WorkChoices and Ethical decision making

                                                  Dr. John Sweeney
                                                  Leader, Edmund Rice Business Ethics Initiative

Introduction: On ethics and Catholic moral thought

There is a long tradition of Catholic moral thought which has contributed very significantly to ethical thinking generally especially in European-based cultures. It is a body of thought that has grown over many centuries as part of a complex process of reflecting on tradition, theology and responding to particular situations. One clear principle of this thought is theological: the model for human beings is Jesus, and the best way to do that is within the community of faith which values this model, the community called the Church. And it goes on from there.

While this principle points to what we can learn from revelation, from God's self-communication to human beings, another principle is that this theology is not in conflict with reason. To have faith must never mean renouncing reason, even though it might mean recognising limits to reason. This principle is very important because it means that Catholic ethical decision making always has reasonable argument as part of the process of deciding what to do.

We can look at this in a different way. Socrates posed a famous question (you might want to think how you would answer it): "Does God command us to do things because they are good or are things good because God commands us to do them?" The Catholic tradition has maintained for a very long time that the answer is the former: God commands things because they are good, God does not do things in an arbitrary way. Logically, this means that we can, by use of our own reason, know what is good, because we can see autonomously that God's command is good, we can see the good that it seeks. Of course this idea opens up the possibility of disagreement about what is the good or the right thing to do and we do disagree, but this is the challenge of living together as conscious, rational, feeling, autonomous beings.

With the Reformation and the Industrial Revolution, people no longer agreed about theology, about which values were the most important, people began to move out of their stable agricultural communities into complex industrial cities, life experiences became much more varied and the methods of talking about them and responding to them also became varied. With these changes came many more. Pluralism started to become a fact of life, especially in western societies. Societies still needed to make good decisions, but had lost a common language in order to do so. So many began to look for languages that this pluralism could share in order to answer these vital questions. These became the languages of ethics.

With this perspective, we can make a useful distinction between "morality" and "ethics", even though this is not the only way of distinguishing between them. Morality is something produced by a community (or a family): a series of ideas, decisions, values, goods, virtues and sensitivities which are lived and experienced in common that help the members of that community group to know and act on what is good and right. They are learnt largely by imitation, so that they become second nature, like walking. They are communicated and reinforced by a shared set of symbols and meanings relating to shared ultimate values. They make sense of the shared lived experience of everyone.

Ethics is a body of principles, language, decisions and reasoning about what is right and good that can be shared by a group of people who do not live together, or do not share in the same communal life or the same sense of what is more and what less important. Ethics is something that a large and complex society, more plural than a community, needs. Ethics must be carried out via explicit means. Values need to be explicitly agreed upon, principles need to be clearly articulated and understood. Applying principles needs to be done with reasoned argument that all can follow. Ethics needs to be learnt in a different way to morality, it is a skill we learn when we become a participant in a pluralist society. The language we use needs to be shareable in different ways.

Three ethical theories (in the context of IR)

In the context of IR, Catholic organisations need to enter into the ethical realm for this same reason: Catholic institutions do not only employ Catholics, nor do they employ people with the understanding that they become Catholic. So while, Catholic moral thought should inform policies of such institutions, this thought must be translated into public ethical discourse as well as into decision making methods. While Catholic Institutions continue to include people who do not profess to be Catholic, they must also use publicly accessible ethical methods and principles. It may feel like betraying deeply felt moral principles but it is not, it is part of "serving rather than being served." There are, as we shall see later, very good ethical reasons for this. They must learn another language.

Let's look at what these ethical (rather than Catholic moral) methods and principlesi are in the context of the recent changes to IR.

Consequences

In this type of theory, ethical behaviour is what creates good outcomes. One of the most famous mottoes of this sort of ethical argument, (but does not apply to all outcomes-oriented arguments) is: "the greatest good for the greatest number". In the context of Industrial Relations, one of the Government's central arguments is of this type. That Australians be better off is the desired final outcome. We should do whatever is necessary to achieve it. To do this the Government focusses primarily on achieving a "strong economy". In our current historical context, where Australia has to compete in the global marketplace, the economy needs to maintain or improve its competitiveness. For the last few years we have not been able to export more than we import. India and China are growing very rapidly and it is going to be difficult to compete with them. These changes to IR are designed to improve competitiveness. Domestically, the economy needs to respond to our ageing population and one way to do that is to encourage more people to join the workforce. The WorkChoices legislation will achieve this.

There are some difficulties with the consequence type of argument. I'd like to talk about three, applied to IR:

1. Outcomes can be difficult to predict. The bigger the promises, the larger the scale of the prediction the more difficult it is for the predictions to be accurate. The links of cause and effect, for example, between the IR changes and enhanced productivity are based, according to the Prime Minister, on increased flexibility. But are these changes the best way to boost productivity? Others argue that the most important blocks to increased productivity are infrastructure bottlenecks, lack of training and education of the workforce as well as the challenges of an ageing demographic. The causal links between these factors and productivity are much clearer and more immediate, the links between flexibility and productivity seems much more tenuous in comparison.
   
• Other, less desirable, outcomes are also possible. Increased competitiveness may be produced by increasing profitability rather than increasing productivity: instead of producing better and more goods and services per working hour, businesses simply reduce their costs so that they can sell their products internationally at lower prices and still make a profit. But this means, logically, that Australia will need to start to compete with the wage structures current in India and China. Such an outcome has now seriously weakened its connection with the overall goal: that most Australians will be better off.
  
• Many argue that one important contributing factor to Australia's steady growth for the last 15 years has been less industrial conflict. The unions, who signed up to the agreements which made this relative peace possible, now look like they are fighting for their very existence and continue to swear to fight these changes. This raises the possibility, as we are already witnessing, of greater conflict in the workplace which may easily have deeply negative effects on productivity. In fact, for this reason (among others), a number of significant companies in Australia, Woodside, NAB, Woolworths, Fosters, Blue Scope Steel and Telstra among them, have recently said publicly that they will not use WorkChoices.ii
  
• The changes to unfair dismissal laws may provide an incentive to managers to manage less. When a not particularly skilled employee of a not particularly large firm begins to manifest signs of not coping, of taking too many days off sick, not turning up on time, not being very productive, instead of trying to find out the causes and help put some measures in place to respond to the problem, a manager may well think it is just easier to get rid of the person. The firm's profitability may rise, but the economy now has one more worker with serious trauma (and if you have ever been sacked, you will know what that can mean) and another manager who, learning how to manage less, will be less likely to be creative and innovative and both will have an overall negative impact on productivity.
  
• There are very large numbers of people who are classified as homeless in the US who work full time. Inequality and disadvantage are on the rise in Australia. Dr. Andrew Leigh, of the ANU has released research that shows that CEO's in Australia earn on average 98 times that of an average worker and that the gap between the rich and the poor in Australia is at the widest it has been for 50 years. Social and economic inequality are by-products of these types of economic strategies that produce this type of "strong economy". It has a collateral effect of loss of social cohesion and trust, increased alienation and violence.iii

2. A second difficulty with this type of ethical argument is that it can be hard to balance benefits and burdens. Typically, decisions will have different outcomes for different people. The greater good for the greatest number may well mean that some minority will in fact be worse off.
   
   • In the case of the Cowra Abattoirs, the company and the Federal Government argued that the company was in financial difficulties and the choice facing them was closure of the plant or use the WorkChoices legislation to fire workers and then re-employ some of them at a lower wage. The argument gives us no way of judging whose good should be sacrificed in this way, nor how great the sacrifice should be. Will it be OK to have 10% of the nation in abject poverty so that 90% can have BMWs?
     
   • Reform has had its costs in the past but we still know little about what they are and who is bearing them. Productivity Commissioner Robert Fitzgerald says that stress is a significant cost of the economic reform of the last 15 years or so.iv In 2003, the National Occupation, Health and Safety Office released figures that showed that stress-related disease accounted for twice the amount of time lost at work compared to physical injuries. It is fast becoming the single most serious work-related health issue in Australia: according to the Australian Chamber of Commerce and Industry over the six years to 2002/3, overall private sector compensation claims fell by 11%, but the number of stress-related claims grew by 78%.v These IR changes will produce less job security and that will contribute to higher stress levels, especially for those with less financial resources. According to the usual logic, upper management has higher rates of pay to compensate for higher levels of stress and higher levels of job insecurity. The IR changes are going to generalise these higher levels of stress and insecurity to all the work force, especially the lower end. Despite the Government's carefully worded protestations, there is little prospect that the higher remuneration will also be generalised. The consequence argument on its own offers too little to help us balance these the burdens and benefits.
     
3. A third difficulty with the consequences based argument is that it is difficult to calculate what is the "greatest good". In 2004 John Howard said, "Maintaining a strong dynamic and growing economy is the overriding responsibility of government". Economists often assume that people always act to increase their economic utility, and from that economic utility all other good things flow. But it is important to remember that higher income does not necessarily mean more happiness, or greater well being. There is good evidence to suggest that greater stress, longer working hours, higher degrees of competition with colleagues lead to greater isolation and greater unhappiness. The model behind these changes takes many of its key elements from the radically individualistic culture in the US. Does Australia want to follow the US model where many people can be working full time and still not be able to support a small family? Is a "strong economy" the greater good here?

Consistency

The consistency moral argument focuses on how we treat human beings rather than on the outcomes. Instead of judging actions in terms of good and bad results, we judge them in terms of right or wrong treatment. Consistency is about fairness, about treating human beings with respect and dignity. Consistency understands that people are equal in this respect: that each individual has certain inalienable rights that must be respected. There are a few famous sayings that reflect this sort of ethic: "People should never be treated merely as a means to an end" and "Do to others as you would like them to do to you." Similar sayings can be found in all the major religions in the world. One way of thinking about consistency, it seems to me, is to treat people in such a way as to provide the conditions for them to be human and I would suggest to you that, in the ethical realm that might be that they be a major actor in their own lives, that they have a decent say over how their life develops. Slavery is wrong, for example, because a slave does not have nearly enough power over his or her own life. Another implication is that, since every person's dignity includes their making decisions over their own lives, they should be moral agents themselves: they cannot just be told what is right and wrong, they have to decide. This is an ethical reason why ethical, rather than just moral, language is important: everyone must have the possibility of being involved.

In the context of IR, the Government's argument is that treating people properly comes about by allowing people to negotiate their own agreements, allowing them the greatest measure of freedom to choose what interests to pursue and how. People are treated as rational autonomous beings who decide what is best for themselves. Work conditions and pay will be decided as the result of impartial market forces, rather than by artificial and intrusive methods of arbitration. So we have improved freedom (of choice), improved impartiality and greater equality of treatment. This is the basis of the Government's claim that the changes are fairer.

The Unions have a different idea of fairness, based on the relative strengths of the negotiating parties in industrial relations contexts. Let's take a limit case to make the point clear.
Over half of those aged between 12 and 16 in NSW work. In 2005, researchers from the NSW Commission for Children and Young People listened to young people talk about work. For most of these children work is generally a positive experience: they gain experience and skills, they like having some money to spend, they like gaining responsibility, they like making friends at work. However, there are problems.

If they work for more than 14 hours a week, other areas of their lives suffer, notably study and family life. Children are educated to trust and obey any adult in authority. This makes them peculiarly incapable of carrying out the sort of negotiation that the legislation contemplates. 25% of child workers don't even receive a pay slip, let alone know about what is fair or what the swings and roundabouts are in terms of negotiable elements of extra time versus more pay versus time with the family. These are very complicated matters for them to weigh up in a putative negotiation with an adult who, unlike the other significant adults in his or her life, does not recognise that the child's welfare is paramount.
While the Government claims that these changes will simplify things, there is little reason to believe that 687 pages of legislation and 565 pages of explanatory notes is really concerned with simplification. There is little reason to believe that this legislation will create a simple environment that will enable a 13 year old to make a good and informed choice.vi

Consistency considerations provide necessary correctives to consequence arguments: "What level of abuse or exploitation of our children are we prepared to accept for the sake of having a stronger economy?" "Who, now that the Government has removed legal support, will take responsibility for the harm done to those children?" Children are but one example of the disparity of power between employees and employers. They can stand as an example of all vulnerable people with intellectual, physical or emotional disability, the old, single parents, women, people who have not mastered English.

Consistency arguments also have their difficulties.

We should treat people according to their rights and according to principles of dignity but in certain circumstances this could lead to them being worse off. For example, some years ago a publishing concern, attracted by the lower wages and a peaceful community setting, decided to establish a large production unit in a rural city in NSW. At first the new workers were delighted, but then they began to demand higher wages to bring them closer to wage levels in Sydney, demanding equal pay for equal work, a question of consistency, of equal rights. The publishing house decided that the increased costs and social friction wiped out the advantages of the move, closed the plant and all those workers lost their jobs. So "fair treatment" should not ignore practical outcomes. Just as "consistency" arguments provide an important corrective to "consequence" arguments, reverse correctives are also important.

So, moving on to consider the rest of the workforce, the question is still worth asking, "Who is the stronger party in industrial relations negotiation?" I doubt that anyone would be willing to make the case that 15 years of steady growth, bonanza profits and astronomically high CEO incomes (CEO of Macquarie Bank earns $58,000 a dayvii) mean that the Australian economy is hostage to labour, organized or not.
Some argue that small employers have been weakened by the unfair dismissal laws in the face of "the employee from hell". Recognising the truth of the claim, we should ask ourselves that if the current or former laws were not fair, does it make sense to throw out the whole notion of fairness altogether? Could not the laws be made fairer?

The recent decision in the case of the Cowra Abattoirs was that "financial difficulties" did conform to "operational difficulties" as the bill defines them. This means that the level of cause required by companies to dismiss employees whether they have less or more than 100 employees is very low, virtually invalidating the unfair dismissal laws that do remain.viii

There are unanswered questions here because we do not have enough information. We need to know more about what is going on, so that we can, in the best traditions of consistency, make better ethical decisions. Of all the difficulties faced by small business, one wonders why the Government has chosen to respond to this one rather than, say, the bullying practises of some large companies.

Care

It is possible for people to weigh up these ethical principles very differently, and we do. However, being able to produce ethical arguments like these is not enough to BE ethical. Take the case of the psychopath. A psychopath is physiologically incapable of feeling empathy. The psychopath can witness the suffering and distress of another human being and have no emotional response whatsoever; for them, watching a child die of hunger has the same emotional impact as watching a boat sail out of a harbour. Such people can learn and apply the sorts of rational ethical principles I have talked about today. But they will destroy another person if there is gain in it for them, feel no qualm, and produce arguments to prove that what they did was necessary and ethical.ix So, in order to be ethical we also need empathy, a feeling rather than a principle. We need to recognise the connections we have with other people, even though they may not be members of my family and friends, we need to recognise their particular circumstances and respond with compassion. In the context of IR, people need to feel connected at work, to be part of the enterprise, to feel the bonds of mutual commitment, that their situation is known (at least to some extent) and is taken into account. The ACTU advertising campaign takes up this point, to date with significant political impact. The particular case of a single mother who needs predictability in her life in order to offer sufficiently stable care for her children should not have to sacrifice her children's needs to her boss' needs for greater flexibility. The Government's IR case does not appeal to this part of ethics much at all, as far as I can judge.

Many think that ethics or morality is mostly reduced to compassion; an attitude which often provokes a "bleeding heart" sort of reaction. Ethics needs all three of these elements, care, consistency and consequences, I would suggest, because each element provides mutual corrections to the others.

Reconnecting to Catholic Moral Thought

This last element of ethical theory brings us back to Catholic moral thinking where compassion has always played an important role in theory and practise, though not without notable lapses.

When Catholic moral thought talks about "common good", it defends the communitarian nature of human life. In reality, communities hold values because communities can put values into practise and pass them on from person to person, from generation to generation. There is no way of exaggerating the importance of "seeing is believing" or "actions are better than words"; there is no way of exaggerating the importance of good example. The most basic way that we learn how to live a human life is by imitation. When we see people actually "putting their 'money' where their mouth is", we have a real chance of learning what values are real and not just talk. We have a real chance of learning what walking the walk means.

It stands up for a communitarian vision where we take responsibility for one another, where there is a clear "yes" to Cain's deceptive question, "Am I my brother's/sister's keeper?", that is: "I am not her Gaoler, but her welfare is part of my responsibility. If not, I am just another individual: isolated, prone to commit murder, even guilty of murder, profoundly distrusted by others, barely human." It stands up for a communitarian vision of life where our chief security is that the community will support us in the hard times, and will expect our contribution when times are better for us, where we treat all and are treated by all with respect and dignity. The alternative forms of security are much more terrible and all of them involve far higher levels of fear: the bigger guns, the being able to beat the other bloke to the punch or else I will go to the bottom. The more fear grows the less possible is community, the less possible is the good life.

This communitarian vision of life is enhanced by the support of good law. This is not the type of law predicated on the basis of rampant individualism where one is in radical and eternal competition with everyone else. It is a type of law that is predicated on what a society needs to function with a communitarian spirit: law that protects the less from the more powerful, which maintains the necessary conditions for the level of human solidarity that a community requires. In the spirit of public ethics, we need law that ensures fair and transparent procedure, so that certain powers are never privatised, never become the domain of the powerful, the clever and the rich, but remain the domain of the community itself.

Many of us who have grown up with a communitarian ideal have articulated that vision of the good life in terms of relationships of love, relationships that use the language of family: father, mother, sister and brother. In this context, there is a strand of thought where the law, or more commonly "the letter of the law" breathes death to trust and family feeling. This self-image is most vulnerable to the dictatorship of the kindly, paternal authority who decides in an inner and private way, rather than a publicly and transparently, what should and should not be done. It has many forms, "Big Brother" not being the least powerful. But it is a dictatorship nevertheless: it does not enable others, does not allow them to develop. In so far as it does not share power it does not really expect or allow the others in the so-called community to become moral agents in their own right. In short, it does not respect those most Catholic of principles, subsidiarity and conscience. Nor does it respect that most western of social principles: democracy.

Law should support those public, transparent, pluralist and social institutions that enable and encourage moral communities, and enable them and their members to deal ethically with one another.

The current IR laws do not reflect that communitarian spirit. Law that is conscious of the communitarian ideal would recognise, as did Leo XIII, the importance of groups like labour unions as a communal institution that protects its members. Rather, these new laws reflect a individualistic competitive spirit where the greater benefits, the honour and the prizes go to the successful and the greater burdens, the shame and the punishment go to the losers. It is a vision of law summed up in the image of "carrots and sticks". Unfortunately, the donkey's mouth is so far away from its rump, it is questionable whether it is one and the same donkey.

Conclusion

After all this, what can we say? Although the WorkChoices legislation does have some points to commend it, on balance my judgement is that it is not ethical. Most seriously, I think that there is a good argument that the legislation is bad law because it further corrodes the communal quality of human life. Therefore, for an employer who takes ethics seriously, it should not represent a guide to policy and practise. We need some better guide.

What will achieve the right outcomes for the Australian economy? How do we ensure that the economy properly serves the well-being of Australians and others? How do we ensure a fair distribution of the benefits and burdens of the economy? What laws do we need in place to ensure that workers and businesses are treated fairly? Whom should we take particular care to protect? If these were to be the starting points for IR reform, we would have very different laws to those in the current WorkChoices legislation.

There are the big questions about productivity and profitability which need to be dealt with honestly and openly.

In the current climate of growing inequality, cost-cutting measures really need a greater level of social accountability. For these reasons we need much more, better and consistent reporting from companies on a range of issues so that we may form better regulation:

• Companies should report not just their employment levels, but also levels of staff turnover. We need to be able to identify those firms that indulge in "churn and burn".
  
• Firms should report on the staff training and education practices and effects, across the whole spectrum of employees, not just the high fliers, but also how well firms contribute to helping those who struggle to become productive workers with dignity.
  
• Firms should report on promotion practises.
  There should be reporting on wage structure from the CEO right across the board to the humblest bottle washer.
  
• We should respect and encourage unions and professional associations in playing a proper role in industrial relations: they are important communal instances for workers. These instances are the most practical way that workers can have a sufficient say over their own lives as well as providing good instances for consultation and negotiation with businesses. This formula has proved remarkably successful over the last 15 (even 100!) years in playing its part in increasing productivity and industrial stability.
  
• We should ensure that minimum wages are living wages: that they provide sufficient income for a small family to live with dignity.
  
• We should provide ways and means for connection and mutual commitment to become realities in the workplace. Casualisation of the workplace breeds stress and lack of confidence for many people. It leaves people vulnerable and lessens their autonomy: it is an assault on respect and dignity.