Management culture is true target

Anyone who thinks the Work Choices legislation is aimed at deregulation of the labour market misunderstands what's happening.  In fact, Work Choices involves heavy regulation, particularly of management.

The fact is that over the past decade enterprise bargaining in Australia has had mixed results.  Most in the mining industry, for example, grabbed enterprise bargaining with both hands in the early 1990s and reshaped the management-worker relationship in a permanent way.  Without this, the industry could not have turned the China demand opportunity into the economic boom it is today.

But other industries and many individual companies went backwards under enterprise bargaining.  In cahoots with unions, managers bypassed award simplification and inserted into their enterprise agreements heavy restrictions on their capacity to manage.

Commercial construction and car and food manufacturing have all severely underperformed.  Transport and others have been mildly affected.  Some companies avoided the problems but, overall, outcomes have been starkly negative.

The federal government has been observing closely and must have become concerned recently when our productivity improvement stalled.  But government cannot manage businesses, it only writes legislation.  Its true influence is limited.  The big challenge is managerial behaviour.

In the United Kingdom and New Zealand, when labour laws were changed to focus on individual manager-to-worker relationships, it took two to three years for managers to learn a new way of managing.

The Australian evidence of the past decade, however, is that Australian unions are skilled at seducing Australian managers into limiting managerial control.  The system teaches managers not to communicate with the workforce.

Work Choices restricts what managers are allowed to agree to in key areas.  For example, managers will face fines if they insert into agreements clauses that stop or limit them using Australian workplace agreements, independent contractors or labour hire.

Work Choices is pushing managers down a narrow corridor towards developing one-on-one relationships with employees.

The federal government seems to be trying to influence management behaviour from a distance, by stopping managers making decisions that will harm quality management structures inside firms.  And it's instructive that the disallowable matters are in regulations not legislation.  This means the government can add items to the list of management limitations if problems emerge.

From this perspective, Work Choices looks like a phased approach to effecting a permanent change to Australian management culture.  If this means better communication between managers and staff, that's a good thing.

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