Anthony Albanese has played down concerns from the Victorian government and employer groups about amendments to Labor’s industrial relations bill, after warnings they will embolden unions to refuse to bargain with industry.
The Victorian treasurer, Tim Pallas, has written to the federal workplace relations minister, Tony Burke, warning the amendments will guarantee unions “will be no worse off on a clause by clause basis” if they dig in and seek an arbitrated outcome from the industrial umpire, encouraging unions to do so. The amendments were introduced by the Greens and agreed by Burke.
Campaigning in Melbourne on Thursday ahead of the Dunkley byelection, Albanese argued there was “nothing unusual” in a state minister expressing views but referred questions about the substance of the dispute to Burke.
Pallas has sought a meeting with Burke and warned he will advocate to members of the Senate crossbench for an alternative approach: a no-disadvantage test that considers whether workers are better off overall, not clause by clause.
Burke told the House of Representatives in late November that the Albanese government backs the changes, which will be considered in the second tranche of the closing loopholes legislation to be debated in 2024 after same-job, same-pay reforms passed in December.
In 2022, the federal government legislated to allow the Fair Work Commission to arbitrate intractable bargaining disputes, providing an avenue for unions to win pay rises without reaching a new agreement with an employer.
Pallas praised the original measure in a letter to Burke, major employer groups and the Australian Council of Trade Unions (ACTU) on Tuesday. He said arbitration “focuses the minds of those at the bargaining table” to reach an agreement because otherwise “either or both parties – employer and union – have the potential to lose something”.
But the United Firefighters’ Union, backed by the ACTU, argued the law was encouraging employers to withdraw from already agreed claims because they might get a better outcome from arbitration.
To address that concern, the Greens leader, Adam Bandt, introduced an amendment so that terms of an arbitrated outcome “must be not less favourable to each” employee and union covered by an existing workplace pay deal.
Bandt told the lower house this would deal with the “unforeseen consequence” of employers, including in the university sector, waiting out the nine-month negotiating period to seek arbitration.
“It means that, if you end up in arbitration, you can’t go backwards,” he said.
But Pallas warned that this would “treat bargaining as if it’s a clause by clause process and each clause stands alone”.
“The amendment also seems at odds with how bargaining works – that is, that it’s a package and during the course of bargaining trades offs are considered and made.”
The chief executive of the Australian Chamber of Commerce and Industry, Andrew McKellar, warned “if this legislation is passed in its current form, unions would be incentivised to drag out a bargaining dispute and force matters to be arbitrated by the Fair Work Commission”.
“By definition, an employer would always be worse off on any term to which parties cannot agree,” he said. “This provision would be used and abused by unions.
“The fact that the Victorian Labor government has called it out speaks volumes.”
The Business Council of Australia’s CEO, Bran Black, said the amendments “should be rejected outright because they will prolong disputes, cause severe economic harm and hit Australians with higher prices for goods when everyone is struggling”.
“All Australians should be alarmed because these changes mean more strike action by incentivising unions to turn every negotiation into an intractable industrial dispute,” he said.
Pallas also warned the Greens amendment is retrospective because it “would have the effect of changing the law that applies to parties currently in the midst of litigation”.
In July the United Firefighters’ Union asked the Fair Work Commission to arbitrate an intractable dispute with Fire and Rescue Victoria. The Victorian minister for emergency services has applied to intervene.
In November, Burke said that federal Labor backed the Greens amendment because it “effectively … [brings] back a concept that was there before we introduced the arbitration principles”.
“It used to be that the old agreement would just remain in place,” he told the lower house. “This [amendment] allows that, as a result of the secure jobs, better pay laws, we don’t end up in a worse situation than that.”
The closing loopholes bill is still before a Senate employment committee inquiry, which is due to report on 1 February.
