Fair Work Act will be a problem for whoever wins government: Gottliebsen

The chief executive of the Australian Chamber of Commerce and Industry, Peter Anderson, delivers a potentially chilling message for Australians in his KGB TV interview. At a time when the National Australia Bank’s quarterly survey shows that business confidence has fallen sharply and that unemployment has started to rise as a result, Anderson warns that the industrial relations legislation is a smoking gun for both parties.

He agrees with Tony Abbot and Julia Gillard that business needs time to settle in to the new legislation and where possible to devise systems to make it work.

But there are already emerging areas where it is simply not working, and whoever wins the election is going to have to fix those areas or we will see unemployment rise much further and productivity slump.

Anderson points out that the Fair Work legislation gives enormous power to the regulating authorities and how they interpret the Act, and the judgments they give are going to determine whether the Act works well or has gaping flaws.

Early indications are not good. We have seen that the regulators have made it very difficult for schoolchildren to work two-hour shifts after school. Anderson didn’t pass judgment on that determination, but the best that can be said of it is that is it absolutely crazy.

Anderson reveals that there have been cases of unfair dismissal where the employer has done everything that was required under the Act, but there was some technical hitch that has required a massive payout or job reinstatement

If Australia wants high employment and better productivity then you can’t have regulators of industrial relations systems acting as though they are High Court judges and turning every judgment on a fine legal point.

I have heard of another stunt in which an employee of a small enterprise, who has been very reasonably treated, goes into mediation and spins it out beyond one month, knowing that’s when free mediation ends. The idea is that the small employer will be forced to pay for future mediations and so can be bulldozed into settling.

Strangely, Julia Gillard may be in a better position to fix the problems that will arise because Tony Abbott has boxed himself in a terrible corner with industrial legislation. You will remember Gillard’s proposed legislation was far more flexible and innovative than the Act that was finally passed. Kevin Rudd and Greg Combet butchered the Gillard proposal and this sowed the seed for Rudd’s removal.

Last night’s Morgan Poll confirms what the bookmakers are saying — that Labor is likely to win this election. But no matter who wins, the industrial portfolio will be a very important post because all the indications are that the regulators who have been appointed are capable of doing considerable damage to the Australian economy.

This article first appeared on Business Spectator.