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  Issue No 99 Official Organ of LaborNet 15 June 2001  




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In Defence of the Umpire

Australian Industry Group chief Bob Herbert on why the Industrial Relations Commission is worth fighting for.


AIG's Bob Herbert

In your speech this week to the IRC you talked about the idea of mutuality of interest between employer and employee as being a key objective in any civil society. What did you mean by this?

Seen in its proper context, it was about the values of the Australian Industry Group and its predecessor organisations. We take a very firm view that the focus of industrial relations should be at the enterprise, and it should be about individual companies establishing a working relationship with their employees so that there is a common purpose between them. There should be an understanding of the interests of the employees and the employees should understand the interests of the business. And in that way Australian industry can grow and prosper. It's as simple as that really. We are in it together. It is not about an employer seeing this issue as: we can foster an outcome that is to our advantage over the employees. It is about trying to get an understanding between employer and employee about the way forward.

And where does the trade union movement fit into that analysis?

We have been strongly in favour of representative bodies of employers and employees. We are one of the registered bodies in the system. Indeed, we hold Registration No. 1 in NSW. We believe that there is value in our registration, so we have been supporters of organisations being registered under the system. You get rights and you get responsibilities as a consequence of that. That is how the system works. You can't have a system of conciliation and arbitration without there being representative bodies or the opportunity for representation.

Of course, there has been an argument over the last decade about the evils of the IR club, and I guess in that sense both employer organisations and unions have been grouped as part of the problem. What is your defence of that?

That is a bit of rhetoric that is so often thrown up and I pick up what Bert Evans used to say when it was thrown up at him. The only club that he knew was the one that some of the union officials would pick up and hit him over the back of the head with. The term "IR Club" is just part of the rhetoric from those that have a different ideology about industrial relations systems, and it is meant as a derogatory term which we don't carry any favour with at all. The system has its political boundaries and requirements and if you describe that as a club, so be it. But the system certainly ought to be encouraging a common view or "mutuality of interests". If this is regarded as being in the club, well we don't mind being in it.

In your speech you also warned against the danger of placing ideology at the centre of any move to reform the system. Do you think the deregulation of the IR system has gone too far under the Coalition Government over the recent years?

I think that industry has a good chance of being the victim of political processes. I think what is happening at the moment - the ideology of the conservatives now in government, and the ideology of the Labor Party who aspire to government, is in conflict one with the other - and in the middle is industry - and we are trying to get on and run successful operations and businesses; building understanding with our employees - but the position of both political parties is not necessarily helpful to industry in the middle. Ai Group has been quite thoughtful in going out and saying what we have said, that really there is a "mutuality of interest" between employer and employee. We don't want to wake up one day and have the system shaped by those who aren't operating in it, and who have different ideology. Or you could get some compromise engineered because of the Democrats view. They too are trying to satisfy an ideology as distinct from what the parties in the system themselves might believe appropriate. The people who really shape the system are the parties - not the political parties - the parties directly involved - it is the employers and the employees for whom the system has been created and they should shape it to suit their needs.

That is why I said if you are going to set up a process of judging fairness and balance in what is a safety net, why would you wish to deride a body such as the AIRC that has won the respect of working people for a century? It an Australia icon that we ought to preserve. We believe that our tribunal system over the years has been respected by working people - and by industry. As industry representatives we are the customers of the tribunals. They have always served us pretty well and if you took it away and left our destiny only in the hands of the politicians and legislated solutions, then I think we would be worse off for it.

Of course, the other wave in recent years has been the move from the industrial tribunals into the judicial system with major disputes now being fought under corporations law. What's your view?

That of course is a dangerous development in my view. The unions now emphasise very much the importance of collective bargaining, which is an Americanism in a sense. There are some difficulties with the American system. No system can easily be transplanted into the Australian environment and be entirely suitable. The thing that I notice about the American system of collective bargaining, is that there are contractual relationships which lead into legal processes - very highly contested litigious processes. So, in the US it has reached a stage that when they negotiate a contract - an employment contract - there is emphasis on every single word in it and legal debates about their meaning.

I saw one example of a company - it was Hoover in Conton, Ohio where something like 167 separate claims, or issues, about the meaning of words had to be cleared up before they actually began collective bargaining about the wages and conditions of employment. The words became so intensely important, because if they got them wrong, there could be some action about what words mean, which would then end up in the courts.

So if Australian unions are favouring collective bargaining, they should be very careful that it doesn't take you down the US route, that every word becomes so important, and a potential source of litigation. This is where the tribunal system that has been available to the parties in Australia, is a far better course than getting into litigation. Litigation has got so many drawbacks, apart from the fact that it takes you away from the concept of "mutuality of interest" and cooperation to a process of debate about words and what they might mean as distinct from what people are trying to do as a common purpose. Individuals are constrained if they are required to follow legal process because of the cost, small companies are constrained as well because they too can't pursue a claim to the end because of the cost. You would be crazy to throw out what we have even though it is not perfect.

I went to one company in the States, where in every discussion they had with the union they would take a transcript of what they said. They had a transcript room where every communication they had had with unions had been taken down word for word, filed away under the various subject matters so if there was a dispute about what the words meant in the employment contract, then they could go back to the transcripts as evidence of the meaning of them.

That's why a tribunal that is seen as being fair and balanced is what we ought to have and we would throw it away at our peril. People who propose total deregulation for it's own sake and who don't believe that there can be some proper and fair underpinning by a safety test could create a feeling that people believe they could be jipped. It would be crazy for one to support deregulation to that extent where "mutuality of interest" is left to be contested in the courts.

But we don't favour re-regulation to the extent that you have central outcomes as we did in the 60s, 70s, 80s. We have encouraged a move away from that to developing a "mutuality of interest" at the enterprise.

I guess the other trend over recent times has been individual work contracts. Do you have a position on those?

Yes we do. There ought to be choice in the system. Forty eight per cent of working people in Australia have individual contracts. Now there is a version of them called AWAs about which there is a paranoia by the unions because they're in an area which has been the union's traditional membership base. The unions don't seem to be so worried about the area outside that, which hasn't been the traditional membership base, when common law contracts apply. So the union's main concerns seem to be retention of membership. They are looking at it from that angle, rather than why shouldn't there be the opportunity for the individual to decide if they want to have an individual relationship with their employer or not.

Now I think it is important for the unions to think more about how they market their services to individuals. Now if I was in their shoes, I would say let's go out and contact individuals through whichever means we can and say these are the things that we can do for you; do you realise here is the trend in wages and conditions, these are the pitfalls etc. That would be a way of selling membership and not be fearful of individuals being better equipped to decide for themselves. I think the resistance of the union in truth comes back to the question of union membership. Otherwise there would have been more grief about individual common law contracts that have been around for years and years.

But there has been a big fall of union membership over the last 15 years. Do you think that is a good thing?

No I don't. It's the way of life I guess. We did a really detailed study of community attitudes with ANOP last year. What's coming through is that there is a trend away from people belonging to organisations to individualism. It's the way of the world. People don't belong to sporting clubs as they used to or Rotary Clubs or Lions Clubs, There is more reluctance to join employer bodies or unions. That's happening and perhaps the bodies themselves might be getting their marketing wrong. But I certainly don't think that it is the right course. At the same time, I don't think we can say to individuals you must belong, because there must be an option to choose. That's why we certainly don't agree with the principle that if you don't belong to a union you must pay a bargaining fee.

In a funny sort of way, bargaining fees would help us because we do a lot of good in the community. But we don't have exclusive domain over companies and we can't force them to pay for all the good work we do. It would be very helpful to our bottom line, but life is not that easy. I think that the bargaining fee concept is wrong and cuts across this idea of democracy and freedom of choice.

So how would you deal with the freeloader issue, the situation where a minority of people are funding work that is leading to a benefit for the majority?

Well that is the way of the world, that has been happening for hundreds of. No doubt all political parties would say that they provide a very good service and have put benefits in place, so why don't we have an obligation to belong or pay a fee to belong to the party. A Democracy must give people the freedom to choose whether they will belong to such bodies or not. Sure it would be nice to have everyone pay but you can't do it by prescription.

Talking about the Federal Election coming up, there is the prospect of a change government. Do you regard the Beazley Government as something to be scared of?

No, and here I come back to the issue of values. Value number one in our organisation is to be apolitical. Our job is not to decide which political party should be in power. Our job is to give leadership to industry and say what industry needs from the government of the day. So we fear a Beazley Government no more or no less than we would a Howard Government. That's for others to decide and we don't fear it at all. All we want to do is make sure they understand industry's position and react favourably to it. And we'll advocate it as hard as we can.

What specified things would you like to see if there is a new Government?

Well to both parties we have put a very firm agenda. It is all built around growth. We must ensure that this economy is not scared of growth, that we don't take our foot off the accelerator. We've enjoyed over the last few years growth in excess of four per cent, which has been good for Australia. It has been falling back a little bit but the crucial issue is to maintain growth so we can have all the benefits which flow from that. To do that we need strong industry policies which leads to the way you go about training and education and building knowledge. And I am complimentary about what the Labor Party is doing in that regard.

You certainly need to take advantage at the present time of where the Australian Dollar sits, it's too low, but there are opportunities for exports. With a competitive dollar we have to start putting more emphasis behind boosting our exports and we will be putting to both parties that this should be a priority. The way we go about tackling investment is absolutely crucial because that is going to kick into growth as well.

How you link our R&D and innovation to industry itself is also very important. If you don't innovate in an over supplied marketplace, you are not going to be able to get products onto the shelves. They will need to be a little bit different, and that requires links between innovation, knowledge, industry policy, investment and growth. These are crucial links and if that's realised by government - whatever flavour it is - then industry will have a smile on its face.

Finally, if you could shape IR policy over the next 20 years, what would it look like?

Very good question. I think certainly we don't need six or eight separate systems for eight million working people. If you are running a business today, and doing it efficiently within Australia you rationalise the branches you have. If you are running an international business it is even more important that you are efficient. So our industrial relations system should service Australia with equal efficiency.

There tends to be a paranoia about a unitary industrial relations system, but you ought to be equally paranoid about having a unified training and education system. The competition that's gone on recently between the state and federal bodies in trying to establish the ANTA agreement is a disgrace. To me, that is just as debilitating as having six or eight Industrial Relations systems. Now looking down the track some unity of purpose between the systems is required for efficiency. I think that over 20 years it will be achieved as gradually people see the common sense of coming together.

I also think you certainly need the concept of "mutuality of interest" that I talked about, and tribunals which are respected because they are seen as being fair and balanced in their approach; that is not expensive to access. I think the system could be a little better tuned into everyday life. I have an idea about enforcement which is novel. At the moment the enforcement process isn't good enough it takes you into the court system and that is expensive. We have been down that track recently and we don't like it, it is not the best option. There must be a simpler way. I draw the analogy of a football game. Every person who runs onto a football field would know the rules of the game. If you break the rules you are sent into the sin bin. That is a punishment for non-compliance with the rules. If you break the rules twice, you go in there for a bit longer. And if you do it three times you might get suspended for a month. I think that we could have the same sort of concept with the Industrial Relations Commission, simple rules where if people step outside them there is a quick mechanism for the tribunal to sin-bin the player who breaks the rules or the obligations that go with your rights given under the system. It should be accepted by the players in the system that if they go over the mark and then you will not be able to carry out your role as a representative for industry or employees for the period you are in the sin-bin. That sort of novel approach is needed to keep the industrial Tribunal tuned in to what is accepted practice by the community in other areas of endeavour.

The bottom line is you do want a Tribunal?

I certainly believe so.


*    Visit the AIG

*   View entire issue - print all of the articles!

*   Issue 99 contents

In this issue
*  Interview: In Defence of the Umpire
Australian Industry Group chief Bob Herbert on why the Industrial Relations Commission is worth fighting for.
*  Unions: Diary of a Dude
One.Tel worker Warren Manners thought he had a dream job and no need for a union. That was until the money ran out.
*  Legal: Dot.Com Casualties
The high profile collapse of One.Tel had significant implications for its employees. But what about its contractors?
*  Industrial: The Shopfloor, United
Chris Christodoulou argues that without an active union membership, workplace democracy is just a pipe dream.
*  International: A Saharawi Woman's Plea
Sydney unionist Stephanie Brennan travelled to Africa to witness first-hand the struggle for independence in West Sahara.
*  History: Once Were Tuckpointers
Trawling through the files, Paul Howes stumbles upon some unions that represented workers long departed.
*  Politics: Out Of The Comfort Zone
In his new book, Brett Evans argues that while Labor is honing its reform agenda, it is still struggling to reform itself.
*  Satire: World Domination
The US has threatened not to pay the UN the money it doesn’t pay anyway.
*  Review: Wiped Out
Bread and Roses is a new movie about the struggle of invisible office cleaners to gain dignity and respect at work. Pity you won’t see it here.

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