As we enter the new financial year, what is the forecast for the Federal Government’s WorkChoices package? Polls continue to show that the law is highly unpopular. Most employers are not taking advantage of it. The 4% coverage of legislated individual contracts (AWAs) is concentrated in different areas of the labour market for different reasons; there is no rapid shift away from union collective bargaining yet.

The States’ challenge to WorkChoices in the High Court has created doubt about the validity of the radical new laws. It may mean employers are reluctant to jump in before the laws are found to be enforceable. The High Court transcript would suggest some judges are not convinced the Commonwealth has the power to legislate in the way it has. But most legal experts agree that a majority are likely to find that it can.

Nevertheless, the majority on the bench may baulk when it comes to the most significant centralist shift since the acquisition of income tax powers by the Curtin Government in 1941 – a voluntary shift impelled by wartime exigencies.

Conservatives tend to abhor big central government, if only because of the potential gift it hands future Labor administrations. Nobody argues that the Constitution was designed to override the powers of the states in the way WorkChoices does. There is also a respectable statutory interpretation argument about reading the powers concurrently; what is the labour power there for, after all?

Alternatively the Court may find that the law should survive, but with limitations. This could create the need for a new Bill, with attendant risks in a now-skittish Senate. If the challenge is rejected, some reformists forsee the constitutional basis being laid for more comprehensive regulation of corporations and all aspects of their employment decisions by future Federal governments. It could prove a Pyrrhic victory for conservatives.

Neo-liberalism out of steam?

Legal doubt aside, attitudes to WorkChoices may represent something far more significant to the Australian body politic. It may be that the neo-liberal economic philosophy, of which WorkChoices is an expression, is running out of steam. Not many Victorians or South Australians of any political hue think electricity or transport privatisation has worked. Few in NSW think public-private partnerships are a great idea when it comes to roads.

A big majority of Australians think increases in tax and public spending are justified if priority is given to public education and health. Privatisation and deregulation are on the nose, which has major implications for economic and industrial relations policy, providing the opposition parties have the wit to respond with positive policies.

Neo-liberal industrial relations policy peaked in the mid-90s when the OECD championed deregulation. The reaction against them helped oust the radical rightwing Victorian and WA Governments, much to the surprise of the commentariat and even the ALP.

A decade on the OECD says high productivity and low unemployment can be achieved through regulated labour markets integrated with welfare and training arrangements. In the 90s the major countries of South America under the impetus of the World Bank adopted the deregulatory model. This caused crises and massive unemployment. Now there is a continental shift towards systems which recognise labour rights and achieve high economic growth. Global firms know this, leaving the Howard government looking somewhat anachronistic in its zealous pursuit of 90s policies.

What of the ALP’s response? Labor’s opposition to legislated individual contracts (AWAs) comes after ten years of prevarication. Opposing AWAs was a poll-driven decision and a means of shoring up the political base of ALP leader Kim Beazley.

But despite the usual chorus of “union-domination” coming from the usual suspects, his unequivocal stand appears to have worked. The jury is back in the public mind; it heard the evidence given to the recent Senate Estimates Committee that most AWAs removed “protected” entitlements from workers who had “chosen” to sign them. Despite Federal Government claims that its new system would not disadvantage workers it is evident that its reform package is being used to cut wages and conditions.

Labour market deregulation was an article of faith for former ALP Prime Minister Paul Keating. The shift to enterprise bargaining, underpinned by the award safety net engineered by the ALP and the ACTU, provided both flexibility and protection against inequity. It allowed minimum industry standards to be maintained. WorkChoices is not a simple extension of that process. It clearly promotes employers’ power at the expense of employees and throws them back to the master and servant era. We are now adherents to some of the world’s worst practice, and this could well be a bridge too far for many ordinary Australians.

Some employers are privately uneasy about the radical changes embodied in WorkChoices which endanger good industrial relations in productive and successful enterprises. Many are dismayed that WorkChoices, which was promoted as a law to increase freedom and flexibility, has increased complexity and government interference in industrial relations. We hear about phone calls to CEOs from Workplace Relations Minister Kevin Andrews asking why companies have concluded new collective agreements with unions. With a whiff of the star chamber, we read of employees being subjected to long interviews by government bureaucrats demanding evidence of industrial misdemeanors.

Shocking union campaign

The success of the unions’ campaign against WorkChoices has shocked the Federal Government, which expected a boneheaded industrial confrontation. Instead the union movement has adopted a professional media strategy which promotes unions as Australia’s biggest membership organisations that look after millions of families. Local organisation and events involving unionists and the community in key marginal seats is bringing US-style organising strategies to “middle Australia.”

Never before has ‘Advance Australia Fair’ introduced a union rally, particularly one of half a million gathered by SkyChannel in all states and territories. The theme of the campaign is clearly ‘defend the family, look after our kids’ – not the pursuit of union power. Its success has energised unions, restored the faith of many in their role and even raised membership in some sectors.

A new front for…democracy?

How should a future Federal government legislate to restore employment rights? The unions have toured a number of countries and are developing policy for the ACTU Congress later this year which will feed into ALP policy for its 2007 National Conference. The Australian Institute of Employment Rights (AIER) prepared a research report for the union delegation comparing union recognition and collective bargaining systems.

Abolishing AWAs does not an industrial relations policy make; Australia which was once a world leader in the field needs to now look to the rest of the world for ideas. Industrial relations arrangements are located in national cultures and legal structures; they can’t be transplanted. A new industrial relations package should attempt to integrate the best features of other systems with our own unique experience, but also look to the future.

Most countries are way ahead of Australia in integrating policy on training and investment in skills, and this is starting to show up in skills shortages and the importation of guest workers. Instead of master and servant, we should adopt successful European experience where workplace rights include consultation about company decisions, information about future plans and protection against retrenchments.

As well as restoring the role of the independent umpire, we should focus on the contribution that the workforce can make rather than on intimidating and marginalising it. New policy should examine the role of industry councils with worker representatives contributing to plans for investment and management; why should democracy end at the factory or office door?

Councils can also provide research and strategy for industry planning, government support and collective bargaining. Collective bargaining systems have now been accepted as a productive and more equitable option by the OECD; for unions they sustain membership and legitimacy in contrast to systems common in the anglosphere.

This is the ‘high road’ to productivity. The ‘low road’ of competing with developing countries — one embraced by WorkChoices – is one we cannot win.