Interview

You’ve Got To Be Kidding!

Interview with Peter Lewis

British legal academic Dr Keith Ewing can't believe we're still debating whether workers' entitlements should be protected.

How are workers entitlements protected in Europe?

The position in Europe is very straight forward. Under European Community law there is a directive that applies to all members states. It says that each member state must set up a guarantee fund from which workers can draw when the business goes insolvent. Different countries have implemented this directive in different ways, but they've all got some provision to support workers when the business goes belly up.

In the UK, if the business goes insolvent, the worker claims entitlements back from the government; the government pays the money owing subject to certain legislative limits. then its up to the State to recover the money from the bankrupt company. This takes the pressure of the worker; the workers recovers from the government and the government recovers what it can from the company. The government may not get the money back from the employer, but it recognises that the worker should not be left carrying the load.

When was this directive brought in?

Way back in 1980 but you can trace the directive back to 1973 when France introduced an employer insurance fund. In 1980 the European Community as an institution issued a similar rule which require compliance by all EC members. This was introduced at a time when the EC was developing a social action agenda, recognising that it was not just about economics, but there was also a social agenda to the EC. Part of the social dimension of then 1970s were three directives protection workers in the case of redundancy, when the business is transferred from one owner to another and when the business went bankrupt. So what you've got is an obligation to introduce protective measures in these cases.

The Howard Government argues that a worker protection fund would cost jobs because they will increase business costs. Was a similar argument run by the Thatcher Government?

I don't remember this issue being controversial and I don't remember this argument being run at all. I don't see this as being any different from liability insurance for employers for health and safety or automobile insurance for people who drive cars. It's just a form of insurance to protect people from certain risks that occur in a capitalist economy. It seems to me that someone has to bear the cost of this risk - you've got to ask yourself who should that be? It could be the worker, it could be the business community or it could be the taxpayers. It seems to me it shouldn't be the worker, I don't see why the taxpayer should be asked to bail out the irresponsibility of the corporate sector. So that leaves the business community to incorporate it into the costs of doing business. It may add to the cost of doing business, but if the insurance fund is universal, then the costs would not be that great.

Does it surprise you that this debate is going on in Australian in 1999?

I'm amazed, particularly when I read some of arguments against it. One of the arguments is that you can't do this because it's unfair to good employers who will then be paying for bad employers. But this happens all the time, that's why we have insurance schemes, to share the risk. One thing is clear and unequivocal and that is that workers shouldn't be left holding the baby. How can you justify that on any ethical basis? And how can you justify asking the taxpayer to fund it? I just don't see how you can. If you go into business you undertake the responsibility to pay your workers the wages and entitlements which they earn. That's the responsibility first of the employer and then of the broader business community.

It seems on this issue the European Community is showing a way forward. What else is going on that may be of interest to Australian workers?

At the Community level there's a great push to develop social programs which will have an effect on all the member states. There are a number of interesting things going through at the moment, some of the existing social measures are being revised, we have new protections for workers on fixed term contracts, new protections for part-time workers, new parental leave provisions, a big push to require all enterprise over a certain size to have a Works Council to ensure workers are properly consulted, so there's a pretty full agenda.

Then there's the member states. There's been stability in the states which have not gone down the Thatcherised deregulatory road that sought to deal with globalisation by dealing unions out of the process.. Looking at some of the countries, it's staggering just how stable the systems are - most mature democracies see trade unions as part of the solution rather than part of the problem. There's fantastically high levels of collective bargaining coverage in Europe except the UK - in France, Germany and Italy collective bargaining coverage is close to 90 per cent. The OECD found that the lowest level of collective bargaining coverage outside the UK was 70 per cent. That's not membership levels, there's still the freeloader problem, but it is an import statement about the regulatory effect of collective bargaining and the positive role of trade unions. There is within the European system an ideological opposition to compulsory trade union membership, it's no longer acceptable, but freeloading is a prize with paying for the high levels of collective bargaining.

What lessons can Australia learn from the British experience under Thatcher and the environment in the rest of western Europe?

Western Europe, as far as I can see, has repudiated the approach adopted hear and by Reagan and Thatcher before you. If you take the British experience, the painful lesson that people have to learn is that this new deregulatory route, if taken too far, just doesn't work. It's unsustainable for two reasons. First, because it's now recognised as being economically inefficient. You can't compete globally by having a demoralised, de-motivated labour force. You can't compete at that end of the market. For reasons of economic efficiency you actually need a highly regulated, highly skilled, highly motivated, highly trained, highly paid labour force. That requires re-regulation. That's the process we're now undergoing in the UK after learning this the hard way. The other reason is about social justice, it's simply unsustainable that you have this huge income gap opening up between those who have and those who have not this kind of society for the few rather than for the many. This itself creates costs that add greatly to the burdens on the taxpayer as a whole.

That's why the British Government is undertaking a process of re-regulation; recognising that there should be fair employment standards, that workers should have a voice in the decisions that effect them. When you go to work you should not have to leave your civil liberties at the door. It's amazing to think that we've moved backwards 100 years re-fighting the battles that we thought had been one. And the same will happen here.

Dr Keith Ewing is Professor of Public Law at Kings College, University of London. He is currently in Australia on a lecture tour.

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  Issue 22 contents

»	Workers' Rights Butchered
»	Unions Back Shaw Plan
»	Buddy’s Buddy Still Singing Blues
»	Labour Calls Labor to Account
»	Olympic Gear - Labor Standards Should Apply
»	Ship of Shame into Darling Harbour
»	Cardboard King Seeks Warehouse Showdown
»	Nurses Enter New Years Fray
»	University Under Fire For Union-Busting Tactics
»	Inquiry to Lift the Lid on Public Service Bargaining
»	Currawong Back on Agenda
»	APHEDA Seeks Campaign and Marketting Officer

»	Guest Report
»	Sport
»	Trades Hall
»	Piers Watch

»	Youth Wages Campaign a Must for the Union Movement
»	Cheers for Piers
»	Cheers from Geneva

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