IR Reform

We obviously didn't have any vocal conservatives at Wednesday's meeting because some of my comments on Howard's IR reforms were just screaming out for a rebuttal. For those that weren't there I was explaining the difference between the current system in which workers have redress for unfair and unlawful dismissal compared to the proposed system which would eliminate the unfair part. In essence the current system allows workers to argue their termination was "harsh, oppressive or unfair" and get redress if it is found in the Industrial Relations Commission (IRC) that it was (according to all sorts of legal tests which have been built up over the years). They can also argue in a formal court of law that their dismissal was unlawful according to s.170CK of the Workplace Relations Act 1996. The grounds for unlawful dismissal are specific categories such as "race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin" and there are, once again, all sorts of legal tests to determine if a dismissal has been unlawful.

My argument was that situations like that shown in the ACTU commercials could easily happen in the new system. An employee could be fired for a reason which is technically unlawful and have no effective redress as few employers are going to be stupid enough to admit they fired the worker for an unlawful reason. Without facing the prospect of having to establish an alternative "fair" ground for the sacking in the IRC, employers who wish to get rid of workers will have no real difficulty getting around the unlawful dismissal laws if they wish to fire someone on a ground which is technically unlawful - even if the Office of Worplace Services gets a funding boost.

I think my argument was sound as far as it goes, and I think Howard is being misleading when he tries to say that situations like those shown in the ACLU ads won't be more likely to happen under the new regime. However my argument didn't address the question of whether or not making it easier for small businesses to sack people is a good thing. Now I can understand why Howard doesn't want to try and make this argument on talkback radio, but it's a plausible argument even if it's not one I personally agree with. I'm sure we're familiar with it, but if not, it goes something like this.

<conservative> A worker's productivity is a difficult thing to measure objectively. In fact it's a difficult thing to measure subjectively, too, which creates a potential for "moral hazard" in the workplace. A moral hazard arises whenever one parties obligations under a contract are difficult to measure by the other party and anyone who's ever slacked off the second the boss goes out for a smoko (and that's all of you) knows exactly what I'm talking about. The productivity loss caused by this slacking off may be difficult to measure but a boss, especially in a small business, will generally have a good idea if a worker is much less productive than normal. However this subjective measurement is difficult to make into an objective measurement which can stand up in the IRC if an unfair dismissal claim is brought. The incidents which go to paint the picture of an unproductive worker are likely to be little things which don't seem like much on their own (especially in a pseudo-court where every little claim will be challenged) but have created a firm and possibly accurate picture of the employee's worthn in the employer's mind.

Thus the chilling effect of unfair dismissal laws. Small business which are unable to implement complicated HR policies and monitoring systems are scared to fire genuinely unproductive workers as it is too uncertain and costly (in money and especially time) to risk an IRC case being brought against them. Thus they are also unwilling to take on workers in a full time role for fear they will become a productivity drain. Also, the laws exacerbate the moral hazard problem as employee's know they can get away with slacking off as their boss is too scared to try and fire them. This increases unemployment and exacerbates the problems of casualisation of the workforce.</conservative>

I'm not saying I buy this argument fully but it is an argument and I wish there was someone around the PIS meetings to regularly make these kinds of arguments. I want people (especially me) to be challenged when they run with the kind of argument I was making on Wednesday. I don't want PIS meetings to turn into soft-lefty head-nodding sessions. We want to "hear both sides" dog-nammit!