23 November 2015

Workplace reform a key ingredient in manufacturing competitiveness

“Pragmatic, sensible changes” to Australia’s workplace relations system are essential to the long term competitiveness of Australia’s manufacturing sector and securing our next generation of industrial employment, according to Manufacturing Australia.

The industry group, run by CEOs from some of Australia’s largest manufacturing companies, has today released a paper calling for changes it says would re-focus and improve the Fair Work Commission, reduce the most destructive aspects of enterprise bargaining and facilitate necessary changes in enterprises.

Manufacturing Australia Chairman, Mark Chellew, said the Federal Government has an opportunity to lead a level-headed, no-nonsense, debate about how Australia can maintain high employment standards for workers, while encouraging greater workplace flexibility and direct engagement between employees and employers.

“We have a good framework: a strong safety net for employees and access to an independent umpire when its needed and is appropriate. Nobody wants to change that. But of course things can be improved, and the Productivity Commission has rightly recognised that.”

“Manufacturing Australia wants to see a labour market where employees have confidence that their wages, conditions, rights and obligations meet community standards. We also want a system that encourages more direct engagement between employees and employers, and provides enough flexibility to respond to shifts in technology, dynamic global markets and changing levels of demand.”

“We must remain open minded about how our labour costs, practices and structures compare to the rest of the industrialised world and constantly refresh our thinking to remain internationally competitive. In particular, if we are to attract new manufacturing investment, then we must must reduce the high costs of constructing new plants, which is a long term choke point on the economy and is driving capital investments offshore.”

Manufacturing Australia says its recommendations will be essential for Australian and international businesses to invest in local manufacturing and secure the next generation of industrial employment in Australia.

Key recommendations include: restructuring and re-focusing the fair work commission in line with the Productivity Commission’s recommendations; limiting the matters covered by an enterprise agreement to the direct employment relationship; tightening laws governing protected industrial action and union right of entry; and, making it easier for employees and employers to bargain directly when it is preferred by the majority of employees.

Mr Chellew urged both the Federal Government and Opposition to prioritise workplace reform and look for areas of consensus in the interests of Australian businesses and employees, and he added that those who suggest we can boost manufacturing productivity without workplace reform were naïve.

“Workplace reform is not a panacaea, but it is an essential ingredient to lifting the global competiveness of Australian manufacturing,” he said.

“I’ve spent my career in manufacturing. I know that we can compete with the best in the world if we are innovative, flexible and play to our strengths.

“Obviously boosting manufacturing productivity is about more than just labour productivity. It’s also about training and skills development, better alignment between research and industry, reducing the burden of uncompetitive taxation and red-tape, public and private investment in infrastructure and sensible energy policy.

“But let’s not kid ourselves: manufacturing is a tough, competitive, global industry. If we overlook any part of our businesses where we could do better, be more flexible, make improvements, then we will lose out to our competitors. And there’s no doubt we can make those improvements to our workplace relations system.”

View a copy of the Manufacturing Australia paper here