Labour and Union

Flexibility needed to protect workers | The Australian

ALL of a sudden it's the early 1980s again. Now, as then, the economy is slowing and there is a real risk that unemployment will rise rapidly. Now, as then, industry is talking about how tough things are about to become. And now, as then, some union leaders are ignoring the obvious and demanding wage rises and job security, regardless of whether companies can deliver. In combination, this all means that, as in the 80s, what the unions do will decide in part how many jobs are lost in the coming year. Of course, not all union chiefs are as economically obtuse as their predecessors were 30 years ago. ACTU president Sharan Burrow has eased up on her old objective of the restoration of union power in favour of a new mantra more suited to our circumstances: "retain, reskill and redeploy". For businesses that can afford it, this is entirely reasonable. Ms Burrow is right to point out that unemployment is a disaster that employers should not too easily inflict on their workers. And her proposal that business should reduce hours and encourage staff to use up all their leave instead of cutting jobs is appropriate. But Ms Burrow has another idea that is right out of the 80s. Yesterday, she warned that business should not use the prospect of an economic downturn as an excuse to delay or alter the implementation of the Government's industrial relations laws. This is definitely an argument from the 80s, when the old industrial relations club of big companies and powerful unions set wages and conditions across the country as if economics was optional for small business.

As we face a hard year, it appears as if some union leaders want to assist their members at the expense of everybody else - such as the Construction Forestry Mining and Energy Union, which wants agreements across the country that include 15 per cent pay rises over three years. With many economists expecting a recession, this is an optimistic ask. But the CFMEU obviously assumes that it is insulated from the real world, at least in Queensland, where it asked the Australian Industrial Relations Commission to stop Xstrata Coal from sacking staff because the union was not convinced circumstances justified the dismissals. Although today's news that aluminium maker Alcoa's decision yesterday to cut 13,500 jobs, 13 per cent of its worldwide workforce, will not effect Australia, perhaps the CFMEU will accept that Xstrata may have had a point when it warned that times are tough in the minerals and energy sector. The CFMEU is not alone in deciding that the right time to demand more money is when the economy could be contracting. The Australian Manufacturing Workers Union, which covers the automotive industry, has signalled that it wants wage rises that at least equal inflation written into the 1300 agreements that are up for renewal. There is an obvious argument that workers' wages should not go backwards, but given Canberra's car industry assistance package, this claim all but amounts to a case of the commonwealth subsidising the industry's ability to pay staff more money.

With 5000 enterprise agreements up for renewal this year, these examples are being replicated around the country. And there is already evidence that the approach unions prefer will hurt the very workers who need the most assistance. Acting under Employment Minister Julia Gillard's new system, the AIRC has created a national hospitality industry award to help some of the lowest-paid workers in the country. The new award will impose uniform wages and conditions across the country next year, including penalty rates for working nights and on Sunday. The problem is that in Western Australia, Queensland and NSW, when combined with state specific laws, this will increase overall wage costs by an unsustainable 20 per cent. The likely outcome is obvious: restaurants and cafes that cannot increase their prices may cut back their opening hours. And so there will be less work for waiters and kitchen hands, the low-paid people the ACTU and the Government say they are keen to assist, will disappear. This is surely not the outcome Ms Gillard had in mind when she bowed to union pressure and gave them back some of their power over wages and conditions in companies across the country, authority that they lost under the Howard government's Work Choices. But it is what we will get if the unions try to impose uniform solutions, or ignore the state of the economy in hard times. Instead of trying to impose ancient ideas on industry, it is time for the ACTU to accept that now is the very time to ease up on its agenda. A wilful pursuit of improved wages and uniform conditions this year on behalf of the minority of workers who are union members can have only one outcome - it will add another "r" to Ms Burrow's mantra ... "R for retrenched".