Government | Regulation

Industrial relations important to Australian economy

New discussion papers on the adequacy of the existing penalty framework and criminal sanctions for exploitative workplaces; and the length of greenfields enterprise agreements, were the focus of a speech by Attorney-General for Australia and Federal Minister for Industrial Relations, the Hon. Christian Porter on day one of CEDA’s state of the Nation Conference.

“Today I announce the publication of two discussion papers,” Mr Porter said.

“The (first) discussion paper published today deals with penalties imposed for various forms of misconduct, including the criminalisation of certain forms of worker exploitation, to complement existing offences for serious criminal forms of labour exploitation, including forced labour, servitude and debt bondage in the Criminal Code 1995.

“By way of background, earlier this year, the Migrant Workers’ Taskforce, Chaired by Professor Alan Fels AO, delivered a report to Government which highlighted the widespread exploitation of migrant workers in Australian workplaces,” he said.

“The Government has accepted, in principle, all 22 recommendations of that report.
“The majority of those recommendations focused on, in broad terms:
  •  the adequacy of the existing penalty framework
  •  the introduction of criminal sanctions for the most serious forms of exploitative workplace conduct
  •  the adequacy of compliance and enforcement tools available to workplace regulators and the courts; and
  •  mechanisms to recover unpaid wages.
“The discussion paper published today is focused on the first two items. A separate paper focusing on the second two items will be issued in due course.

“As a starting point, we recognise that in order to develop a more effective compliance regime,  there are opportunities to amend the Fair Work Act to provide further protections for workers and deter unscrupulous employers from doing the wrong thing.

“To this end, we are currently in the process of drafting a Bill to criminalise certain forms of worker exploitation and through this discussion paper consultation process, we will seek views on a number of aspects about this ground-breaking reform to help inform that drafting process.

“The second discussion paper published today deals with the length of greenfields enterprise agreements. Under the Fair Work Act, a greenfields agreement is an agreement that relates to a new business, activity, project or undertaking prior to the employment of employees.

“Businesses, communities and governments require infrastructure projects to be delivered on time and on budget.

“These projects often cover the construction of much-needed public infrastructure, such as hospitals, roads and schools, and require complex long-term planning and future investment in these projects will depend, in large part, on Australia being able to demonstrate an ability and track record of being able to deliver such projects without uncertainty about costs (including labour costs) and project delays.

“In this sense, the ability to predict the budget of the projects and deliver the project within a reasonable budget is the key to attracting investment and so create jobs.

“Overall, industrial uncertainty and the impact of industrial action can add significant costs and delay to major infrastructure projects, many of which are, at least in part, funded by the taxpayer.

“The Productivity Commission stated that any weaknesses in bargaining for a greenfields agreement can have ‘potentially large impacts on major project investment in Australia’ and that current arrangements ‘pose risks for large capital intensive projects with urgent time frames’. This, in turn, poses significant risks to job creation in Australia.

“The consultation process will bring out the evidence on these matters and enable the government to decide how best to deal with this issue. I am hopeful that through this process appropriate reforms can be formulated that attract widespread bipartisan support.

“The earliest observation I made about the industrial relations landscape in Australia was that IR is very important to the Australian economy and it has a history of being a contested and an often controversial policy space.

“That is the coarsest possible summary imaginable of a complicated area of intersection being law and the economy.

“But even if an inelegant summary of the industrial relations landscape, they point further to the two most important questions before a government seeking to make improvements in this area.

“Of a range of conceivable legislative or systemic or administrative changes - what possible improvements are of the most importance to strengthening the Australian economy and what changes are actually possible – in the sense of – what possible changes can achieve a significant enough degree of consensus that they can be supported through parliament?”

Mr Porter said that these are not simple questions to resolve. He went on to say that much of the contestability in the IR area had arisen from the simple but mistaken view that the industrial relations system is a contest.

“A false view in my observations, that the IR system is a perpetual contest between employers and employees,” he said.

“There is probably no other area of economic/legal policy where the zero-sum game conception is less reflective of the actual real world facts – which are that there are significant opportunities for changes that benefit both employers and employees because they grow the economy, grow jobs and put pressure on (or directly) lift wages.”

Mr Porter said there are two areas where there is a need for improvement and that these were evidenced by significant shortcomings. Both appear in the two IR Bills currently before parliament.

“Both these bills are designed to allow more reasonable and timely responses to known instances of lawlessness and corruption in the industrial relations system,” he said.

“The Bill before Parliament would simply require proper transparency for what goes into the benefit funds, what comes out and how it's spent so that we can all rest assured that it is spent for the benefit of workers.

“Workplaces in Australia will not be fair, high performing places that drive job growth and wages growth if they are not lawful places and ultimately, we want to see high-performing workplaces that sustain high-paying jobs in a competitive global economy.

“The PM has set three key criteria that any future reforms will first need to meet before actively pursued.

“Firstly, they will need to create jobs and put upwards pressure on wages to benefit workers.

“Secondly, they must help business by boosting productivity.

“And thirdly, we need to be able to demonstrate that reforms will help to grow the economy overall.

“If we can meet those three criteria, then everyone wins and we can hopefully develop a consensus for change.”