Labor to stop employers axing pay deals

Tony Burke has signalled Labor will legislate to stop employers slashing wages by getting pay deals axed, slamming the tactic as a ‘rort’.

Tony Burke says the ability of employers to cut pay and conditions by applying to unilaterally terminate enterprise agreements will be on the agenda at next month’s Jobs Summit. Picture: AAP

Workplace Relations Minister Tony Burke has signalled Labor will legislate to stop employers slashing wages by getting pay deals axed, slamming the tactic as a “rort” that is against the national interest.

In a significant speech on Monday, Mr Burke will declare he is disgusted employers are even attempting the “heavy-handed” approach and that “on face value, I cannot see how this tactic can possibly be justified”.

Mr Burke says the ability of employers to cut pay and conditions by applying to unilaterally terminate enterprise agreements will be on the agenda at next month’s Jobs Summit when the government seeks a consensus between unions and business on how to fix the “broken” bargaining system.

The minister’s comments, the strongest by the government on the issue, signal Labor will seek to scrap the unilateral termination provisions as part of a package of industrial relations changes to be introduced into federal parliament by the end of the year.

In his address to the Australian Industry Group conference in Canberra, Mr Burke criticises the bid by the country’s largest tugboat operator, Svitzer, to terminate its enterprise agreement with maritime unions.

Svitzer’s application sparked strikes across the nation’s ports by unions, which are highlighting the dispute to lobby Labor to ditch the termination provisions.

“If the termination goes ahead, I am advised it could result in pay cuts to the workforce of 40 per cent or more,” Mr Burke says.

“These are the same workers who, just weeks ago, were applauded for putting their lives on the line to save a bulk carrier and its crew, stranded off the coast of Sydney after a cable snapped.

“The NSW Premier, Dominic Perrottet, described the work of these crews as ‘heroic’ and ‘incredibly impressive’ – and rightly so. But even if these workers weren’t in the news, the basic fact remains: If you want wages moving, a tactic that allows for 40 per cent pay cuts is not in the national interest.”

Mr Burke says that “as someone who has the job of determining if the workplace relations system is fit for purpose, I see this as a way to get out of freely bargained obligations, something we would never accept in the world of commercial or consumer contracts”.

“To me, this appears to be more than a loophole, it’s a rort, and I’m disgusted that it’s even being tried. On this issue, this is my clear disposition,” he says. “There may be room for a narrow exception for cases of exceptional business distress, where termination was found, on the evidence, to be likely to ensure ongoing employment of the affected workers. That is something that can be discussed further at the summit.”

Svitzer says it launched the termination application after more than 50 meetings with unions had “come to nothing”. It says the agreement enables restrictive work practices and interference in managerial decision-making.

The company has committed to maintaining crew salaries and core conditions if it succeeds in getting the agreement axed but says it wants “reasonable productivity improvements”.

Svitzer’s application was due to be heard by the Fair Work Commission on Monday but hearings have been adjourned until December and February 2023.

In his speech, Mr Burke says t the solution to a decade of wage stagnation cannot be a heavy-handed tactic that causes wages to go backwards.

He was not criticising the commission, he says, as its job was to apply the current law and his job was to see if the current law is justified and fit for purpose.

Mr Burke says at the summit the government will be looking at a different kind of solution to industrial issues, and “rather than unilateral action, we’re aiming to find solutions based on consensus and co-operation”.

“We want the Fair Work Commission to facilitate bargaining and help parties make agreements, not spend its time terminating agreements against the wishes of the workforce,” he says. “We want bargaining to happen in good faith – and we particularly want to make sure the bargaining system works for small business and for women.

“We want agreements to deliver pay rises and productivity. I am hopeful we can achieve this because it will serve the national interest, and the interests of both employers and workers.”

ACTU secretary Sally McManus has accused Svitzer of exploiting “serious loopholes in our broken bargaining system” by seeking to terminate its agreement with unions. “The threat of agreement termination is one of the ways the current system gives employers too much power during bargaining,” she said. “The dangerous work which is done every day by workers at Svitzer should be paid fairly, not rewarded with massive pay cuts facilitated by a broken system.”

Unions succeeded in having the hearing adjourned until December after arguing the volume of evidence submitted by the company was too much to allow them to adequately prepare for Monday’s commission hearing.

In a statement on Friday, Svitzer said it believed the unions were “seeking delay in the hope, and perhaps the knowledge, that the government will change the law before the case is finished, which won’t be until next year”.

“We know the unions want to delay the negotiation. We know they want to delay the Fair Work Commission process. They are banking on the federal government to make change aimed at strengthening their position,” a Svitzer spokeswoman said.