Comparing Patterns of Re-regulation of Labour in Three Liberal Market
Economies
Peter Waring, John Lewer and John Burgess
University of Newcastle, Australia
Abstract
In November 2007, the Howard Coalition Conservative Government that had
governed for eleven years was decisively defeated in the Australian federal
election by the social-democratic Australian Labor Party led by Kevin Rudd.
The election campaign was dominated by intense debate over the conservative
government’s ‘Work Choices’ industrial relations reforms introduced in 2005
that radically re-regulated employment relations in favour of capital and which
the then Rudd-led Opposition promised to dismantle.
The removal of ‘Work Choices’ provides the third example of electorates within
Anglo Saxon economies rejecting extreme neo liberal industrial relations
legislation – the other two countries being the Britain and New Zealand. After
waves of conservative reform which saw trade unions marginalised and
bargaining structures remodelled in favour of Capital, the election of social
democratic parties in these countries has brought increased state intervention
and legislative promotion of equity considerations in employment relations. In
each of these countries, however, it seems that elements of the legacy of neoliberalism have been retained, albeit tempered by a renewed interest in rebalancing equity and efficiency objectives. Neo liberal changes tend to be
“sticky” to the extent that it is difficult to reverse legislation, to rebuild institutions
that have been dismantled and move forwards with promised workplace
reforms while at the same time demonstrating credentials for sound economic
management.
This paper analyses and compares the re-regulatory experiences of Britain,
Australia and New Zealand as evidence of governmental intent to reclaim some
employment relations aspects of the labour market and to strike a more
centrist-balance between equity and efficiency objectives. It asks whether there
are consistent patterns in the statutory provisions of Britain’s Employment
Relations Act 1999, New Zealand’s Employment Relations Act 2000 and the
foreshadowed legislation of the Rudd Labor Government.
1
Introduction
Britain, Australia and New Zealand are capitalist economies and apart from a shared
language, their constitutional and political (pluralist) pedigree is common and as
Castles (1996: 234) notes ‘they tend to operate under single-party governments and
still share a single head of state’. However, reflecting dynamic variables such as their
peculiar social democratic structures and traditions, each has developed its unique
approach and institutional mechanisms to managing the employment relationship
between Capital and Labour and the inherent relations of power and class. None of
each nation-state’s system is fixed, generating a long-standing scholarly pursuit
(generally attributed initially to Kerr and Dunlop’s et al, grand theorising in
Industrialism and Industrial Man [1962]) as to the degree of the each systems
‘natural’ convergence/divergence (see Bamber and Lansbury, 1998). More latterly, a
not inconsiderable theoretical and empirical research agenda has sought to explain
how these differing industrial relation systems have been shored up, modified or
otherwise disassembled in the face of ‘globalisation’ (Wailes et al, 2008). Wailes and
Ramia (2001), for example, tested the robustness of various competing theoretical
frameworks by analysing change in the Australian and New Zealand systems since
the opening up and deregulation of their economies in the 1980’s. Bray and Walsh
(1998: 358) have similarly sought to compare the differing neo-liberal paths pursued
in Australia and New Zealand suggesting political and industrial factors best explain
‘the speed of the journey and the destination reached in both countries’. Being
located within this familiar field of comparative industrial relations, this paper seeks
to, as Bean (1985: 7) drawing on Rose (1983) neatly states:
‘ . . .promote wider understanding of, and foster new insights into, industrial
relations, either by showing what is unique about any one set of national
arrangements or, equally well, reducing what might appear to be acutely
specific and distinctive national characteristics by demonstrating their
recurrence elsewhere.’
The purpose in this article is to trace the path back from a prior neo liberal industrial
relations regime in each country. In the UK under the Thatcher government (19791996), in New Zealand under the National Party government (1990-1999), and in
Australia under the Howard government (1996-2007) there were legislative programs
designed to fundamentally transform the industrial relations system. As Tickell and
Peck (1995) suggests there were many variants in neo liberalism across countries,
each driven by a market ideology and the dismantling of the previous forms of public
intervention in the economy. Geddes (2005) places the differences across countries
in terms of welfare regimes, where the Australia, New Zealand and Australia are
classified as liberal welfare regimes where there are limited forms of welfare support,
services are marketised and there is a work focus behind the welfare system.
However, Geddes (2005, 369) states that while the anglo Saxon nations of the USA,
UK, Australia and New Zealand are core neo liberal welfare regimes, there are
differences between them in terms of the extent of the welfare net, the prioritising of
programs towards poverty reduction and the linkages between citizenships and
responsibilities.
2
At a more general level there is an extensive literature around the varieties of
Capitalism theme (Hall and Soskice, 2001), with many deviations and variations of
the framework. Wailes et al (2008) discuss the strengths and weaknesses of the
framework with one of the issue they highlight being the differences across what they
call the liberal market economies. Neo liberalism is generally presented as a system
based on market allocations and individualism, with a supporting policy framework of
small government, low taxes and a welfare to work regime (George, 1999).The neo
liberal system is supported and sustained by an array of well funded think tanks,
large parts of the media and national and international institutions such as Treasury
departments and the International Monetary Fund (George, 1999). Neo liberal
policies are premised on the market being capable and effective for nearly all
economic activities, and as a result the public sector requires restructuring and
downsizing and an international agenda that supports free trade, free circulation of
capital and freedom of investment (George, 1999). Larner (2000, 6) states that “neo
liberalism is both a political discourse and about the nature of rule and a set of
practices that facilitate the governing of individuals from a distance.” The premises
and details of the neo liberal agenda are more extensive and nuanced to be detailed
here (see Lloyd, 2008).
Our context is the discussion of industry relations policy. Is there a coherent neo
liberal industrial relations program? We apply the term neo liberal to each country for
the recent period of conservative government in office since there was an emphasis
on individualism, and each program was associated with common elements such as
privatisation, restructuring the welfare system and the marketisation of many parts of
the economy. The details and the processes attached to the neo liberal agenda were
different in each country, and the timing of the changes was likewise different across
the three countries. There was also a concerted attempt in each country to
fundamentally transform industrial relations.
Two key issues stand out in the changes to the industrial relations system, reducing
trade union influence and participation, and reducing collective bargaining.
Alternatively, we could state the aims as being de unionisation and increased
individual and non union bargaining. What we are particularly interested in is the
path back from this process. In each country opposition parties with strong linkages
to trade unions came into office with a mandate to remove the neo liberal industrial
relations framework. Is it possible to return to a previous industrial relations regime,
particularly when institutions have been transformed and economies have moved on
in terms of their structure? One case where this is apparent, as explored by Gough
and Ogden (2008), is union management partnerships. While various forms of
participation and co operation are encouraged in the co ordinated market
economies, they are largely ignored in the liberal market economies with
transactional market relationships being regarded as sufficient. However, how do
you facilitate or return to forms of co operation and participation after trade union
exclusion and individual contacts?
A broad description and explanation of the legislative changes adopted post
deregulation in each of the three countries is outlined in the first part of the paper.
Understandably, given the constraints of this vehicle, the review represents a
synopsis at best. The second part endeavours to analyse and evaluate the power of
differing variables in explaining the legislative frameworks most recently enacted in
Britain, Australia and New Zealand.
3
We use the terms re regulation in a generic sense to describe the post neo liberal
phase in each country. This is not to suggest that the neo liberal phrase was
exclusively about fewer regulations and the post neo liberal phase is about more
regulations. In the Australian case of Work Choices the legislation was extensive and
complex, and many aspects of industrial relations were more closely regulated than
previously (we subsequently refer to this as command and control regulation). The
post 2007 phase will involve the removal of many of these regulations.
The Re-Regulation of Employment Relations in Britain
British experience suggests a moderate attempt to re-regulate employment relations in
that country. Observers have noted that the Blair Government largely won office in
1997 through a successful assault to capture the political middle ground. This strategy
involved reconstituting Labor’s image by distancing itself from the British labour
movement and promising policies which would only vary rather than replace
Thatcher’s conservative industrial relations reforms (see Smith and Morton, 2001).
Nevertheless, the enactment of the Employment Relations Act 1999 represents a
significant re-balancing of the interests of Labour and Capital, imbued in the ‘social
partnership’ philosophy, and a ‘third way’ shift towards the re-regulation of the British
labour market (see for example Brown, 2000).
For all its hype, the inadequacy of ‘third way’ thinking to properly intellectualise and
problematise industrial relations is, in itself, an interesting phenomenon. Whilst key
contributors to ‘third way’ thinking such as Giddens (1998) attempt to establish a
platform for social democratic renewal, it seems that this platform clearly neglects
the workplace (see Waring et al, 2001). Undy (1999:333) has speculated that this
failure to focus on industrial relations in a systematic way underscores third way
thinkers’ belief that it was no longer a significant issue. Globalisation and the steady
disintegration of all forms of collectivism, according to Undy (1999), have meant that
third way advocates have pushed industrial relations issues into the realm of the
irrelevant. Nevertheless, it seems that the indirect implications of the third way
philosophy have filtered down into the Blair Government’s approach to industrial
relations in the UK. In particular Undy (1999:332) argues that New Labour’s third
way response to Giddens’ dilemmas – globalisation and individualism - can be found
within its industrial relations settlement, firstly through the adoption of the EU’s social
chapter in 1997, and secondly, through the extension of individual rights at work. In
this section, New Labour’s approach to industrial relations is evaluated in the context
of its guiding third way philosophy. In particular, it seeks to understand how third way
thinking has influenced the development and implementation of industrial relations
institutions and policies, especially with respect to the diffusion of ‘partnership’
practices.
An important precursor to the development of New Labour’s ‘industrial relations
settlement’ was its signing of the EU’s Social Chapter in 1997. McKay (2001:291)
has argued that New Labour’s commitment to the social chapter signalled its
acceptance that ‘there was a social dimension to European integration’. The signing
of the social chapter importantly committed the Blair government to introduce
legislation consistent with EU directives on such issues as working time
arrangements, parental leave and, perhaps more controversially, works councils.
Besides signing the social chapter, the incoming Blair Government also established
4
a Low Pay Commission that was charged with investigating issues associated with
the establishment of a National Minimum Wage. The National Minimum Wage was
subsequently introduced in June 2000. This development has been responsible for
an increase in the real wage for low paid workers, reduced wage inequality and a
narrowing of the gender wage gap (Metcalfe, 2008). This has arguably been one of
the greatest contributions of New labour towards addressing a social justice agenda
and addressing a major gap in the UK industrial relations framework.
Central to the Blair governments’ industrial relations reforms though, was the drafting
of the Fairness at Work white paper which was subsequently passed, with some
amendments, as the Employment Relations Act 1999 (ERA). It is within the detail
and values of the ERA, that the influence of third way thinking becomes visible. For
instance, the legislative changes incorporated in the Employment Relations Act were
mostly focused on the extension of individual rights rather than measures designed
to facilitate collectivism at the workplace. Brown (2000:301) notes, for example, that
the new Act did not loosen the constraints on industrial action imposed by previous
conservative governments. Indeed, the vast bulk of the Thatcher Government’s
legislative restrictions on industrial action remain in place, causing Smith and Morton
(2001:131) to claim that under the Act ‘the liberty of individual workers to take
industrial action remains precarious, in breach of international standards’. Similarly,
Undy (1999:330) has argued that the maintenance of restrictions on industrial action
means that the ‘existing balance of bargaining power which favoured the employer is
seen as appropriate’. Yet the Act also introduced, despite employer opposition, a
statutory union recognition system consistent with New Labour’s belief that
employees should be granted the right to choose whether they want to be
represented by a union or not. Moreover, the mechanism is also consistent with the
Blair’s governments’ goal to ‘foster a new culture of partnership in the workplace’
(Wood and Goddard, 1999:204).
As explained by Wood and Goddard (1999:204), the statutory union recognition
system is supposed to encourage voluntary recognition where there is a clear desire
of employees to be represented by a trade union. However, if voluntary recognition is
not achieved, a formal ballot can be undertaken requiring a majority vote of at least
40 per cent of those eligible to vote. Wood and Goddard (1999:204) also explain that
this ballot will not be necessary where the union can demonstrate that it has majority
support from employees. Alternatively Smith and Morton (2001:124) level the charge
that the legislative detail of the statutory union recognition mechanism largely
embodies the wishes of employers. They point to the restriction of the mechanism to
employers of at least 21 workers; the associated reduced bargaining scope and
other legislative hurdles as clear indicators that the mechanism is designed to limit
the mobilisation of collective power.
Despite these legitimate criticisms of the Act’s restrictions on collectivism, it did
introduce a number of initiatives consistent with addressing Gidden’s globalisation
and individualism dilemmas. In particular, the ERA extended parental leave rights,
raised compensation levels for unfair dismissal and extended full-time employees’
rights to part-time employees. It is a moot point as to whether these new rights are
the genuine product of a third way approach or simply a result of European Union
directives. Brown (2000:304) contends that these new rights simply reflected the
pressure of EU directives whilst McKay (2001:291) has claimed that although New
Labour committed to the social chapter in 1997, it has ‘complied with European
5
proposals in a minimalist fashion, never exceeding what the European legislation
required’.
One EU directive that has been implemented more or less in line with European
practice, has been the directive on the establishment of works councils. According to
McKay (2001:291) the directive on European Works Councils came into force on the
15 January 2000 in the UK. Under UK law, employers with 1000 employees or more
are required to establish Works Councils composed of both employee and
management representatives. McKay (2001:292) estimates that around 300 UKbased companies will be required to establish these councils.
The implementation of the Works Councils directive also seems to be largely in line
with the Blair Government’s current enthusiasm for social partnership in the
workplace. Guest and Peccei (2001:208) have observed, then-Prime Minister Blair
has argued that the Employment Relations Act’s objective is to promote partnership
in the workplace – to replace adversarial industrial relations with notions of
cooperation and mutual gains. In order to promote partnership at work beyond the
introduction of the ERA, the Blair Government has established a partnership fund to
‘stimulate a diverse range of partnership activities and initiatives’. The Trade Union
Congress enthusiastically embraced the concept of partnership in its May 1999
manifesto ‘Partners for Progress: New Unionism in the Workplace’. It articulated six
principles underpinning its conceptualisation of partnership for trade unions, viz.:
(a) Employment Security
(b) Commitment to the success of the firm
(c) Openness and transparency
(d) Recognition that partners have overlapping but distinct interests
(e) Enhancing quality of working life
(f) Tapping the motivation, commitment and innovation of employees to make work
more interesting and to add value to the firm
These are also the principles underpinning the UK union movement’s partnership
agreements with individual firms which, according to Brown (2000:300), have
assisted UK unions to stabilise membership after years of decline. However, the
meaning of ‘partnership’, in Guest and Peccei’s (2001) assessment is not settled,
and appears to be highly contested in UK discourse. They contend implicit and
explicit unitarist, pluralist and hybrid assumptions inform different conceptualisations
of partnership. Pluralist conceptualisation of partnership is largely rooted in the
European development of industrial relations in terms of accepting the opposing
interests of the parties and extending employee representation through works
councils and representation rights.
Guest and Peccei (2001:209-300) contend the second approach to partnership is
informed by an explicit unitarist frame of reference. In this conceptualisation of
partnership, employee and employer interests are integrated through profit sharing
and or employee share ownership plans (ESOPs) and where employee participation
and voice is limited to direct participation. Guest and Peccei claim that because there
is more emphasis on the values and objectives of the organisation, this
conceptualisation signals an imbalanced approach to partnership.
The third approach to partnership is described by Guest and Peccei as a hybrid one
which combines features of the unitarist and pluralist perspectives. For instance,
6
they contend that under the hybrid model, progressive human resource management
practices are supported through mechanisms for joint governance (p210). It is this
approach which Guest and Peccei argue, has underpinned the development of
partnership in the UK.
The differing perspectives on the notion of ‘partnership’ suggest that it may be simply
a convenient vehicle for the industrial parties to pursue their own interests regardless
of third way (ill-defined) ideals. This point is brought out by Guest and Peccei
(1999:231), the results of an empirical analysis of practices and policies in place
within firms that have embraced ‘partnership’. Their results indicate that under
partnership agreements, more emphasis has been placed on employee contribution
to the firm rather than the ‘promotion of employee welfare, rights and independent
representation’. On the basis of this finding, they claim that ‘In many cases
management would appear to be gaining more from the practice of partnership’ and
that ‘the balance of advantage is skewed towards management’.
This finding is also consistent with Smith and Morton’s (2001:120) broad thesis, that
New Labour’s approach to industrial relations involves ‘measures that weaken
workers’ collective power through the exclusion of autonomous trade unionism and
initiatives to regulate the labour market, strengthen worker’s rights within the
employment relationship and include enterprise-confined, cooperative unions as
subordinate 'partners’. Moreover, the capacity for employers under the ERA to
negotiate terms with individual workers enables them to undermine collective
bargaining if they so wish. This capacity to ‘derogate’ from collective bargaining has
led Smith and Morton (2001:130) to claim that this signals that ‘the logic of social
partnership gives way to the flexibility of common law individualism’.
One area where New Labour has been reluctant to address EU standards is the lack
of protection for temporary workers. While EU directives call for equality of rights
across workers, regardless of their employment arrangements, there was reluctance
by the UK government to accede these rights to agency workers who constitute a
substantial minority of the paid temporary workforce (around 20%) (Stanworth and
Druker, 2004; Forde and Slater, 2006).
The path back for New Labor has been assisted by the EU social regulations. But
even here there can be observed a fairly minimalist approach towards the
implementation of the regulations. In the area of trade union recognition and the
rights to take industrial action the record has been patchy. The Low Pay Commission
can be presented as a genuine innovation and a development that embraces
traditional equity objectives.
The Re-regulation of Employment Relations in Australia
Altering bargaining structures has been a key policy priority of both sides of
Australian politics since the election of the Hawke Labor government in the mid1980’s. In more recent years, policy debate over the direction and shape of
bargaining structures intensified with the enactment of the Howard Government’s
controversial federal Workplace Relations Act 1996 (WRA) and subsequently its
Work Choices legislation, 2005.
7
Perhaps the most controversial innovation of the 1996 Act was the further shift
towards individualisation through the introduction of statutory individual contracts
(AWAs). This measure enabled employers (who were constitutional corporations) to
offer individual contracts to their employees which, if accepted, would be registered
with the Office of the Employment Advocate (OEA), then a new statutory agency
established under the WRA 1996 (see Bray and Waring 1998, van Barneveld and
Waring 2002, Peetz 2006). Procedurally, AWAs were required to pass a no
disadvantage test in which the Office of the Employment Advocate would compare
the contents of a proposed AWA with those of the relevant award and determine
whether, on balance, the proposed AWA would result in any uncompensated
disadvantage. AWAs were private and secret agreements, in so far as statutory
penalties could be incurred if a party to an AWA divulged the contents of their AWAs
to third parties. The main benefits of AWAs for employers are their ability to reduce
trade union intervention as well as cut certain conditions of employment and expand
managerial prerogatives, so long as there was no net financial detriment to
employees. Common law individual contracts, by contrast, do not offer a right for
employees to trade-off award conditions for financial or other compensation
The introduction of statutory individual contracts in the WRA was coupled with a
strong focus on ‘freedom of association’. Although both the positive and negative
rights of freedom of association (the right of employees to join and the right not to
join a trade union) were present within Part XA of the WRA 1996, it was very much
the negative right not to join or to leave a trade union which was emphasised in
government advertising and ‘education’ campaigns on this part of the Act. The Office
of the Employment Advocate, aside from its role in registering AWAs, was also
charged with investigating and prosecuting breaches of the freedom of association
provisions. Bray and Waring (1998) have commented that when combined with
stricter right of entry provisions and the removal of automatic union dues
arrangements, the WRA ‘made it both easier to leave and harder to remain a trade
union member’. Perhaps ironically, it was the positive right in the WRA which
ultimately prevented Patricks Stevedoring Corporation, in the 1998 Waterfront
dispute, to carry out its ambition to deunionise its stevedoring operations. Lang
Corporation (the parent company of Patricks Corporation) (with the public support of
the Howard Government and especially then Minister for Workplace Relations Peter
Reith) had transferred the employment of its workforce through an asset sale to
several special purpose companies it had established which then supplied labour to
Patricks. Then on a single day in 1998, the labour supply contracts with these
special purpose companies were severed, which had the consequence of placing
these companies into liquidation and their workforces out of work. Patricks then
moved in new non-union employees employed under AWAs into their stevedoring
operations protected by high security arrangements. The Maritime Union of Australia
challenged the company’s actions in the Federal Court and succeeding in arguing
that the company’s restructuring was designed to injure the unionised workforce in
employment based upon their union membership –a direct breach of the freedom of
association provisions. The original decision of Justice North was later upheld by the
Full Court of the Federal Court of Australia, and then on appeal by the High Court of
Australia (see Dabscheck, 2000; McCallum, 1998; Wiseman, 1998).
Apart from freedom of association, there were many other aspects of the Workplace
Relations Act that were designed to restrict the power and activity of trade unions
8
include tight rules around union right of entry and the award simplification process
that had the effect of removing union meeting time provisions from awards.
Two other strong themes emerge in most analyses of the WRA. First, there was a
substantial weakening of the powers of the Australian Industrial Relations
Commission. The AIRC’s role had been reduced under the earlier Industrial
Relations Reform Act 1993, but its arbitral power became much more circumscribed
under the WRA – it was only permitted to arbitrate in the most narrow of
circumstances when protected industrial action threatened a significant part of the
Australian economy or the health and safety of the community. It was also charged
with issuing s.127 certificates to prevent industrial action outside of the bargaining
period that was ‘threatened, probable, likely or continuing’. The weakening of the
AIRC led Dabscheck (2000) to announce the ‘death’ of the Commission, although
other commentators (including Justice Kirby of the High Court of Australia) have
claimed that news of the death of the Commission was very much overstated (see
Bray et al 2005).
A second significant theme of the WRA was the narrowing scope of awards. The
Keating government had attempted to reform and modernise awards, but the
Howard Government went much further by confining awards to just twenty core
employment conditions – these were the only matters allowed to be included in
awards. Matters deemed to be non-allowable included any award provision which
facilitated trade union activity, including preferences clauses, automatic dues
arrangements, meeting time and trade union education leave. These matters are
important procedural rights for unions which enabled them to represent the interests
of members, so removing them from awards weakened union capacity.
In 1999, the Howard Coalition unsuccessfully attempted to introduce a raft of
amendments to the WRA known as the ‘second wave’ reforms – these were placed
before parliament in the Workplace Relations (More Jobs Better Pay) Amendment
Bill. The proposals included the government’s wish to exclude small businesses
employing 15 or less employees from the purview of unfair dismissal law, a range of
harsher penalties for unions engaged in pattern bargaining and reforms designed to
facilitate the spread of AWAs. If these proposals had been passed, they would have
significantly advanced neo-liberal reform, with a greater focus on ‘command and
control’ and individualist regulation. However, these ‘second wave’ reforms did not
pass the Senate. In response, the Howard Government broke up the larger bill into
smaller single-issue bills and re-presented them to parliament. With few exceptions,
they were again unsuccessful. Indeed only 16 of 56 employment relations bills
introduced to parliament were passed by the Senate during this period (see Bray and
Waring, 2005). Some successful changes with respect to unfair dismissal laws were
passed in the 2001 Workplace Relations Amendment (Termination of Employment)
Act, which sought to discourage frivolous applications for unfair dismissal remedies,
to prevent lawyers from acting for such clients and to extend the categories of
employees who were unable to access these remedies. In 2002, the Workplace
Relations
Amendment
(Registration
and
Accountability
of
Organisations)(Consequential Provisions) Act also imposed tougher procedural rules
on unions. However, much of the Howard Coalition government’s employment
relations ambitions remained unrealised until it won control of both houses of
parliament in its stunning 2004 electoral victory.
9
The Work Choices Reforms, 2005-2007
In October of 2004, the Howard Coalition government won its fourth successive term
with an increased majority and, more importantly, with control of both houses of
parliament – a rare occurrence in the history of governance in Australia. This
provided the Coalition with capacity to pass legislation unfettered by review from a
hostile Senate. This control handed the Howard Government an historic opportunity
to pass more radical employment relations legislation than they had foreshadowed in
policy proposals in the lead-up to the 2004 electioni. For the Prime Minister John
Howard especially, it was an opportunity to realise the achievement of a longstanding ambition (Williams 1997, Norrington 2006).
It was not until 2006, however, that the highly anticipated and controversial
Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices
hereafter) came into effect. The government’s rhetoric when introducing Work
Choices focused on giving employers and employees greater ‘choice’ in determining
wages and working conditions that best suited their circumstances, but the reality
was that Work Choices strongly favoured employers, significantly reduced the
influence and capacity of unions, and really only assisted employees with significant
bargaining power. State governments (by this time all under Labor control)
challenged the constitutionality of the reforms in early 2006, but in a split 5:2 decision
(Kirby J and Callinan J dissenting), the High Court upheld the validity of the Work
Choices amendmentsii. In essence, the majority confirmed the capacity of s.51xx
(the corporations power) to fully regulate industrial relations. The decision validated
the significantly extended reach of the new federal jurisdiction.
Much has been written about Work Choices including legal analysis of its many
provisions (see Stewart, 2006, Fenwick, 2006, Cooney, 2006, Waring and Bray,
2006a), its productivity consequences (see Burgess and Waring, 2005; Peetz, 2006,
ch.3), its impact on trade unions (Forsyth and Sutherland, 2006), collective
bargaining (Cooper and Ellem, 2007) and state-based employment relations systems
(Lee, 2005), its impact on the Australian Industrial Relations Commission (Cooney,
2006) and on women (Elton et al. 2007). Several of these observers noted that Work
Choices did not facilitate a deregulatory approach in which there was a return to the
common law of contract, rather Work Choices introduced ‘command and control’
regulation in which the state seeks to control actors and bargaining outcomes. In
essence however, Work Choices represented an unprecedented attack on trade
union and collective bargaining rights. Work Choices, among other things, abolished
the ‘no disadvantage test’, sought to expand individual contracting while deemphasising collective bargaining and awards, abolished compulsory arbitration,
abolished unfair dismissal protection for workers employed in business with 100
workers or less and introduced new and reduced minimum standards in the form of
the Australian Fair Pay and Conditions Standard.
Work Choices quickly drew the ire of the trade union movement who responded with
a multi-million dollar campaign funded largely through member levies entitled ‘Your
Rights@Work’ and involving mass rallies, leaflets, billboards, bumper stickers and
print, radio, television and internet advertising. The television advertisements
typically featured employees who had been unfairly dismissed without any recourse
or whose family life had been disrupted by unfair employer demands. The
10
advertisements clearly struck a chord with the electorate as Brett (2007:74) observed
that ‘Opinion polls and survey data consistently showed that WorkChoices was
supported by only about 20 per cent of voters’. Throughout the election campaign
the Work Choices legislation was a both a divisive and defining issue that clearly
differentiated the two major parties (MacCallum, 2007).
On the evening of the election held on 25 November, 2007, it quickly became
apparent that the Howard Government’s eleven year term of office would come to an
end. Moreover, the Prime Minister John Howard would suffer the rare humiliation of
losing his own seat of Bennelong in an historical parallel with Prime Minister Stanley
Bruce who lost his seat as Prime Minister in 1929 after also introducing controversial
employment relations laws. ACTU exit polling at the election showed that 78 per cent
of voters rated Work Choices as one of the top three issues while 45 per cent stated
that it ‘was their highest priority’ (West, 2007).
A consensus of political commentary indicates that employment relations and
especially the Work Choices reforms were central to the downfall of the Howard
Government in November of 2007 (see Norrington and Hannan, 2007; Mac Callum,
2007; West, 2007; Brett, 2007). Brett (2007:62) summarises this contention arguing
that:
‘Work Choices, Howard’s industrial relations revolution was the biggest
misjudgement of his political career and goes a long way to explaining why
nothing went right for him in 2007. Without the constraint of the Senate, he
succumbed to the hubris of power. The reforms were not part of the Coalition’s
policy for the 2004 election, and they tilted the balance of power in the
workplace decisively towards employers. Opposition to them stubbornly
persisted, despite the spin and the massive government advertising campaign,
undermining the general credibility of Howard and his government’.
On December 3, 2007, the Rudd Labor Government was sworn into office and with
this the Hon Julia Gillard was appointed Deputy Prime Minister and Minister of a new
‘super portfolio’ combining education with employment and workplace relations. On
the 13 February, Minister Gillard introduced the first legislative steps to dismantling
Work Choices with the reading of the Workplace Relations Amendment (Transition to
Forward with Fairness) Bill 2008 . The bill is an interim measure before a more
comprehensive replacement for the Workplace Relations Act designed to fulfil the
policy taken to the election and which has been promised to be introduced late in
2008.
The Bill passed Parliament on 19 March 2008 and from this day, no new Australian
Workplace Agreements (AWAs) could be made. Instead, the act introduced
Individual Transitional Employment Agreements (ITEAS) that are to be made
available during the transitional period between the introduction of the Transition to
Forward with Fairness Act and 31 December 2009 – the last date before more
comprehensive reform is to commence.
11
The act also re-introduces the ‘no disadvantage test’ for ITEAS and for collective
agreements and abolishes the Howard Government’s ‘Fairness Test’. Under s346D,
ITEAs or collective agreements pass the no disadvantage test if the Workplace
Authority Director (the successor to the Employment Advocate) is satisfied that the
agreement does not result in balance in a reduction of overall terms and conditions
of employment of the employee under any ‘reference agreement’. Reference
agreements are defined in the act as any relevant collective agreement or if there is
no relevant collective agreement, any designated award. Hence, the new ‘no
disadvantage test’ incorporates a critical change from its predecessor in making the
basis for comparison a collective agreement rather than an award – an
acknowledgement that developments in wages and conditions in collective
agreements have outstripped those of awards but also closing a regulatory gap
which historically has permitted agreements with less beneficial terms in previous
collective agreements on the grounds that they were superior to relevant awards.
Moreover, the act repeals the concept of ‘protected award conditions’ since the
whole of the designated award would be considered for the purpose of the no
disadvantage test in the absence of a relevant collective agreement.
The act also removes the capacity for employers to unilaterally terminate collective
agreements requiring instead applications for termination to be made to the
Australian Industrial Relations Commission. Further, the act introduces new
provisions regarding award modernisation. Under the amendments, the Australian
Industrial Relations Commission is charged with creating new modern awards which
will seek to protect 10 entitlements including penalty rates and overtime.
As part of the Rudd Government’s ‘Forward with Fairness’ policy, Minister Gillard
released ten draft National Employment Standards (NES) on February . As indicated
earlier, the Rudd Government has stated that its safety net will comprise the ten
National Employment Standards (which will replace the Australian Fair Pay and
Conditions Standard) and modern awards (which will provide industry–specific detail
and may contain up to a further ten minimum standards above the NES. The NES
are statutory entitlements which cannot be altered or excluded by any industrial
instrument or contract of employment.
12
The ten draft NES’s and associated explanation are set out in the table below:
Table 1 National Employment Standards
National Employment Standard
Commentary
Maximum Weekly Hours
38 hour week to remain the standard for
fulltime. Employees may be required to
work reasonable hours in excess of the
standard but cannot be required to work
unreasonable additional hours.
Requests for Flexible Working
Arrangements
Right of employees to request flexible
working arrangements from their
employer until their child reaches school
age. Employers may refuse on
‘reasonable business grounds’.
Parental Leave and Related Entitlements
Will allow individual parents to be absent
from work for separate periods of up to
12 months of unpaid parental leave.
Annual Leave
Four weeks paid annual leave in
accordance with accepted community
standard.
Personal/Carer’s Leave and
Compassionate Leave
Ten days of paid personal/carer’s leave
for each year of service. Two days of
paid compassionate leave per occasion
(eg. Death or serious illness of family
member). Two days of unpaid carer’s
leave ‘per occasion’ for genuine caring
purposes or family emergencies.
Community Service Leave
Right to be absent from work to engage
in prescribed community service
activities such as jury service and
emergency service duties.
Long Service Leave
Long Service Leave provisions to be
preserved.
Public Holidays
Right of employee to be absent from
work on a day declared a public holiday.
Notice of Termination and Redundancy
Pay
Entitlement of fair notice of termination
and redundancy pay in accordance with
13
2004 Redundancy Test Case.
Fair Work Information Statement
Employees entitled to a statement
(published by Fair Work Australia) on
their rights and entitlements in the
workplace to be distributed by the
employer to each new employee upon
commencing employment.
It is proposed that the ten final NES’s will be fully operational by 1 January 2010
when the other component parts of the Rudd Government’s employment relations
system commence.
Aside from these developments, the general tenor of the Rudd Labor Government’s
approach to employment relations may be viewed in its submission to the Australian
Fair Pay Commission’s Minimum Wage Review on 14 March 2008. In the
submission, the Government suggests that the Commission should grant an
increase in minimum wages to assist the low paid in sharing in economic prosperity
but also warns that the Commission should have regard to inflationary pressures in
the Australian economy (Australian Government, 2008). The Government does not
recommend the quantum of any minimum wage increase but rather provides the
Commission with economic data to help its decision-making. This approach signals
an effort to convey a balanced approach to employment relations matters but the
submission also signals considerable agreement with neo-liberal economic
assumptions regarding the negative relationship between wages and employment
levels and the potential for minimum wage increases to fuel inflation.
An important issue to consider is the extent to which the ALP has followed their
British counterparts in adopting third way thinking to industrial relations policy. An
explicit point of difference between New Labour and the ALP therefore lies in the
party’s different attitudes towards collective bargaining. Although the promotion of
collective bargaining forms a key element of the ALP’s ‘Forward with Fairness’
policy, Smith and Morton (2001:123) point out that the Employment Relations Act
expressly does not favour collective bargaining. Importantly, Smith and Morton
(2001:125) have also argued that the scope of collective bargaining has narrowed
with the act confining collective bargaining ‘to market (economic) relations, to the
exclusion of managerial relations’.
Although it is too early to make a decisive judgement, it seems that the ALP’s
industrial relations approach has not been heavily influenced by New Labour’s
industrial relations ‘settlement’. More particularly, it seems that Gidden’s thesis of
growing individualism in society has not weakened the ALP’s resolve to remove
Australian Workplace Agreements – statutory individual contracts – from the
Australian industrial relations scene and reinforce collective bargaining as the
preferred modus operandi. In this regard, it seems that third way thinking has not
14
filtered down into the ALP’s industrial relations policy setting in the same way it has
for Blair’s New Labour government.
The differences between the Rudd Labor Government’s reform proposals and that of
New Labour may lie in the strong and almost universal belief that the Howard
Government’s downfall was caused by Work Choices and the successful trade union
campaign against it. Moreover, in the absence of strong evidence of a need for such
reform and a relatively robust Australian economy, Work Choices seems to have
fallen victim to what has been labeled as ‘reform fatigue’ in the Australian electorate.
This phenomenon has also been labeled as a ‘spirit of disengagement’ and ‘strategic
withdrawal’ by the renowned Australian social observer, Hugh Mackay (see Mackay,
1999:300). Further, the differences may also lie in the stronger purchase the left
wing of the ALP seems to have in Government as a consequence of the perceived
authority and status of the Deputy Prime, Julia Gillard.
In the immediate aftermath of Labor’s victory, doubts emerged over whether the new
government would continue to recognise the importance of the union movement’s
campaign in its historic win. Former Treasurer Peter Costello commented that ‘Rudd
would seek to rewrite history’ while John Robertson, Secretary of Unions NSW
argued that the only difference between John Howard and Kevin Rudd was ‘this guy
(Rudd) doesn’t want to kill us’. Similarly, the national secretary of left-wing union, the
Construction, Forestry Mining and Energy Union told a forum in July 2008, that ‘On
industrial relations policy, the Rudd Labor Government is considerably better than
Howard but not as supportive as Labor governments of past eras.’ (Davis, 2008).
This concern was also evident in a media release of the ACTU on 15 July 2008
which presented the findings of a Galaxy Poll of a thousand adult respondents
commissioned by the ACTU. The poll provided support for the immediate dismantling
of Work Choices rather than follow Labor’s plan to introduce comprehensive reforms
in 2010 and points to the trade union movement’s frustration with the Rudd Labor
Governments transition plans (ACTU, 2008).
There remain significant areas of industrial relations regulation from the Howard
government that remain in place. Two areas that have attracted attention are first the
extensive regulations governing the right of entry and strike activity that remain in
place (ACTU, 2008a). Second, the controversial Australian Building and
Construction Industry Commission (ABCC) will remain in place until 2010. This
organisation was given extensive and special powers for regulating the construction
sector, including trade unions (currently one unionist faces imprisonment for not
revealing to the authority the details of what was discussed at a union meeting).
(Davis, 2008) The third issue on which there appears to be little progress are the
gaps that are present in the regulatory framework that allow many workers to be
excluded from employment rights and protections (see the paper by Iain Campbell at
this conference). In general, the peak union body, the ACTU, has expressed a sense
of frustration at the slow pace of industrial relations reforms with the window for
significant change (2010) being long enough to allow for the institutionalisation of
union exclusion processes and the continuation of individual agreement making
(ACTU, 2008b; ACTU, 2008c).
15
In summary, the Rudd Government’s transitional legislation and its promises for
more comprehensive reform in 2010 suggest that while measures to protect equity
are high on its agenda, there will not be a return to twentieth century arbitration or
extensive privileges for trade unions. Rather, there will be a stronger safety net in the
form of a revitalised ‘no disadvantage test’ and national minimum standards, and
greater emphasis on collective bargaining and the workplace rights this implies. Only
time will tell whether Work Choices represented the ‘high watermark’ of neo-liberal
reform and whether the Rudd Government’s reforms will indeed ‘get the balance
right between fairness and flexibility’ or simply moderate the path taken by earlier
governments.
The Re-regulation of Employment Relations in New Zealand
Of all the OECD countries, New Zealand implemented the most radical set of neoliberal ‘reforms’, in the process diverging markedly from its ‘sister’ Australian
industrial relations system and discarding conciliation and arbitration institutions
which had operated continuously from the late nineteenth century. A Labour
government, elected in 1984 established the foundation of the reform agenda.
Initially by rejecting any form of corporatist cooperation with the industrial wing, the
government set out to partially deregulate the labour market by enacting the Labour
Relations Act 1987. It did determine though to maintain a number of union security
mechanisms. These included exclusive bargaining rights and compulsory unionism
provisions in awards. Chief driver of change was the abolition of compulsory
arbitration that the government anticipated would generate substantially
decentralised bargaining structures. However, through a number of trade union
coping strategies, especially by emphasising awards rather than enterprise
agreements as the preferred source of employment conditions, the deregulation
policy outcomes were frustrated. The interests of Capital, particularly embodied in
groups such as the New Zealand Business Roundtable railed against the
government for not securing change consistent with the deregulation achieved in
New Zealand’s product and financial markets. Their message promoted the
proposition that the labour market continued to be beset by employment reducing
rigidities, inflexibilities and in dramatic need for radical reform (Bray and Walsh:
1998).
Employer militancy and dissatisfaction with the trade unions’ resistance meant that
after its electoral success at the October 1990 election, the conservative National
Party was unswervingly focussed on a market ideology mandate and radical
deregulation. This it achieved by enacting the Employment Contracts Act 1991
(ECA) which cast off a century’s set of union security rights and dramatically
refocussed the ‘web of rules’ from collectivism (standardised, union-based awards)
to individualism (especially non-union individual contracts). Unlike the earlier
legislation which emphasised providing procedures for the ‘orderly conduct of
relations between workers and employers’, and accountability by the parties, the
ECA’s purpose was to promote an efficient labour market, freedom of association
and employee choice of who (if anyone) should represent them. In summary the Act:
discontinued trade unions’ rights to exclusive representation by providing workers
with the capacity to unilaterally decide their bargaining agents, abolished compulsory
unionism and created an individual bargaining stream with provisions designed to
encourage its adoption. Section 18(2) of the ECA, for example, specifically prohibited
16
an employer from being required to become involved in any negotiations for a multiemployer agreement. The state, ironically given their ideological passion for
deregulation, did continue to maintain a role by enacting a minimum employment
code (including a minimum wage, annual leave entitlements and prohibition on
certain forms of discrimination) and by creating industrial relation tribunals with
widespread jurisdiction to interpret and enforce employment contracts.
In response to a New Zealand Council of Trade Unions (NZCTU) complaint lodged in
1993, an ILO Committee on the Freedom of Associationiii found that the ECA was in
contravention of a number of ILO Conventions which New Zealand had ratified, viz
Convention 87 (rights of workers to organise freely) and Convention 97 (workers
organisations are separate and protected against employer retribution). The
Committee determined, inter alia, that the Act did not promote collective bargaining,
provided inadequate protection for workers against employer discrimination when
undertaking union activities, unduly limited the right to strike and placed undue
limitation on the rights of unions to organise. It recommended the legislation be
amended to satisfy the requirements of both Conventions, but given the nonmandatory status of ILO determinations, the New Zealand government took no
action. The President of the CTU commented, ‘the recommendations . . . were a
strong attack on the credibility of the Employment Contracts Act’ and suggesting ‘it is
very relevant at the end of the this decade that international agencies are warning
against the infatuation with globalisation, the obsession of competitiveness and the
casting aside of values’ (Wilson, 2000: 87 and 80. See also, Honeybone, 1997).
Unlike the earlier Labour Relations Act, the ECA overcame resistance and highly
marginalised New Zealand’s industrial relations system from the OECD mainstream.
By 1997, as a result of both pieces of legislation, the internationally distinctive and
previously durable system of compulsory conciliation and arbitration had been
abolished with single employer collective agreements and individual contracts all but
supplanting multi-employer agreements and awards. Evidence cited in Honeybone
(1997) for example demonstrates the proportion of workers covered by collective,
multi-employer, unionised awards/agreements collapsed from 59 per cent in May 1991
to only 6 per cent in August 1993. The number of unions declined from 227 to 83 (in
part through amalgamation) and density dramatically declined to 20 per cent of the
workforce from over 44 per cent in the mid 1980’s (Honeybone: 1997 and Bray and
Walsh: 1998). Industrial stoppages fell from 193 with 366,000 working days lost in
1986 to 42 and 24,000 working days lost in 1997 (Bradford, 1999: 160). In Boxall’s
assessment the ECA heightened the bifurcation of the labour market around skill with
the talented ‘rewarded’ and ‘comfortable’ whilst the less skilled and less organised
experiencing ‘greater difficulty exercising appropriate voice and accessing their
employment rights generally’ (Boxall, 2001: 27). Overall, Fryer and Haynes (2000:
122) conclude that the ‘ECA swept away the vestiges of the old system and replaced it
with a decentralised, contract-based system founded on the individualisation of the
employment contract . . .the impact of the ECA was dramatic.’
In November 1999 a Labour/Alliance coalition government, committed to repealing
the ECA was elected. Max Bradford, the Minister for Labour in the National Party
government had sought to defend the ECA as being a ‘model for flexible labour
market legislation’ by generating jobs, creating flexibility, reinforcing individualistic
freedom of choice and by empowering business with the right to develop workplace
17
arrangements best suited to their unique needs (Bradford, 1999). Whilst the Labour
Party plainly indicated their dissatisfaction with the deregulatory assault of the ECA,
they were equally keen to dispel any fears of a reinstating a pre-reform set of
industrial relations arrangements. Their labour relations spokesman, responding to
some NZ Employers Federation ’mischief’, starkly pronounced that ‘Labour will not
return, directly or indirectly, to compulsory unionism, compulsory arbitration or
national awards’ (Hodgson, 1999: 174).
Explaining the Employment Relations Bill to a forum of the N.Z. Employers’
Federation, the Minister dismissed the then ECA legislative framework as embracing
the seductiveness of ‘simplicity’, being ‘a poor foundation for progressive business
management’ and for ‘failing to deliver the increase in productivity that (was)
promised by its advocates’. The new legislation would be framed on the overarching
theme that the employment relationship ‘is a human relationship . . . (which)
functions best in an atmosphere of mutual trust, confidence and fair dealing’ and that
‘most employers will recognise that an employee who is committed to the enterprise .
. able to make full use of their skills, and willing to contribute ideas is a more valuable
one’ (Wilson, 2000). The new act would attempt to restore balance in the employer
employee relationship and recognise the rights to union membership and collective
bargaining (Wilson, 2004).
In the first year of office, the new government repealed the ECA and enacted the
Employment Relations Act 2000 (ERA) The detail of the major changes introduced
by the ERA are explained in Appendix 1. The law set out a number of key objectives,
including;

to build productive employment relationships through the promotion of mutual
trust and confidence in all aspects of the employment environment . . .,

by recognising that employment relationships are built on good faith
behaviour,

by acknowledging and addressing the inherent inequality of bargaining power
in the employment relationship, and

by promoting collective bargaining.
The broad thrust and specific new institutional arrangements demonstrate the ERA
represents a shift back to a more regulated, collectivised but not centralised system.
The Act returns the monopoly right to unions to collectively bargain (although
individual agreements are still allowable), reinstates unions’ rights to organise (for
example by right of entry provisions), requires employers to bargain in good faith and
facilitates multi-employer bargaining with worker assent. This mix of strategies will
generate a renewed legitimacy for collectivism. ‘Free-riding’ is less likely and unions
gain a psychological fillip from being rewritten into the employment relationship as
making a positive contribution. This is the principal discontinuity from the ECA.
Walsh and Harbridge (2001:355) conclude:
‘…the bargaining provisions of the ERA provide a basis for unions to repair
some of the damage done to their movement during the last decade. The Act
18
proceeds from the premise that employment relationships involve inherent
inequality and that collective organisation by trade unions is the most effective
way to redress this inequality’.
In the subsequent evaluations of the Employment Relations Act there are three
features that stand out. The first is that the dramatic decline in the trade union
density that occurred under the ECA has not been able to be reversed under ERA.
While the number of trade unions has increased and the decline in density has
stopped (May, 2004), it will not be returning to pre ECA levels. Trade union
membership remains concentrated in the public sector and in manufacturing (may,
2004). There has been no coming back for trade unions in many workplaces and in
many sectors. May (2004) discusses an incumbency effect whereby a whole
generation of workers commenced employment in the context of trade union
absence and an individual bargaining regime. Second, and related, union bargained
collective agreements have also been slow to return. Non union and individual
bargaining remains an important feature of the New Zealand system. Third, the free
rider problem remains, the coverage under union collective agreements exceeds the
trade union density, and the extent of free riding has not been appreciably been
reduced under ERA (Wilkinson et al, 2003).
In the New Zealand case the re regulation of industrial relations did not bring about a
revival in either trade union membership or collective bargaining. Authors such as
may (2004) acknowledge the far reaching impact of the ECA on New Zealand
workplaces and industrial relations. While the aim of the ECR was not to return New
Zealand to the pre ECA era (Wilson, 2004), it is apparent that in practice the ECA
has a enduring presence. In this context it is not surprising that the New Zealand
path is towards legislative rights in such areas as parental leave, holiday leave and
OH&S standards (Howarth, 2004).
Comparing Re-regulation in Britain, Australia and New Zealand
Perhaps not unusually, it appears that those countries that had highly deregulated
labour markets, have only partially, re-regulated, or at least returned to the
regulations that were present in the pre neo liberal era. Again, in all three cases the
elected Labor party governments announced that they would not be returning to the
past. The discussion was generally put within a context of modernisation and
developing strategies to cope with globalisation (Wilson, 2004).
Table 2 seeks, in the form of a taxonomy, to summarise the key shifts in the
industrial relations systems operating in Britain, Australia (including the states) and
New Zealand. he variables on the y axis, degree of collective bargaining and the like,
have been chosen as they perhaps best reflect the principal measures of a
government’s approach to how employment conditions will be determined, the
degree of encouragement of individualism, whether trade union are tolerated or
despised and how workers may seek relief against unfair dismissal. Each factor is
measured in terms of the degree to which the most recent legislative change has
shifted (if at all) the pre-existing regulatory environment. In New Zealand, for
example, the Employment Relations Act has clearly reinstituted a number of trade
union rights. The table should be regarded as an aid to the analysis rather than as a
19
definitive template. Plainly, to distil complex legislation and bargaining arrangements
into a single cell necessitates broad tolerances and a degree of subjective
measurement. Also, the impact and actual operation of these institutional
frameworks needs to be mitigated against the ‘realities’ of organisational and
personal power relationships, the capacities and resources of all the actors
(especially the regulatory agencies) to achieve their objectives and relevant social
norms such as community tolerance of failure by unions and employers to comply.
Table 2 Comparing Britain, Australia and New Zealand post Conservative
Governments
Employment
Relations
Dimensions
Policy Britain
Collective Bargaining
Individual Contracts
Australia
New Zealand
Moderate
facilitation via
trade union
recognition
Encouraged (central
bargaining mode but nonunion collective
agreements permitted)
Retained
Will be Abolished in 2010 – Retained but
retained 2008-2009
deemphasised
Encouraged
Regulation of Industrial Neo-liberalist
(ie. little
Action
change)
Limited Right to Strike
Moderate
weakening of
Neo-liberalist
policy
Trade Union
Recognition
Statutory
system
(complex)
Strengthened Right of
Entry
Strengthened
Right of Entry
Encouraged
through
partnership
Encouraged
Encouraged
Strengthened
Strengthened
Strengthened
Euro-Works
Trade unions
Councils/Trade
Unions
Trade unions
Good faith bargaining
Unfair Dismissal
Employee
Representation
20
From table 2 there are similarities and differences attached to the post Conservative
industrial relations agendas in the three countries. The degree of change and the
speed of change also differ. Each country (to different degrees) seeks to facilitate
collective bargaining; each moved away (to different degrees) from individual
contracts; industrial action remains regulated in each country; good faith bargaining
is strengthened as is unfair dismissal protection.
Conclusion – Accounting for the Presence of Convergence and Divergence
Whilst the general trend towards re-regulation is unusually consistent across the
three countries compared, there remain significant differences in form that regulation
has taken. This raises the important question of how to account for the co-existence
of these similarities and differences. One potential explanation for the parallel
experiences in the three countries is the influence of third way type thinking on
government policy. The argument is perhaps most persuasive in the British case,
where New Labour’s entire political platform has been informed by third way thinking.
Although, as previously contended, third way advocates have rarely contemplated
industrial relations issues, the acceptance and facilitation of growing individualism at
the workplace is a feature of the UK’s Employment Relations Act 1999. In Australia,
third way ideas have been promulgated by current and former office-bearers of the
ALP such as Tanner (1999) and Latham (1998), both of whom have said little about
the translation of third way ideas into the industrial relations arena. Indeed, most
discussion seems to dwell on changing the welfare system to reflect the third way
principle of mutual obligation. Similarly, there is little evidence to suggest that third
way thinking has influenced the industrial relations policy of NZ Labour in
government. Indeed it would be drawing a very long bow to argue that key principles
of third way politics have filtered down into, and significantly influenced, the reregulation policies of the antipodean labo(u)r parties.
A more persuasive account of the simultaneous finding of similarities and differences
in Britain, Australia and New Zealand lies in new institutionalist theory, which Wailes
(2000) has argued is characterised by the methodology of ‘common pressure,
divergent response’. Wailes and Ramia (2001:133), for example cite Locke and
Thelen (1995) who have argued that whilst globalisation has created ‘uniform
economic pressures for increased flexibility, the types of flexibility sought and the
degree of success achieved differ from country to country, state-societal differences
being the main explanatory differences’.
During the 1980s and 1990’s in the three countries under analysis, similar economic
and ideological pressures were addressed through de-regulatory economic policies.
But, although these policies were similarly inspired by neo-liberalism, their impact on
the type and extent of de-regulation differed according to the countries various
institutional arrangements and history. For instance, New Zealand’s unicameral as
opposed to Australia’s bicameral parliamentary system has been identified by Bray
and Walsh (1998) as a significant factor in facilitating New Zealand’s radical labour
market deregulation in 1991. Similarly, in Britain the absence of a compulsory
arbitration system to provide institutional legitimacy to trade unions perhaps made it
easier for the Thatcher conservative government to crush the mineworkers union in
1984-5.
21
If it is accepted that institutional arrangements and history help explain the three
nation’s divergent responses to prevailing economic pressures in the 1980’s and
1990’s, the question remains as to what common pressure(s) has facilitated a
general trend towards re-regulation? Part of the explanation appears obvious –
political cycles in Britain and New Zealand have more or less tracked each other,
with Australia as the laggard, such that Labo(u)r parties in government have moved
to re-regulate labour markets. Underlying Labo(u)r’s electoral success however, is
perhaps a more fundamental phenomenon which has emerged as a result of
rationalism – that is, a general cynicism of neo-liberalist policies and associated
reluctance to countenance further de-regulation. This is somewhat speculative but
there is some evidence to support this position. In Britain, for instance, the popularity
of cultural epithets to the Thatcher years such as the film ‘Brassed-off’, and in the
title of Blair’s ‘Fairness at Work’ policies, are a reflection of community experience of
neo-liberalism. Similarly, in Australia the rationalisation of Work Choices did not fit
with the everyday work experiences of Australians and was largely seen as an act of
hubris by a government unconstrained by the Senate. In New Zealand, continuing
economic weakness in spite of radical neo-liberalist policies has depleted any
goodwill the electorate may have had towards further de-regulation.
There are a range of institutional factors which help explain the type and extent of reregulation evident in each country. The significant contribution of the trade union
movement to Rudd Labor’s success signalled that a Federal Labor government
would re-regulate the Australian labour market to a greater extent than has been the
case in Britain. However, even here the speed and the extent of change remains an
issue. “Your Rights at Work” campaign that was influential in the 2007 election still
retains its website and continues to highlight what it sees as the ongoing abuse of
employee rights and conditions associated with the retention of the Work Choices
legislation (Your Rights at Work, 2008). New Labour’s conscious decision to distance
itself from the British labour movement has meant that the British trade union
movement is unable to exert as much influence as it once enjoyed. Similarly the
influence of supra-national institutions such as the European Union, has clearly been
pivotal to the form that re-regulation has taken in Britain.
Why is it difficult to remove or to turn back neo liberal industrial relations programs in
a post conservative era? In all three countries the newly elected governments had
strong ties with trade unions and a commitment to fairness and rights at work. We
would suggest that there are three reasons for the neo liberal resilience. First, the
various Labor party’s were and remain adherents to a globalisation and a
modernisation agenda. In Australia many of the major neo liberal and deregulation
programs were introduced through the government of the Australian Labor party
(Ramsay and Battin, 2005). Second, the ability of the neo liberal agenda to
transform industrial relations cannot be understated. In New Zealand whole sectors
were de unionised and a whole generation of employees worked without trade union
contact (May, 2004). Third, Labor parties are anxious to develop their economic
credentials with the electorate and the business community (Ramsay and Battin,
2005; Waring, 2005), as a result radical reforms are avoided or eschewed in favour
of gradualism.
22
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Endnotes
i
For this reason, the opposition parties would later argue that the Howard Government had no
mandate to introduce Work Choice.
ii
New South Wales v Commonwealth of Australia; Western Australia v Commonwealth of Australia
[2006] HCA 52
iii
Case No. 1698 in 292nd Report of the Committee on Freedom of Association (1994) reported in
Wilson, R. (2000) ‘The Decade of Non-compliance: the NZ Government record of Non-compliance
with International Labour Standards 1990-98’, New Zealand Journal of Industrial Relations, Vol. 25,
No. 1, pp. 79-94.
28