June 28, 2005

Labor Market Reforms

By Bob

John Howard in Australia is, according to this article from Bloomberg, set to use his electoral victory to push through some labor market reforms:

The government has tried to make it easier for small businesses to fire workers and simplify working condition agreements since it was elected in 1996. Attempts have been rejected seven times, according to the main opposition Labor party's workplace spokeswoman Penny Wong in Canberra.

The changes will ``make it easier for firms to negotiate with workers than it ever has been,'' said Mark Wooden, deputy director of the Melbourne Institute of Applied Economic and Social Research, founded in 1962 and funded by the University of Melbourne. Wooden calls the planned law changes the ``most significant'' since the Industrial Relations Commission was established in 1905.

The changes will make it easier for employers to arrange individual agreements with workers, allowing them to tune work arrangements to circumstances and avoid industrywide regulation.

Businesses with fewer than 100 staffers will also be able to dismiss workers without challenges from unions and tribunals. For businesses employing more than 100, the probation period during which new employees can be fired without explanation would be doubled to six from three months.

The response from a union representative isn't surprising:
``The government has declared war on workers,'' said Doug Cameron, secretary of the 137,000-member Australian Manufacturing Workers Union in an interview from Melbourne.
As this type of deregulation is very difficult to pass, Howard should be appluaded for pushing this agenda. The article also talks about productivity which such measures are also likely to boost.

Naturally, most of you are saying to yourself that Europe, specifically France and Germany, should follow suit. IMO, such deregulation will never pass until blood is in the streets and I don't think they are there yet.

Posted at June 28, 2005 12:19 AM

Comments

Very intressting. Question: A friend of mine said Australias political left was gaining strenght, is this true? Will Howard succeed in this?

Comment by Tino at June 29, 2005 02:53 AM | Permalink

Tino, what I know of the electoral system in OZ it seems it will. Also, the left there doesn't seem in too good of shape. Labor there are about what Dems are here in the U.S.(I'm giving them the benefit of the doubt). It is a center-right country

Comment by Bob at June 30, 2005 05:09 PM | Permalink

G'day,

For those of you who would like to track labor market deregulation in Australia, try my clearinghouse, Industrial Relations Reconstruction in Australia (there is some irony in that heading) at http://www.mcdonald-assocs.com/irreforms/recon.htm

For what it's worth, The Australian Labor Party doesn't seem to be running very hard with the case. Maybe - to be kind - they're adopting a strategy of waiting for the legislation to be introduced into the House of Representatives, probably in September or October. The only party that seems to be on the ball (and I do not support them with my vote) is one of the minor parties in the Senate, the Australian Democrats (they mostly do not resemble the US Democrats, although there are some true liberals in their depleted ranks).

The Australian Liberal Party, in government, whose leading faction horribly resembles the neo-con factions in the Republican Party and their tactics , owes a lot to the tactics of Gingrich and the others implicated in the legal harrassment of the Clintons: opponents of their radical right policy are either liars or don't know the policy. The churches, whose leaders have criticised the industrial relations policy of the government are either left-wing (so not to be trusted in their commentaries) or are not industrial relations experts, so they don't know what they are talking about either.

One of the ludicrous premises on which the policy is founded is that the individual worker has as much bargaining power as the employer.

Cheers,

Jim McDonald

Comment by Jim McDonald at July 13, 2005 11:32 PM | Permalink

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