...'light touch' regulation, as a response to Work Choices. This article presents findings from a study of light touch labour regulation in New South Wales, Queensland and Victoria. The article also makes some preliminary observations on the use of this regulatory technique by the three states, drawing upon a normative model of 'responsive regulation'. This preliminary assessment of light touch labour regulation suggests that there is considerable scope for improvement, as many of the approaches discussed are relatively weak informational strategies. The article identifies a number of possible regulatory improvements.]



CONTENTS I Introduction II Regulatory Theory and 'New Governance'. III Light Touch Labour Regulation by State Governments in Australia A Attaching Labour Conditions to Government Procurement Contracts 1 Applicability 2 Standard-Setting 3 Monitoring Compliance 4 Enforcement 5 Post-Work Choices B Financial Subsidies 1 Monitoring, Evaluation and Enforcement C Codes of Practice 1 Codes of Practice for the Victorian Transport and Forestry Industries 2 Monitoring, Evaluation and Enforcement D Best Practice Case Studies or Guidelines 1 Promotion of Family Friendly Work Practices 2 Monitoring, Evaluation and Enforcement 3 Post-Work Choices IV Evaluation of Light Touch Regulation in Australia V Conclusion

I INTRODUCTION

Analysis of the role of the state in shaping industrial relations and employment practices has traditionally focused on labour law. Certainly, a key role of government has been to set labour standards through legislation, or by establishing legal systems of industrial relations whereby conflicts between employers and unions are resolved and there is a mechanism for the determination of appropriate rights and standards for employers and employees. Recently, however, a number of developments--including criticisms of labour law's capacity to accommodate flexibility in employment practices at the level of the firm (often referred to as a need for labour market 'deregulation'), questions about the effectiveness of legally prescriptive and hierarchical models of regulation, and a growth in corporate power--have converged to shift attention to other ways in which the state may influence labour standards and practices. (1) Increasing attention (particularly in Europe and the United States) has been paid to the use by states of 'soft' or 'light touch' approaches to regulating labour standards. Such regulatory approaches are yet to receive extensive consideration as forms of state labour regulation in Australian labour law scholarship.

In Australia, the Commonwealth government's Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ('Work Choices'), which amended the Workplace Relations Act 1996 (Cth) ('WRA'), brings into further relief the actual and potential use of light touch labour regulation by Australian states. Work Choices will reduce the impact of awards--historically the most influential and comprehensive form of legal regulation of employment conditions in Australia. Moreover, under Work Choices, the Commonwealth government has created a national system of labour law by 'covering the field' of industrial law, severely restricting the jurisdiction of state governments to use law to regulate corporate labour practices within their jurisdictions. Nevertheless, the federal takeover has the potential to bring a 'cauldron of innovation' (2) to the boil by causing state governments (and perhaps local governments) in Australia to consider creative approaches to labour regulation, including light touch approaches. While it is too early to evaluate innovative responses to Work Choices, it is certainly possible to identify existing light touch labour regulation by state governments, and to discuss recent and impending developments.

This article presents preliminary findings from a study of light touch labour regulation by state governments in New South Wales, Queensland and Victoria. It seeks to contribute to an understanding of how the states aim to effect normative changes in employment practices and industrial relations in Australia other than through legislation. Part II of the article identifies the theoretical approaches that have informed this research. Part III outlines how the three Australian state governments under review are currently using light touch regulatory techniques to improve labour standards. We focus in turn on the states' use of public procurement; financial subsidies, tax concessions or loans; codes of practice; and best practice case studies or guidelines. This discussion demonstrates that NSW, Queensland and Victoria already use a range of regulatory techniques to promote desired labour practices. Furthermore, there are indications that the prevalence of light touch approaches by the states is likely to increase in response to Work Choices. Part IV provides a very preliminary evaluation of light touch labour regulation in Australia. It assesses the use of light touch regulation by the Australian states against a normative model of responsive regulation. It identifies a number of weaknesses with the current approaches and offers some suggestions for improvement. Suggestions for further research are also considered.

II REGULATORY THEORY AND 'NEW GOVERNANCE'

Informing this research are perspectives drawn from regulatory theory and the 'new governance' movement in Europe and the US. (3) We adopt a broad understanding of regulation

as any process or set of processes by which norms are established, the behaviour of those subject to the norms monitored or fed back into the regime, and for which there are mechanisms for holding the behaviour of regulated actors within the acceptable limits of the regime (whether by enforcement action or by some other mechanism). (4)

Secondly, we recognise that, in seeking to influence behaviour, the state has available to it a number of regulatory techniques beyond the conventional 'command and control' style of regulation, in which formal rules are created, monitored and enforced by the state through orders and sanctions. (5) Of these alternative techniques, soft or light touch approaches to regulation are distinguished from 'hard' legal or centred command and control regulation on the basis that the former are less reliant on the imposition by the state of generally applicable mandatory legal standards as a means of regulating behaviour. These light touch approaches may have advantages (or disadvantages) over command and control style regulatory approaches in that they have the potential to be more 'responsive' to complex regulatory environments and the interests of non-state actors. Thirdly, we recognise that regulation is 'multifaceted, differentiated and increasingly "shared" by a range of public and private actors.' (6)

A number of scholars have suggested that the state is increasingly adopting many of these 'lighter' forms of regulation. (7) For John Braithwaite, the current era of regulation is best understood as one in which the role of the state has shifted from a provider of services and direct regulator, towards a role which is more facilitative of markets and private ordering as both mechanisms of resource provision and distribution, and of regulation. (8) Describing this era as one of 'regulatory capitalism', (9) Braithwaite observes that there is not less regulation but rather that the form of regulation has shifted. (10) Increasingly, attention is paid to regulation of corporations by corporations themselves: to 'corporate governance', 'private ordering' and 'self-regulation'. (11) Moreover, it is now commonly argued that self-regulation can replace, supplement or interact with state law and public provision as mechanisms of social regulation, such as where governments require or facilitate self-regulation by firms or industries. (12)

In the realm of labour law specifically, the traditional focus on 'hard' law--legislation, awards and enterprise agreements, and case law--has indeed provided an incomplete picture of the role of the state (and of non-state actors) in regulating work. (13) The state effects normative changes in employment practices and industrial relations through a range of regulatory techniques. The wide range of techniques available to, and used by, governments to regulate labour standards is well-illustrated through the concept of a 'spectrum' of labour regulation. (14) Between the regulatory extremes of command and control legal regulation and voluntary self-regulation (where there is no direct role for the state) are a number of regulatory approaches which can be classified according to the extent of government involvement and the coerciveness of that involvement. (15) Across this spectrum, approaches vary from:

* initiatives relying on government deployment of wealth to secure behavioural change by attaching conditions to government contracts, or through the offering of financial incentives or rewards; (16) and

* facilitation of 'co-regulation' or corporatist arrangements and/or 'self-regulation' by requiring or encouraging firms and stakeholders either to develop codes of practice, or standards of behaviour, which are better than state sanctioned minimums; (17)

through to the use of informational strategies. (18) Informational strategies encompass the imposition of public disclosure requirements on firms, as well as governmental use of information as a regulatory instrument, including dissemination of voluntary codes of practice, 'best practice guidelines' or 'case studies'. The latter approach seeks to promote or encourage private sector take-up of decent work practices by presenting these practices in a way which suggests consistency with ideals of good corporate (self) governance. (19) We should note, however, that the different 'forms and legalities' (20) across this spectrum frequently interact with each other within a given regulatory space, and are therefore not necessarily mutually exclusive. (21)

In this article, we set out some examples of Australian state governments employing light touch approaches to regulate labour practices, to assess whether these approaches are adequate alternatives or supplements to more traditional labour law. In outlining and assessing the various regulatory techniques adopted by the state governments, we distinguish between the character of the regulatory objective and the nature of the regulatory process adopted for the achievement of this objective. In relation to the former, we examine the different forms of labour regulation with an interest in the extent to which they address the quality of jobs created and maintained in the labour market. (22) While we are interested in minimum standards, we do not presume that standards of decent work are confined to current legal minimums. (23) We distinguish between approaches that endeavour to secure or improve compliance with existing standards set by legislation or by (collective) industrial instruments such as awards, and those that go beyond this to identify appropriate working conditions or forms of work organisation above the floor of minimum standards. (24) For example, we are interested in the use of light touch regulation to influence employer labour management practices in relation to 'work-life' balance or cooperative, 'high performance' work practices.

In terms of the character of regulatory processes adopted, we enquire into the nature and extent of standard-setting, monitoring and evaluation, and enforcement associated with these approaches, including the degree to which regulation is shared with non-government actors. We do not confine ourselves to legal processes. A government may, for example, require other actors to disclose information regarding compliance with particular standards as a way of enhancing monitoring and evaluation of the effectiveness of a regulatory regime. Similarly, information may be used for enforcement purposes, for example, where a firm is 'named and shamed' as a sanction for noncompliance. (25)

III LIGHT TOUCH LABOUR REGULATION BY STATE GOVERNMENTS IN AUSTRALIA

Before outlining our findings, we must acknowledge some limitations on the scope of our research. Our survey of state government labour regulation is limited to three states--NSW, Queensland and Victoria--and excludes some relevant regulatory schemes which have already been subjected to scholarly analysis regarding their light touch characteristics. These schemes may be found in areas such as occupational health and safety, (26) anti-discrimination legislation, (27) and the textile, clothing and footwear industry. (28) Exhibiting features of light touch responsive regulation, these models may be useful for comparative purposes in assessing the responsiveness of the regulatory initiatives that are the subject of this article. Furthermore, it must be acknowledged that there are also some forms of 'corporate social responsibility' regulation which address employment systems and practices which are mostly outside the scope of our study. (29)

A Attaching Labour Conditions to Government Procurement Contracts

One of the light touch regulatory techniques used widely by governments is that of attaching 'secondary' or 'social policy' criteria to government procurement contracts. (30) There is an extensive history of governments using their market power as a major purchaser of goods and services from the private sector to promote desired labour practices, particularly those standards relating to equal opportunity employment and the payment of fair wages. (31) By attaching labour standards to contracts--through which the government purchases the goods and services it needs to carry out its functions from the private sector--governments provide businesses with an economic incentive to comply with specific labour practices. (32) All the states and the Commonwealth government rely extensively on public procurement as a means of promoting compliance with desired labour practices. (33)

Before proceeding to outline how the three states are using public procurement as a means of promoting labour standards, it is important to note the actual and potential limitations on their power to do so. The Australian states are limited in their capacity to use public procurement and other forms of regulation to promote social policy objectives by the nature of Australian federalism. There are two legal restrictions of principal relevance. The first set of restrictions relates to the application of the federal WRA. The changes effected by Work Choices mean that the WRA 'covers the field' and thus renders as void any state 'industrial law' that seeks to regulate constitutional corporations in a manner which is inconsistent with the federal legislation. (34) The WRA, through its freedom of association provisions, also limits the capacity of state governments to encourage collective forms of workplace arrangement. (35)

The second set of restrictions upon state governments arises from the promotion of competition and free trade. The Trade Practices Act 1974 (Cth) ('TPA') has been identified as a potential restriction on the capacity of a state government to use procurement to impose social obligations on businesses supplying goods or services to the government. (36) A number of commentators, however, have suggested that the TPA does not apply to public procurement. (37) Nevertheless, doubts about the extent of the TPA's application may be a reason for state government hesitation to strengthen labour conditions attached to public procurement policies.

State governments are also restricted in their ability to use light touch labour regulation to influence labour practices in the building and construction industry. Any such regulation must take account of the Commonwealth government's National Code of Practice for the Construction Industry (38) and Implementation Guidelines for the National Code of Practice for the Construction Industry. (39) The Australian Building and Construction Commission has extensive powers under the Building and Construction Industry Improvement Act 2005 (Cth) to investigate alleged breaches of the industrial relations provisions of the Code, (40) not to mention substantial resources. The Commonwealth government has made it clear that any building project with Commonwealth funding must be 'Code compliant'. (41) The Code is designed to reduce union influence in the building and construction industry, so many of its requirements conflict with state governments' efforts to promote decent labour practices and facilitate trade union activity.

In NSW, Queensland and Victoria, the public procurement process is governed by a complex web of policies, frameworks, codes and guidelines. Each state has a broad procurement policy or framework that sets out general principles applying to government procurement contracts. (42) Prior to Work Choices, all three states included some labour conditions in their procurement criteria. In the case of Victoria, one of the broad policies requires all businesses that tender for government contracts to adhere to an 'ethical employment standard'. (43) Queensland and Victoria also have codes of best practice that set out specific labour standards and industrial relations practices with which all businesses in particular industries that tender for government contracts must comply. Queensland has codes of practice for...

NOTE: All illustrations and photos have been removed from this article.



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