At first glance, not much change is proposed in ‘The Coalition’s Policy to Improve the Fair Work Laws’, and deliberately so.

True to its title, the policy promises to keep the Fair Work laws. The recent amendments to the Fair Work Act will stay, and there will be further low-key amendments possibly by December 2013.

When the prime minister launched the policy in May, he said, “if elected, these are the only changes that an incoming government will make in a first term”. Having won government, the Coalition is now preparing to implement its first-term changes.

What might follow in a second term is another question. The clue is in the policy’s centrepiece. During the first term, the Productivity Commission will review the Fair Work laws, and make recommendations to be taken to the next election.

What does productivity mean?

This year industry bodies, the union movement, presidents of the Fair Work Commission past and present, and the Productivity Commission itself, have all commented on the interaction between workplace relations and productivity.

The Coalition policy promises higher living standards, better pay and more jobs, and insists the pay and conditions of workers will be protected.

Although the Fair Work system stays, its evolution under the Coalition government will be based on a distinctly different vision of regulation and the role of the system. The government has not yet released terms of reference for the Productivity Commission review, or named who will conduct the inquiry.

The Productivity Commission obviously sees potential for improvement at the enterprise level. Based on my own experience, the greatest potential is at the local workplace level.

To understand this requires an acknowledgement that workplace culture is the key, and the hidden potential can only be unlocked by focusing on relational issues, because leadership and management style are what determine work place culture.

Setting benchmarks

Back in 1995, the Karpin Report found the most successful Australian organisations emphasised leadership, people management, communication, conflict resolution, creativity, innovation and change management. Unfortunately, according to international benchmarks, instead of being a world leader in people management, Australia lags behind.

International studies consistently show Australian organisational cultures are more often “passive/defensive” and “aggressive/ defensive”, than “constructive”.

Leaders always want constructive high-performance cultures, but as long as their own leadership styles are defensive, people will act defensively.

Supported by the Coalition, the new Fair Work Act anti-bullying jurisdiction commences in January. But changing the culture, whether to eradicate bullying or to lift productivity in other ways, requires a whole-of-organisation response, not just regulation.

It requires an insight into workplace culture that most organisations simply do not have. As Senator Abetz has said, “It is one thing to chant the productivity mantra. It is quite another to deliver it.”

Rather than waiting for the review, some industry bodies are lobbying for more significant change now, and the government may feel pressured to act sooner. However, regardless of any legislative change, to really improve productivity organisations need to do more to address local workplace issues, improve the quality of management, and encourage innovation.

Ultimately, what makes a great Australian workplace is the quality of workplace relationships and trust, not regulation.