Unions are calling for “multi-employer bargaining” to help grow wages, but employers warn the idea is a dangerous “throwback”.
So, what is it? How could it help reverse wage cuts? And is there any chance the Albanese government could agree to the reform at the September jobs and skills summit?
How pay is set in Australia
There are three ways pay is set: minimum conditions, such as the national minimum wage and awards; individual contracts between employer and employee; and “enterprise bargaining agreements”, which are collective pay deals between an employer and employees.
But since the early 1990s, these pay deals have been struck between one employer and its workforce. Taking industrial action in support of “pattern agreements” – to get the same conditions across an industry or multiple-employers – is banned.
Although Labor repealed WorkChoices and replaced it with the Fair Work Act in 2009, this remained a feature of the industrial relations system, subject to very few exceptions that are not widely used.
What is the wages problem?
Australians’ pay has been stagnant for a decade, even before the pandemic.
Since the pandemic, although employment has soared, wages have only crawled upwards, while runaway inflation wipes out these gains and means most workers are experiencing a real pay cut.
Although union-negotiated agreements tend to pay more than non-union ones, fewer Australians are members of unions and industrial laws make it hard to take strike action in support of pay claims.
What is multi-employer bargaining?
Rather than having to negotiate a separate enterprise agreement with each employer in an industry, unions want the ability to strike deals that will cover more than one employer.
In sectors with many different employers, such as childcare, this would help workers band together for a bigger pay rise.
Because employees would be bargaining to be covered by the same agreement, they could also go on strike at the same time if they choose, something that can allow employees in heavily unionised workplaces help colleagues in less unionised workforces win pay rises.
Does it work to lift wages?
Yes.
Despite the ban on pattern bargaining, in some heavily unionised sectors it still occurs and, guess what? Unions tend to win bigger payrises there.
While the wage price index in the private sector is 2.7%, in the construction sector annual pay increases of 5% are common.
In August Steven Amendola, a partner at employment law firm Kingston Reid told a webinar organised by his firm, which represents employers, that the pattern agreements negotiated by the Construction Forestry Mining Energy Union win “strong” terms and conditions for employees.
Allowing unions to seek similar agreements among cleaners, aged care and other sectors where they are not traditionally as strong could lift wages, he said, predicting Labor would come under pressure to do this.
What does the Albanese government say?
Labor’s platform states:
The Fair Work Act has not adequately facilitated multi-employer collective bargaining. This is a particular issue for those industries where employees are low paid and where they lack industrial power. Labor will improve access to collective bargaining, including where appropriate through multi-employer collective bargaining.
But despite pressure from unions, Labor did not commit before the 2022 election to legislate multi-employer bargaining if elected.
The workplace relations minister, Tony Burke, has described the requirement for employers to seek his consent before bargaining together as “red tape”, raising hopes changes could be on the agenda.
On Thursday the treasurer, Jim Chalmers, said he agrees that “there is something broken in the enterprise bargaining system” which is “not delivering that strong, responsible sustainable wages growth we need to see”.
Chalmers said he was “not naive” that the union request was “contentious” and he was “not surprised” there are different views, but he agreed it should be discussed at the September jobs and skills summit.
The prime minister, Anthony Albanese, said on Thursday it was a “good thing” discussions are occurring before the summit, but noted unions “speak for themselves”.
What about employers?
They hate it.
The Australian Industry Group chief executive, Innes Willox, described the idea as a “throwback” to the 1960s and a “job-killer”.
Willox told Sky News the unions’ demand amounted to wanting “everyone to be paid the same, across whatever industry no matter what size, scale or geography of the business”.
The Australian Chamber of Commerce and Industry chief executive, Andrew McKellar, said multi-employer bargaining is not needed to lift wages.
Instead, Acci wants greater flexibility in rules for negotiating and approving pay deals, arguing that wage rises will follow if productivity improves.
The shadow workplace relations minister, Michaelia Cash, said: “Industry wide bargaining would be devastating for the Australian economy, leading to widespread strike action, including sympathy strikes by those unrelated to a particular dispute.”
Would conditions really be uniform?
The Australian Council of Trade Unions has asked for more “options”, including multi-employer or sector-wide bargaining. The former suggests it would be possible to have agreements covering some but not all employers in an industry.
ACTU secretary, Sally McManus, said there would “still have to be an interest from workers and employers” in bargaining together, and bargaining would also have to be “in good faith”. This suggests if an individual employer and their workforce wanted a separate deal, this would still be an option.
Employers could also strike side-deals offering higher conditions than a multi-employer deal. Employers and employees can also agree to “individual flexibility arrangements” that vary terms for an individual worker.
