Workplace laws a bad sign of Labor reform intentions

Business leaders face a new era of multi-employer bargaining, a resurgent trade union movement and less flexible workplaces as a result of capitulation by senator David Pocock to demands that the government’s industrial relations laws be passed by Christmas. The final agreement, after a hurried consideration by the Senate, sets an ominous tone for how Anthony Albanese intends to govern. He has shown himself willing to spend the political capital from the election win and successful appearances on the world stage to push ahead with industrial reforms that far exceed anything put to voters. Senator Pocock’s backdown after arguing strongly that not enough time had been given for proper consideration and that the bill should be split to remove the contentious multi-employer provisions defines what will be the transactional nature of politics going forward. The government has found a balance of power it can work with.

Where business groups may have believed Senator Pocock was standing firm for the economy’s best interests, the final agreement underscores that this was not necessarily the case. Senator Pocock’s key demands favour welfare recipients and contract workers most. Business groups have been outmanoeuvred by a joint campaign by the ACTU and the Albanese government to seduce them into a consensus-building wages summit that delivered an outcome they did not see coming. Industry-wide bargaining has been firmly on the ACTU agenda and Labor Party platform but was not raised specifically by the Albanese team during the election.

As opposition Treasury spokesman Angus Taylor said in question time on Monday, Jim Chalmers was quoted last year saying industry-wide bargaining was “not part of our policy”. The Treasurer says he is being misquoted and that the current reforms do not constitute an industry-wide scheme. But they burst open the doors to greater union involvement and workplace agreements across comparable industries.

Senator Jacqui Lambie said Senator Pocock had been “pounded” by Labor into backing its industrial relations bill. She said pressure was applied to Senator Pocock and his office. “When you have that tremendous amount of pressure and you’re tired, your resilience becomes a lot less and unfortunately Labor’s had the win,” Senator Lambie said. “I do not believe those contentious issues have been fixed with (the amendments) he is proposing, which is very, very worrying, and I can see why businesses today are up in arms.” In political terms, negotiations to meet the government’s desired Christmas deadline have been a masterclass by Workplace Relations Minister Tony Burke. “We have legislation where every section of the bill is still there,” he said. “The bottom line is there will be a pathway now for wages to get moving again in Australia. It will be a deliberate design feature of how we manage things.”

Senator Pocock said changes agreed with the government in exchange for his support included: a published annual review of the adequacy of welfare payments; consideration of greater protections for subcontractors; a review of modern awards; an increase in the number of employees from 15 to 20 for a business to be included in the single-interest multi-enterprise bargaining stream; a statutory review two years after the passage of the bill; an extension to the “grace period” during which a single-interest multi-enterprise bargaining authorisation can be granted to nine months; a new reasonable comparability threshold will be included in the common interest test; new safeguards for businesses with fewer than 50 employees wanting to exit multi-enterprise bargaining, and; a nine-month “minimum bargain period” to get agreement before conciliation or arbitration. There will be greater powers for the Fair Work Commission to compel a vote on a multi-enterprise agreement. Civil construction will be exempt from all streams of multi-enterprise bargaining. The minister will have new powers to declare an industry or occupation eligible for the supported (previously low-paid) bargaining stream. There will be greater workers’ compensation benefits for firefighters and a new national construction industry forum to advise government on measures that will ensure contractors are paid accurately and in a timely manner in the construction industry.

The Business Council of Australia maintains the IR reforms are a huge economic risk with no evidence that multi-employer bargaining will lift wages. Missing from the government’s approach is any commitment to boosting productivity as part of increased wages, something Reserve Bank governor Philip Lowe has warned is critical to beating inflation and getting interest rates down. Dr Lowe told a Senate estimates hearing on Monday engineering a “soft landing” for the economy was possible “as long as we manage the wage- and price-setting dynamics OK”. We agree with the BCA that the way to deliver higher pay without stoking inflation is by working smarter, creating new jobs and building new industries, but multi-employer bargaining risks seeing these opportunities flow overseas because of the reintroduction of rigid and old-fashioned work practices. The speed with which Australia has been taken back down this road by Labor bodes ill for the nation’s economy in the years ahead.