‘Ready for action’: Government to forge ahead with multi-employer bargaining

Multi-employer wage deals have received a green light from the federal government despite lingering opposition from big business, which warns it could lead to costly industrial action.

Following behind-the-scenes talks with unions and employers, Workplace Relations Minister Tony Burke told Thursday’s jobs summit the government was “ready for action” on a raft of changes to the industrial relations system, including simplifying the test that ensures individuals don’t go backwards under enterprise agreements.

Workplace Relations Minister Tony Burke says the government will overhaul collective bargaining.Credit: James Brickwood

“We’ve gone from a situation where everybody’s in their corners throwing rocks to a situation where people are making a genuine effort to see how we can work together,” Burke told media after the announcement in Canberra.

“The changes that have been worked through right now will make a real difference to business being able to employ people and people being able to make ends meet with decent pay rises into the future.”

The ACTU and the Council of Small Business Organisations reached a deal this week to allow multi-employer bargaining, giving unions the ability to strike agreements for workers across a number of employers in the same industry.

But other business heads have raised concerns it would limit workplace flexibility.

Australian Industry Group chief executive Innes Willox is concerned about multi-employer bargaining.Credit: Dominic Lorrimer

Australian Industry Group head Innes Willox said Burke’s announcement represented “a fundamental shift” in how bargaining operated and raised concerns for employers over the prospect of industrial action across broad parts of the economy.

“There is no detail around either the ACTU’s proposals or the government’s thinking on how multi-employer bargaining would operate in practice,” he said.

“A clear red line for industry is the potential for unions to engage in industrial action in pursuit of multi-party bargaining claims. This has the potential to shut down key parts of our economy in the pursuit of claims. Such a possibility has deeply alarmed industry and must be ruled out.”

Illustration: Matt GoldingCredit:

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said people in low-income jobs could already enter into multi-employer agreements under a section of the Fair Work Act.

“The opportunity is there to make those sorts of agreements. Now I particularly would want to understand, is there a suggestion that something’s holding them back? What is that?” he said.

However, Burke said there was “enough of agreement on the concept of opening up to multi-employer bargaining that we’re willing to go forward on it”.

“The big shift we saw on the floor there from where the conversations had been at even a few days ago, is those different business groups have gone from railing against it, to saying effectively they want to see where the case is being made. That is a big shift in itself,” he said.

“Everybody agrees that the current low-paid bargaining stream has failed and that proof that it’s failed is how rarely it’s been used.”

He said whether the existing law would be changed or something new created would be the subject of consultation. Meetings with his department would start next week.

The government has also committed to unravelling the complexity of the enterprise bargaining system, including by making the better off overall test (BOOT) “simple, flexible and fair”.

The BOOT guarantees that employees do not go backwards in enterprise bargaining negotiations, but businesses have complained it is being too rigorously applied by the Fair Work Commission when ratifying pay agreements.

They want the test simplified by scrapping clauses to do with hypothetical scenarios and allowing the passage of agreements that have majority workforce backing.

What is the BOOT?

• The better off overall test, or BOOT, is a central safeguard in Australia’s workplace system that ensures individual workers don’t go backwards in enterprise bargaining.
• The Fair Work Commission compares a registered agreement to the relevant industry award to ensure the employee would be better off overall if the agreement were approved. It is not sufficient that a majority of the employees would be better off.
• Employer groups say the BOOT increases costs and reduces flexibility. They want the test simplified by scrapping clauses to do with hypothetical scenarios and allowing the passage of agreements that have majority workforce backing.
• Unions say the test, introduced by the Rudd government, protects workers against wage cuts.
• ACTU secretary Sally McManus on Sunday acknowledged the test could be simplified. 
• Workplace Minister Tony Burke had hinted he was open to seeing the ratification of agreements that had majority support.
• About 1.66 million Australians are covered by enterprise agreements, down from a peak of 2.6 million in 2010.

ACTU secretary Sally McManus said the BOOT needed to be revised to shed some complexity built up over time from its interpretation by Fair Work and the courts, meaning it took “months and months for agreements to be agreed to”.

“That just means months and months and months without any pay rises, so it’s a common interest for both of us to fix this,” she said.

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