The new IR world

Will there be a recession that compares to, or is worse than, the Great Depression of 1930?  Maybe there will not be 25% unemployment like 1930, but current employment is more skilled, more highly paid and less flexible in a difficult employment market.

The banking crisis is worse than any recent experience, and personal and corporate debt is significantly higher, in comparative terms, than the Depression. 

All of us have seen the clouds but, without being alarmist, the underlying financials now suggest the storm will be truly terrible.

Australian business is faced with the advent of a new industrial framework that, among other things, will see the following:

• Re-introduction of the unfair dismissal regime for small business.
• Broaden the redundancy test.
• Increase access for unions.
• Permit unions to participate in all industrial agreements.
• Permit the return of prohibited matters into agreements that constrain how you employ/engage, and on what rates.
• Increase the level of union intervention and disputation.
• Increase the level of delay and frustration in business decision making.
• Create a “them and us” mentality between employer and employee.

What are the obvious answers?

•1.                   Quickly economically model your business and your competitors’ businesses based on the expected fall within the economy.

•2.                   Decide what changes are necessary to protect cashflow, margins and risk, while developing a business case that improves your position against your competitors.

•3.                   Develop your industrial strategy and roll it out quickly and openly before the Fair Work bill becomes law. In many critical ways the law assisting simple structural changes under the current IR system will change in the Fair Work environment to businesses’ detriment.

•4.                   Be open and honest with all employees (whether staying or leaving).

•5.                   Create a new vision based on your business case, communicate it and lead it.

•6.                   Drive all industrial change with your workers; don’t wait for the union to direct and control it.

Andrew Douglas is the founder, principal lawyer and managing director of Douglas Workplace & Litigation Lawyers. Andrew is an experienced commercial litigation and workplace lawyer, who acts both as a solicitor and advocate.