Shared prosperity agenda puts reforms on the table

Just days into the new Albanese government, signs are emerging that significant reform of Australia’s workplace relations system could be achieved under Labor.

Secretary of the Australian Council of Trade Unions Sally McManus. Picture: Liam Kidston

Just days into the new Albanese government, signs are emerging that significant reform of Australia’s workplace relations system, especially the ailing enterprise bargaining framework, could be achieved under Labor.

Big business and the union movement have flagged using an employment summit, expected to be convened by Anthony Albanese by September, to drive a shared prosperity agenda that includes the objectives of higher wages and increased productivity.

Labor’s industrial relations policy is not as far-reaching as the multi-pronged platform put forward by Bill Shorten at the 2019 election. Nor is it as ambitious as many union leaders would like.

But it does leave the door open for broader changes, particularly if the new Prime Minister and his senior ministers can achieve a level of consensus between employers and unions.

As a priority, Labor will implement all the recommendations of the Respect@Work report, including legislating a positive duty on employers to safeguard their staff from sexual harassment.

The government will make a submission to the Fair Work Commission soon effectively backing a 5.1 per cent minimum wage increase. Separately, Labor is expected to tell the commission that it backs 10 days of paid family and domestic violence leave being enshrined in the National Employment Standards.

Inquirer understands the government also will seek to introduce changes criminalising wage theft into parliament this year. The former Coalition government ditched its promise to criminalise wage theft – despite having the numbers – when the rest of its omnibus bill was gutted.

Early indications are that some big-ticket items on Labor’s workplace agenda will take longer to be translated into proposed legislation as they are highly complex and would benefit from the government engaging in extensive consultations with employers and unions.

These include a guarantee that labour hire workers doing the same job as direct employees are entitled to the same pay; a limit on the number of consecutive fixed-term contracts an employer can offer a worker for the same job; creating a fair test to determine when a worker can be classified as a casual; and the proposed extension of the commission’s powers to include employee-like forms of work, notably gig economy work.

Citing the “prime examples” of the Hawke and Keating governments, Albanese has stressed the importance of successful businesses as job creators and how “the best governments in our history have understood the need for a compact between capital and labour to advance their mutual interests”.

University of Adelaide law professor Andrew Stewart says the employment summit gives Labor the opportunity to formulate changes to the enterprise bargaining laws.

“I don’t think I can emphasise this too much: there is enough wriggle room for the new Labor government to do quite a lot. What they’ve said, what they’ve talked about, their policies, provides a basis to go further if they want to,” he says.

“They have a fairly detailed agenda on wages, insecure work and gender equality, but they’ve said nothing on bargaining except we’ll have a summit. It gives them a way of dealing with it.”

In separate interviews with Inquirer, Business Council of Australia chief executive Jennifer Westacott and ACTU secretary Sally McManus said the summit would allow constructive dialogue about how to start fixing the enterprise bargaining system.

CEO of The Business Council of Australia Jennifer Westacott. Picture: Toby Zerna

“It’s an opportunity to bring people together around some common principles and … in our view, the first conversation has got to be about rescuing and improving the enterprise bargaining system, which we see at the centre of higher wages, higher sustained wages growth,” Westacott says.

“So we would say that’s the starting point for the IR discussion. There are other things that people will put on the table but, for us, the central platform of a high-performing industrial relations system is to have the capacity for employers and workers to collectively bargain around how the enterprise is more successful and how workers share the benefits in better conditions and higher wages.”

McManus says “everyone agrees that there’s a big problem” with the enterprise bargaining system and there is a “lot of common ground in terms of people wanting a simpler and a fairer system, an accessible system”.

“We have got to look at the whole package – everything from how do minimum wages work and how does bargaining interact with that and, in the end, the outcome you would think people would want is ensuring that workers are at least seeing the benefits of productivity growth, which they’re not at the moment,” she says.

“One of the things we want to discuss with employers is the labour share of economic prosperity. It’s been going backwards and that’s we think a big problem and not something we want to see in this country.

“It’s first principles of that. We want to address that and have working people share in the benefits, and if we do, OK, let’s look at what can be done.”

During the pandemic, Westacott and McManus developed a historic joint proposal to rewrite the enterprise bargaining laws. The deal, kept secret from other key employer groups, had been endorsed by key BCA members and the ACTU executive. It was presented by then industrial relations minister Christian Porter to employer and union representatives in September 2020 but dropped after uproar from rival industry groups who warned cabinet ministers and the prime minister’s office they would publicly campaign against the government on industrial relations unless it was junked.

They said the agreement gave preferential treatment to union-backed enterprise agreements at the expense of non-union deals.

In the election lead-up, Albanese spoke favourably on two occasions about the BCA-ACTU agreement when discussing the proposed summit. “What we saw was the Business Council and the ACTU get very close to an agreement that would boost productivity. The way that you lift wages and lift profits can only be through productivity, that’s how you can get a win-win. And that’s what I’m keen on,” he said on April 11.

McManus says the agreement with the BCA could “definitely be part of the mix” but unions wanted to have a broader discussion about making sure that wages were growing.

“The other thing people need to understand is the previous discussions happened in the context of a Coalition government in the middle of a pandemic with an extremely narrow set of topics we were allowed to discuss,” McManus says.

“If you want to address these problems properly in the best interests of the country you should see things in a broader sense and have a go at looking at things in a broader way rather than in a narrow way, which is how those working groups were approached.”

McManus says unions want to start with first principles, including the goal that workers are “sharing in the productivity, sharing in the prosperity of the country, and they’re not at the moment”.

“We want to have constructive discussions. We want to fix that (bargaining) system,” she says.

“Everyone can see that it’s failing. That’s common ground. The number of bargains that are now reached and how low that is. In fact, it’s just basically failing on every measure. It’s got to be fixed so we should all look for this opportunity to make it work.”

Westacott says the agreement with the ACTU retained the Fair Work Act’s “better off overall” test but sought to improve its operation.

“The fundamental agreement (McManus) and I did was that the agreement of the parties had to be given primacy; that you could negotiate both monetary and non-monetary benefits; that the EBA could, where agreed, replace the award,” Westacott says.

“(This was) versus the commission coming in and revisiting the agreement line by line and making its own determination about what it thinks is better off overall. A really important part of our agreement was that third parties who had not been part of the agreement could not come in and blow an agreement up effectively.

“If we really want to have wages growth we have to allow the parties to negotiate how to deliver sustained wage increases, but there has to be a productivity discussion and that has to be done in the context of how can the enterprise be more successful.

“That includes things like how do we adopt new technology, how do we train people, how do we have regard to the rostering system, the organisation of the workforce.

“Those things are very important when you actually get into workplaces, particularly the big workplaces, where people want to have those conversations and they want to have them in quite an ambitious way.

“We have got to make progress. We have been in a stalemate for a decade on this.”

Asked about the employer groups that opposed the agreement, Westacott says they should go to the summit in good faith.

“I would encourage us to break through,” she says. “In the history of industrial relations you can’t get progress if there’s not agreement between unions and business. You might do things but they don’t stick.

“And I would encourage all of us to go to the job summit with an open mind and try and see the bigger picture, which is we want that EBA system working, functioning, we want the issues corrected, and the unions are entitled to turn up and say, ‘We agree with that, but we want to see some safeguards for workers.’ And I think we have got to start with those principles.”