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Enough rope: Why allowing room to move could liberate the Fair Work Act

Industrial relations in Australia is captive to antagonistic histories.

“The object of [the Fair Work] Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians …” Fair Work Act, 2009

Many rail against the strictures of the laws governing the workplace. But what would they do if the Fair Work Act authorised them to craft their own framework, subject to but one key condition: that they must negotiate and agree that outcome with the rest of their workplace stakeholders? Could they rise to the challenge?

There is no general consensus in Australian society on what our model of workplace relations should be. Anyone who doubts this need simply look at the divergent views of employers, unions and others that have been posted recently on the Fair Work Act Review Panel website.

Perhaps the most insistent claim of employers is that the law should allow them to relate to their employees as they see fit and with minimal interference from trade unions. Unions generally want the law to gift them more scope and influence across workplaces.

The key parties do, though, seem to agree on one thing: their interests are substantially at odds with one another. And so they argue the rightness of their competing positions and appeal to the political process to nudge or shove the legislative pendulum in their favoured direction. But this arm wrestle is only about the resting point of a pendulum that describes an inferior arc.

Defying the parties’ analysis, the Fair Work Act asserts that its object is to promote “cooperative and productive workplace relations” - very similar language to its forerunner, Work Choices. However, our current Act, again like its immediate predecessor, has 21st century objects serviced by 20th century machinery.

It does very little to provide structures, processes and remedies to foster collaborative and fruitful workplace engagements. It is designed and operates to set basic terms and conditions of employment and then to institutionalise conflict. Both worthy and necessary goals, but a far cry from the recipe for great workplaces.

The high profile conflict between Qantas management and its unions have epitomised the entrenched positions taken in the workplace.

The features of the great workplace are well-known: mutual trust and respect, good communications, fairness, the right skills, a strong business plan, and some more. In the Australian and Anglosphere context, the explanation for the failure to go for greatness can be attributed in large measure to the fact that the workplace parties are the captives of their antagonistic histories.

That ingrained antipathy looks increasingly small-minded with each passing decade. Given the character of contemporary Australia, perhaps the most scathing thing that can be said about the state of much of current industrial relations is that it is unnecessary. Australian society, while not without its serious flaws, is broadly consensual, congenial, accommodating and successful.

If its workplace relations reflected the broader societal picture, it would be more Nordic than Anglo-Saxon – better still, Australian – in character. Enabling labour legislation that can help steer the workplace parties in a more constructive direction is what is needed.

It is unlikely that that the current statutory review process will trigger sweeping changes favouring one or other of the major social players. There is, however, an option for reform – a threat-free invitation brimming with possibilities – that should excite everything but consternation.

Open-minded workplace parties should be given this empowering offer: assume mutual responsibility for developing productive workplaces and the statute will support you. An astutely revised Fair Work Act should provide a pliable alternative to its default scheme.

Willing workplace parties should be given the latitude to negotiate comprehensive, customised frameworks for the regulation of their relationships. They would need to demonstrate that their creations promoted the achievement of a cooperative and productive workplace as envisaged by the object of the Act.

A necessary starting point is that employers not only acknowledge but comprehend that employees’ interests are promoted by association, matched by an understanding on the part of employees and their representatives that an abiding commitment to improving organisational performance must be part of the bargain.

Unions have traditionally represented employees, but for non-unionised workplaces a formula is needed for elected representatives whose standing is sourced in a charter that ensures their independence and viability. Thereafter, the scope for bespoke arrangements should be extensive.

The parties should be able to agree to engage with one another on all matters of mutual interest between them, and the forms of engagement should range beyond bargaining to consultation and other varieties of dialogue.

They should commit to capacity building in respect of business education and continuous process improvement and, if indicated, to training in appropriate negotiation, consultation, problem-solving, dispute prevention and dispute resolution skills.

They should be able to draw on independent resources (FWA with an expanded brief or some other agreed and independent agency). They would need to decide how best to conciliate and finally resolve any disputes of right or interest that may arise between them. And their agreed deals should be legally enforceable.

Those open to exploring, developing and settling such flexible alternatives to the otherwise prescribed formula should be assisted with access to federal funding and other capacity-building resources.

Any approved framework could dispense with and indeed displace all the statutory provisions dealing with bargaining representatives, bargaining procedures, good faith bargaining requirements, bargaining scope provisions, individual flexibility agreements, job security provisions, consultation requirements, the better-off-overall test, formal agreement approval requirements and industrial action regulations, amongst others.

Basic statutory rights such as the National Employment Standards would need to be respected. The provisions of modern awards, though, could be substituted.

Self-evidently, employers and employee representatives would only agree to supplant the default system if they shared the belief that their jointly negotiated alternatives served their combined interests better. And they should do better, because the dated design features of the current statute do not of themselves assist with the making of great contemporary workplaces.

BHP chairman Jac Nasser has suggested Australia’s Fair Work Act is an obstacle to running a productive workplace.

Any provisionally agreed framework for the promotion of cooperative and productive workplaces that displaced the default provisions on bargaining, consultation, industrial action and dispute resolution provided for by the statute would need to be submitted to Fair Work Australia for examination and approval.

Before endorsing any such arrangements, FWA would need to be satisfied that they met the prime objects of the statute, were not for any reason contrary to the public interest and that a convincing majority of the affected employees supported them.

It is suggested, though, that Fair Work Australia should show a proper margin of appreciation to the bargaining and consultation outcomes of endorsed engagement frameworks. Explicit provision for that margin would serve as a further incentive for the workplace parties to opt for (more) autonomous and tailored bargaining and consultation arrangements.

No one would be compelled to enter into any such arrangements; they could only be the product of coercion-free, voluntary negotiations. They would be available only to those parties who showed sufficient imagination, collaboration and resolve to get them up.

Were such arrangements to be provided for, a telling boost would be given to prescient parties to cut through all the regulatory requirements of the statute and to arrive at simplified, expeditious and functional engagement frameworks that meet both their particular needs and the needs of a get-ahead 21st century society and economy.

Nor would the negotiated arrangements be uniform or static. It is reasonable to assume that workplace parties operating in different sectors would fashion quite different frameworks to meet their particular needs and circumstances. And that these solutions would evolve continuously, adapting to the dynamics of the domestic and global economy.

The international and local research and experience suggest very strongly that parties who took up the cooperative proposition would gain a significant competitive advantage over those whose apparently implacable differences obliged them to soldier on under the ancient regime. Amongst other things, they could escape many of the constraints of our conflict-premised legislation, with its cramped conversations and prescribed bargaining cycles, opting instead for alternatives such as continuous consultation.

Today only a minority of Australian workplace parties, acting in combination, would have the imagination and then the dexterity to actually negotiate their own futures. Most are still caught up in the zone of industrial indignation and finger-pointing. There is something quite fitting, though, about the fortunes of the quarrelling mass being tied to the vagaries of the political pendulum.

If Australia is serious about innovation, then the law should enable the social parties to innovate. There can be little policy hazard in providing legislative space for cooperative pioneers. Consent is their platform, and they need venture only so far and as fast as their combined intent takes them. And should their ingenuity overshoot the public interest, the independent umpire can rein them in.

Could our legislators contemplate moving from brown to green to rainbow fields?

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