Government Has No Mandate to Reintroduce Arbitration

“Julia Gillard as Deputy Prime Minister in 2008, while drafting the Fair Work Act, gave business repeated commitments that arbitration would not be introduced. Any attempt to reintroduce arbitration would be a broken promise by the government”, Business Council of Australia Chief Executive Jennifer Westacott said.

“The federal government must rule out once and for all a return to arbitration of workplace disputes, which would cost jobs and drag our economy back to the unproductive bad old days of 30 to 40 years ago”, Ms Westacott said.

“The government did not include arbitration in its Fair Work Act Amendment Bill 2013 in March after business made it clear it would be disastrous for the economy, especially when many businesses are struggling to respond quickly to change and stay competitive”, she said.

“It is alarming that less than three months later there are reports in the media suggesting that the government is continuing to consider the reintroduction of arbitration in what would be the dying days of the last sitting of parliament before the election.

“Winding the clock back on industrial relations more than 30 years is economically irresponsible, especially when the latest IMD World Competitiveness Centre report already shows the current rigid labour laws have contributed to Australia slipping to its least competitive position in a quarter of a century.

“Introducing arbitration in greenfield agreements or other disputes takes us back to the bad old days where third parties with no direct engagement in the workplace can make decisions that go to the core of the operations of the business.

“We will be back to the days of ambit claims by all the players knowing third parties will arbitrate between the different bids and not focus on the capacity of the business.

“Slipping arbitration amendments into the last days of parliament before an election with little time for parliamentary committee consideration or community consultation fails any test of good regulation making.

“Arbitration is not the solution to protracted greenfield negotiations nor other disputes. It is unclear what problem the government is attempting to solve in Australia’s workplaces other than appeasing powerful union interests.

“The government must not give in to union pressure on arbitration, which effectively says employers and their workers can’t be trusted to agree on mutually beneficial arrangements in their workplaces.

“Arbitration was abandoned in the 1980s because it was obvious it neither improved the job prospects of Australian workers nor helped businesses be competitive as the country joined the global economy.

“Should today’s reports be true and the government pursues a return to arbitration, we call on all other parties not to support the legislation.

“The parliament should go further and reject the entire Fair Work Act Amendment Bills 2013”, she said.

For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2664 | Mobile 0403 241 128