Inquiry into the Workplace Relations Framework actu submission to the Productivity Commission

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The articulation of the protective purpose of industrial relations laws has been constant and is often attributed to Sir Otto Kahn-Freund’s seminal text Labour and the Law:

“The main object of labour law has always been, and I venture to say will always be, to be a countervailing force to counteract the inequality of bargaining power which is inherent in the employment relationship”8

The fundamental rejection of freedom of contract as the sole determinant of the content of the labour-capital relationship has been evidenced in all iterations of federal industrial laws, including WorkChoices (albeit to a lesser degree)9. This rejection is founded on the premise that the bargaining power between a worker and their employer is inherently unequal. A worker’s labour is inseparable from them as a human being – it is not a commodity. The price paid for labour thus dictates the quality of the worker’s life. The protective purpose aims to address the bargaining inequality and the potential for exploitation. It does this through:

  • Providing a framework of rights that allows labour to act collectively in its bargains with capital;

  • Directly establishing minimum inalienable standards or rights from which each worker may benefit; and

  • Providing the infrastructure for minimum standards to be progressed in line with economic development.

Owens et al describe the following as desirable outputs of the protective purpose:

  • Fostering Social Cohesion: There is a wider social goal that all workers are treated fairly not simply in their relations with their employers but in the position relative to other workers. Minimum standards and rights provide such fairness and equality.

  • Social Citizenship: The protective purposes of labour law reinforce and extend the normative values of fairness and equality that underlie civilised society into the workplace, therefore reinforcing the social utility of work.

  • Human Rights: The protective purposes of labour law reinforce the responsibilities of States under human rights law. For example, the rights to freedom of association, just and favourable conditions of work, equal pay, to join and form a trade union and to “just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity”, all of which are expressed in the Universal Declaration on Human Rights are reflected to varying extents in our federal industrial relations laws, including through statutory causes of action.

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