Helping out without dipping into the surplus or worsening the deficit

As Fred Argy reports, the Government is still toying with the disastrous policy of going with the Hollowmen’s fiscal strategy in a recession – which is to obfuscate about whether or not you’ll run a deficit until you can’t obfuscate any more at which time you go (shamefacedly) into deficit and then reassure the public that you’re doing everything you can to fight the slowdown, that you’ve had a ‘stimulus package’ or two to that end, but that they’re not very big and you’re trying to minimise the deficit as well. Those Hollowmen never did like anything that was too unambiguous or consistent.

Yes folks, we’ve been there in the 1930s (most of us not personally) and again in the early 1990s when Paul Keating told us he was changing course and winked to officials at celebratory drinks on the night his ill-titled ‘One Nation’ statement first saw the light of day “What’s a half a percent of GDP amongst friends”. What indeed.

Anyway, we’ll see how things unfold.

Meanwhile it is an interesting thing to ask what might be done to fight the recession that wouldn’t hurt the budget bottom line. I can think of one thing that would help it, and would stimulate the economy.

Allow people early access to their super. They can currently access them early only on showing extreme hardship. One might want to hedge this in with conditions. Such as ‘not too much’ (eg you can elect to only contribute 5% to your super for the next year) or ‘only if you agree to increase payments above 9% in a year or two’s time’. One might want to avoid people accessing any lump sum from their super to go on an overseas holiday – which really wouldn’t do us much good (though I’m not sure how you do it without an attack of the political nasties). But one might allow them to access their super to fund a deposit on their first home – especially if it was newly built.

Any other ideas?

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Tel_
Tel_
13 years ago

To be perfectly honest, I can’t see any realistic advantage to government surplus. They get the money from taxing the citizens of the nation, so that money is public money and should be spent doing something for the public. If they really can’t think of anything worthwhile to do with the surplus then tax cuts are in order. Either way, the budget should balance.

It would also be nice to feel that our government played by the same rules as the rest of us. If a balanced budget is good enough for the household, then its good enough for Canberra.

Early access to super basically means that the super system would not exist anymore. I agree that it was a pretty stupid system that never should have existed in the first place, but we are kind of stuck with it now. Making a complex system even more complex so we can pretend to have it while secretly not having it strikes me as an expensive exercise in paper shuffling.

Australia’s best bet is just to diversify our trading partners as much as possible on a worldwide basis and be willing to do without some fancy imported goods if times get tough. As economies go, we are a cork floating in an ocean. If the whole world goes into recession, then the Australian government can sing Jingle Bells for all the good it would do. If the recession primarily hits England and the USA then at least we can trade with Asia and Eastern Europe. The free market is supposed to have winners and losers, that’s the whole idea of how we figure out which strategies are successful. The best thing our government could do to help this is put in the diplomatic leg work to ensure we have access to plenty of foreign markets and make it as easy as possible for Australian companies to trade. Reducing the complexity of the customs process would also be nice.

vanaalst.robert
vanaalst.robert(@vanaalst-robert)
13 years ago

“But one might allow them to access their super to fund a deposit on their first home – especially if it was newly built.”

So what you really want to do here is allow people who can’t save any money of their own to get a deposit so they can borrow lots of money and artificially drive up house prices? Somehow or other, that doesn’t seem like a great idea to me.

Tel_
Tel_
13 years ago

Somehow or other, that doesnt seem like a great idea to me.

It worked last time around.

David Coles
David Coles(@david-coles)
13 years ago

But one might allow them to access their super to fund a deposit on their first home – especially if it was newly built.

The government recently announced first home saver accounts (ATO website is down as I write this, try google cache) that look a lot like super but can be used for paying for a house. If you don’t use it for a house, it gets rolled into your super.

derrida derider
derrida derider
13 years ago

No, no no. In the long term we may want Australian households to save (though I think the need isn’t anywhere near as obvious as conventional wisdom holds). But in the shorter term we definitely need them to spend. Unless we’re Austrians who think the poverty of stagnation is somehow good for the economy’s soul then we don’t want them repairing their household balance sheets quite yet.

So let ’em draw down some super for the next couple of years and don’t be too fussy about what they spend the money on (it’s their money after all). It would be absurd to try and force those still in jobs to keep saving an extra 9% of their wage in the middle of a deflationary spiral.

I also have to say that this constant refrain about the need to help people save for a deposit for a home is 20 years out of date. It’s at least that long since a big deposit was needed to buy a house. Now some lenders probably wish they’d charged a bit more for mortgage insurance in the past few years, but it is the existence, not the pricing, of such insurance that has made big deposits unnecessary (one of the many benefits of Fred’s financial deregulation).

It’s not a greater economic sin for people to be in voluntary poverty in the name of home ownership immediately after they’ve bought the house (due to big mortgages) rather than immediately before (due to having to accumulate a big deposit). At least they can enjoy the house for a few more years in the former case.

Joshua Gans
Joshua Gans(@joshua-gans)
13 years ago

Yeah, yeah, no, yeah, no, no, yeah — totally agree.

David Coles
David Coles(@david-coles)
13 years ago

Nicholas: They seem the perfect vehicle for money transferred out of super for house buying – the bureaucracy for making sure it’s only used for housing is already set up.

NPOV
NPOV
13 years ago

“Its not a greater economic sin for people to be in voluntary poverty in the name of home ownership immediately after theyve bought the house (due to big mortgages) rather than immediately before (due to having to accumulate a big deposit).”

Except that the latter at least proves that you are capable of managing finances well enough to build up savings, before you have the commitment of a several-hundred-thousand-dollar mortgage hanging over your head. But the problem in the market up till the end of last year had been that those who had chosen to wait 5 years to save up a deposit had found themselves priced out of the market, so even if there was some sort of virtue in choosing to save up a deposit first, there was a huge disadvantage in doing so.

Certainly, allowing people limited early access to their super to use for a deposit on a home seems reasonable to me. It’s simply untrue that this would mean the “super system would not exist anymore” – plenty of behavourial studies have shown that, providing some benefit is seen, the majority of people will stay in an opt-out system. My only concern is the degree to which the housing market is still over-priced: if it really still does have a long way to fall, then there will inevitably be individuals who put, say, 75% of their super savings into a house, see their houses fall in value by an amount greater than that deposit, lose their ability to continue affording their mortgage, and wind up virtually bankrupt with barely a penny in savings.

vanaalst.robert
vanaalst.robert(@vanaalst-robert)
13 years ago

“It would be absurd to try and force those still in jobs to keep saving an extra 9% of their wage in the middle of a deflationary spiral”

That might be true, but it’s not clear to me what deflationary cycle you are talking about. The inflation rate last time I checked it was 5.0%, which is huge. It seems to me that most of the “deflation” is in asset prices for things like houses, which are not counted in the inflation measure at all. Alternatively, most things that are in the inflation measure excluding petrol (rent, consumer goods etc.) seem to be happily increasing to me (or perhaps unhappily for those on the losing end of those prices). Is this going to suddenly change?

Fred Argy
Fred Argy(@fred-argy)
13 years ago

That may be worth a look if everything fails. But why or why are we so hung up with deficits?

Niall
Niall
13 years ago

Never seen any validity for a non-profit organisation to be seen running surplus budgets

Peter Whiteford
Peter Whiteford(@peter-whiteford)
13 years ago

One rationale for running budget surpluses (in good times) is that governments have unfunded liabilities (e.g. public service pensions), so that we can have “higher than strictly necessary” tax levels now in order not to have to sharply increase levels of taxes on succeeding generations when the population ages (and because Australia taxes older people very lightly.) So it is a form of pre-payment, and arguably also for the age pension and the health care system.

Tel_
Tel_
13 years ago

…some really good cheap plays can be made with the hoi polloi about the Libs $70 billion of surplus and Labor immediately plunging the country back into deficit.

If you compare John Howard’s traditional conservative government with the George W Bush, neocon radicals, I’m happy that Australia did not go down the path of a mind-boggling huge national debt like the current US situation. Probably more by accident than design, Peter Costello put us in a good position to have both a budget surplus and moderately high RBA interest rates at a time when recession hit. This gives the Labor government options in terms of both reducing interest rates and spending the surplus (or just offering generous tax cuts, which also stimulate economic activity) — neither option is available to the new Obama administration.

NPOV
NPOV
13 years ago

Nicholas, what studies are you aware of examining what benefits to the economy WorkChoices brought? The impression I was left with after following the debate up till last November was that WorkChoices itself did relatively little to increase flexibility in the labour market (for a start, the actual number of AWA’s taken up was never that great), and was often more about what sort of collective bargaining was *not* permitted. Certainly if the majority of voters felt that WorkChoices did in fact offer valuable flexibility to their employment arrangements, it’s hard to see why they’d be so firmly opposed to it.

NPOV
NPOV
13 years ago

“That was producing employment growth” – but that’s what I’m asking to see: some sort of study that actually analysed the degree to which WorkChoices was helping lower-skilled workers to gain employment.

When you say “you don’t think you agree” that Workchoices wasn’t good for “lots of people who got worse wages and conditions”, what do you mean? That you don’t think lots of people did end up with worse wages and conditions? Or that worse wages and conditions was somehow good for them?

When I say flexibility I mean flexibility – simply that both employers AND employees have real increased flexibility in the type of wages and conditions they could negotiate (for instance, the working arrangement I have currently with my US-based employer is probably not even legal, but I don’t see any reason it shouldn’t be). Now I don’t buy the union line that the majority of workers who went onto AWA’s were “forced” to do so, but I’m aware of very few examples other than a few skilled jobs in the mining industry where under Workchoices employees were able to arrange working conditions more to their liking that weren’t possible previously.

pedro
pedro
13 years ago

I imagine that for many people, the other main repository of savings is the equity in their homes in that extra money has been channelled into repayments. It is for me. I suppose the difficulty is that it is now hard to calculate the amount of that equity until the market stabilises and you have to pay it back.

Much better to go into deficit by reducing taxes, like corporate tax.

Hard to see how it would be a good thing to encourage the housing market. Obviously new home construction delivers jobs and investment, but I think now is probably not the time to artificially stimulate the price of existing homes.

The small employers I know were all very attached to the removal of unfair dismissal.

NPOV
NPOV
13 years ago

To be “very attached to the removal of unfair dismissal” surely means that either a) you feel as an employer you should be able to dismiss workers for whatever reason you want (bored with your current secretary? Hire a cuter one! Got a pesky employee who keeps insisting you stick to expensive OH&S standards? Plenty of less pesky folks out there that could do his job…) or
b) you’ve seen cases like those Nicholas describes above, carefully considered the possibilities, and determined that it’s logically impossible to draft unfair dismissal legislation that prevents such abuses, therefore we shouldn’t before with such legislation at all.

or maybe

c) you’re a hard-line anarchist that thinks you should be able to run your company any god-damn way you like…

NPOV
NPOV
13 years ago

“My argument is basically that labour market policy is an inefficient way to deliver equity”

I’m not sure that’s ever been the primary purpose of labour market policy though.
Unless by equity you mean something other than “reduction in income inequalities”
Even the minimum wage has never been about that.

derrida derider
derrida derider
13 years ago

My nannyish scolding was directed at conrad, not you Nic. Sorry to both parties.

Peter’s bit about surpluses needed to fund future liabilities such as pensions ignores the presence on the balance sheet of a very large countervailing asset – the power to coerce money from future (and richer) taxpayers. Theoretically a surplus could deprive you of things that increase future taxable capacity (education, infrastructure, low capital taxation, etc) and so actually worsen your true balance sheet. Just like companies, it’s possible for governments to be under-geared.

There’s no smoking gun either way on the employment effects of Workchoices et al, but given the other things that were going on in the economy at the time you wouldn’t expect there to be. For my part, I think it probably did help employment a bit. But whether it represented a net gain in national wellbeing or even a net addition to GDP (two quite different things in any case) is something I’m less sure of.

My argument is basically that labour market policy is an inefficient way to deliver equity
It can be, but the trouble is that those who say this are so often the first to make strong claims about the inefficiency of the alternative – a highly redistributive tax and welfare system.

NPOV
NPOV
13 years ago

Nicholas, I guess I see labour market regulation as a way of correcting for the fact that individual employers don’t always have sufficient motivation to protect the long term interests of their employees. Any individual employer may well be able to benefit from asking unreasonable hours or paying very low wages or creating unsafe work environments (because somebody else will ultimately pick up the tab from the costs created by such practices), but if all employers did it collectively, then everybody would be worse off.
Labour market regulation also acts to provide a basic set of expectations that employees can reasonably have when looking for work – instead of having to read through every individual contract to determine if it grants a reasonable conditions, I can apply for a job confident that I will still get so many weeks leave, be expected to work so many hours per week etc. etc.

The only sense in which I see there is a striving for ‘equity’ is the recognition that there is typically a significant difference in bargaining power between an employer and an employee, and labour market regulations act to help push the balance of power back towards the middle. But even this has a pretty insigificant effect on the ability of employees to bargain for higher wages relative to their employers.

pedro
pedro
13 years ago

NPOV, I’m no anarchist, very counter-productive philosophy for lawyers to get behind. I do think you should be able to sack at will and without cause. Employees get to resign at will and without cause. But my point was that I believe it affects the willingness of small business employers to put on staff.

I also know, as a lawyer, that there are plenty of instances where employers prefer to pay something rather than go through the hassle of the process and the tribunal.

I don’t think it is possible to write laws to get rid of the abuses because the abuses arise from the incentives created by the system. Even a cost penalty for a protesting employee would not get rid of the problem.

AS for the equity question Nick asked you, what about the minimum/award wages – no equity element in that?

pedro
pedro
13 years ago

Nick made the unfair dismissal point much more nicely than me in the class war thread.

NPOV
NPOV
13 years ago

Well I probably overstated when I suggest that there had “never” been an equity element behind minimum wages, but I think they can be justified on other grounds.
It doesn’t make much sense to consider Australia a wealthy country with high productivity if there are still full-time jobs out there that don’t even pay enough to provider decent clothing, food and shelter: the minimum wage provides a base level of labour productivity that businesses and governments are expected to maintain. It’s certainly hard to understand under what circumstances a business wouldn’t be able to extract $13.50 an hour in productivity out of an adult, non-disabled worker.

“Employees get to resign at will and without cause”

Well you normally need to give at least a few week’s notice. And in many contracts (including most of mine) you were expressly forbidden for going to work for another company that did sufficiently similar work, which somewhat restricts your options for resigning for trivial reasons. Indeed, I wouldn’t have any problem with a business negotiating a contract with its employees where by the employees get protection from unfair dismissal in exchange for employers getting protection from “unfair resigning”.

“I dont think it is possible to write laws to get rid of the abuses because the abuses arise from the incentives created by the system”

Well no law is perfect, but I see no reason to assume it isn’t possible to come up with unfair dismissal laws whereby employees need to have very good grounds for complaint to successfully challenge a dismissal. And as it is, the majority of unfair dismissal complaints (over 50%) come from employees who did not received the required period of notice. The next biggest bracket is those who have been sacked after absence due to sickness or injury. Do you believe it would be better if employers were under no obligation to give a period of notice (or payment in lieu of) when firing employees? If employers were free to sack workers because of sickness or injury? Who do you think ultimately pays the costs in such cases?

FWIW, Denmark still has unfair dismissal laws, despite it being one of the easiest hiring/firing labour environments anywhere in the Western world. The two are not incompatible.

pedro
pedro
13 years ago

“I wouldnt have any problem with a business negotiating a contract with its employees where by the employees get protection from unfair dismissal in exchange for employers getting protection from unfair resigning””. – Me neither, but I’m all for freedom of contract.

I’m not suggesting that there should not be a notice period or pay in lieu, 2 or 4 weeks perhaps, depending on the job.

Restraint of trade laws deal with one of your concerns, and restraint only apply at all in high value occupations where the risk of dismissal is clearly not such an issue.

I can’t comment on Denmark, but with regard to writing the laws, the problem with the system is that the cost of fighting the employee is such that a payment is still the better option. Employee lawyers know how much they can ask for with the expectation that the employer lawyers will advise paying rather than going to court.

Another problem with the concept is that your crap employee might be good enough in the eyes of a judge. Ultimately the owners and managers of a business should have control over it. If they don’t have control on hiring and firing they get less certain about hiring and it is the weakest candidates that will miss out on the opportunity to improve their prospects.

I reckon the classic discussion point is pregnancy and maternity leave. In a small business with valuable female employees, like a law firm, it can be a real problem. You have to keep a place open for a year and I can tell you as a fact that some will get to the end of the year and decide not to come back and some will decide to come back. You won’t know until the year is nearly up. During that year you need a replacement employee and then suddenly you might have one lawyer more than you need, you can’t sack the mother so the other one has to go, even though they’ve had the files for a year and may be better lawyers and also will probably be able to work harder because mums with a 1 year old generally can’t put in the same time and effort and a non-parent. So who pays the cost of maternity leave?

It gets worse, a senior associate might be working long hours and handling big and interesting files. She comes back to work and is stuck on 9.00 to 5.00 because of the child and so can’t get the same files because she has not got the same work capacity. Now she’s unhappy to get more routine work, but for the sake of the client, those juicy files have to go to lawyer who can work all night if need be.

NPOV
NPOV
13 years ago

“the problem with the system is that the cost of fighting the employee is such that a payment is still the better option”

But what I’ve read suggests that getting rid of unfair dismissal laws and the tribunal process through which cases are currently taken will drive up the costs of employees suing for breach of contract, because they then have to go through the regular courts.

Maternity leave is one of those issues that sounds horribly difficult until you recognise that every single developed nation in the world aside from Australia and the U.S. have some how managed to cope with it, presumably with varying degrees of success.

Tel_
Tel_
13 years ago

c) youre a hard-line anarchist that thinks you should be able to run your company any god-damn way you like

Any way that involves consent of the parties involved. And why not? You think there is some value in placing arbitrary restrictions on behaviour to prove how lawful we all are? May I be the first to recommend that all Australians spend 15 minutes a day kneeling in silence before a portrait of the Prime Minister — anyone who refuses is sure to be an Anarchist.

So who pays the cost of maternity leave?

A society that cannot produce children is doomed. I’m all for women in the workplace, providing there is still an incentive for them to also take time for children. Exactly how that incentive is structured is a matter of debate, but ultimately no matter how you shuffle it around, there will be a cost involved and someone (not the mother) is gonna have to pay that.

pedro
pedro
13 years ago

NPOV, breach of contract is not the same thing as unfair dismissal. I have no problem with people suing for breach of contract and there is an endless argument as to whether disputes should be in a low-cost tribunal or a real court. My experience suggests that you have to decide between mickey-mouse and relatively cheap or good by expensive.

NPOV and Tel, My point about maternity leave is that the societal goal for maternity leave gets particularly put on employers and other employees. The widespread existence of maternity leave provisions and programs does not in any way deny the point. If there is a societal goal then the cost should be society wide and not particularly foisted on some people. How do you feel about conscription for example? Defence under attack is great for society, but should the price be especally high for 18-30 year olds or whatever?

“Everyone does it” is not a valid argment for anything. Everyone once did slavery. Was the wide acceptance of slavery a valid argument against the decisions different countries made to drop it?

NPOV
NPOV
13 years ago

pedro, I’m not suggesting that “everyone does it” is an argument in favour of adopting maternity leave, simply that it demonstrates that the problems it raises are actually reasonably tractable.

Tel, can you give an example of why an employee might truly wish to sacrifice all unfair dismissal provisions as part of their contract, and happily consent to such an arrangement? FWIW, I suspect the risks in allowing employees to do that are often overstated by unions etc., but where are the benefits to the employee that couldn’t be acheived through better means? I’d much rather see employees accepting they will have to improve their skill levels and productivity in order to gain employment than thinking they can do so simply by willing to work under sub-standard conditions.

NPOV
NPOV
13 years ago

“There are employees who work at a place because they like it and who would have no desire to hang around if the boss wanted to sack them”

Indeed, that’s always been my own position. And personally I’ve never valued unfair dismissal protection all that highly as far as my own employment goes. But it doesn’t mean I think there would be much benefit from being given the option to trade it in. For instance, it’s not outside the realm of possibity that my boss might suddenly decide to fire me just because another employee fabricated allegations against me. I’d like to think I had some sort of option outside of the expensive process of going through the courts to prove the allegations false (though as it happens I probably don’t, because I’m employed as a contractor directly by a US-based company).
But I’ve also read enough of what goes on in other workplaces to accept that my own situation is very fortunate and not representative of a large number of workers who don’t have the luxury of picking decent employers.

If it’s really “cloud cuckoo” stuff to believe that the vast majority of workers are capable of improving their employability by skilling up, then there doesn’t seem much hope for ever acheiving just and equitable workplace conditions for all.
As it is, exceptions are already made for the cases where skilling up is not an option – e.g. lower minimum wages for disabled workers etc. If there’s a case for making exceptions on particular workers re unfair dismissal, then fine, but I I really can’t see a lot wrong with the assumption that your average worker should be confidently able to enter an employment contract knowing that it can’t be terminated for any arbitrary reason with no period of notice. If current unfair dismissal laws are discouraging employers from taking on employees, then fine, they need changing – but getting rid of them entirely seems just as likely to push more employees towards unionised workplaces where unfair dismissal provisions are part of collective bargaining agreements, which doesn’t seem likely to benefit small businesses very much.

NPOV
NPOV
13 years ago

BTW Nick, I can only imagine you’re arguing as an employer rather than an economists, because there don’t seem to be a lot of economists agreeing that scrapping unfair dismissal laws would have a positive impact on the labour market, and quite few arguing specifically that it won’t (I can provide a list of papers/interview transcripts if you really want).

NPOV
NPOV
13 years ago

Actually, I will specificially quote one paper:

[I]n 2001 the Full Court of the Federal Court investigated the relationship between unfair dismissal laws and employment growth, including taking expert evidence from a number of leading scholars in the field, and concluded that the suggestion of a relationship between unfair dismissal laws and employment inhibition is unproven (Hamzy v Tricon International Restaurants t/as KFC (2001) 111 IR 198 at [70]).

…followed by…

It has been argued that the adoption of fair dismissal procedures reduces the likelihood of dismissing an employee in circumstances where consideration by a cooler head would reveal that dismissal was not warranted, and so potentially saving the firm the substantial costs of hiring a replacement employee (Johnstone, Mitchell and Riekert 1991: 117). Other benefits for business in being bound by unfair dismissal law are also apparent. De Ruyter and Waring discuss research that indicates that unfair dismissal law encourages employers to invest in the education and training of their workforces, thereby enhancing labour productivity in the longer term (at 28). They use organizational justice theory to conclude that perceived injustice around dismissal issues can result in reduced performance by employees, and reduced commitment by employees to the organization, including preparedness to undertake discretionary roles and tasks (at 28-29).

Which makes a lot of sense to me.

pedro
pedro
13 years ago

I suppose it is a bit like voluntary redundancy. The employees you want to keep are the ones most likely to take the package.

NPOV
NPOV
13 years ago

Well if that last reply was a sum total of your thoughts on the matter, then I’d say we were largely in agreement. I don’t fully agree that that employment relationships can be meaningfully compared to a marriage, partly because marriage is a one-on-one relationship, but largely because there is and always will be a substantial number of employees whose only chance at employment (which is necessary to provide any sort of meaningful existence, unlike marriage) will be with employers who have fairly minimal respect for their employees.

What I will say is that it seems those in support of unfair dismissal laws seem more likely to accept the need for reform than those opposed to them, who simply remain committed to their scrapping no matter what the evidence says.

NPOV
NPOV
13 years ago

Ah, well if only this thread had been typical of most unfair-dismissal arguments that actually happen then we might actually have sensible unfair dismissal laws that almost everybody was happy with!

Tel_
Tel_
13 years ago

And in many contracts (including most of mine) you were expressly forbidden for going to work for another company that did sufficiently similar work, which somewhat restricts your options for resigning for trivial reasons.

I feel very uncomfortable about such restrictions and avoid them. Obviously not everyone feels the same way, I don’t want to force anyone to do it my way, so long as they accept the truce, and don’t try to force me to do it their way.

There are employees who work at a place because they like it and who would have no desire to hang around if the boss wanted to sack them. A lot of those kind of workers would also be confident that they could find another job.

Exactly, there are plenty of examples of this, including myself. I’m very happy to trade unfair dismissal laws in return for higher pay, I didn’t value the unfair dismissal laws in the first place and I do value the higher pay. Easy decision. I’ll also add that getting anything proven through a court of law is an agonising process that I would be happy to avoid.

In relation to NPOV’s example of unfair accusation, I can understand someone wanting to protect their reputation, but I think that is completely separate from whether they continue working that particular job or not.

But Ive also read enough of what goes on in other workplaces to accept that my own situation is very fortunate and not representative of a large number of workers who dont have the luxury of picking decent employers.

First you asked for “an example”, now you want a representative example based on people who are less fortunate than ourselves. In other words you want to offer charity to other human beings and you feel that restricting my freedom is an effective method of offering charity. I would argue that other methods are far more beneficial to all concerned.

NPOV
NPOV
13 years ago

No, I don’t feel that “restricting [your] freedom is an effective method of offering charity” – and I don’t really have a serious issue with the idea that employees should be able to trade away unfair dismissal provisions if they really want to, but I have a strong concern that making it too easy to do so will ultimately disadvantage the employees that arguably need them the most, whereas the disadvantage to me or you of being required to engage in employment contracts that make at least basic provisions for unfair dismissal is very minor.

Regarding the unfair accusation thing – what’s your proposal? What methods should be available to me to prove my innocence? And once I’ve managed to prove my innocence, why shouldn’t I want to stay working there, just because, for example, my boss was momentarily convinced by another employee that I was engaged in something in breach of my contract?

NPOV
NPOV
13 years ago

Would something like this work?

* By default all new employment contracts, regardless of company size and/or employee income, include a provision that after a period 6 months, workers have a right to protest a dismissal that they feel does have not “just cause”. In return, employers have a right to demand at least 2 weeks’s notice in the case of employees choosing to resign.

* However, after that 6 months they also have a right to negotiate to trade away that right in exchange for some other improvement in their pay or working conditions (e.g. I could trade away my right to protest a dismissal with an extra week of paid annual leave, if my employer agreed to it).

I’m not sure what’s currently defined as “just cause”, but one thing that should be explicit in all new employment contracts is that an employer may not fire an employee simply because they refuse to renegotiate a contract to trade away unfair dismissal provisions.

Patrick
Patrick(@patrick)
13 years ago

What I will say is that it seems those in support of unfair dismissal laws seem more likely to accept the need for reform than those opposed to them, who simply remain committed to their scrapping no matter what the evidence says.

I hadn’t noticed this flimsy dodge. Inherently, if you are in favour of unfair dismissal, you can either support their reform or look ridiculous trying to insist that they work as they should. OTOH if you don’t support them abolition is a reasonable position despite somewhat unclear evidence – particularly since you can adopt the position that abolition would be better than whatever amount of mucking around is involved in trying to improve them given the likelihood of success.

All you are saying, then, is that it seems that those in support of unfair dismissal aren’t complete clods. Good for them.

NPOV
NPOV
13 years ago

Nick, I may be misunderstanding you but if their were no unfair dismissal laws, and Employment Tribunal to help settle dismissal cases, then in my example of being fired because another employee falsely raised allegations against me, I’d have no choice but to go through the “dysfunctional” legal system…so if anything having a dysfunctional legal system is surely an argument in favour of having unfair dismissal laws and a tribunal outside the regular legal system to oversee cases.