Tony Burke to stop bosses axing pay deals

In wake of summit, the government will legislate workplace policy changes as soon as possible

Workplace Relations Minister Tony Burke at the Jobs and Skills Summit in Canberra. Picture: Martin Ollman/Getty Images

Workplace Relations Minister Tony Burke will legislate “as soon as possible” to stop employers unilaterally threatening to axe pay deals.

Mr Burke wrote to Fair Work Commission president Iain Ross about the proposed law changes on Friday after the government used the Jobs and Skills Summit to sign off on a suite of proposed workplace relations changes.

The Australian revealed in August that Mr Burke had signalled he intended to legislate to stop employers slashing wages by applying unilaterally to get pay deals axed, slamming the tactic as a “rort” that was against the ­national interest.

In his letter to Justice Ross, Mr Burke said the government would seek to legislate to ensure the process for enterprise agreement terminations was “fit for purpose and fair”.

“The government’s reforms will be aimed at limiting the circumstances in which employers can apply unilaterally to the commission for termination of an agreement where termination would result in reducing employees’ entitlements,” Mr Burke said.

“The government is concerned by the practice of some employers threatening to terminate agreements as a bargaining tactic.”

He said he was conscious there was always the possibility that some employers might seek to terminate agreements before any amendments could be enacted.

He acknowledged the commission would always consider a range of issues required by law before terminating an agreement, including that it was not contrary to the public interest to do so, as well as the likely effect that termination would have on employers and employees.

The agreement termination changes are part of a package of proposed changes to the Fair Work Act. Mr Burke’s department will start consultations with stakeholders next week on the changes, which also include a proposed widening of multi-­employer bargaining provisions and a simpler better-off-overall test (BOOT).

The Australian Industry Group has claimed that multi-employer bargaining could lead to “disruptive and costly industrial action”.

Business Council of Australia president Tim Reed welcomed changes to the BOOT but said the BCA did not believe multi-­employer bargaining was the solution to achieving sustained wage and productivity growth. “We are concerned about the prospect of multi-employer bargaining and its potential negative impact on innovation, supply chains, industrial action and the overall complexity of the system,” he said.

Business Council of Australia president Tim Reed. Picture: Adam Yip

Mr Reed said proponents of the change should “put a detailed proposition on the table, based on existing elements of the Act, and clarifying it with; a clear outline of the problem we’re trying to solve; confirmation that such a system would be voluntary for workers and businesses; and explaining exactly how it would be implemented and how broadly the system would apply”.

Treasurer Jim Chalmers said: “All industrial relations systems in the free world have got some element of industrial action in them, including ours and countries with which we compare ourselves. And there is a right balance to be struck there to make sure that workers can make their voices heard in a way that works for the broader national economy.”