Thursday, June 02, 2005

Lawyers will turn Howard's industrial nirvana into employer hell

ON LINE opinion - Australia's e-journal of social and political debate
By Irfan Yusuf
Posted Thursday, June 02, 2005

LAWYER: Doctor, what is your impression of the accused?
PSYCHIATRIST: I’m sorry, sir, I don’t do impressions. My training is in psychiatry!
(from the slapstick comedy Flying High)

John Howard has been a favourite target of impressionists from Max Gillies to the crew on the Mike Carlton Breakfast Show. But in industrial relations law and policy, few have made such a big impression as our good PM.

And now after years of crusading for change, it seems that the PM will finally have his chance to implement industrial nirvana. But will it be as heavenly as Mr Howard and his supporters from employer organisations imagine?

Mr Howard’s policy looks absolutely superb on paper. It will be easier to sack workers, especially for smaller businesses with up to 100 employees. Unions will have less power as enterprise bargaining is phased out more quickly and individual and workplace contracts become the norm.

Labor premiers, of course, are up in arms. Premier Bob Carr, the man who slashed injured workers’ entitlements for the sake of appeasing insurers, has seen the light and will fight the Howard reforms. He will be joined by his colleagues from other states in what promises to be a legal showdown in the High Court.

Who will win? Will Mr Howard have his day of glory? Will unions and workers be saved? Who knows? Who cares? One thing is for certain – whoever wins, the lawyers always win.

And not just lawyers acting for either side of the High Court challenge. Howard’s reforms will simply not work because they, like everything else created in policy nirvana, do not take into account how industrial law works on the ground. Mr Howard has failed to take account of how litigants and their advisers will be looking at the system, and how judges and commissioners will be administering the system.

One would expect that having one of Australia’s premier industrial counsel as one’s deputy would have given Mr Howard some idea of which way his reform winds should be blowing. Then again, one would also expect Mr Howard to advocate on behalf of all Australian citizens caught up in a spot of legal bother overseas. Yeah, right.

Mr Howard’s reforms simply won’t work. Let’s look at unfair dismissal. Say my fictitious client Jasmine approached me and said she had been working as a research scientist for a decade before being shafted by her laboratory management, would I first look at unfair dismissal? I might consider it as one option. But unfair dismissal has enormous disadvantages.

Jasmine could only get up to 6 months wages as compensation for unfair dismissal. She has to pay my fees out of that amount. If I take her matter to hearing, the fees might add up to $10,000. Her compensation might be three months wages. If she earns $800 per week, she will get $9,600 compensation. And this is before tax is deducted.

If Jasmine loses the case and is found to have made a frivolous or vexatious application, she might have to pay her employer’s legal fees.

And all these factors have to be considered and an application lodged within 21 days of dismissal. Rarely will a resignation under pressure be regarded as a dismissal.

On the other hand, Jasmine may have resigned or been offered a redundancy package. She may even have been dismissed. She may well have a more lucrative option of an application under s106 of the NSW Industrial Relations Act for unfair contract. Similar provisions also exist in Queensland and other States and Territories as well as at Commonwealth level.

Jasmine could apply for a host of things. Her claim would not be limited to six months wages. Further, we could ask the commission to make orders that her employer pay all or part of her legal fees. And we could couple it all with a claim for unpaid entitlements.

If employers realised how expensive a claim for unfair contract is (as opposed to an unfair dismissal claim), they would not be cheering Mr Howard on in his crusade against state unfair dismissal laws. If unfair dismissal is made unavailable, more litigants will use alternate legal avenues which will prove even more expensive for employers.

Next, let’s look at the focus on individual and workplace agreements. Who is going to advise on these agreements? Who will draft them? Will there be one standard agreement? Or will we see different agreements for different level staff? How will all this tie in with Occupational Health and Safety, anti-discrimination and other matters? And who will adjudicate in the case of disputes?

I admire Mr Howard for trying to free up the industrial marketplace. It is badly in need of deregulation. For too long, workers and employers have been hampered in their dealings by too much regulation and red tape. But methinks the Howard reforms will achieve little for either side. Mr Howard has failed to consider litigation dollars and cents.

And without considering the dollar-and-cent decisions, the reforms will make little sense in the long run.

Irfan Yusuf is a Sydney lawyer.