Howard fails to make economic case for IR changes

Even John Howard`s business supporters are sceptical of the federal government`s weak economic arguments for workplace change.

A prominent business leader and a conservative economist often used by the federal government are the latest voices to question the economic arguments put forward by John Howard and his Minister for Workplace Relations Kevin Andrews to justify their new workplace laws.

Professor Mark Wooden, a high-profile economist who has been a witness for employer groups and the federal government in test cases on reasonable hours, redundancy and unfair dismissal has slammed government claims that the changes would give a boost to workplace productivity.

‘There’s not a lot of evidence that individual contracts produce productivity. I think that the biggest gains for productivity still revolve around a system which is collective-based. There’s plenty of evidence around again that unions can enhance productivity where they’re very active in representing the worker’s interests and where they collaborate cooperatively with firms,’ he said.

Wooden is equally dismissive of government arguments that the changes will lead to more jobs.

‘A stated objective of the reform is to provide more jobs; yet it is unable to deliver any proposal that will help the unemployed to secure employment,’ he said.

‘The cost on the other hand is greater uncertainty and insecurity for some Australian families, directly contrary to the aims of the reform agenda.’

Wooden’s dismissal of the government’s economic arguments is backed up by Heather Ridout, CEO of leading employer organisation the Australian Industry Group. She disputes John Howard’s claim that unfair dismissal laws stop employers from hiring people and that rolling back these laws will create jobs.

‘You’re not going to go around putting on more people just because the unfair termination laws have changed,’ she said.

She also casts doubts on government claims that individual contracts will boost productivity.

‘I’m not aware of direct research to that effect,’ she said.

Howard’s unfair dismissal ‘solution’

5 winners, 21,000 losers

The announcement by John Howard that $4,000 may be available to a worker who has an arguable case for unlawful termination does absolutely nothing to help workers who are unfairly dismissed.

NSWNA General Secretary Brett Holmes says the Howard government is devious to suggest that workers will still be protected from unfair dismissal under the new laws.

‘John Howard is fudging the two types of laws relating to the dismissal of employees – unfair dismissal laws and unlawful dismissal laws.

‘Unlawful dismissal laws do not protect workers from unfair dismissal. They only cover terminations of employees for very narrow discrimination reasons such as race, sexual preference, disability, ethnicity, age or gender.’

There have been just five unlawful dismissal cases decided by the Federal Court in the past three years.

Unfair dismissal laws cover all the most common types of unfair or unjust dismissal: for raising an issue about their pay, or requesting time away from work, or if their employer is unfairly criticising your work performance.

About 21,000 Australian workers lod-ged unfair dismissal claims with the IR Commission in the same period.

‘If the experience of the past three years is repeated in the next three years, the government’s $4,000 would partially help five people and leave up to 21,000 others with no protection,’ said Brett Holmes.

Lawyers say the Prime Minister’s plan to offer $4,000 towards legal fees in suitable cases will help only a handful of people due to the expense and difficulty of the type of actions that will be available once the government introduces its IR changes.

‘It [$4,000] would cover about 10 per cent of the cost of an action in the Federal Court,’ says Steven Penning, partner of law firm Turner Freeman.

The difference between unfair dismissal and unlawful dismissal

Unlawful dismissal

  • unlawful termination laws do not protect workers from unfair dismissal.
  • unlawful termination laws only cover terminations of employees for very specific anti-discrimination reasons such as race, age, sexual preference, ethnicity, disability or gender.
  • unlawful termination cases are legalistic and must be heard in the Federal Court.
  • there have been just five unlawful termination cases decided by the Federal Court in the past three years.
  • the cost to an employee of running an unlawful termination case is between $30,000 and $40,000.
  • the cost of preparing a statement of claim to initiate the proceedings would be $8,500 to $15,500.
  • If a worker lost the case they may end up paying their former employer’s legal costs.

Unfair dismissal

  • unfair dismissal laws protect all Australian workers from being sacked for an unfair reason.
  • unfair dismissal applications are heard in the Industrial Relations Commission, do not require workers to be represented by lawyers, are heard quickly with little cost to employees or employers.
  • about 7,000 Australian workers lodge unfair dismissal claims with the Industrial Relations Commission each year.
  • the Federal Government plans to remove access to these laws for all employees in businesses with less than 100 staff. This means more than 3.6 million workers employed in 99% of Australian companies would have no protection from unfair dismissal.