For a moment, think the unthinkable. It is December 2007. Greg Combet is the federal minister for trade union affairs, and his ministerial adviser is Dean Mighell.
To meet Labor's election promise the minister proposes legislation requiring every new employment contract in the country to be approved by the government. If a public servant deems that the contract is not "fair" then it is void, regardless of the wishes of the employees and employers. The proposed law provides no definition of "fair". What is "fair" is left up to departmental officials to interpret according to the individual circumstances of employees and employers. And to help them reach a conclusion, officials have the power to question the employer's staff and search through the employer's financial records.
Thankfully, this is hypothetical. Sadly, it is not far removed from reality. The difference between the imaginary and the actual is that it isn't Labor suggesting such a law, it is the coalition.
In an effort to neuter the political campaign by the ALP and the ACTU, the coalition will prevent employees earning $75,000 or less from making new workplace agreements with their employer unless they receive "fair compensation". Usually, "fair compensation" will be a higher wage gained at the expense of losing some conditions. The theory that workers should be compensated if they lose existing benefits is simple. But in practice it is immensely complicated. And when governments make complicated laws the only people to benefit are lawyers.
The "safety net" provisions introduced into parliament on Monday will make Australia's employment law more complex and more uncertain. Worse, the way the safety net is to be enforced will hand to the new Workplace Authority and the Workplace Ombudsman almost untrammeled powers to intervene in relations between employees and employers. These bodies will have a power potentially far greater than ever possessed by the Australian Industrial Relations Commission. At least the AlRC is constrained by an established process.
If this had been an ALP-inspired piece of lawmaking, the coalition would have screamed.
Coalition MPs, not unreasonably, would have asked what public servants know about the commercial realities of operating a business. They would also have questioned what had happened to the idea that parties to contracts know what is in their own best interests.
Protecting the rights of those with low skills on low wages who have only a limited command of English is one thing. But that is entirely different from not allowing someone on an annual salary of $74,999 from trading off some benefits in exchange for higher pay unless they have the government's permission.
Certainly there are all sorts of contracts that people are prevented from entering into, and in the industrial relations context obviously paying less than the minimum wage is outlawed. But in cases such as the minimum wage the criteria on which something is prohibited is reasonably clear.
The problem with the "fairness" test is that it is ambiguous and subjective. What one public servant believes is fair another might believe is unfair.
Compounding this difficulty is the fact that there are actually different tests of what is fair. When deciding what is fair, public servants can take into account "exceptional" circumstances, such as if a company is in a "short-term crisis". But as anyone with more than a fleeting knowledge of running a small business would know, nearly every small business at a stage in its history has suffered a short-term crisis. Many small businesses are perpetually in some sort of crisis.
The coalition has warned that if Kevin Rudd is elected, the risk to small and medium-size enterprises is that trade unions will become their unwanted business partner. The unwanted business partners the coalition has offered instead are the Workplace Authority and the Workplace Ombudsman.
Some commentators have been surprised that Labor has said it will vote for the coalition's changes. Of course the ALP would support the establishment of a new industrial relations bureaucracy with huge discretionary powers that will have over 1000 staff and an annual budget of more than $200 million. If ever Labor gained power it would have an apparatus ready made to do the ALP's bidding.
It's ironic that in the same week that measures to streamline company financial reporting were introduced in parliament, the details of these amendments to Work Choices were revealed. It is a case of the government lifting red tape with one hand and putting it back with the other.
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