IR reforms go back to the future

Of all the productivity-sapping threats posed by the Albanese government, a return to industry-wide wage bargaining to satisfy the demands of the ACTU has the most potential for harm. Legislation to be introduced by Workplace Minister Tony Burke on Thursday delivers on longstanding union demands, with some concessions to business that do not go far enough. The Secure Jobs, Better Pay Bill flows from the government’s showcase jobs and skills summit in September at which business groups were beguiled into lending optical support to changes that were against their own and the national interest.

The changes, if passed, will wind back the clock on IR to a system that was dismantled by the reforming Hawke and Keating governments as overly restrictive and a handbrake on productivity and growth that was bad for workers, business and the economy. As the federal budget has made clear, the Albanese government has not been able to present a coherent case for how it will boost productivity to grow the economy out of its current trajectory of high debt and deficits. Instead, a more restrictive workplace culture with greater union involvement can be added to high energy costs and the prospect of higher taxes as major concerns for businesses as they grapple with high inflation, rising interest rates, supply bottlenecks, labour shortages, falling consumer sentiment and slowing economic growth.

How the proposed IR changes proceed will determine the future relationship between the Albanese government and business. Many believe the business community was wrong-footed by false claims of consensus made at the jobs summit at which the industry-wide bargaining issue was put on the agenda.

The ACTU claimed the support of small business for changes that would make it easier for them to piggyback off the negotiations of similar organisations, something that already existed in legislation but was rarely used. Instead, the pressure from the ACTU has been for a pattern bargaining system that is not restricted to small workplaces and allows for widespread strike action in support of union demands.

Even the Business Council of Australia, the business group that has been most accommodating of the Albanese government’s agenda, has voiced concerns about where it is all heading. BCA chief executive Jennifer Westacott said on Wednesday: “We want to see the enterprise bargaining system revitalised. What we don’t want to see is more complexity. What we don’t want to see is industry-wide bargaining, which we think will really hurt productivity and, in the long term, hurt wages growth.” Ms Westacott said the union movement was calling for a system that allowed widespread strike action but the economy was too fragile to take rolling strikes like we had in 1983.

The Australian Chamber of Commerce and Industry warns that the proposed reforms in industrial relations represent a seismic shift in Australia’s bargaining system. The ACCI is concerned the changes will drag many businesses into so-called agreements that they do not support and cannot afford.

Legislation being put forward by Mr Burke allows for multi-employer bargaining and will make it easier for widespread strikes. It will allow for a new right to strike in favour of pay claims across multiple employers but, in a concession to business, unions will have to hold separate ballots at each workplace before they can strike.

Militant unions that consistently break the law will not be able to engage in multi-employer bargaining. There will be new powers for the Fair Work Commission to resolve disputes and be able to arbitrate where disputes are intractable. Under the current system, both sides must agree to arbitration. The FWC will also have new arbitration powers to deal with flexible work disputes such as when workers want to work from home and the boss wants them to come in to work.

There will also be changes to the better off overall test to accommodate situations where a tiny minority of employees are affected. Special arrangements can be made for those employees rather than having to renegotiate the entire agreement.

In exchange, employers will lose their right to cancel an enterprise agreement and revert to a lower paying award if no agreement can be reached.

Peter Dutton was right to stay away from the jobs and skills summit and he must hold the line on opposing the backward steps being taken on IR that it has produced.