P 31 7
PRIME MINISTER
CHECK AGAINST DELIVERYEMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
THE SIR RICHARD KIRBY INDUSTRIAL RELATIONS INAUGURAL LECTURE
KIRBY: THE PRECURSOR OF CONSENSUS
MELBOURNE 16 NOVEMBER 1988
The last five and a half years have seen the most dramatic
change, for the better, in the industrial relations
environment in Australia's peace time history.
This is a large claim, but it is not, to use the jargon with
which you are familiar, an ambit claim. Its validity is
easily established and I will do so.
But I make the point at the outset, not because of
justifiable pride in having had something to do with that
achievement but because the achievement has something to do
with Dick Kirby indeed it has a great deal to do with him.
I can think of no-one from whom I learned more about
industrial relations than Dick Kirby. But industrial
relations is not some easily compartmentalised category of
law and/ or economics, despite the best endeavours of some so
to define it. These definitions have occupied chapters, but
my offering as to what industrial relations is about is
brief. It is about what are the conditions, in the industrial
scene,-for optimising behaviour between individuals and
groups in terms of achieving their legitimate aspirations
against the essential backdrop of the broader national
interests. So it is about law, it is about economics and it
is, profoundly, ab 5iit human nature.-
I don't know whether Sir Richard would claim to have taught
me any law and I doubt that he would claim to have taught me
any economics. But whether he realises it or not he was for
me a tutor, par excellence, in the subtle, mysterious,
complex of emotions and motivations that go to make up the
patterns of human behaviour.
And, for me perhaps most important out of all this, he was
and is an optimist. Despite the almost daily evidence,
with which he was confronted, of our propensity for
stupidity, provocation, pig-headedness and worse, he
remained supremely confident of the capacity of the human
spirit ultimately to triumph in decent and intelligent
outcomes. 3476
Whenever I listen to the final movement of Beethoven's Ninth
Symphony based on Schiller's " Ode to joy" the most
majestic affirmation of this spirit I think of good men
and women whose lives have been such an affirmation. I
think often then of Dick Kirby.
So it is no mere formality when I say that it is a great
honour to be invited to give the inaugural Sir Richard Kirby
Industrial Relations Lecture on the occasion of Sir
Richard's retirement as Patron of the industrial Relations
Society of Victoria and of the Society's Silver Jubilee.
And it is a pleasure to be given the opportunity of paying
tribute to an eminent Australian who presided over one of
our most important national institutions for 17 years, and
to a man I have known and admired since I first appeared
before the Commission as ACTU advocate in 1959.
Before his appointment to the Arbitration Court Bench in
1947, Kirby had already made his mark in other spheres: he
was appointed to the District Court in 1944; he served on
three Royal Commissions and on the Australian war Crimes
Commission; and especially noteworthy was the role he
performed as Australian representative on the United Nations
Security Council's Committee of Good offices on the
Indonesian Question and the crucial part this played in the
development of our relationship with Indonesia.
But it is on the period of his Presidency of the Australian
Conciliation and Arbitration Commission ( 1956-1973) that I
wish mainly to dwell.
That period saw a series of wage decisions of national
importance; a major battle over indexation; and the
evolution of the concept of the total wage. It also saw two
landmark decisions of great long term social significance:
the Aboriginal stockmen case, and the case for equal pay for
women. Everyone knows that not all of those wage decisions were
welcomed by the ACTU. Indeed the 1965 decision was seen as
disastrous and I was totally committed to seeing it
overturned. It is also a matter of public record that the
Full Bench was not always of one view on these matters and
that Kirby on some important occasions notably. 1965. was
in a minority.
Yet the influ'ence of Kirby as President of the Conciliation
and Arbitration Commission was profound in a sense beyond
measure not only in influencing, by argument and example,
the attitudes and approach of his colleagues at the time,
but also in developing an approach which others would follow
and build on in the future. 3477
3.
Kirby had many notable qualities and strengths: his
readiness to listen to new arguments, and the integrity and
courage to change positions previously taken publicly; his
willingness to foster reform ( and his desire to reform
Fosteri); his humanity and keen sense of social justice; his
determination to maintain the Commission's authority and
independence against outside influence or pressure; his
sense of humour; and finally but certainly not least his
great skills as a negotiator and msediator which were evident
throughout his career.
He had a fundamental belief in the value of consultation and
his door was always open for informal talks.
He strove hard to identify areas of common ground between
the parties and to establish the potential for compromise
and co-operation.
He had a full appreciation of a basic truth that the
prospects of a lasting resolution of a dispute are greatly
improved when all parties believe they have gained from, or
have not been unfairly disadvantaged by, the terms of the
settlement.
Looking back over the Kirby years, several decisions are
worthy of special mention in view of their long term impact.
The 1959 Basic wage Case had a special significance for me
as my first case and one in which we had to tackle the
fundamental issue of the ground lost through the 1953
abandonment of automatic quarterly cost of living
adjustments. My approach as advoca * te in this case was not unambitious.
Not to put to fine a point on it, I attacked the 1953
decision as being unsound in its law, perverse in its
economics, sociologically inept and an industrial relations
disaster. That I was heard through to a successful conclusion was
regarded by some as a minor miracle. with appropriate
modesty I can claim some small credit', for a brash talent and
tenacity of purpose. But the greater credit belongs to a
Dick Kirby who was big enough to make allowance for the
exuberance of youth and to harness the niggling of his
brethren on the Bench. He was determined that arguments,
however, in some senses, offensively they may have been put
should be heard and judged on their merits. And he was big
enough to make that judgement in a way which involved a
movement away from his own previously enunciated positions.
That we were substantially successful in 1959 in making up
that ground lost, in amount and in argument, since 1953 was
a matter of considerable pleasure to me as advocate.
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0 4' 0 q I, i,
But may I say, ladies and gentlemen,. moot e importantthan
that; Dick Kirby restored.: and eemen. ted: the faith. pf. an: iangiy.
young man who hadibegun:: to despai rnofefectingbchange, : r
through the procesesssofnational argument withipthe
established system.;'; , J c
I have never since lost that faittho. ndi., ti. that ,. in; any:. way,
has been of significance to this country, then'the credit is
due -to Sir Richard Kirby:.. nr c ; i
The' 1959 judgement paved the. way for the more important 1961
Decision;-g
That decision was a major reform. Although it did not
reinstate automatic adjustments,,;. it clearly signalled that
the Commission would i. n futureadjust; the, basicwage for,
price rises unless, it found unusual cir. cumstances: otained,.
While this principle was subsequently abandoned by the
majority 1965 decision, it was indeed soon resurrected and
found its echo in the Commission'. s 1983 Wage Principles.
In 1966, in the Cattle Station. Industry Case, the Commission
reached an historic judgement when it declared, " There must
be one industrial law, similarly applied, to all
Australians, Aboriginal or not". and ruled in favour of equal
pay for Aboriginal stockmen.
Kirby's vision and commitment to a society of equal
opportunity were again evident in April 1967 when the
margins Bench announced, " It seems to us to be industrially
unjust that women performing the same work as men would be
paid a lower margin". That pronouncement, and the
invitation extended by. the national wage bench the next
month to the parties to study the question of equal pay,
together with an offer of the Commission's services to
arbitrate, led directly to the Equal Pay Case later in the
year. Kirby's belief in justice for. the ordinary working man and
woman was demonstrated throughout his career. Equally
evident, I think, was. a sense that the best prospect for
resolving conflict and moving forward lies through a process
of discussion and consultation and determined effort to
identify common goals and: shared interests.
After his retirement from the Commission, Kirby was active
in arguing the case for. more co-operation and dialogue
between management and employees at all levels and for
establishing a joint. body'-to . promote goodwil-in industry.
The general political : climate. during the. years of his
Presidency was not, to. say the . least, always conducive to a
consensus approach. -In : any evnt,-the, re are clear limits to
the role the Commission can perform. But his approach was a
model for those who worked in the industrial arena. 3479
The deep respect I developed, as advocate, for Sir Richard
was further enhanced during the last three years of his
Presidency of the Commission and the simultaneous first
three years of my Presidency of the Australian Council of
Trade Unions. His commitment to exhaust the processes of
honourable negotiation with myself and the employers without
ever bringing into question the integrity of his office
continuously served this country well. That tradition of
Kirby was continued by his successor, friend and long
serving colleague, John Moore.
My relations with Dick Kirby remained close for the decade
after his retirement from the Commission in 1973. He was
for me a constant source of advice, assistance and, although
some may say it was superfluous, a spur to reasonable
ambition. Ladies and gentlemen, you can see therefore that when I
became Prime minister of our country in 1983 the influence
upon me of Sir Richard had been, indeed, profound. My own
philosophy had been enl arged and strengthened by his wisdom
and by his compassion.
And, therefore., as I speak now of achievements in the last
five and a-half years, it is for that reason, in part the
story of Sir Richard Kirby. I hope, Dick, you will see that
not as a cross to bear but a pride to share.
when the Labor Government came to office in March 1983, we
faced an economic crisis the worst Australia had suffered
since the 1930s. We were confronted with the task,
unprecedented in the post-World War II period, of having to
combat the problems of historically high unemployment
coupled with a high level of inflation.
Among the problems which had helped create this economic
crisis were an over-valued and unresponsive exchange rate;
an antiquated financial system; an over-protected and inward
looking manufacturing sector; a wages system which
perpetuated inflationary pressures; an industrial relations
system locked into expensive and futife confrontation; and
an education system failing to meet the needs of our most
potentially productive workers.
The central challenge in front of'us was to restore the
economy to a state of sustained economic growth. we
believed that an essential precondition for achieving this
was the creation of an atmosphere of constructive
co-operation among the various groups within our community.
Put simply, as I have often said before, it was a matter of
making workers understand that their legitimate aspirations
for improved standards, and employers' equally legitimate
aspirations for growth, were both more likely to be achieved
by such constructive co-operation than by a confrontationist
tunnel-visioned pursuit of their own objectives.
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Too often, in the immediately preceding years, Australians
had been set against Australians. There was a lega-cy of
conflict and division rather than of determination to work
together to achieve common goals.
The progress we have made since then in achieving our
objectives is a matter of record. it can be traced in large
part to the implementation of the Prices and Incomes Accord
with the trade union movement. The processes of
consultation were not limited, however, to the union
movement. We were concerned also to involve industry and
community groups and this was done through the National
Economic Summit and other tripartite mechanisms.
This approach produced sustained economic growth;
outstanding employment growth which so far has produced more
than 1.1 million new jobs; a substantial increase in
competitiveness; a remarkable drop in the level of
industrial disputation; increases in the social wage
especially for low income earners; and improved working
conditions for example, through Government action on
occupational health and safety, affirmative action, equal
employment opportunity and occupational superannuation.
In the difficult economic times of recent years, the Accord
has proved a viable and particularly effective mechanism for
change. Without it, the adjustment process would have been
more traumatic and damaging, with much higher levels of
unemployment and industrial conflict. Instead, adjustment
has been achieved in a socially acceptable way, with
protection for low income groups.
Let me give you one measure of this. During the
Fraser-Howard years, when workplace relations were
characterised by a confrontationist approach fuelled in so
many ways by the words and actions of the Government, there
was an annual average of around 590 working days lost per
thousand employees. Under my Government, this has fallen to
239 a drop of 60 per cent.
Results from recent empirical studies, reported in the
Journal of this Society and elsewhere, offer compelling
confirmation of this turnaround. They find that the
decrease in Australia's strike activity since 1983 is
dramatic, and has been substantially greater than comparable
industrialised countries. The evidence is that
consensus-based incomes policies do deliver more favourable
labour market. outcomes than the alternatives.
But I stress that such evidence is merely the measure of the
improvement in the industrial relations environment. The
meaning of that improvement is far broader.
For many years, Australia was seen by our trading partners
as an unreliable trading partner because of our industrial
disputes record. But our record now compares very
favourably with other OECD nati ' ons. Our reputation as a
reliable supplier is being rebuilt with consequent
improvements in our external accounts. 3481
In other words, Australians are, through working together,
achieving greater goals than-they could achieve by working
separately. That fundamental truth is the meaning of the
Accord. It is a truth recently acknowledged by the Managing Director
of the International Monetary Fund, Mr Michel Camdessus, and
also by the Secretary-General of the Organisation for
Economic Cooperation and Development, Mr Jean-Claude Paye.
Mr Camdessus, when he was in Australia in may this year,
pointed to the crucial role of the Accord as an additional
dimension of macroeconomic and structural policies aimed at
overcoming severe balance of payments, inflation and
external debt problems. Specifically,-he noted the
impressive results from a policy of dialogue which has
facilitated national cohesion, and allowed wage restraint
and exceptional employment growth at three times that of the
OECD average. At the same time the balance of payments
deficit has been progressively reduced. He concluded that
the world has a good deal to learn from what is now
occurring In Australia.
Mr Paye, the head of the OECD, when he visited Australia in
June, publicly affirmed the Accord wages policy as a
watershed in policy making, involving a consensual approach
to industrial relations which was to be preferred to
polarisation. Mr Paye described it as a very sensible wages
policy that had assisted in the improvement of the
Australian economy and contributed to the restoration of
confidence. He considered that Australia as a result was a
more dynamic, less rigid and less sclerotic economy.
You may recall that, initially,-there were those who doubted
that the Accord-would stand the test of time. There were
others who-professed to see danger in the-cooperative
approach developed between the industrial and political
wings of the labour movement. And there was also a certain
amount of nonsense spoken about the dangers of a corporate
state The critics saw the Accord as an arrangement which would
essentially act to protect vested interests, a conservative
force which would be resistant to change-especially
necessary structural change.
Nothing could have been further from the truth. The last
five and a half years have been a period of the most wide
ranging reform, and the Accord has amply demonstrated its
ability to respond flexibly to a rapidly changing
environment.* I do not need to give a comprehensive run down of the
changes which . have occurred to underline this point : the
floating of the dollar, the deregulation of the financial
system, the cut in tariffs, the new era of industrial
harmony and the sensible cooperation being achieved through
a series of industry plans.
34 g 2
As far as the labour market was concerned, our first
priority was to put in place an effective wages policy which
generated a responsible overall wages outcome. The
magnificent cooperation which Australian working men and
women, through the union movement, were prepared to give in
exercising sensible restraint, and the acceptance of the
short term need for a decline in real wages, were central to
the economic recovery.
We were, however, also very conscious of other reforms
needed to improve productivity. To tackle outmoded work and
management practices we convened a tripartite conference in
September 1986 which paved the way for the two tier wage
system introduced the following March. That decision by the
Commission provided a vital stimulus for workplace reform,
yielding tangible benefits as well as further enhancing the
degree of underitanding of mutual interests between workers
and management.
These then are the immediate and enduring-fruits of the
Accord and its underlying consensus approach to industrial
relations and economic management.
I gave this lecture the title " Kirby The Precursor of
Consensus" to emphasise my belief that the vision,
intelligence and generosity of spirit that Dick Kirby
displayed during his years of active involvement in
Australian industrial relations laid the foundations for the
broad acceptance by the Australian community, and in
particular by industrialrelations practitioners, of that
consensus approach.
Tonight, I do not in any way suggest that we have exhausted
the benefits of consensus in industrial relations. The
contrary is true. Having spoken so far of the years leading
up to the current climate in industrial relations, and of
the five and a half years during which the Accord has
dominated that environment, I want now to turn to the
future. I assert that we are on the verge of a new era in industrial
relations which will, if the consensus model is maintained,
yield massive benefits to the economy and to the Australian
community. It is perhaps not surprising, given what I have said of
Kirby's lasting influence on the Conciliation and
Arbitration Commission, that the last National wage Case
handed down by the Commission should have put award
restructuring at the top of the industrial relations agenda.
For award restructuring is the key to this new era. The
beginnings have been modest but the opportunities in front
of us are very large indeed. 3' 483
9. Furth
If the opportunities are grasped, we will have a more aret
productive society and a workforce which can adapt much more ret ra
readily to change. outmoded practices will be removed. aware
Jobs will be better designed to reflect modern requirements, cor re
and will be more fulfilling. Clear career opportunities part3
will be developed for the ordinary worker. We will have a great.
more highly moti * vated, better trained and more flexibly ret ra
skilled workforce. the v1
the t
In effect, a much greater degree of labour market peo0 P
flexibility will have been achieved without the costs
inherent in the approach favoured by those who advocate 1Einawholesale
deregulation. That approach wpuld destroy the f rame
hard won gains of recent years. Australia simply cannot
afford to abandon a system which delivers an economically The I
responsible outcome and substitute one which would t r i p
inevitably see an inflationary bidding up of wages. Nor can we Ca
we afford to-~ see an attack on basic standards and the
disruption, conflict and hardship that would entail. T he A
strei
Negotiations on award restructuring are already underway -Ki rby
at various stages of advancement across a range of title
industries such as the metals, steel, motor vehicles, TCF parti
and maritime and the waterfront. provi of Ck!
In the critically important Metal. Industry Award, the 350
odd classifications that represent the accumulated w ith
ossification of some 60 years will by next year be replaced small.
by nine. Traditionally the Metal Trades Award has set the clear
pattern for other awards. As a pacesetter, the metal Trades Recor:
Award can be expected to exert a strong influence on the LveCI
award review process which will be taking place across the Iunicen
spectrum as a result of the Commission's decision. A mov
If the full benefits are to be realised, this restructuring bene
process should not simply be about revising job dema I
classification structures, although this is obviously a key and i
ingredient. Award reviews should also-embrace issues such have
as work organisation and working patterns, working time
arrangements and payment systems. The priorities will The 1%
depend on the circumstances of the industry or sector perlhi
involved, in jet:
prose
I stress that restructuring is not a vehicles for unwarranted
wage increases. Certain conditions will need to be observed There
including the establishment of appropriate competency a rran
standards and accreditation arrangements and a clear indi..
statement in new job classifications of the range of work some
and expertise required. labot. agree
Support for this crucial reform process will be provided by enhai
the Government in several important ways. Ter
The Workplace Reform program that my colleague Ralph Willis, these
then Minister for Industrial Relations, announced in the from
Budget will be one means through which the Government will the C
provide direct support. the a
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Further, if the changing skill requirements of the economy
are to be met, then adequate education, training and
retraining arrangements will be essential. No one was more
aware of this than Dick Kirby an early advocate of
correcting the imbalance in Australia's skilled workforce,
particularly by improved training of apprentices. Much
greater attention is now being given to training and
retraining opportunities at all levels, not just to increase
the volume of training, but also to improve the capacity of
the training system itself to produce sufficient numbers of
people with relevant skills.
Vinally, the Government has overhauled the legislative
framework to ensure major reforms can be achieved.
The Industrial Relations Act 1988 is the outcome of the A
tripartite Hancock Committee of Review which we set -up when
we came to office.
The Act updates the federal ' system's institutions and
streamlines its processes. The Commission over which Dick
Kirby presided now adopts the simpler and more accurate
title of the Australian Industrial Relations Commission. In
particular the Act encourages union amalgamation and
provides opportunities for flexibility through the provision
of certified agreements.
with over 300 registered trade unions, many of which are
small and craft-based, Australia's trade union structure is
clearly in need of considerable reform. In both Australia
Reconstructed and Future Strategies for the Trade Union
Movement, thec ACTU expressed support for the processes of
A move to larger industry-based unions offers substantial
benefits, including a reduction in the potential for
demarcation disputes, more efficient use of union resources,
and a reduction in the number of unions with which employers
have to negotiate.
The Act's provisions for certified agreements, which have
perhaps attracted less attention, are important because they
inject the potential for greater flexibility into the
present wage setting system.
There will now be considerable scope for developing
arrangements to reflect the particular requirements of an
individual employer or enterprise. Agreements will provide
some certainty to individual employers in relation to the
labour costs which will apply during the set period of an
agreement, and will have considerable potential for
enhancing workplace productivity.
The essential point is that the settlements embodied in
these agreements may provide outcomes which differ somewhat
from those generally prevailing, provided a Full Bench of
the Commission is satisfied that to certify such terms in
the agreement would not be contrary to the public interest.
Ladies and Gentlemen,
In advocating this form of integrated approach to labour
market reform, the Government enjoys the support of the
ACTJ, a number of key national employer groups and
individual-omployers, all of whom recognise the link bet-ween
award restructuring, work practices and training.
The ACTU and CAT have produced a Joint Statement on
Participative Practices. Such a statement presents a
framework for the further development of a more cooperative
and constructive approach to industrial relations at the
w'orkplace level. The ACTU and CAI are to be congratulated
for what is in many respects an historic achievement.
Such initiatives to improve the competitiveness of their
industries are reminiscent of, because ultimately they arise
from, processes advocated by Sir Richard Kirby over many
years. His desire to see joint employer/ union bodies may
now be starting gradually to take form.
Throughout, my Government has facilitated the process of
change : change based on mutual respect and cooperation
between the parties. we believe that the potential benefits
of the award reviews are great. Whether they are realised
will depend on the vision and level of commitment brought to
the negotiating process. It is now up to the practitioners
to ensure that the most is made of this historic opportunity
within Australia's industrial relations system.
So let me end tonight with a plea to industrial relations
practitioners. I am sure Sir Richard will support me in
this regard. what I have outlined tonight is not the end of
our labour market reform program, it is a continuing
process, it is a challenging process the very future of
our country will be affected by our success in meeting that
challenge. Our greatest tribute to Sir Richard K( irby will be if we as
practitioners in the fields of indus -trial relations and of
politics show ourselves capable of ri'sing to this challenge.
He would want us, I am sure, as individ~ uals, as groups and
as a society to do what I have recently urged: that is, to
put on our -bi-focals and see the immediate foreground of
contention in the longer term perspective of the national
interest. May I conclude on this note. I have spoken tonight of Dick
Kirby. Throughout this great life of service to his country
he has had at his side as constant friend, support and
help-mate, his wife, the incomparable 11ilda. To you Hilda,
also, goes our abiding affection and respect.
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