Victoria. I'd encourage all states which are concerned with ensuring that government projects are achieved on time and on budget without the union bosses being in charge of the time frame to adopt a similar code.

I note with interest, that Premier Bailleu obtained a COAG agreement from the architect of the Fair Work Act for the Heads of Treasury to take a look at the increasing costs of construction in Australia.

I'm sure that they will conduct a considered review. Chances are, a quick look at the Wonthaggi Desalination Plant will tell them all they need to know. It is a project where you can get paid a hell of a lot of money to do.... well not very much at all.

The Victorian Government's work in this area is to be applauded and leads the way for other states and territories.

Policy Development

The Coalition announced over the weekend our Plan for Better Transparency and Accountability of Registered Organisations that will ensure that members of unions (and AIG) are able to hold their bosses to account.

It isn't reasonable that someone can be a shareholder in a company and expect one level of transparency and accountability from the board – yet that same person who is a member of a union cannot expect that same level of accountability from their union or for that matter an employer organisation.

The Coalition's plan fixes that and establishes a Registered Organisations Commission to restore faith in the institution responsible for ensuring the law is obeyed in this space.

Apart from this policy initiative, the Coalition is also listening closely to the concerns that have been raised by employees, employers, independent contractors and other stakeholders.

A pattern is emerging. There are problems with the functioning of the Fair Work Act to protect jobs, with greenfields agreements, with flexibility and with transfer of business. Concerns have also been raised in relation to unfair dismissals and adverse action. Indeed even the name, Fair Work Australia, is an issue placed on the agenda by Justice Ross himself.

In brief, the fundamental difference between the Green-Labor Alliance and the Coalition is that we can admit it when we got it wrong. WorkChoices went too far and was wrong and we admitted that. Labor cannot admit that any part of the Fair Work Act may be in error. Indeed Bill Shorten has refused to give a guarantee that the Government will act on any recommendations of the review[6]. Despite the panel and skewed terms of reference we will seriously consider the recommendations.

Conclusion

The ultimate objective of any workplace relations system must be having more people in jobs and delivering sustained wage growth (not simply a smash and grab raid) as the underpinning of our economy.

The damaging approach by some elements of the union bosses towards negotiations, pushing for extreme wage increases upwards of 20% as well as frankly ridiculous claims may make people feel better in the short term but in the long term has a damaging impact on the enterprise, the economy and importantly on the employee. Let's not forget former Labor Treasurer Frank Crean's injunction "one man's pay rise is another man's job."

But, it is understandable that workers will seek wage increases in line with the increases in cost of living. And that the imposition of a Carbon Tax will drive up the cost of living which in turn will drive larger wage claims on top of the other flow on effects of higher energy costs, input costs and rates making a very difficult business environment so much worse.

The Coalition message to the trade union bosses is simple, the Coalition message to the enterprise bosses is simple: True leadership requires the abandonment of excessive demands. True leadership requires the refusal to accommodate excessive demands......and the role of government is to provide the framework to enable the environment for achieving exactly such a balance......and it is to that balance which we dedicate our policy formulation in the lead up to the next election.


[1] Quarter of families earning less than last year, the Australian, April 17, 2012

[2] Zero jobs growth worst in 20 years, the Australian, January 20, 2012

[3] Interview with David Speers, Sky News, 27 April 2012

[4] Press Conference at ACTU Headquarters, 4 April 2012

[5] The Future of Work is having a Good Job, Address to the Sydney Institute by the Hon. Bill Shorten MP, 4 April 2012

About Eric

Eric Abetz has been a Liberal Senator for Tasmania since 1994 and has served in a range of Leadership, Ministerial and Shadow Ministerial roles.

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136 Davey Street
Hobart  TAS  7001

(03) 6224 3707

Senator.Abetz@aph.gov.au

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