Back to the bargaining table: Lies, damned lies and IR reform
The focus now is on whether Labor’s workplace changes will get wages moving. The jury is still out.
Federal Labor’s industrial relations changes will cause an economy-wrecking, strike-laden wages breakout or fail to get pay packets moving any time soon, depending on which government critic has the microphone.
Contradictory? Absolutely, but that does not faze the ALP’s political opponents or the vocal employer organisations paid by companies to push back aggressively against policies that would increase wages and therefore their labour costs.
Not that they would admit such motivation publicly. Indeed, the same people who rail against red tape are shameless enough to demand more regulation to try to cruel the objectives of the bargaining changes.
Ditto claims of 1970s-style industry-wide strikes when they know Australia has a greatly different industrial relations system to a half-century ago and private sector union membership is down to 9 per cent compared with 50 per cent during the heyday of David Bowie’s Ziggy Stardust and the Sex Pistols.
And, quelle surprise, it’s actually a lot harder to strike legally now than it was then.
But while you may know through personal experience that Australian workers have endured a decade of stagnating wages and, more recently, real wage cuts, you may not be aware, given the self-interested hysteria of some, that industrial action has been at historically low levels in recent years.
To paraphrase 19th-century British prime minister Benjamin Disraeli, the national political debate about the way we work is too often a case of lies, damned lies and industrial relations.
Now that the Secure Jobs, Better Pay Bill has been legislated, the focus goes to whether the changes will be the vehicle, as Labor promises, to get wages moving.
And it is the most contentious change – the proposed single-interest multi-employer stream – that Employment and Workplace Relations Minister Tony Burke says will help generate wages growth.
But not in the way you may think.
According to Burke in an interview with Inquirer, employers will be enticed back to enterprise bargaining for two reasons.
First, the improvements to the legal test applied by the Fair Work Commission when approving agreements – the better-off-overall test – will make enterprise bargaining easier.
Second, employers not wanting to participate in multi-employer bargaining will be able to avoid the regime by striking an enterprise agreement across the coming months.
“The multi-employer changes don’t start for six months but the reaction to them will start immediately,” Burke says. “There’s a good number of businesses who won’t mind multi-employer bargaining and also a lot of smaller businesses where realistically it’s never going to touch them.
“But there will be some medium and larger businesses who have a strong view that they want to avoid multi-employer bargaining, and knowing that a single enterprise agreement cuts them out should cause some businesses to come back to the table where they have walked away over the past six or so years.”
Burke says “if the fear campaign run by some of the business groups is based on any facts, then there will be some behavioural changes that will happen. If it’s completely confected, then nothing will change.
“But if it is based on in any way a view of business, then I expect those businesses with that view will use the mechanism that’s available to them that then avoids multi-employer bargaining and that mechanism is the one that we always believe should have primacy. It’s also the mechanism that will drive the most relevant productivity gains for business.”
According to the Australia Institute’s Centre for Future Work, the total number of current federal enterprise agreements has fallen by 13,200 since 2010, with three-quarters of the decline having occurred by 2016.
Jim Stanford, the centre’s director and economist, says the five sectors with the biggest decline in covered workers are retail (down by 187,000), hospitality (-113,000), education (-91,000), manufacturing (-88,000) and public administration and safety (-80,000).
“Most of those 13,000 expired agreements expired several years ago so it isn’t possible just to flick a switch and reactivate them instantly,” Stanford says.
“However, where enterprise agreements once were in place, and where unions still have some workplace presence, it’s certainly possible that negotiations could commence quickly.
“The new legislation reinforces the expectation on employers that collective bargaining is a normal, desirable practice. That’s a change from an environment that has been generally hostile to union activity and collective bargaining for several years.
“Some specific provisions of the bill – including the single-interest stream, the new termination provisions and the expanded possibility for dispute resolution – enhance the net incentive for employers to reach agreement rather than just ignoring the union or stonewalling negotiations. Once the bill is passed, I would expect to see a noticeable increase in collective bargaining activity and coverage within a year, with resulting positive impacts on wage growth.”
ACTU secretary Sally McManus says there are thousands of expired agreements and the changes will kickstart enterprise bargaining. She says an initial priority for unions using multi-employer bargaining will be to pursue pay rises for early childhood educators.
“The government obviously, will need to come to the table as the funder. They recognise that these workers are underpaid,” McManus says. She says “there won’t be a rush from the union movement” to pursue multi-employer bargaining.
“We’ll want to engage employers around it first of all because we want the system to work and we can see the benefits of it, and we want to have those discussions outside of the hysteria that’s been going on in 2022,” she says.
McManus nominates transport and renewable energy as sectors where unions believe multi-employer bargaining could work successfully. Rather than a primary focus being on wages, she says, multi-employer bargaining also could involve companies and unions negotiating a broad productivity-enhancing framework.
“Trying to encourage people into the transport industry to be truck drivers or transport workers, they’re competing against everyone else because of the skill shortage, and they’re thinking among each other, well, why don’t we get together because wages isn’t the issue really.
“It’s about what can we do to provide career paths for people. What can we be doing to do things like portability of long service leave across our companies so that we keep people? What can we do to improve this type of job so that people work in it?
“There’s a lot of advantages for employers if they get over the initial hysteria being run by some of the employer lobbyists.”
McManus says “there’s been no engagement for quite awhile now with workforce around productivity issues and hopefully this will be the new generation of productivity improvements where we stop petty competition around small differences in wages, which have only taken us downwards. What we want to see in our country is companies compete on innovation, on customer service, on the quality of their product, not on how much they can game the system to pay their employees rock-bottom rates or undercut each other.”
The renewable energy industry will have new jobs, and unions want to talk to employers about encouraging new apprentices, building skill paths and career paths to ensure there are quality good jobs.
“There’s been a lot of mistruths told by some employer lobbyists about how multi-employer bargaining might work because the truth is it can work however the parties would like it to work," McManus says.
“Doing a framework agreement which might just cover core topics … and everything else you do on your own, or you could have schedules that would have different pay rates for different companies but have a core set of things that they worked on together.
“This idea that it’s one size-fits-all is a very narrow thinking. I think our country just really needs to grow up a bit and look at a more mature bargaining system that allows us to move forward in the ways we clearly need to.”
Burke says renewable energy is “very likely” to be a sector where multi-employer bargaining occurs especially given the interest by the Electrical Trades Union in pursuing agreements.
“From the government’s perspective, we want to make sure that renewables result in good, secure, well-paying jobs. It’s been part of our language the whole way through to make sure that the energy transition involves secure, well-paid jobs, so we’re very hopeful that bargaining is used there effectively.
“It’s also the case in an industry that’s expanding, you’re more likely to get new players coming in. You want a situation where the nature of the competition is on the quality of the product, rather than a race to the bottom on wages.”
McManus believes “there’s going to be lots of limits to how much multi-employer bargaining there’ll be done outside the supported stream”.
“I think that’s inevitable because there are so many hurdles to get in there,” she says. “And unions are the ones who are going to have to make decisions to spend all the resources to get over those hurdles. And I think they’ll make that very, very judiciously and probably mainly focus on enterprise bargaining other than where it’s clear that there’s a strong case that workers want to do it and that they think they can get through all those hurdles.”
Burke says the government’s approach was a “very substantial change in direction” from the Coalition government. He says as more policy levers kick in, more workers each month will get the benefits of these laws.
“Some impacts should be relatively quick,” Burke says.
“Businesses who return to the table to bargain because of the changes to the better-off-overall test and who want to get a single enterprise agreement established before the new laws kick in, their workers will see a difference in their pay packets in the coming months.”
