Jobs summit high on the vibe but the devil is in the detail

The government wants the bargaining system to facilitate productivity increases and higher real wages. Is this expectation admirable? Yes. Realistic? No. Just ask Dominic Perrottet.

Chief Executive, Business Council of Australia, Jennifer Westacott addresses the media at Parliament House on September 1, 2022 in Canberra looked on by ACTU secretary Sally McManus, ACTU president Michele O’Neil and BCA president Tim Reed. (Photo by Martin Ollman/Getty Images)

It was like being a footy player in the changing room shed at halftime; the first two quarters have already been played, and this brief bit in the middle is the obligatory pep talk. People got up to speak and gave their various opinions, and were politely listened to, but it is clear to all the course of the game is already set, although only the inner circle knows what that is.

This paraphrased opinion came from a participant at the jobs summit this week. Not that the person was complaining; in contrast, there was appreciation for the new government behaving as “the adults in charge”, who consult and collaborate, and conduct themselves professionally. Importantly, the word from those who engage is that the Prime Minister is a genuinely nice bloke, who does not act like he is the smartest person in the room.

When it comes to the workplace relations focus of the summit, everyone was united in one belief – the bargaining system is “broken”. The only trouble with all this is that everyone has a very different idea of how to fix it because everyone wants something different out of it. The system can’t be all things to all interest groups.

The government wants the bargaining system to facilitate productivity increases, and higher real wages. Is this expectation admirable? Yes. Realistic? No. Where is the evidence that enterprise bargaining increases productivity?

Nevertheless, fresh eyes see things anew, and as reported in industry publication Workplace Express, Jim Chalmers told those present that the summit was “just one step – a major step, yes, but one step” towards addressing productivity growth as an urgent national task because higher profits and wages depended on it.

Chalmers warned Australia had a “productivity problem”, which was also “a growth problem and a wages problem”, with real wages lower now than a decade ago. The lower rate of productivity and wages growth “is not a coincidence – there is a connection”.

This is all fine and good, and perhaps the Treasurer is right, but back in 2009 the Fair Work Act and its enterprise bargaining framework were presented as the mechanism to increased productivity and higher wages. Now, apparently, the system only made everything worse. What a waste of time all that was, then.

Admitting that the optimism back then was “misplaced”, was another speaker, University of Sydney labour law professor Shae McCrystal. She reflected on the “generally optimistic” outlook when the Fair Work Act was introduced, that it would reinvigorate collective bargaining. However, since 2013 there had been an “almost terminal decline” in the lodgement and coverage of new enterprise agreements in the private sector, with small business a “virtually agreement-free zone”.

One problem with the system, according to McCrystal, was there was no effective right for workers to strike. This assertion might have surprised all NSW citizens and one summit attendee, NSW Premier Dominic Perrottet.

This week, industry news reported on a leaked letter between the Transport for NSW secretary and the NSW TrainLink chief executive. It revealed that, already, government entities have engaged in 59 bargaining meetings, and released delegates and bargaining representatives from duty for 50,000 hours for negotiations. Yet in NSW, it seems, this year has been the year of the strike.

Transport Minister David Elliott is one employer who has had his fill of enterprise bargaining. He was reported this week as saying that although he had backed the union through the process, “every step of the way”, they had only “shat on me from a great height”.

Perrottet has since flagged the state government’s intention to apply to the Fair Work Commission to terminate the current enterprise agreement and therefore exit the bargaining system altogether.

It seems that, like many employers, Perrottet has come to the view that the best bargaining is no bargaining. Therefore, the last thing the Premier may want from the summit is to fix the “broken” bargaining system by making it harder for employers to get out of it and giving workers an increased ability to strike.

For many employers, “sitting down around the table” with unions to engage in bargaining proves to be possibly the most unproductive (and painful) activity they have ever engaged in. Sometimes it works out well, but often it is a staggering exercise in self-harm and, frankly, the results have driven many companies broke or offshore.

In the public sector, there is a place for it. Here is where people join unions to protect themselves from the bureaucracy, a machine that left unchecked would grind employees mentally into the ground with the sheer senselessness of their decisions.

However, in the private sector and small business, most people don’t want to join unions and engage in bargaining, for various reasons. Yet we are seeing the jobs summit emerge as an opportunity for unions to deal themselves back into the game, with the surprising endorsement of groups purporting to represent small business. Will all this succeed? At this stage, the vibe is hopey-changey, but the devil is in the detail, so we wait for draft legislation to scrutinise.