Wesfarmers boss Rob Scott says the enterprise bargaining system is ’broken’, needs urgent reform

In the lead-up to next week’s jobs summit, the boss of one of the country’s biggest employers says enterprise bargaining needs urgent reform.

Rob Scott, boss of Wesfarmers, one of the nation’s biggest employers says the enterprise bargaining system is “broken” and needs reform. Picture Ross Swanborough.

Wesfarmers chief executive Rob Scott, whose Perth-based conglomerate is one of the biggest employers in Australia, believes the enterprise bargaining system is “broken” and needs urgent reform.

He said the current enterprise system was “flawed” and also “disempowers” workers and he would be happy to share his views with others at the upcoming jobs and skills summit — where unions and big business are expected to clash over the future of the industrial relations system.

“First of all, we think that enterprise agreements are a fantastic way, if they operate appropriately, to really help businesses adjust to the competitive forces they face to create value and then very clearly share that value with your team members,” Mr Scott said on Friday.

“It is a fantastic framework. Unfortunately, the framework is just broken at the moment.”

The comments from Mr Scott, whose Wesfarmers is one of Australia’s largest private sector employers with approximately 107,000 team members, comes as he prepares with other business leaders and unions to meet at the federal government’s jobs summit next week where the industrial relations system and enterprise bargaining is set to flare up as a major thorny issue.

Already the unions, led by the ACTU, have led the charge calling for a return to sector-wide wages bargaining to lift wages, but with the business community has labelled it as a return to the 1980s and a poor outcome for the economy.

Mr Scott, the boss of Wesfarmers which owns retailers such as Bunnings, Kmart, Target and Officeworks, did not support the return to sector-wide bargaining but did strongly call out the current enterprise bargaining system as “broken”, in need of reform and the jobs and skills summit next week called by prime minister Anthony Albanese a good venue to sort out the problem.

“We now have a system, and everyone seems to understand this, that the enterprise bargaining system is broken. So there are various obstacles within the EBA that are stopping that happening.”

Mr Scott said a recent wages deal at Bunnings highlighted the broken state of the system.

“To give you an example, one of our Bunnings EBA’s that resulted in 98 per cent of our team being better off, that was overwhelmingly supported by the Bunnings team — and even for the 2 per cent off that were not going to be better off Bunnings had agreed to compensate them. Notwithstanding that, we weren’t able to technically get the agreement agreed. So that just goes to show how flawed the system is.

“And quite simply it disempowers workers, and there are plenty of examples that we’re happy to share.

“And the great news here is that we’re just thinking of technicalities, overcoming a few technicalities, we can, we can unlock a fantastic benefit for Australian business and Australian workers.

“So look, I these issues that are really important for our teams now businesses are well understood going into the jobs summit.”

He said the retail award, that Wesfarmers retail businesses operate under, has 100 different interpretations, and it was no struggle that businesses and workers struggle with compliance and understanding the system.

“It‘s no surprise that workers can’t even really understand what they should be getting paid.”

“Enterprise agreements were originally set up to empower workers, to give them a role in making their businesses more competitive and sharing in the benefits,” Mr Scott said.

He looked forward to raising these issues at the upcoming jobs summit that he will attend next week.