NEW: Michael Schaper

The Federal Government’s WorkChoices is such a mess, it is making the much maligned award structure look a better choice.

Are awards better than hundreds of pages of WorkChoices?

Sometimes it’s not what you do, but how you do it, that really matters. How change is implemented often determines whether the community will accept a given reform initiative, regardless of its inherent merits. In Australia in 2007, WorkChoices is the prime example of this maxim.

The lead up to a federal election – especially one where the Opposition seems to have a very good chance of winning – is not a good time to calmly try and analyse the nuts and bolts of the new industrial relations system created since the return of the Howard Government.

Election times are heated times; debates take on a shrill tone and emotion often replaces logic. In the industrial relations arena, this has meant that both sides of politics have been caught up in trying to argue for their own partisan advantage. 

But this has meant that some key issues in the IR debate have been overlooked. No one is arguing that we should go back to a fully regulated labour market; almost everyone agrees that firms and employees should (at least in certain circumstances) have the capacity to mutually set their own employment arrangements (I certainly do). The Coalition wants to maximise this flexibility, while Labor is more reticent to do so.

But the Federal Government seems to have done itself a huge disservice in its implementation. There’s a lot of confusion among business owners – and no wonder.

The WorkChoices labour laws run to hundreds of pages. Accompanying explanatory material are another several hundred more. AWAs sit alongside existing federal awards, common law contracts and various state-based workplace laws. There are minimum conditions and a separate fairness test.

A new bureaucracy of workplace regulation has sprung up, while the old institutional structures are still remain in place – thus we now have a Workplace Authority, an employment ombudsman, a federal Department of Employment and Workplace Relations, an Australian Industrial Relations Commission, and much more. The bureaucratic process of actually registering a workplace agreement is extensive, and administrators have not been able to vet contracts in a simple and timely manner.

For many small businesses, the much-maligned award is starting to look like a better choice. It may not give employers all the flexibility they want, but it takes much less time and effort to comply with.

The Howard Government rushed these changes through without much public scrutiny of the laws, and the results are now showing. The detail of the changes is in danger of destroying their original objective: providing business with the option to use a different employment contract.

A similar pattern happened after the introduction of the GST, where it took Treasury a while to realise that its rules for GST collection were creating a headache for SMEs. This time round, it may be too late in the electoral cycle to make such a change – and there may be too few bureaucrats who understand how entrepreneurs really manage their employees.

Professor Michael Schaper is Dean of the Murdoch University Business School in Western Australia. m.schaper@murdoch.edu.au

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