Interview: Minority Report
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Not A Casey Fan
Labor Council of NSW
Thanks so much Monika, and thanks to Charles for issuing the invitation on behalf of the Trustees of the Julian Small Foundation.
Decent of you Charles to forgive me for exposing Minters to the risk of being labelled as a "Labor law" firm! That's spelt "L-A-B-O-R".
Seriously though, it was Minters generosity and broad-mindedness (consistent with the approach Julian Small was known for, whose memory is honoured by this foundation) when in 1994, they assisted in the development of a path-breaking approach to modifying the worst excesses of sweatshop exploitation in the clothing industry.
Innovative voluntary agreements between retailers and the Textile, Clothing and Footwear Union of Australia based in common law, rather than industrial law were a significant departure from the clumsy and ineffectual regulation of the past. Whilst I can't vouch for their utility a decade on it seems to me that this was an example of unlikely partners stepping outside the square of "whose side are you on'' and collaborating to develop new approaches to solve old "problems".
This is a good point of departure for speaking to you this evening on the topic of the role of Alternative Dispute Resolution in our Industrial Relations System.
We know now what none of us knew when I prepared the topic summary for this evening. The Coalition has been re-elected for a further 3 years and it may well be able to command a majority of votes in the Senate with the help of the Family First senator. Not just an "historic fourth term" for the Coalition numerically, but in terms of the power to make laws, something it has been constrained in for the previous 3 terms.
We know that the Coalition sees a greater role than at present for voluntary, private mediation in workplace disputes, a view shared by the Australian Chamber of Commerce and Industry. Is this fact alone enough to draw the ire of the trade union movement such that even any discussion of the topic is seen as supping with the devil?
I think not, at least at the level of the senior strategists in key trade unions and the ACTU. My assessment is that they are willing to examine intelligently new models, as long as the intent and effect of new approaches is not to disempower working people and their organisations. This is not the same as saying they are advocates - not by a long shot. So, much depends on how new models are crafted and what their likely impact is anticipated to be.
Industrial relations practitioners are often guilty of diving into the mechanics of the system without pausing to reflect upon what the system is there to deal with. So let me try to avoid that.
At one level we are seeking to "prevent and settle industrial disputes" as the architects of our constitution declared. Implicit in this is the acknowledgement that conflict of interest is inevitable in the workplace - and this reflects reality as I see it. Although it is hardly the whole story since capital and labour have common interests too.
We seek to manage conflicting interests because there is a higher (common) purpose - productive workplaces able to provide workers with satisfying jobs (materially and psychologically) and the community with growing wealth to share (however unevenly between shareholders and citizens)
It seems to me that there are two prime models at play in Australian industrial relations at present. One is founded upon the idea that conflict of interest is just about all there is in the workplace and the other on the notion that there really is minimal conflict beyond that manufactured by trade unions seeking to justify their own existence.
Hence one group is focussed on an industrial relations system that manages the conflict by mandating a collective relationship with a strong safety net (arbitration) and another on liberating the 'true' workplace parties from the collective arena altogether. Currently institutionalised as Australian Workplace Agreements, the stated intention is to create a direct relationship between individual workers and management who bilaterally decide terms and conditions of employment and resolve issues that may arise between them. However in practice AWA's allow companies to be able to determine their own policies (benevolent or otherwise) and impose them upon the workforce.
In the absence of arbitral powers in the IRC, power-plays arising from the first model, can give rise to "intractable " industrial disputes now often characterised by lock-outs as often as long duration strikes. Clearly this was a feature the ALP IR election policy sought to address.
The second model, gives rise to the very real possibility of exploitation - the so-called "race to the bottom" - as well, of course, to "intractable" industrial disputes as unionised workers resist measures to remove their union from the workplace, for example use of contractors or outsourcing arrangements.
Between these divergent models it seems we have forgotten the larger purpose - productive enterprises providing decent and satisfying work. Surely industrial relations policy makers should be asking "what is the best system to promote this purpose?"
We know from contemporary research that the most productive workplaces are characterised by high quality relationships. Recent work by Hull and Read found, and I quote from "Simply the Best" a study of Australian enterprises judged as "excellent' compared to matched pairs judged "good" - carried out for the Business Council of Australia:
"In all our excellent workplaces the atmosphere of mutual trust and respect was overwhelming. We became convinced that central to every excellent workplace is an understanding that to produce quality work in Australia, one must have quality working relationships. This applies particularly to workplaces with high levels of uncertainty, demanding skills requirements and turbulent markets.
What mattered most was the quality of the working relationships, particularly with respect to key dimensions such as trust, respect, self-worth and recognition. The fundamental relationships built on that magic word - trust - couldn't be over-estimated."
There is also a credible body of evidence that says that a
co-operative relationship with trade unions delivers higher productivity than, not only, adversarial unionised workplaces, but also union-free ones.
But somehow these truths have not revealed themselves to key policy makers and strategists in our IR system.
So what would the key elements of an industrial relations model be, that would allow productive and satisfying enterprises to flourish?
Firstly, place the emphasis on the promotion of functional collective bargaining - a system that sets out to grow relationships and achieve balanced outcomes. We got off to a poor start to enterprise bargaining in Australia through AIRC monitored "productivity bargaining". Unions and employees are reluctant to venture into the area of productivity improvements without a "pay off" and equally employers look for "concessions" to underwrite pay rises. This departure point has shackled a joint approach to productivity improvement for the common good.
This has been compounded by the union movement's limited answer to falling membership - the "organising model". Both experience and mindsets have fuelled the view that collective bargaining is essentially a conflictual, zero sum game, with the devil taking the hindmost. We flirted with the notion of "good faith" bargaining in the 90's and now the statute talks equally vacuously about "genuine efforts at reaching an agreement". But this has all been superficial stuff, providing no more than tactical leverage for those engaged in scraps. There has never been a concerted endeavour to build a web of economic and socially beneficial bargaining practices. Instead, employers have invested great engergies in escaping bargaining relationships, while unions have seized upon bargaining campaigns as little more than mobilising events that deliver some money.
Isn't it ironic that in the first decade of enterprise bargaining employers have fled the institution of collective bargaining at the same rate as the unions have diminished it? Will collective bargaining go the way of the Tasmanian tiger? By the time people wake up to its democratic and economic worth, will there be too few specimens left to reproduce?
A socially adequate collective bargaining system searches out mutual gains, and treats employers and unions as social partners or at least reciprocally appreciated social parties. Functional bargaining encourages negotiators to move from their positions (demands - what people say they must have) to interests (underlying reasons or needs that cause them to take the positions they do). Utilising interest based problem solving can expand the range of options available to meet interests and give rise to agreements in even the most fraught circumstances.
By focussing on the quality of the process, and not just the product, as we do now in the application of the "no disadvantage test", a more constructive form of collective bargaining could take root. The goal, as Fisher and Ury from Harvard said over two decades ago, is one where the process is efficient, the outcome is durable (fair) and the relationship between the parties is at least maintained, if not strengthened. This ought to be the basis of better bargaining approaches.
Secondly, in pursuit of productive and satisfying workplaces, encourage the parties to work on the integrative side of the relationship - productivity and service improvement, quality issues, skills development etc (so called "value creating") not only the distributive side of the relationship - terms and conditions of employment negotiated in collective bargaining (so called "value claiming").
Thirdly, introduce a strong educative element with opportunities for transfer of knowledge and skills in processes such as interest based negotiation and interest based problem solving. Empirical work in the US has revealed that parties using this approach in collective bargaining are significantly more likely to produce well-rounded agreements that contain distributive and integrative matters and reforms that are vital to productivity improvement that in positional bargaining would be seen by unions as "concessions".
Fourthly, provide strong but flexible tribunals. A quasi-judicial role for tribunals should be anchored, and last resort arbitration should continue to feature, but tribunal members could use their knowledge and skills to guide and mentor parties towards more preventative activities. For example, an expertise in what makes consultative processes deliver would not go astray, and would achieve more than a shallow mandating of boilerplate dispute resolution procedures.
Fifthly, provide for a full suite of complementary Alternative Dispute Resolution (perhaps more accurately - though verbosely - described as Appropriate Workplace Relations Resourcing mechanisms). In other words, provide for upstream relationship-building, dispute system design and facilitation, and downstream fact-finding, mediation, voluntary arbitration and so on.
In short, a modernised regulatory environment should provide both a peace-keeping mainstay in the form of the tribunals, and a range of complementary relationship-strengthening, dispute preventing and dispute resolving options. But thereafter the responsibility must shift to the social parties: employers, employees and their representatives. It is for these primary stakeholders to craft from the mix of obligatory and optional mechanisms a set of bargaining, consultative and dispute resolution processes that meet their particular needs.
Let me develop this a little further, and first by distinguishing the contrary case. To the extent that ADR has been used in workplaces, it seems to have attracted a particular breed of mediator - the IR trouble-shooter (aka the independent beer drinker). He - Australia has yet to have a woman as prime minister, and there are not too many women on the bench or in the IR trenches - draws on his personal cache, muscle, past glories, camaraderie and stamina to deliver a result. The drawbacks of this genre of ADR include:
But then looking ahead, let me outline 9 attributes of a supplementary dispute resolution regime:
First, whereas the tribunals' legitimacy depends on an historic social consensus, and their efficacy on generalised processes, ADR in the workplace could and should turn on a contemporary, party-driven consensus, custom-built for the situation. And it helps that the parties get to choose how, when and whom to draw on when it comes to supplementary resources. This is quite different to the orthodox, crisis-driven response.
Second, there would be no jurisdictional or other legal constraints, real or perceived, and parties will often look holistically at an organisation, finding ways of addressing issues that are beyond those immediate matters that regularly bring them into dispute - terms and conditions of employment.
Third, voluntary ADR processes can spend more time on issues than tribunals, probing more deeply in the solution-seeking exercise.
Fourth, privacy of process can be a real confidence booster, allowing a mediator to access all the issues and to present a fuller range of solutions.
Fifth, and relatedly, a key role of alternative intervention should be relationship-building and relationship restoration, not merely deal-making.
Sixth, a clear focus should be on support for ongoing consultative arrangements; something as important, if not more so, than collective bargaining narrowly conceived.
Seventh, stakeholder training - and especially joint stakeholder training should be available from the service.
Eighth, the process should encourage a much sharper focus on underlying needs and interests rather than mere deal-making.
Ninth, supplementary third parties should be demonstrably independent and make their mark through professionalism rather than personality - although the right personality means a lot.
I have given a broad sweep above but would like, as I draw to a close, to bring these considerations to bear on the Coalition's tentative proposals in relation to Commission-supervised mediation for small business and perhaps others as well.
I would suggest that if the returned government's proposals are not merely to pass legislative muster - not such a hard ask these days - but to find fertile soil in workplace relations, then a new mediation service must meet certain vital thresholds. It must at minimum be -
And, finally, a throw-away line on the charged issue of small business and unfair dismissal. No defensible case can be made out for the restoration of the common law, which asserts that a person may be deprived of access to their livelihood for a good reason, a bad reason or no reason at all provided only contractual notice is given. Capricious or unfounded decision-making is not only unfair; it is bad management.
Keep the substantive protection against arbitrary workplace decision-making in all contexts, large and small, but reform the process of challenging unfair dismissals decisions.
Provide for a fused mediation-arbitration dispute resolution process that is genuinely expedited - to be triggered within seven days and disposed of in a short, lawyer-free session where, if really need be, the worker can carry the burden of proving the unfairness of the decision. Robust justice is better than none and all, and eminently better than the US expedient of returning to your workplace the day after with a sawn-off shot gun.
Anna Booth is Director CoSolve Pty Ltd . This speech was first given to the Julian Small Foundation
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