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Tuesday, July 12, 2005


What are the consequences of individual contracts in the workplace?

I'll bet pounds to peanuts that Bill Farmer, ex-DIMIA, was on an individual contract which is a thou shalt please thy master or else document. Someone was on the radio over the weekend saying that what happened in Immigration would not have happened under the old time mandarins, so&so and so&so. He didn't mention one vital factor - these people would not have been on contract with defined time limits. Tenure in a position either in the bureaucracy or universities has a lot of negative baggage but there is also positive stuff - and one thing is being able to give fearless advice if you are a public servant.

At the moment, we see the great sideshow of John Howard and Peter Costello selling themselves as The Workers' Friends. The fact is that what they are trying to do is please employers. Now the scenario is that lower costs will benefit employers and employers will feel more able to offer more jobs. My experience as a union organizer across a range of industries showed me the level of ignorance of employers and the can't be bothered to take on board industrial law attitude of employers. To sum up: a lot of employers in small business are ignorant and a lot of employers in both small and big business can't be bothered to do the right thing by their employees. Why should ignorance or disdain be supported by government policy.

If employers take industrial law precautions and act ethically, they are unlikely to come off worst in relation to unfair dismissal claims. But, if they want the quick fix to satisfy their hubris, then they are likely to get what they richly deserve. They can be as much part of the problem as the employee they disdain.

No, changes to industrial law are to benefit employers. Contracts are designed to decrease the cost of labour over the long term.

There are two ways to reduce wages

1. Increase the power of the market. This means increase the power of employers and/or create an oversupply of labour so that people will have to take anything at any price just to get their foot in the door.
2. Decrease taxation levels so that what the labour market through the price of labour does not provide, the government can alleviate through being seen to be Santa Clause through tax cuts.

What all this means is that there are two levelling factors going on here:
1. The driving down of the price/cost of labour to internationally competitive levels
2. The driving down of taxation on income to internationally competitive levels.

Trouble is low-income people can't win either way - they have no power to bargain when things are individualised and they are treated shabbily in relation to taxation levels compared to the wealthy and the upper middle.

Of course, tax cuts of the proportion that are currently delivered are only possible because the GST has delivered to government riches beyond its wildest dreams. So through GST there is a flat rate of taxation (except for some luxury good items) for rich and poor.

Thought Costello's criticism of the new Anglican Primate, Archbishop Aspinall, where he denounced him for not being an expert on IR was a bit rich. If Labor was on the ball, it could have chipped back that Costello was possibly an expert on IR but only at employer level. He knew nothing of representing the best interests of working people only screwing them and their organisations on behalf of employers.

So the international agenda rolls on. The church, to the best of my knowledge, has never set out to develop a theology of labour relations. In fact, I have to tell you that a couple of major denominations (including my own) were among the worst offenders. There couldn't be a better time for Christians to embark on such a task. An internationalised economy where poor labour practices are driving down pay and conditions for those who labour for livelihood is, in many countries, doing nothing more than building the population of the slavery of the working poor.