This opinion article by Jennifer Westacott, Chief Executive of the Business Council of Australia, was published in The Australian on 14 February 2015 under the title ‘Workplace relations can be enhanced without sacrificing key rights’.
It is the first in a series in The Australian about the BCA's submission to the Productivity Commission's Inquiry into the Workplace Relations System.
While a new year has brought new challenges for our country, it also provides the opportunity to bring a fresh perspective on areas of public policy that have become stuck in outdated mindsets. It is crucial to deal with these issues to strengthen our economy and create the jobs of the future.
The federal government already has on the table some key parts of a broad economic reform agenda to achieve this focus on improving the competitiveness of our tax system, reducing unnecessary regulation, and improving the federation and our workplace relations system.
Workplace relations has been put back on the agenda following the government asking the Productivity Commission to review the performance of the Fair Work Act and the system overall. Australia’s workplace relations system is a key piece of the jigsaw in creating jobs and keeping our economy strong. The review is important because the system is far too complex to use for both workers and enterprises.
It is critical this review be future-looking and that it comes to grips with the huge changes happening in our work places, in technology and in the way people want to work. The aims of reform should be clarity, simplicity, predictability and flexibility.
It is also vital that the workplace relations system encourage innovation and productivity. Let’s be clear that lifting productivity is not about making people work harder. It’s about unleashing the innovation potential of our people and working more intelligently to succeed in a global economy.
I will attempt to crash through some of the old debates on workplace relations and challenge Australians to think about the kind of workplace relations system we need to ensure rewarding and productive workplaces.
When the prospect of change to our workplace relations system is raised, there are groups and commentators that automatically perceive change as a threat to workers’ rights. In reality, changes to improve the system can be made without threatening the foundation of workers’ rights which reflect the expectations of our society. But the discussion about workplace rights has become very confused.
It is important to distinguish between workplace rights — a basic set of minimum standards or safety net entitlements — and employment conditions that should be negotiated between enterprises and their workers to suit the needs and circumstances of that enterprise and the people within it.
The Business Council is not interested in challenging the foundation of workers’ rights — the safety net. This includes equal pay for men and women, four weeks’ annual leave, maternity and other types of leave, and overtime for extra hours.
The council won’t be calling for the minimum wage to be cut, but we believe the review should canvas how future minimum wage rises are set so they are a better fit for current economic circumstances. There will be much talk about penalty rates. We must ask how we redesign this system to take account of the 24-7 economy, particularly in retail and hospitality, versus a debate about the wholesale abolition of the penalty rates system.
The various rights we see in our workplace relations system today came about one by one as a response to both economic and social change. They reflected and continue to reflect our values and will change over time.
For example, until 1969 women only had to be paid 75 per cent of the minimum wage. It wasn’t until 1975 that the equal application of the minimum wage was fully phased in. The 38-hour week was only introduced in 1983, unpaid maternity leave wasn’t introduced until 1979 and parental leave for fathers wasn’t available until 1990.
We all take for granted four weeks of annual leave in Australia, but holiday pay didn’t exist until 1936 and then it was limited to one week. The council is not seeking to attack the foundation of any of these rights, but we do want to explore whether we can improve on how relationships within enterprises work so those enterprises can be more competitive, and sustain and create rewarding jobs.
The review should also help clarify the responsibilities that ought to go along with workplace rights in our modern economy.
We must also clarify the rights and responsibilities of enterprises — to create jobs, return profits to shareholders and stay competitive in today’s global economy.
So, in building a workplace relation systems for the future economy where workplace rights remain a foundation, three questions must be answered: what is the right safety net? What are matters for negotiation between an enterprise and its workforce? And what are management decisions that an enterprise needs and should be able to make without third-party intervention?
The Productivity Commission review is a chance to consider these questions in a calm and considered way. It also gives an independent assessment of the impacts of changes on enterprises, workers and the economy.
If we can agree that our workplace relations system can be improved to better support job creation, productivity and competitiveness in the 21st century, we must be prepared to have an open and honest discussion without creating fear that any change is a threat to the rights we hold dear.