2.1
Despite a near-record low unemployment rate of 3.5 per cent, inflation is outpacing wages growth and workers are falling behind. Indeed, real wages are lower today than they were a decade ago. According to the Regulation Impact Statement, this reflects both an imbalance in bargaining power and the 'failure of the market to work within a legislative framework which presently does not adequately promote collective bargaining'.
2.2
In addition, the last four decades have seen little progress made in closing the gender pay gap. This is in large part because of the undervaluation of some jobs, particularly in female-dominated industries. However, women are also impacted by insecure work and make up more than half of all employees engaged on fixed-term contracts.
2.3
This has occurred within the context of an increase in insecure work more broadly, with the proportion of Australian employees holding full-time jobs with leave entitlements falling below 50 per cent for the first time ever in 2018. The rapid growth in insecure work includes rising rates of part-time employment with few or no guaranteed hours, labour hire, gig work and fixed-term contracting.
2.4
In response to these issues, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (bill) seeks to implement commitments that are expected to promote job security, help close the gender pay gap, modernise the workplace bargaining system, and increase wages.
2.5
The remainder of this chapter explores the extent of support for the bill and examines the specific concerns raised by participants during the Education and Employment Legislation Committee's (committee) inquiry.
General views on the bill
2.6
There was broad support for many of the measures contained in the bill, including prohibiting pay secrecy, boosting the bargaining power of low-paid workers, and addressing gender inequality. The need for higher wages, increased innovation and productivity, and a more diverse and dynamic economy was also acknowledged by stakeholders. This was particularly the case in the context of a decade of real wage declines and record low wages growth, rising job insecurity, the decline of wages relative to profit as a share of GDP, and recent cost of living pressures.
2.7
In line with the discussion at the September 2022 Australian Jobs and Skills Summit (Summit), the inquiry heard significant consensus about the need to reform Australia's industrial relations system. Indeed, a number of participants noted that the current workplace relations framework was neither delivering a fair go for workers nor achieving productivity gains for employers. For example, the Australian Council of Trade Unions (ACTU) explained that real wages have been declining for workers:
Australians urgently need a pay rise. The average worker today is about $3,000 worse off than they were a year ago. That's due to low wage growth and rocketing inflation that they have done nothing to cause.
…
The wages crisis is real. We are at 7.2 per cent inflation and heading towards eight per cent, and the last figures we have officially show wages are only going up 2.6 per cent. Even if we factor in expected small wage growth since then, inflation is more than double the rate of wage increases. Real wages are going backwards by about four per cent.
2.8
The Business Council of Australia (BCA) also underscored the need to reinvigorate the bargaining system. To this end, it advocated for sustainable wages growth supported by higher productivity, which it argued was responsible for 80 per cent of all income growth over the last four decades. On this point they said:
Working smarter is the result of ingenuity, the creativity of people and investment—investing in new tools and new equipment that allow those people to be more productive. This is proven to occur best at the enterprise level, and enterprise bargaining should therefore also happen at that same level. The No. 1 objective of this bill should therefore be to get enterprise bargaining working again.
2.9
There was strong support for the bill's objective of increasing job security and gender equality for employees. For example, the Centre for Future Work (CFW) argued that the measures to strengthen gender equality in the FW Act 'are especially welcome as necessary to addressing gender inequities— including poorer working time protections and gendered undervaluation of skills in low-paid feminised industries—that are embedded and reproduced in existing employment regulation'. Notwithstanding this, inquiry participants had divergent views on how to best achieve job security in practice.
2.10
The committee also heard differing views on whether the bill's reforms to collective bargaining would address long-standing issues with the current system and increase the utilisation of enterprise agreements, boost wages, and reduce inequality. For example, in relation to multi-employer bargaining, some employer groups raised concerns that its increased use would be detrimental and have unintended consequences. However, this was strongly refuted by other participants who cited experience overseas that demonstrated significant benefits in terms of employment, equity, and macroeconomic outcomes.
2.11
While some inquiry participants raised concerns about the time frame provided for consideration of the bill, it was also recognised that the government had engaged with stakeholders in good faith and was working in a collaborative manner, especially regarding possible amendments to the bill. The Department of Employment and Workplace Relations (department) noted that it 'held over 50 consultation meetings during development of the bill with union, business and industry representatives, state and territory officials, individual businesses, academics, the National Women's Alliances, and the Women's Economic Equality Taskforce'. The department also noted that it had made itself available to anybody who asked to meet with it.
2.12
The committee also heard calls from some participants for the bill to be broken up to allow for the contested provisions to be considered separately. Other stakeholders argued that the cost-of-living crisis and decade of declining real wages required the bill to be urgently dealt with by the Parliament. In its submission to the inquiry, Per Capita rejected assertions that the government had rushed the reforms, noting that many were expressed in the Australian Labor Party's 2022 election platform and that they reflected decades of legal, economic, and sociological research. The Australian Hotels Association (AHA) also noted that the multi-employer bargaining aspects of the bill were raised at the Jobs and Skills Summit.
Comments on specific aspects of the bill
2.13
While stakeholder feedback addressed various aspects of the bill, most of the commentary centred on the following key measures:
addressing gender inequality in the workplace;
improving job security for workers;
reforming the bargaining streams under the Fair Work Act 2009 (FW Act);
abolishing the Australian Building and Construction Commission (ABCC);
expanding the role of the Fair Work Commission (FWC); and
streamlining the better off overall test (BOOT).
2.14
These issues are examined in further detail below. Due to the chronology of events, the evidence the committee received relates largely to the provisions of the bill as they were referred to the committee by the Senate on 27 October 2022. Government amendments to the bill, which address some of the issues raised by inquiry participants, are listed later in this chapter.
Addressing gender inequality in the workplace
2.15
Although Australian women are amongst the most educated across OECD member countries, Australia still has a significant gender pay gap: 14 per cent for full‑time workers. Each week, a woman takes home $473 less on average in pay than a man. Further, women are more likely to work in insecure roles and have other markers of lower job quality, such as poorer career progression and working time regulation, and less of a voice in the workplace. Successive governments have been unable to effectively close this gap, and since 1983 it has only been reduced by 5.1 per cent.
2.16
In recent years, submitters noted that Australia's performance on gender equality at work has in fact worsened. Australia's ranking in the World Economic Forum's Global Gender Gap Index has dropped from 15th in 2006 to 43rd in 2022, while the gender pay gap has been stagnant for the past five years and has recently worsened.
2.17
The need to address gender inequality in the workplace was raised by a number of participants, both in terms of career progression and wages. For example, in terms of career progression, the National Assistant Secretary of the National Tertiary Education Union (NTEU), Ms Gabrielle Gooding, highlighted that, although 50 per cent of academic staff are female, only 36 per cent of them are at senior lecturer level or above.
2.18
Accordingly, there was broad support for many of the reforms aimed at addressing enduring gender inequality within the workplace. For example, Professor Rae Cooper submitted that the following aspects of the bill would help address the issue:
strengthening the right to request flexible working arrangements;
introducing the supported bargaining stream;
making gender pay equity an objective of the FW Act;
changing the way in which equal remuneration applications are heard; and
building the capacity of the FWC through expert panels.
2.19
The Australian Institute of Employment Rights (AIER) also welcomed the bill's focus on achieving gender equality in the workplace, and specifically commended the measures that would prohibit pay secrecy, remove the need for a male comparator in equity cases, and provide options for workers impacted by sexual harassment to seek redress through the FWC.
2.20
The Parenthood, an independent, not-for-profit advocacy organisation representing more than 78 000 parents, expressed its strong support for the new gender equality objective. On this issue, it also stated the following:
Progress to address the gender pay gap in Australia through the Fair Work Commission has been too slow. Most equal remuneration cases have failed, including two affecting early childhood educators and teachers. Arcane arguments about the need for ‘male comparators’, under-recognition of the skills and expertise required of traditionally feminised workforces, the rigidity of the modern award system, and lack of access to enterprise bargaining have all combined to prevent much progress on the gender pay gap through the Commission.
2.21
Although recognising that making gender equity an object of the FW Act was a positive development, Associate Professor Meg Smith and Dr Michael Lyons argued that a preferred term was 'gender equality'. On this, they said:
… it is a term that more comprehensively encompasses substantive equality in impact, outcome or result for a wider range of industrial and employment matters.
2.22
Similarly, the ACTU listed banning pay secrecy and enhancing the role of collective bargaining among the specific measures that would help lift women's wages. On this last point, the President of the ACTU, Ms Michele O'Neil, stated that the bill:
… clarifies that gender equity is a matter that can be bargained over and makes it easier for multi-employer bargaining to lift up wages in sectors where the majority of workers are women. That's why countries that have a form of multi-employer bargaining have lower gender pay gaps than Australia.
2.23
Ms O’Neil also noted the importance of the provisions aimed at improving flexible work rights for those workers who have caring responsibilities.
2.24
However, the proposed changes to flexible working arrangements were not universally supported. The Chief Executive Officer (CEO) of the Council of Small Business Organisations Australia (COSBOA), Mrs Alexi Boyd, explained her members' concerns:
This aspect is already causing stress and worry at a time when small businesses are trying to rebuild and recover after COVID. Aspects such as operating hours may be impacted, potentially affecting the whole business and other employees, and the size of the business means that they will be disproportionately affected by this new regime.
2.25
The department clarified that the proposed changes to flexible working arrangements would not alter the 'reasonable business grounds' threshold for which employers can refuse requests. Further, it stated that the circumstances in which the FWC can make orders requiring employers to make changes to employees' working arrangements have been specifically limited, and that the FWC may only alter such arrangements when it is 'satisfied' that there are no reasonable prospects of the dispute being resolved without the making of such an order.
2.26
Submitters noted that bolstering access to flexible working arrangements would go some way towards addressing a key obstacle for women in the workforce. For example, the National Foundation for Australian Women (NFAW) pointed to the fact that women are far more likely than men to apply for flexible working arrangements, and are overrepresented in lower paid, less secure jobs. This means that the status quo is framed by a significant imbalance of power for many female employees. While employees are currently free to apply for flexible arrangements, there is little recourse available when employers turn down a request.
Improving job security for workers
2.27
Broad-based secure employment is fundamental to Australia's social fabric and cohesion, as it strengthens communities and enables financial independence. Unfortunately, insecure arrangements continue to proliferate. Importantly, these temporary arrangements have a disproportionate impact on women, who represent 58.3 per cent of all employees engaged on fixed-term contracts.
2.28
In its evidence to the inquiry, the ACTU highlighted the prevalence of this issue in contemporary Australia and noted that one in three workers are insecurely employed. The NTEU also contended that job security was a major issue for its members and stated that over three quarters of all research staff at higher institutions in Australia are on rolling fixed-term contracts. Across all staff in higher education, two thirds are on casual or fixed-term contracts, and the number of casual and fixed term workers in the sector has increased by 89 per cent since 2000.
2.29
The ACTU believes that the bill begins to address these issues through limiting the use of fixed-term contracts and making secure work an objective of the FW Act; however, it argued that further work needs to be done to improve security for casual, labour hire, and gig workers, as well as to eliminate sham contracting arrangements.
2.30
Noting the importance of the issue, the BCA said it supported the intent of the bill in increasing job security. Notwithstanding this, it argued that the principal tools to achieve such an outcome were improving economic growth and increasing productivity. To this end, the Hon. Tony Burke MP, Minister for Employment and Workplace Relations (Minister), noted in his second reading speech that this bill is only the beginning of the government's workplace relations reform agenda, with a second tranche of legislative amendments expected next year.
2.31
The NFAW welcomed the limitations on the use of fixed-term contracts for the same role beyond two years; however, it noted that preserving the indefinite recycling of fixed-term contracts, where permitted under a modern award, would appear to exempt a large proportion of women from benefiting from this reform. A number of other submitters, including the AIER and the Australian Council of Social Service (ACOSS) expressed concern that the limitations do not go far enough or that the scope of the exceptions from the limitations is too broad.
2.32
Employer groups such as Master Builders Australia (MBA) did not oppose the proposed changes, and noted that exceptions to the two-year limit would include (but are not limited to):
engaging an employee who has specialised skills required to complete a specific task;
essential work during a peak period, including seasonal work;
emergency situations or where a permanent employee needs to be replaced for a period of leave; and
where an employee earns more than the high-income threshold (calculated from the first year of the contract, noting that the threshold is currently $162 000 per annum).
2.33
The Migrant Workers Centre also articulated the benefits to employers of this reform, citing a possible reduction in the risk of poorer business outcomes, and allowing people to continue to work, and businesses to retain those skills.
2.34
The department indicated that the bill had been amended to strengthen the prohibition on the use of fixed-term contracts, ensure the anti-avoidance provisions are 'strong and effective', and extend the commencement date to allow for further consultations with stakeholders and for employers to adjust their hiring practices.
Reforming the bargaining streams under the FW Act
2.35
The bill would amend existing bargaining streams under the FW Act with the aim of expanding the use of enterprise agreements and increasing wages. This section outlines support for reform of the bargaining system and addresses stakeholder views in relation to two key measures—reform of multi‑employer bargaining and the low-paid bargaining provisions in the FW Act.
Support for bargaining system reform
2.36
The Summit earlier this year confirmed a widespread desire to reform Australia's bargaining system, with a consensus being reached regarding the need to modernise Australia’s workplace relations laws to make bargaining accessible for all workers and businesses.
2.37
As mentioned in Chapter 1, there has been a marked decline in the utilisation of enterprise agreements over time, with Australian Bureau of Statistics (ABS) data indicating that only 35 per cent of employees were covered by these agreements in 2021. This represents a fall of eight per cent since 2010 and compares poorly to other comparative countries, including the vast majority of European countries—the United Kingdom, Canada, Japan, New Zealand, and Chile—each of which have far greater bargaining coverage.
2.38
Of the small minority of employees covered by enterprise agreements, 56 per cent are covered by an agreement that has expired. Just 14.7 per cent of employees in Australia are covered by an enterprise agreement that is not expired.
2.39
A number of participants highlighted the link between enterprise agreements and higher wages. For example, in his evidence to the inquiry, the President of the BCA, Mr Tim Reed, highlighted the beneficial nature of enterprise agreements, stating that covered workers typically earn $100 more per day than those relying on awards.
2.40
Other stakeholders noted that the current lack of effective multi-employer streams presents a barrier to higher wages. For example, the CFW stated that, as a result of the ineffectiveness of the existing multi-employer streams under the FW Act, hundreds of thousands of workers, across many sectors, are currently dependent on safety net minimum award pay and conditions. On this issue, it said the following:
These safety net standards fall well below normal standards for workers who have been able to access collective bargaining – and well below what is required for a decent standard of living. The low-paid bargaining stream of the FW Act is not fit for purpose; it has been a complete failure. It is too complicated, too restrictive, and provides inadequate support for workers to exercise power through industrial action. The other options have provided virtually no scope for unions and employees to initiate bargaining at all.
2.41
Similarly, Associate Professor Chris F. Wright pointed out that low wages are a key reason why employers are currently facing challenges in attracting and retaining staff. He went on to explain that the root cause of this problem is deficient labour laws. On this point, he argued that:
Australia’s industrial relations laws are stuck in an outdated paradigm fixated on solving problems that have diminished or no longer exist, such as perceived excess union power and inflationary wage pressures.
2.42
More broadly, the Acting Secretary of the Electrical Trades Union of Australia (ETU), Mr Michael Wright, contended that Australia has enterprise bargaining in name only and described it as a broken part of the industrial relations system. In support of this view, he related the example of Abbotsford brewery in Melbourne:
You would think that we could do an agreement that covered that enterprise, but we can't because there are five different employers on site, all under the control of Carlton United, and they can chop and change as they wish. We can't do an enterprise agreement that covers that site. We don't have enterprise bargaining in Australia.
When we go into bargain for our members, we are restricted by the corporate entity that the employer throws up for us on the day.
2.43
This strategy of fragmenting a workforce across numerous employing entities to disenfranchise workers is taken to its most extreme at Qantas, which has split its frontline workforce across 38 different employing entities, including 17 Qantas-owned subsidiaries and 21 external labour hire or services contractors:
Qantas has now positioned itself as the head, basically, of a complex labour hire network. The airline has now got 17 subsidiaries and 21 contractors in Australia alone. These didn't suddenly emerge over the last two years. This is evidence of a long-term plan to disenfranchise the workforce, exploiting the current flawed system. That's allowed the airline to transfer roughly half of its directly hired workforce onto lower paying, insecure jobs at those entities.
2.44
Qantas submitted to the inquiry that it opposes the proposed reforms to bargaining, asserting without substantiating evidence, that the reforms will:
… mean less flying because costs will rise, and demand will be destroyed – particularly on marginal routes. This will result in less investment and fewer jobs in aviation, with a flow on effect for communities and tourism.
2.45
Qantas' assertion that it cannot afford to fairly bargain with its splintered workforce should be viewed in the context of its estimated $1.2 billion half‑yearly profit, its recently announced $400 million share buyback, and its recently announced $4 million annual bonus for its Chief Executive Officer (CEO), Mr Alan Joyce, which suggests Qantas may have the financial capacity to end its deliberate wage suppression tactics.
2.46
Likewise, ACOSS said:
The enterprise bargaining system is currently not working for millions of workers in the care sector and community services, or their employers. It is challenging, especially in the many smaller organisations across the sector, for unions and employers to use this complex, rigid and time-consuming process to negotiate pay and conditions for workers. That leaves many workers in the sector completely reliant on the Award system.
2.47
Multi-employer bargaining, as set out in the bill, would provide a solution to the wages crisis currently faced in the care and community sectors by allowing employees to collectively bargain for better agreements. This has been shown to work in the early childhood education sector in Victoria where bargaining across hundreds of small and large early childhood providers has effectively secured superior wages and conditions over time. Through the collaboration of employers, unions and government, these agreements have increased retention of teachers and improved quality.
Support for the multi-employer bargaining reforms
2.48
Although the FW Act currently permits multi-employer bargaining, due to its strict regulatory requirements, very few multi-employer agreements have been established since the Act came into force. Hence, single-employer enterprise bargaining is currently the principal form of bargaining.
2.49
It was highlighted during the inquiry that a majority of OECD member countries bargain predominantly on a multi-employer basis, and that international research, including from the OECD itself, suggests this form of bargaining has significant benefits, including improved employment outcomes and gender equality; a fairer wage distribution; and better macroeconomic outcomes and worker training.
2.50
Research published by the CFW during this inquiry concluded that, if the bargaining reforms in the bill result in bargaining coverage increasing toward a level typical of other countries where most bargaining occurs at the enterprise level, there would be substantial and long overdue upward pressure on wages growth:
Elevating bargaining coverage in Australia to this intermediate level would imply a reversal of most (but not all) of the loss in coverage experienced over the past decade. It is anticipated that coverage would grow by slightly over 10 percentage points on this basis. Considering the observed correlation between bargaining coverage and wage growth in recent years, this in turn would lead to an improvement in nominal wage growth of some 1.6 percentage points per year. Just one year of faster wage growth would boost annual earnings for a worker with average full-time wages by $1473. That increment would expand to almost $8300 by the fifth year of (compounded) faster wage growth. On a cumulative basis over the first five years alone, the average worker would receive additional income of almost $24,000. By restoring bargaining overage and hence more traditional wage growth, these reforms would underpin a significant improvement in household incomes.
2.51
The AIER submitted that multi‑employer bargaining leads to fairer outcomes and is good for the economy. In support of this position, they referenced a 2018 article written by Emeritus Professor Joe Isaac and published in the Australian Economic Review. In that article, Emeritus Professor Isaac wrote:
Compared to enterprise bargaining, MEB [multi-employer bargaining] establishes greater fairness and uniformity in pay, in that employees doing the same work are likely to be paid the same/similar wages by all employers covered by the agreement. MEB establishes a common standard for all employers involved—the profitable and the less profitable. It takes wages out of competition and forces the less efficient firms, rather than being subsidised by lower wages, to operate at greater efficiency in order to survive, thus raising productivity.
2.52
Associate Professor Wright argued that by promoting multi‑employer bargaining, the bill would likely lift wages for low paid workers and create a better balance between employers and employees. In support of this, he referenced international evidence indicating that a coordinated multi‑employer bargaining system can be good for workers, employers, and the broader economy. Further, based on research he undertook with colleagues at the University of Copenhagen, he submitted the following:
… comparing the wage determination systems of Australia and Denmark provides further evidence about the benefits of multi-employer bargaining. Denmark has the type of multi-employer bargaining system that the Australian government wants to move to with this bill. Despite 65 per cent of its workforce being members of unions who have extensive rights to undertake strike action, Denmark generally has fewer industrial disputes than Australia, lower unemployment and similar wages growth. Multi-employer bargaining is a key ingredient of Denmark's strong economic performance.
2.53
In a joint submission to the inquiry, Distinguished Professor Anthony Forsyth and Professor Shae McCrystal provided support for the reforms but expressed concern that the modest nature of the reforms to multi‑employer bargaining may not go far enough. Specifically, their submission argued:
International evidence clearly demonstrates the connection between industry/multiple employer bargaining systems and high levels of bargaining coverage (especially in continental Europe). Therefore, an unequivocal statutory preference should be stated in favour of multi-employer agreement options as the pathway to increasing the volume of collective bargaining and lifting workers’ wages above award levels.
2.54
Distinguished Professor Forsyth raised that, conversely to the positions of some employer groups, the restrictions around single interest multi-employer bargaining was too onerous, and more onerous than provisions in place in comparable countries, even prior to the government's amendments requiring a majority determination in each workplace:
We have a majority threshold in the act now with the majority support determination just to get a regular agreement. Even in that context, majorities can be very difficult to obtain, and, in other countries like the US and the UK, where majority support is required, what it does is opens up the workplace contest over whether bargaining should occur and in what form it should take place to quite vigorous campaigns driven by employers to defeat the majority ever being achieved. So, while it's framed as, and sounds like, a democratic principle and you might think, 'Why would you move away from that?', the reason is the range of employer tactics that we know have been engaged in even under the majority support determination mechanism in the current law.
So, in terms of getting a majority for an agreement now and employers opposing that, let's say the union is trying to use a petition to establish majority support, employers have engaged in—and there have been many cases on this in the last 13 years—questioning the validity of the petition; refusing to provide the total number of employees so you don't know what the target is to get a majority of; and going directly to the workforce with appeals in the nature of, 'The business will have to close if you vote up this type of agreement to fortify this union.' So there are a range of employer tactics that are engaged in, even under current law.
The lowering of the threshold is not about being antidemocratic; it's about recognising the difficulties in establishing legitimacy in the workforce across a wider bargaining unit, and I think that's why they've chosen to adopt that lower threshold [10 per cent] in New Zealand.
2.55
In her evidence to the committee, Ms O'Neil stated that the bill starts to fix Australia's 'broken' bargaining system. She went on to say the following:
Even if workers can bargain, the system is so out of balance that workers have almost no leverage in the bargaining process, which, under the Fair Work Act, is full of red tape. Bargaining is largely limited to a single enterprise, even when pay is often effectively set across employers, particularly in low-paid sectors such as early childhood education and care or cleaning or government-funded services.
Even when workers have successfully bargained to get an agreement in place, it's all too easy for an employer to simply apply to get it terminated, sending workers back to minimum rates of pay. So we need to fix bargaining to get wages moving in this country again. The bill seeks to address this with modest changes that make a range of fairer bargaining options available to employers, employees and their unions. Having multi‑employer bargaining in our workplace laws is not new. What the facts tell us, though, is that the current provisions just don't work.
2.56
In its submission to the inquiry, Per Capita supported the bargaining reform measures in the bill, which it considered to be 'sensible, overdue, and essential'. It also noted that there had been decades of campaigning by Australian working people to put these reforms on the legislative agenda and that they:
… recognise that secure work and better wages are the essential ingredients for productivity and shared economic prosperity. This is why this Bill is crucial to Australia’s future economic security and success. It should be passed as soon as possible.
2.57
Likewise, the CFW argued that multi‑employer bargaining holds 'great promise' in reversing the declines in collective bargaining seen in Australia. In their submission they articulated this position as follows:
When negotiations can occur at more than one workplace or enterprise at a time, negotiators can establish common terms across multiple worksites. The bargaining process becomes more efficient, by coordinating negotiations across several firms (rather than replicating the entire process at numerous separate worksites). And by establishing terms and conditions that apply evenly across a wider population of businesses, multi-employer bargaining can lift wages and standards for workers but in a way that does not disadvantage any particular company or enterprise – since similar terms will apply to their competitors.
2.58
ACOSS stated its support for the multi-employer bargaining reforms in the bill, adding that OECD research has demonstrated that 'sector level bargaining or coordination can assist in negotiating targeted raises in female-dominated and low-paid sectors'. A number of other civil, social, legal and religious groups also indicated their support for the multi-employer bargaining reforms, including Catholic Religious Australia, the Migrant Justice Institute, the NFAW, The Parenthood, and Maurice Blackburn.
2.59
In addition to broad support from workers, unions, academics and other civil, social, legal, and religious groups, a number of employers and employer associations indicated they either supported or did not oppose the multi‑employer bargaining reforms, including the single-interest stream.
2.60
For example, Ms Julie Price, Executive Director of the Community Child Care Association, which represents over 750 community not-for-profit early childhood education and care (ECEC) providers, set out how a multi-employer agreement in the Victorian ECEC sector has delivered above-award wages for workers for over a decade, with the support of employers:
Community Child Care has been with the employer representatives for the last round of the PCS agreements in Victoria, which have been going since 2008 in various different guises. However, at the moment, that agreement only covers just under 60 services in Victoria. It certainly is a fantastic instrument to help ensure better wages and conditions. For example, the base rate for our first year certificate III qualified educator from 1 July this year under the award is $24.76 an hour. But, under our PCS agreement, their base rate is $28.87, so that's 16 per cent above the award. So this agreement, over time, has really enabled the signatories to this agreement to continue to improve the wages and conditions of educators and teachers in their employment. And those 56 centres are small community owned and managed services, so they're managed by boards or committees of volunteer parents, and they really don't have the financial resources or they don't necessarily have the expertise in industrial relations to be able to negotiate an agreement themselves.
2.61
Ms Price further noted that there has been a collaborative approach to multi‑employer bargaining with the unions and the sector, with no threat of industrial action as a result. Contrary to the assertions of some employer groups that multi-employer bargaining results in industry-wide strike action. Ms Price explained why this is the case:
For the community services sector, because there's been cooperative bargaining and negotiations, they haven't felt the need. Each time there have been negotiations about improving wages and different conditions, it's gone backwards and forwards between the employers and the unions, but, because it's been collaborative and not adversarial, they haven't felt the need to go to industrial action.
2.62
Ms Price was also asked whether engaging in multi-employer bargaining had enabled employers to pick up best practices and productivity tips through the bargaining process. In her response she said:
I would definitely think so. The volunteer parent boards and committees are often quite isolated and on their own and haven't got a background or any expertise in our sector, or even in human resources development or management. Being able to sit and be part of the negotiations—during the last round of the PCS negotiations, we had video link-ups of 60 to 70 people with a representative from each board or committee speaking to the group—and certainly sharing ideas about what could be improved and what might go in as an offer from employers in the bargaining process was a learning experience for many of those committee and board members. I think that the sharing of best practice, and what can be done in different services, is definitely a by-product of this negotiation process.
2.63
Mr John Cherry, Head of Advocacy at Goodstart Early Learning (Goodstart), Australia's largest not-for-profit provider of early learning and childcare, said that while Goodstart has a history of successful single enterprise agreements and would continue as their primary method of bargaining, he welcomed the multi-employer bargaining provisions:
I certainly believe that this bill will make it easier because one of the challenges we have in our sector is 80 per cent of the sector does not have an enterprise agreement. We do. Twenty per cent does; 80 per cent doesn't. And 63 per cent of the workforce is paid no more than the award rate. We certainly think that an enterprise agreement will make it easier to record any variation in wages that the government puts in place—definitely.
2.64
Mr Mimmo Scavera, President of the HVAC Manufacturing and Installation Association, representing nine major employers collectively employing approximately 900 people, also stated his strong support for the single-interest multi-employer bargaining provisions of the bill:
It's about not having a race to the bottom, to put it bluntly. At the moment the major construction projects don't have any regulation in relation to pay. So you have a mixture of people on a site that will be either enterprise agreement covered, award covered or covered by whatever other means people are creating. We're hoping that through this mechanism we can have an industry agreement through multi-enterprises. That's what we're aiming for: to regulate the market a bit more.
2.65
Mr Scavera added that the HVAC Manufacturing and Installation Association hoped that multi-employer bargaining could help the industry better address productivity, safety and certification issues:
We need to get some sort of control there. There's nothing that says that the company putting in a tender for a project needs to be of a certain standard. That's the sort of thing that we want to put in play.
… We want to introduce formal training, formal recognition, certification and licencing to work in the area of HVAC. There are certain areas of HVAC that, logistically, have to be monitored. We need to put that into place now to ensure that people are paid according to skills that have been assessed.
2.66
Other witnesses noted the importance of the single-interest multi-employer bargaining reforms to specific industries. Mr Michael Wright, Acting Secretary of the Electrical Trades Union, noted the importance of collective bargaining in the renewables industry to a successful social transition to net zero emissions:
In too many areas in Australia, 'renewables' has become a dirty word. The renewable sector is plagued by poor wages, lack of opportunities for locals, lack of opportunities for apprenticeships, and poor quality. These poor conditions have been an underlying fuel source that has been powering Australia's climate wars, because too many regions simply couldn't see a future for them in Australia's renewable future. What these reforms offer is an opportunity to break this cycle.
What we see that we'll be able to do with the multi-employer bargaining is to do agreements that cover an entire renewable energy zone, because the problem we have is not that employers are bad, that they're jerks or that they want to drive down conditions for the sake of it; it's that, when it comes to an individual wind farm or solar farm, they don't go for long enough that an individual employer has any incentive to invest in the community, to provide apprenticeships or to provide opportunities for locals.
We know that there is an enormous amount of work coming in across the region. These sorts of agreements will allow for the coordination to deliver training and career-pathing for workers that will then give those communities and those regions buy-in into the renewable future.
2.67
Ms Emeline Gaske, Assistant National Secretary of the Australian Services Union, told the committee that single-interest multi-employer bargaining is essential to raising wages in low paid, feminised call centre work. This was reiterated by Ms Sinead Francis-Coen, a call centre worker, who said multi‑employer bargaining could not just deliver better terms for her and her colleagues, but also productivity benefits for her employer:
These are the sorts of things that would make a real difference for us, and I think that, in being able to work with my colleagues across the contact centre area locally, we can bring in a lot of better practice in terms of procedures and things that will work well for us and my employer.
Concerns raised regarding the multi-employer bargaining reforms
2.68
Since the announcement of the reforms, a number of employer groups, including the BCA, Australian Industry Group (Ai Group), Australian Chamber of Commerce and Industry (ACCI), and the Minerals Council of Australia (MCA), have expressed their opposition to the proposed changes to Australia's multi-enterprise bargaining framework. These organisations are concerned that the reforms provide the potential for industry-wide agreements to proliferate, hypothetically allowing for ill-suited terms and conditions to be imposed on employers.
2.69
In its evidence to the inquiry, the BCA specifically raised issues around the expansion of the concept of 'single interest' to potentially cover large numbers of businesses that may have nothing in common with each other or may even be in direct competition. They were concerned that these changes risked a 'fundamental shift in Australia’s workplace relations landscape' and argued that the case for these reforms had not yet been made.
2.70
The BCA also argued that, as the bill is currently drafted, a majority of employees in large workforces would be able to, amongst other things, determine sectoral coverage, whether to enter into multi-employer agreements or not, the scope and conditions of any such agreements, and whether or not to take protected industrial action. Such an outcome could result in small businesses being 'roped into' bargaining processes with much larger businesses and, hence, lose control of their own circumstances. It was also submitted that the reforms could:
… open the door for widespread industrial action across multiple parts of the economy, because we're opening this up across a range of sectors, across a range of employers.
2.71
Given the above concerns, the BCA made the following suggestions for amendments to the bill:
multi-employer bargaining should be confined to low-paid sectors;
small businesses with less than 100 employees, as well as high-paid industries with a history of bargaining, such as construction and mining, should be excluded from multi-employer bargaining; and
a majority vote of employees in each workplace should be required to enter into multi‑employer agreements, to agree to any terms and conditions, and to take protected industrial action—which has been actioned through subsequent government amendments.
2.72
The peak organisation representing Queensland’s cane, cattle, grain, sheep, and wool producers, AgForce, raised concerns regarding the unintended consequences of the bill's changes to multi-enterprise bargaining. In its submission to the inquiry, it argued that certain aspects of the bill appeared to be designed to unionise currently non-unionised sectors. AgForce concluded by saying that such significant changes 'cannot be rushed' and advocated for a splitting of the bill.
2.73
The Regional Universities Network were concerned that the changes to multi‑employer bargaining may inadvertently oblige universities with significant differences in size, scope, mission, and location to be covered by single-interest multi-employer agreements. It believes this outcome could have significant adverse effects on regional universities and the regions in which they operate.
2.74
The Australian Meat Industry Council raised with the committee that their membership is concerned that the reforms to multi-employer bargaining would 'force employers in to bargaining processes which may not benefit their business or even their direct employees'.
2.75
The Franchise Council of Australia contended that the bill represents the 'most significant changes ever introduced to the Fair Work Act'. It was concerned that widening the 'single interest' bargaining provisions would enable employees and union representatives to organise broad-based protected industrial action.
2.76
However, in response to a number of critiques raised by employer groups regarding the expansion of multi-employer bargaining in Australia, Associate Professor Wright pointed out that:
Employer groups have strongly criticised the proposed expansion of multi‑employer bargaining, claiming that it would return Australia to a 1970s-style industrial relations system, with high levels of industrial conflict, unemployment and wage-led price inflation. These outcomes are highly unlikely and fanciful.
The 1970s industrial relations system was starkly different to today. Unlike then, only a small minority of workers now are union members, and it is much harder for them to undertake industrial action. The concerns that have been raised about multi-employer bargaining overlook the extensive international evidence regarding its benefits, including for employers.
2.77
In addition, the department highlighted that the existing prohibition on industrial action in support of pattern bargaining would be retained. The department also stated that the amended bill:
… precludes multi-employer agreements (other than greenfields agreements) from covering employees in relation to the performance of work in the 'general building and construction' industry, as defined in relevant modern awards. The provisions also prevent variations to extend coverage of multi-employer greenfields agreements to employers and employees performing work in the general building and construction industry.
2.78
In relation to the proposed changes to the single interest bargaining stream, the department clarified that businesses (with 15 or more employees) cannot be compelled to bargain unless their employees show majority support. Furthermore, the bill as amended:
… provides the [FWC] with discretion to refuse to add an employer to a single interest authorisation or agreement if it is satisfied that the parties are bargaining in good faith and have a history of effectively bargaining, and less than 6 months have passed since the most recent relevant agreement has passed its nominal expiry date. In addition, employers and employees who have agreed in writing to bargain, or who are covered by an in-term enterprise agreement, will be excluded from the stream.
The bill as amended also provides that voting in the single interest stream in relation to majority support determinations, protected action ballots and agreement approval will occur on an employer-by-employer basis.
2.79
With respect to the concerns raised that the multi-employer bargaining provisions of the bill would result in widespread unionisation, collective bargaining and industrial action at small businesses, the ACTU noted that even when union density was substantially greater than it is now, small businesses were not unionised or involved in industrial disputes:
We also know that small businesses are largely un-unionised; they're not businesses that are traditionally involved in taking industrial action, because of the reality of what I heard senators talking about before. People work really closely together with their employer. They're often engaged daily in just trying to work out how to keep the business running and how to meet workers' needs for their families as well as the business's needs. Nothing in this bill is going to change that. That is the reality. Even when unions had 60 per cent density in Australia, there was not unionisation of small businesses, and there was no history of industrial action in relation to small businesses.
2.80
Considering the evidence provided to the inquiry by various academics and think tanks that multi-employer bargaining overseas has often been associated with superior wages, employment, and macroeconomic outcomes, and in some instances less industrial action, major employer groups were offered the opportunity to cite evidence in support of their assertions to the contrary. The CEO of the BCA, Ms Jennifer Westacott AO, affirmed she did not have evidence to support her claims:
We're basing it on the way the bill is drafted and the consequences that it would open up in terms of solving some of the problems, which we don't believe it will solve, and opening up the door for large, widespread industrial action and all of the complexities we've talked about.
2.81
The National Farmers' Federation provided a similar response when it was asked whether it had any evidence to substantiate its assertions that the bill would have 'a similar, or indeed worse' impact than the COVID-19 pandemic:
We don't. We can see what has happened in the past… We are talking about potential consequences.
2.82
When the same question was put to the Ai Group, Ms Nicola Street, Director of Workplace Relations Policy, responded that research by Mr Mark Wooden had suggested that:
… across Europe, countries that have multi‑employer bargaining have actually delivered lower, on average, wage growth than countries with an enterprise bargaining system where wages are developed and negotiated at the enterprise.
2.83
This was the only academic citation provided to the committee in support of many of the claims made by employer groups opposing the multi-employer bargaining provisions of the bill. The submission by the CFW, provided to the inquiry prior to Ms Street’s comments, cast doubt on the veracity of Mr Wooden's conclusions:
One recent commentary by Mark Wooden cites international evidence to argue that greater latitude for multi-employer bargaining would potentially reduce wage growth in Australia. This commentary has been cited by opponents of the proposed IR reforms to argue that the existing enterprise-based system is best for wages. However, this conclusion is not even consistent with the data provided in Wooden's commentary, let alone with a more nuanced analysis of international comparisons.
2.84
The CFW explained that Mr Wooden's analysis inaccurately categorised 15 OECD countries into two categories—where bargaining predominantly occurs at a multi-employer level, and where it occurs predominantly at an enterprise level. The CFW noted 'many complexities prevent such a simple binary categorisation, and the OECD itself does not group countries this way'. The CFW noted that some of the countries Mr Wooden categorised as being dominated by single enterprise bargaining, such as Canada, the United Kingdom, Ireland and South Korea, in fact have a far greater incidence of multi-employer or industry-wide agreements than Australia. The CFW also noted that in the 10-year sample period, the countries Mr Wooden characterised as being dominated by multi-employer bargaining saw wages grow almost twice as much as in Australia.
2.85
Mr Wooden's assertion that the government’s decisions on workplace relations policy can impact wages, in either a positive or negative sense, would also appear to contradict political commentary he chose to make to the media during the 2022 federal election campaign, when he said:
Anthony Albanese is saying we will raise wages, which I think is very interesting since the only lever have [sic] to pull is wages of the public service ... when he says he’s raising wages, it’s just political games.
Approving and varying enterprise agreements
2.86
Some industry and employer groups expressed concern about the government's amendments to the bill that could require an employer to obtain written approval from employee bargaining representatives prior to requesting that employees vote to approve or vary a multi-enterprise agreement. However, the National Secretary of Transport Workers Union, Mr Michael Kaine, argued that the changes were needed to ensure that agreements were not pushed through without genuine agreement:
The union's involvement is important, particularly in sectors that are under such immense pressure, with such splintered workforces and companies with a history of antiworker, anticollectivism and anti-union approaches. With Swissport, we had workers being faced with Swissport ramming through agreements that ultimately were ruled illegal by the Fair Work Commission for not being able to pass the better off overall test … This is what occurs when you have companies that have an unfettered right to just push through agreements. They'll find the loopholes and they'll exploit them, and we saw the worst of that in the case of Swissport. Registered organisation involvement in agreements is vital to make sure that situations like that don't occur.
2.87
Indeed, the department clarified the rationale for the changes:
… this amendment applies to the multi-employer streams and really it's getting at ensuring that genuine bargaining has actually occurred and employers aren't rushing off to put an agreement to a vote before that bargaining has occurred and has been finalised. For the multi-employer streams, some of the employees that are covered by those agreements need to be represented by an employee organisation. So this is recognising that special role that employee organisations play in the system to get their agreement before it's put to a vote.
Support for the supported bargaining stream
2.88
The bill would reform the low-paid bargaining provisions in the FW Act and create the supported bargaining stream, with the aim of addressing the initial scheme's limited take‑up. While it was originally hoped that the low-paid bargaining stream would address pay outcomes for low-paid workers, the criteria were considered too onerous and a major barrier to entry. This difficulty is demonstrated by the fact that since the commencement of the FW Act over a decade ago, the stream has been rarely used, with just four applications being made and only a single one actually being granted.
2.89
There was broad support for the proposed reforms. For example, Professor Rae Cooper said the following:
I think that there are some aspects of the design of the supported bargaining stream which are different to the low-paid bargaining stream and which, I think, take out some of those tripwires that we had in the low‑paid bargaining stream that aren't in existence anymore.
One thing that I'm particularly heartened by is the inclusion of the capacity to bring the funders to the table when there's an application for a supported bargaining order. So that might mean, as you all know, in areas in human services such as aged care or early childhood education and care, where essentially the federal government is the funder and sets the parameters of what the wages will be, that that funder can be brought to the table to be involved in the conversation between the parties—the unions representing the workers, employer associations who might be representing the employers and also employers in the sector themselves—about how to make a sustainable basis for wages in those areas.
I think there is quite some merit in that, and there's quite some evidence that the funding that flows from government funding in those types of areas absolutely sets what's available for wage increases, so I very much hope that that will make a big difference.
2.90
Noting that the current system is not delivering for workers in low-paid sectors—and that this problem was a key issue identified at the Summit earlier this year—the BCA expressed their strong support for the renamed and reformed supported bargaining stream. However, it argued that the broader multi‑employer bargaining changes should be pursued through this stream rather than the approach taken by the bill, which it believes will expose the whole economy to the 'risks of multi‑employer bargaining'.
2.91
Although the NFAW was supportive of the new stream and the powers available to the FWC to facilitate agreements, it remained concerned that the barriers to entry will continue to be too high. It concluded that this would ultimately depend on the approach taken by the FWC in applying the stream's criteria which, it observed, had historically been 'so conservative that no agreements could ever be made'.
2.92
ACOSS also expressed its support for the bill's changes to supported bargaining. It articulated its reasoning as follows:
We support the introduction of a fairer and simpler system of enterprise bargaining that allows organisations to bargain together in multi‑enterprise agreements to reach outcomes that better support care and community organisations and their employees. We note OECD research demonstrating that sector level bargaining or coordination can assist in negotiating targeted raises in female-dominated and low-paid sectors.
Given that, we are supportive of the supported bargaining and cooperative workplace bargaining streams proposed by the Bill. We are encouraged that the proposals to revise the current low paid bargaining stream to become the supported bargaining stream will allow sector workers struggling with low pay, modest conditions and job insecurity to achieve much more equitable outcomes.
Concerns raised regarding constraints on industrial action
2.93
Distinguished Professor Anthony Forsyth and Professor Shae McCrystal noted the provisions of the FW Act limiting access to industrial action are some of the 'most complex and over engineered provisions regulating strike action in the world'. They further explained that:
With only the possible exception of the UK, no other country which purports to provide workers with the right to take lawful strike action makes it so difficult to access lawful strike action, so challenging to take meaningful and impactful strike action, and so easy inadvertently to break those rules and lose the capacity to strike.
2.94
Contrary to some of the fears raised by employer groups, the bill’s most substantive change to the process of taking protected industrial action is a new requirement for a conciliation conference conducted by the FWC prior to the close of a Protected Action Ballot (PAB), thus making industrial action more onerous and difficult for employees to take.
2.95
While there was broad support from employer groups for this provision— despite it negating their argument that industrial action would be more prevalent if the bill were to pass—it was widely opposed by other stakeholders. Professor McCrystal told the committee:
Australia's strike laws are some of the most complex and challenging in the developed world, and the introduction of a three-month ballot mandate combined with the need to return to the commission for a PAB order and a reballot, along with a compulsory conciliation conference, will exacerbate that problem.
2.96
The ACTU informed the committee that the requirement for compulsory conciliation 'would only move us further away from meeting our labour rights obligations arising under international law, not closer towards them'. Similarly, the AIER told the committee that 'this new barrier to industrial action is not consistent with the "intrinsic corollary" of the right to strike deriving from right to organize protected by Convention No. 87'.
Concerns raised regarding the exclusion of the building and construction industry
2.97
The bill, as amended in the House of Representatives, excludes workers engaged in building and construction work from accessing multi-employer bargaining. The exclusion received support from employer groups including the Ai Group and MBA.
2.98
The committee received evidence from other organisations strongly opposed to the exclusion. The AIER noted the provision 'flagrantly breaches the collective bargaining convention and their right of free association'. Distinguished Professor Forsyth and Professor McCrystal, in their joint submission, argued the pre-amendment exclusion 'should be removed from the bill so that all workers and their unions have the opportunity to access multi‑employer bargaining'.
Abolishing the ABCC and the Registered Organisations Commission (ROC)
2.99
The bill would abolish the ABCC and the ROC and transfer various regulatory functions to the Fair Work Ombudsman (FWO) and the Fair Work Commission (FWC). In his second reading speech, the Minister stated that these two organisations were 'ineffective and discredited' and that they were more concerned about prosecuting workers and their representatives than addressing wage theft or promoting workplace safety, education, and good industrial relations.
2.100
The ACTU also highlighted the 'politicised' nature of the ABCC and ROC and argued that they have utilised taxpayer funds to pursue unions which were only taking action to 'make sure workers in one of the most dangerous industries in the country are safe'. She further articulated this as follows:
Pursuing workers and unions over things like people going in to have a cup of tea with workers, and using taxpayers' money to go all the way through the courts over years about saying that a union organiser couldn't go and have a cup of tea with a group of workers, is ridiculous, when you think of the rates of injury and death, underpayment and wage theft that happen in that sector, and the ABCC completely ignoring those issues and instead pursuing an ideological attack on unions.
2.101
In its evidence to the inquiry, the BCA disagreed with the government's proposed abolition of the ABCC. It submitted that the sector is 'driven by a union culture of lawlessness and militancy', and to not have a 'tough cop on the beat' would be a mistake. The BCA also highlighted the critical nature of the construction sector to the economy, noting that it is this industry which ultimately determines whether community infrastructure is constructed and houses are built.
2.102
Abolition of the ABCC was also opposed by MBA. They stated that evidence shows the ABCC has been an 'effective and efficient regulator', and that it has improved compliance with the rule of law and driven positive cultural change. It also argued that the FWO would not be an effective replacement for the ABCC.
2.103
The MBA also stated its opposition to the abolition of the ABCC on purported economic and productivity grounds. Specifically, it cited a report it had commissioned from EY, that claimed that the economic impact of abolishing the ABCC would be $47.5 billion by 2030.
2.104
The credibility of this report has been scrutinised separately by Dr Phillip Toner, an Honorary Senior Research Fellow at the University of Sydney, and Dr Richard Denniss, the Chief Economist at the Australia Institute.
2.105
Dr Toner, in concluding the EY/MBA report's methodology was 'effectively anecdotal‑ empirically empty and useless as a basis for analysis and modelling', found:
There are two key disclaimers. First, the report represents solely the ‘interests’ of the MBA and so does not have regard to other evidence that contradicts these interests. Second, the modelled outcomes are contingent ‘on the collection of assumptions as agreed with the Client’. That is, the assumptions critical for modelling which, forms the core of the report, were determined by the MBA and not based on objective data or accepted economic theory.
The EY report appears to regard all industrial action, both protected and unprotected, as illegitimate and simply a cost, and has no regard to the role of industrial disputes in raising safety standards, recovering unpaid wages, improving conditions and seeking a fair distribution of the surplus generated by both capital and labour.
The study does not attempt to directly measure the effect of the ABCC on productivity or firm performance rather, it establishes a hypothetical case by first estimating how productivity could be affected by abolition of the ABCC and then applying these estimates in an economic model to determine the impact of this change on productivity and output in the macro-economy.
2.106
The analysis by the Australia Institute reached a similar conclusion, describing the MBA/EY report as 'astonishing', 'unreliable', and 'grossly misleading', in finding:
EY's survey 'involved' just 49 respondents, only 34 of which appear to have provided responses to key questions.
Respondents appear to have just guessed the impact of abolishing the ABCC on worker productivity and labour costs, with no methodology or workings provided.
Given that the ABCC employs just 154 full-time equivalent staff, EY's results [a $47.5 billion economic impact] suggests the staff effectively generate the same amount of GDP as over 11 800 construction workers that they oversee. If true, the ABCC staff are among the most productive in the world.
2.107
Both the Toner and Australia Institute reports note the MBA/EY report did not refer to publicly available ABS data on productivity in the construction industry. If they did, they would have seen that 'productivity has largely gone backwards under the ABCC, suggesting that its abolition could in fact improve construction industry performance, the exact opposite of EY’s conclusion'.
2.108
In addition to overseeing declining productivity, the ABCC has confirmed that between its re-establishment in December 2016, and the end of December 2021, a five-year period, it had only recovered $4.796 million in unpaid wages and entitlements for construction workers. By comparison, in a five-month period in late 2021, the construction union recovered more than $17 million in unpaid wages and entitlements for workers. Thus, in five months the union recovered more than three times more in stolen wages for workers than the ABCC had in five years.
2.109
The ACTU argued that the FWO was very well resourced to undertake its additional responsibilities and would investigate matters as they occurred in the industry. It highlighted that this reform meant the industry would now be subject to the same laws as everyone else and would also have the same regulator.
2.110
This view was supported by representatives of the department, which indicated that the FWO had been provided with an additional $69.9 million over the forward estimates, which included funding 80 ASL (average staffing level). The department also explained how the new arrangements would work:
The current situation is that under the Fair Work Act both the ABCC and the Fair Work Ombudsman have overlapping jurisdiction for matters dealt with in the Fair Work Act, so it's not a transfer of functions, if you like. The ombudsman already has the ability to regulate those provisions in the act, so they will essentially just pick up that function again. The ABCC won't be enforcing those provisions. The Fair Work Ombudsman will commence. They have been given additional funding[.]
2.111
The department also pointed to the proposed establishment of the National Construction Industry Forum as an ongoing statutory advisory body. This was an outcome of the Summit and intends to address various issues across the industry, including mental health, safety, training, apprentices, productivity, culture, diversity, and gender equality.
Expanding the role of the FWC
2.112
The bill would expand the role of the FWC in resolving intractable disputes between negotiating parties, through arbitration, when there is no reasonable prospect of an agreement being reached. According to the Minister, these changes are, amongst other things, intended to incentivise good faith negotiations and allow for a quicker resolution of intractable disputes.
2.113
The New South Wales (NSW) Minister for Employee Relations, the Hon. Damien Tudehope MLC, said in his submission to the inquiry that he supported this specific reform in light of protracted industrial disputes in certain parts of the NSW public sector:
The proposed intractable bargaining scheme is welcome and supported in circumstances where a resolution between the parties appears to have reached an impasse following a reasonable period of genuine bargaining.
2.114
The ACTU indicated it supported the introduction of an arbitration mechanism to resolve intractable bargaining negotiations but expressed concern that the minimum bargaining period in the bill is too short, and may encourage bargaining representatives to run out the clock and avoid bargaining in good faith. It recommended that the minimum bargaining period be extended.
2.115
Some employer groups, including the MCA, ACCI, and the Ai Group, stated their objections to this provision of the bill. When asked about the protracted industrial disputes taking place in New South Wales rail, and at Svitzer, the MCA indicated they are satisfied with the existing system which has thus far failed to resolve the disputes:
I think that any disruption is unfortunate and, reading the article about Svitzer, apparently there's a history of protected industrial action by the unions over years rather than months, I think. And there are current provisions in the act that enable industrial action to be brought to an end if there is significant damage to an important part of the Australian economy. It could well be that those current provisions come into play in bitter disputes like we're hearing about with Svitzer. It would appear that they could be very relevant, the current provisions.
2.116
Qantas, which in 2011 took the extraordinary step of grounding its entire fleet over a protracted bargaining dispute, leaving 70 000 people stranded in Australia and around the world, including 20 world leaders attending the Commonwealth Heads of Government Meeting in Perth, also submitted that it is opposed to the FWC having the power to resolve protracted industrial disputes through arbitration.
2.117
Ms Westacott, also raised concerns regarding these changes, stating that the definition of 'intractable' was unclear and that the threshold was too low. To address these issues, she suggested that:
a party should not be able to apply for arbitration unless they have complied with good faith bargaining obligations and have genuinely tried to reach an agreement; and
the FWC must be satisfied that the position of the party applying for arbitration is fair and reasonable in the context of the employer's business.
2.118
The AIER supported the expanded arbitration role of the FWC; however, it also raised concerns with the term 'intractable', noting that it was undefined. Given this, it recommended that the bill's text be amended to clarify that a declaration could only be made when bargaining had reached a stalemate, attempts at reaching an agreement had persisted for some time, and there was no reasonable prospect of reaching an agreement.
2.119
Recognising these concerns, the government made amendments which clarify that the FWC must be satisfied that a minimum period of good‑faith bargaining has occurred before moving to arbitration. Further, it also removed the previously proposed changes to the 30-day rule for protected action ballots.
Streamlining the BOOT
2.120
There was general support amongst inquiry participants for the streamlining of the BOOT. For example, the BCA said it was 'very supportive' of the changes, as they removed a number of problems holding back enterprise bargaining and causing a decline in agreements being reached. By taking a global approach, combined with giving primary consideration to the common view of an employer and bargaining representative, Ms Westacott said the following regarding the reforms:
We believe that this paves the way for more ambitious agreements, focusing on how the enterprise shapes itself, training and looking at how it orientates itself to its markets. But most importantly, we believe this will bring in a new era of employers and employees really working together in that enterprise to drive collaboration, to improve productivity and to share those benefits through higher wages and better conditions.
2.121
COSBOA was also supportive of the move to a global assessment for the BOOT. Responding to questions from the committee, Mrs Boyd said the following:
It's certainly a step in the right direction, and it would assist with small businesses being able to understand, rather than line by line, that they are trying to do something that makes the entire situation better both for the employee and for themselves as the employer.
2.122
However, other stakeholders, such as the Retail and Fast Food Workers Union (RFFWU) strongly opposed the reforms to the BOOT. For example, the RFFWU argued that the existing test is fit for purpose and that the proposed changes would enable the approval of enterprise agreements which would currently fail. It submitted that, as a result, many low paid workers would earn even less, and called for the changes to be abandoned.
2.123
Responding to concerns from stakeholders, the government has amended the bill to align the commencement of these changes with its reforms to the multi‑agreement streams. Further, it introduced a 'safeguard' against the possibility that employers may structure agreements that would not result in new employees being better off overall when assessed against the relevant modern award if they were assessed as a separate cohort'.
Government amendments to the bill
2.124
On 9 November 2022, as a result of ongoing consultation since the bill was introduced into the House of Representatives (House), the Minister introduced amendments aimed at addressing the concerns raised by the community, members of Parliament, and senators. Some of these amendments aim to address issues raised by inquiry participants during the committee's inquiry, and which have been discussed earlier in this chapter.
2.125
As introduced by the Minister, these amendments would:
remove the capacity for ministerial directions to the general manager of the FWC about the performance of their functions under the Fair Work (Registered Organisations) Act 2009;
preserve the concurrent operation of state and territory laws dealing with sexual harassment and ensure that the Commonwealth can be held vicariously liable for contraventions of the new prohibition on sexual harassment by defence members;
provide that certain FWC orders under new section 65C cannot be inconsistent with the FW Act, or a term of a fair work instrument (other than another FWC order of the same kind);
strengthen the fixed term contract anti-avoidance provisions, by providing that a person must not fail to re-engage an employee and instead engage another person to do substantially the same work, in order to avoid the prohibition in new section 333E, and insert a new commencement date of 12 months for these provisions;
require that before issuing an intractable bargaining declaration, the FWC must be satisfied that a prescribed minimum period of good faith bargaining has elapsed;
provide that employers and their employees are precluded from being compelled into an authorisation or single interest employer agreement where they have agreed to bargain for a proposed single enterprise agreement;
give the FWC discretion to refuse to make an authorisation for a single interest employer agreement, vary an authorisation or vary an agreement to add an employer and their employees in prescribed circumstances (broadly, where there is a history of effective bargaining between the parties, the employer is bargaining in good faith and it has been less than six months since the nominal expiry date of a previous relevant enterprise agreement);
ensure that single interest employer agreements would be treated as multi‑enterprise agreements in all respects (while preserving the current rules for those with current agreements or who have applied for a declaration or an authorisation prior to the commencement of the provisions);
replace proposed new section 178C, with a scheme precluding multi‑employer agreements from covering employees in relation to the performance of certain types of work in the building and construction industry;
provide that before an employer requests employees to approve a multi‑enterprise agreement by voting for it, the employer must obtain written agreement to the making of the request from each bargaining representative for the agreement that is an employee organisation;
ensure that for multi-enterprise bargaining, protected action ballot (PAB) orders will be issued with respect to each employer on an enterprise-by-enterprise basis;
omit Division 1 of Part 19 of the Bill that would provide a PAB is valid for three months and that industrial action can only be taken during that period under that PAB;
retain specific safeguards concerning explaining agreements to employees and in an appropriate manner taking into account the particular circumstances and needs of those employees, for example, those who are young, from a culturally and linguistically diverse backgrounds or who did not have a bargaining representative for the enterprise agreement;
provide that the better off overall test reconsideration process would be available to ‘new employees’ (engaged after the original ‘test time’) in circumstances where an enterprise agreement provides different terms and conditions for those employees than it does for the ‘original employees’ when they engage in the same patterns or kinds of work, or types of employment; and
insert a new Part 25A to establish a National Construction Industry Forum as a statutory advisory body.
2.126
On 10 November 2022, the House agreed to 153 government and 4 crossbench amendments to the bill. This included codifying the role of the FWO and FWC in providing outreach in community languages.
Committee view
2.127
Australia's industrial relations framework is broken. Despite near record low unemployment and high business profits, wages remain stagnant and workers continue to fall behind. Real wages today are lower than they were a decade ago, and insecure work arrangements proliferate. Further, the gender pay gap persists and reports of sexual harassment in the workplace are all too common. It is the Senate Education and Employment Legislation Committee's (committee) view that the existing frameworks are failing to deliver positive outcomes for both Australian businesses and their workers, and that urgent reforms are necessary. As articulated in more detail below, the committee believes the bill is a positive first step in this process.
Comprehensive consultation
2.128
The committee would like to thank all inquiry participants for their engagement throughout the inquiry process and for the valuable contributions they made in assisting and informing the committee's deliberations. The committee consulted widely across business groups, unions, employers, workers, and academics, receiving 96 submissions and hearing from 46 individuals and organisations across five days of hearings. It is notable that this inquiry has heard more evidence in public hearings than any other industrial relations‑
related bill inquiry since the Fair Work Act 2009 (FW Act) commenced over a decade ago.
2.129
The committee would also like to acknowledge the ongoing participation of key stakeholders in the various government consultation processes, which have occurred over many months across many fora, and have informed the development of the bill, as well as the Australian Government's (government) subsequent amendments.
2.130
While noting the concerns of some inquiry participants about the length of time available for consultation, the committee does not believe that additional time is warranted in this case. The committee is satisfied with the government's extended, and ongoing, consultation with key stakeholders, and notes that the bill delivers on several of the government's election commitments and implements recommendations emerging from the Australian Jobs and Skills Summit held in Canberra earlier this year.
2.131
In addition, the committee notes that many of the proposed reforms are not new. In fact, a number of them were the subject of broad consultation as far back as 2020. As highlighted by Per Capita, they also reflect decades of legal, economic, and sociological research. People should not have to wait any longer to benefit from evidence-based policy. The evidence is in, and the government must act.
2.132
In its deliberations, the committee must try to separate facts and sincerely held beliefs, from hyperbole and unsubstantiated scare campaigns, particularly when some wealthy and powerful inquiry participants—the self-described 'corporate gorillas'—publicly threaten to spend tens of millions of dollars engaging in a 'mining tax campaign but on steroids'.
2.133
The committee notes with disappointment the astroturfing that has taken place throughout the inquiry, with lobby groups representing big business consistently framing their opposition to provisions of the bill through baseless assertions about its purported impact on small business.
2.134
This was exemplified by the Franchise Council of Australia stating in its submission that it 'represents an estimated 94 000 small businesses', and in its opening statement that it 'is a voice for just over 90 000 small businesses', when it had actually revealed to the Parliamentary Joint Committee on Corporations and Financial Services in 2018 that it has just 483 franchisor members (many of which are large multinational companies), and two franchisee members.
2.135
What was not disputed by any inquiry participant is that Australian workers have suffered through a record decline in real wages over the last decade, at a time when productivity and corporate profits continued to rise. The fundamental disagreement over the bill is whether this is desirable, or a crisis requiring urgent reform. The committee's view is that low and middle income earners deserve a pay rise.
Addressing job insecurity and gender inequity
2.136
The committee is encouraged by widespread support for action to promote job security and address gender inequality and sexual harassment in the workplace. In 2022, it is untenable that Australia's industrial relations act does not explicitly prohibit sexual harassment. It is also untenable that workers in undervalued and female dominated industries, such as childcare, have been unable to win pay rises because they are unable to find an appropriate male comparator group.
2.137
To this end, the committee notes the particular support for measures, such as strengthening the rights of workers to request flexible working arrangements, prohibiting pay secrecy provisions, and the introduction of the supported bargaining stream to assist workers in low-paid industries who currently face barriers to bargaining.
2.138
Further, the committee recognises the strong support for making job security and gender equality objectives of the FW Act, as well as changing the way that equal remuneration applications are heard by the Fair Work Commission (FWC).
Repairing a broken bargaining system
2.139
The committee notes the concerns raised by a number of employer groups regarding the expansion of multi-enterprise bargaining in Australia. While the committee heard claims that this could lead to increased bargaining disputation, reduced productivity, and industry-wide industrial action, there was never at any point any evidence provided to support these assertions. In contrast, research shows this form of bargaining can result in beneficial outcomes for both workers and employers, including improved employment outcomes, fairer wages, and gender equality.
2.140
The committee also considers the multi-employer bargaining reforms contained within the bill to be a vital step forward in repairing Australia's broken bargaining system, where less than 15 per cent of employees are covered by an in‑term enterprise agreement and reliance on safety net awards has increased materially since 2010. As highlighted during the inquiry, workers covered by an agreement typically earn $100 more per day than those relying on an award—a substantial sum of money which would assist many Australians currently struggling to deal with cost-of-living pressures.
2.141
The committee accepts that productivity growth is a contributor to wages growth, although certainly not the only factor, and notes that productivity growth has outstripped real wages growth considerably over the last decade. The committee further notes that promoting productivity remains an object of the FW Act and must be taken into consideration by the FWC when performing its functions or exercising its powers under the FW Act.
2.142
The committee also accepts the evidence of numerous stakeholders—including employers from the Victorian early childhood education and care (ECEC) sector and the HVAC manufacturing and installation sector—that multi–employer bargaining can deliver productivity benefits through the exchange of best practice ideas, human resources efficiencies, and by moving the focus of competition away from labour costs and towards innovation.
2.143
The committee was encouraged by the strong support it heard for the supported bargaining stream. The problems of the existing low-paid bargaining stream are well known, and the fact that only one application has been granted since the commencement of the FW Act highlights its ineffectiveness. The committee considers that this reform is vital to improve pay outcomes for the lowest paid workers in Australia, including those individuals working across the aged care, disability care, and childhood education and care sectors—sectors with large percentages of women workers.
2.144
The committee was surprised to hear of the opposition by some employer groups to empowering the FWC to arbitrate intractable bargaining disputes, particularly in light of ongoing protracted high-profile disputes in New South Wales rail, and at tugboat operator Svitzer. The latter is particularly concerning, given the current system has enabled the dispute to escalate to the point that Svitzer/Maersk, a multinational, multi-billion-dollar company, is now threatening to bring the entire Australian economy to a standstill through an indefinite lockout.
2.145
The committee also notes that many of the employers engaging in a fear campaign about the bill purportedly leading to widespread protracted industrial action, are at the same time opposed to the FWC having the power to arbitrate protracted industrial action.
2.146
The committee notes there have been some calls for the bill and bargaining provisions to be split so that the low-paid bargaining stream can be reformed now, and the single-interest stream delayed until next year. While it is urgent that low paid Australian workers get a pay rise, it is no less urgent that those on middle incomes are given a long overdue opportunity to collectively bargain for a fair pay increase after a decade of declining real wages.
Abolishing the Australian Building and Construction Commission (ABCC)
2.147
The committee recognises the importance of the building and construction industry in delivering long-term prosperity across Australia's cities, towns, and regions. This sector represents approximately 10 per cent of the Australian economy, employs 1.1 million people, and generates $200 billion in revenues.
2.148
The committee considers that the ABCC has not realised its objective of making the building and construction industry fair, efficient, and productive. On the contrary, it has allowed underpayments to workers to endure, and has had an insufficient focus on improving workplace safety and education and achieving harmonious workplace relations. More generally, the committee also considers that the construction industry should be subject to the same laws, and have the same regulator, as other industries. It should not be treated differently for political purposes.
2.149
The committee believes Master Builders Australia (MBA) commissioning and citing a report on the purported economic impact of the abolition of the ABCC, that turned out to be based on the opinions of 43 people and concluded the ABCC's 154 full-time equivalent (FTE) employees contribute $47.5 billion to the Australian economy, or $308.4 million each, perfectly illustrates the unjustified hysteria that has dominated debate on this reform. The committee further notes that productivity in the construction sector has actually worsened since the reintroduction of the ABCC in 2016.
2.150
The committee notes that in addition to the misinformation disseminated about the ABCC's supposed economic value, the actual lives and livelihoods of construction workers are often ignored in the political debate about the ABCC. The fact that in a five-month period last year, the construction union recovered more than three times more in stolen wages than the ABCC has in the five years since its establishment suggests the ABCC is fundamentally either disinterested in, or incapable of protecting the rights of construction workers.
2.151
Given the above, the committee supports the government's abolition of the ABCC and the transfer of its various responsibilities to the Fair Work Ombudsman (FWO). Based on evidence received during the inquiry, the committee is satisfied that the FWO will be adequately funded and resourced to undertake its expanded role going forward and will be an effective regulator of the industry into the future.
2.152
Importantly, the committee believes this reform will support the maintenance of law and order on Australian construction sites, while also improving safety, education, and industrial relations. Further, the committee recognises that the abolition of the ABCC has been a long‑standing policy of the Australian Labor Party, and that its election commitments were endorsed by the Australian electorate at the 2022 federal election.
2.153
It is important to note that existing illegal behaviours on construction sites, such as intimidation and violence, will remain criminal offenses under the new arrangements. Workers and employers subjected to such antisocial and illegal behaviours will continue to be able to submit complaints to the police force for their investigation and remedy.
Government amendments and ongoing consultation
2.154
The committee notes that the government introduced a series of amendments to the bill to address key stakeholder concerns. These amendments are outlined above at paragraph 2.125. The committee is encouraged by these amendments and believes that they will address many of the concerns that have been raised by stakeholders during the inquiry process.
2.155
The committee is also reassured by the government's commitment that it will continue to consult and engage stakeholder groups to gauge the impact of the reforms. The committee strongly encourages the government and the Department of Employment and Workplace Relations to monitor and evaluate the changes as they are implemented to ensure that the desired outcomes are delivered for both workers and business.
2.156
The committee believes that the reforms in the bill are urgently needed to address a decade of low wages growth and the increasing prevalence of insecure work arrangements. The committee is particularly pleased with the bill's focus on addressing a number of key issues for lower-paid and female‑dominated workforces and making a range of fairer bargaining options available to both employers and employees.
2.157
The committee is strongly of the opinion that Australian women have waited far too long for harassment-free workplaces and pay equity, and that workers deserve higher wages and increased job security right now. These reforms are long overdue and there is no time to wait.
2.158
The committee notes that there is still work to be done, and this bill only represents the first step. The committee is encouraged by the government's publicly stated commitment to address wage theft, fairly define casual employment, protect 'employee-like' workers from exploitation, and implement the principle of same job, same pay.
2.159
Overall, the committee considers that this bill will deliver on its objectives of closing the gender pay gap, improving workplace relations on construction sites, eliminating the scourge of sexual harassment from workplaces, fixing Australia's broken bargaining system, and addressing job insecurity and wage stagnation.
2.160
Accordingly, the committee recommends that the bill be passed.
2.161
The committee recommends that the bill be passed, subject to the amendments that follow.
2.162
The committee received a number of submissions which suggested that the FWC should be required to conciliate disputes over flexible work arrangements before arbitration, including from Woolworths, the Business Council of Australia (BCA), National Retail Association, and the Australian Chamber of Commerce and Industry (ACCI). This matter was also raised in the House of Representatives (House) by way of an amendment proposed by the Member for Wentworth, Ms Allegra Spender MP.
2.163
The committee notes that, during debate in the House, the Minister for Employment and Workplace Relations (Minister), the Hon. Tony Burke MP, indicated the advice he had received was that the structure of the FW Act presumed conciliation would take place before arbitration, and that this had been the practice of the FWC. As such, the government indicated it shares the intention that conciliation would precede arbitration of a flexible work dispute.
2.164
Given the concerns raised by stakeholders, the committee considers that making this explicit in the bill would be a helpful clarification and be consistent with the policy objectives of the provisions, which the committee endorses. Such clarification would provide additional certainty for parties regarding the FWC's processes.
2.165
The committee agrees with the proposal made by Woolworths that the requirement to conciliate before arbitration should not apply if there are exceptional circumstances. This will preserve a discretion for the FWC if urgency is required.
2.166
The committee recommends that an amendment be made to the bill to clarify that conciliation should take place before arbitration of disputes over flexible working arrangements unless there are exceptional circumstances.
2.167
The committee heard evidence from both the Migrant Justice Institute and Migrant Workers Centre on the special difficulties facing migrant workers in ensuring access to the protections afforded all workers under Australian law. In particular, the issue was raised that there is conflicting case law as to whether workers' migration status can impact their right to the protections of the FW Act and other workplace laws (including anti-discrimination law). The Migrant Justice Institute noted that the legal uncertainty creates a loophole which permits the exploitation of workers performing work without permission under the Migration Act 1958.
2.168
The issue raised here was also addressed by the Report of the Migrant Workers' Taskforce, which the government has committed to implementing as an election commitment. Recommendation 3 of that report is that 'legislation be amended to clarify that temporary migrant workers working in Australia are entitled to workplace protections under the Fair Work Act 2009'.
2.169
The FWO, as the dedicated regulator responsible for workplace laws, states that 'Visa holders and migrant workers have the same workplace protections as all other employees in Australia'. However, there is practical uncertainty as to whether this is the case—as demonstrated by the recommendation of the Migrant Workers' Taskforce and the submissions referred to above.
2.170
To ensure migrant workers receive the protections of the bill, and to clarify the pre-existing policy intent of the FW Act, the committee considers the bill should clarify that migration law does not affect workers' entitlements to pay and conditions under the FW Act.
2.171
The committee recommends that an amendment be made to the bill to clarify that the protections and entitlements under the Fair Work Act 2009 apply regardless of immigration status.
2.172
While there was broad consensus among academic submitters that the changes to promote gender equality contained within the bill were significant and positive steps, a submission from the Australian Discrimination Law Experts Group identified a potential area where the bill's provisions on sexual harassment do not line up with proposed amendments to the Sex Discrimination Act 1984 contained in the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 and amendments recently made by the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021.
2.173
These reforms, which build on the critical work of the Respect@Work Report, ensure that sex-based harassment is prohibited (as a related, but distinct concept) and that discrimination on the basis of workplace environments that are hostile on the ground of sex is prohibited.
2.174
Given the relationship between the FW Act and anti-discrimination law, and the need for consistency between the regulatory frameworks, the committee agrees that this issue should be considered further.
2.175
The committee recommends that the provisions of the bill prohibiting sexual harassment be reviewed for consistency with the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 and the Anti‑Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022.
2.176
The committee received several submissions and heard evidence from peak bodies, including from the Business Council of Australia, Australian Hotels Association, Australian Chamber of Commerce and Industry, and the Council of Small Business Organisations Australia, which called for an amendment to the small business exemption that applies to the single-interest bargaining stream. This matter was also raised in the House by way of amendment proposed by several independent members.
2.177
The submissions and evidence reflect concerns that these peak bodies have about the capacity for small businesses to adapt to single-interest employer bargaining. Broadly, the view by these peak bodies is that the FW Act's current definition of 'small business employer' (fewer than 15 employees) is too restrictive a number within contemporary workplaces and not fit for purpose to define the scope of the single-interest stream exemption.
2.178
By contrast, submissions by the Australian Council of Trade Unions (ACTU) and some academics recommend that the small business exemption to single-interest bargaining be removed from the bill entirely, on the basis that the rights of employees should not be restricted solely because of the size of the business they work in.
2.179
The effect of increasing the scope of the exemption is that a larger number of workplaces will not be permitted to access the single-interest stream, even if the majority of the employees in that workplace wish to do so. This places a significant limitation on the rights of these employees, and the committee is approaching this matter with caution.
2.180
The committee is of the view that the mechanism for determining the number of employees should continue to be headcount, including regular and systematic casuals. Moving to a 'full-time equivalent' measure may be confusing for small businesses and is subject to fluctuate quite significantly.
2.181
After considering the evidence, the committee considers that an increase from fewer than 15, to fewer than 20 employees, for the single-interest stream exemption, will provide the certainty that small businesses have called for, but will not exclude too many workplaces that it would be appropriate for the single-interest stream to cover, for example early childhood centres.
2.182
The committee recommends that the definition of 'small business employer', for the purpose of Part 21 of the bill be increased from fewer than 15 employees, to fewer than 20 employees, including regular and systematic casuals, based on headcount. The definition of 'small business employer' in section 23 of the Fair Work Act 2009 should remain unchanged.
2.183
Several of the peak employer bodies' submissions advocate for an increase to the 'minimum bargaining period' required before the FWC may make an intractable bargaining declaration. The ACTU's submission also calls for an increase to the 'minimum bargaining period' for intractable bargaining declarations to ensure that a declaration may only be made after bargaining has been engaged in for an appropriate period and bargaining is truly intractable.
2.184
Currently, the bill provides that the end of the minimum bargaining period would be the earlier of six months after the nominal expiry date for the existing enterprise agreement, or the latest nominal expiry date if there are multiple existing enterprise agreements that apply; or three months after an application to deal with a bargaining dispute under section 240 was made in relation to the proposed enterprise agreement (if any).
2.185
ACCI called for this minimum period to be extended from six to nine months when engaging in multi-employer bargaining including for single interest agreements. While not advocating for a particular minimum bargaining period, the BCA's evidence to the committee called for arbitration to only be available to parties who have met their good faith bargaining obligations and have genuinely tried to reach agreement.
2.186
Arbitration is a crucial mechanism to ensure that disputes don't drag on— damaging the economy and delaying pay rises. However, the committee acknowledges and agrees with the policy intent of giving parties a reasonable opportunity to try to reach agreement before access to arbitration is available. Increasing the period to 9 months from the nominal expiry date or the commencement of bargaining will provide a greater opportunity for agreement and limit the prospect of either party engaging in delaying tactics in order to access arbitration.
2.187
The committee recommends the amendment of the 'minimum bargaining period' in s235(5)(i) for the purpose of an intractable bargaining declaration, to provide for a nine month minimum bargaining period commencing after either the nominal expiry date of the agreement or nine months from the commencement of bargaining, whichever is later.
2.188
The committee heard evidence from Professor Andrew Stewart regarding his recommendation for a statutory review of the provisions. Professor Stewart's evidence suggests a review within two to three years to determine how the provisions are working in practice.
2.189
The committee notes that a similar amendment was moved in the House by the Member for Wentworth, Ms Allegra Spender MP, which called for a statutory review after 12 months.
2.190
The committee recommends that a statutory review of the bill be undertaken but occurs no earlier than three years after the bill receives Royal Assent.
2.191
Several of the peak employer bodies' submissions have advocated for the removal of the bill’s current requirement for the written approval of every employee organisation that is a bargaining representative for a multi-employer agreement before it can be put to employees for a vote to approve the agreement.
2.192
The committee heard evidence from the Transport Workers' Union (TWU) and others about some employers, such as Swissport, ramming through agreements without the approval of employee representatives, which in some instances left employees worse off than even the Award minimum.
2.193
As a principle, the current requirement in the bill provides an important safeguard to ensure that enterprise agreements reflect genuine agreement amongst the bargaining representatives. However, this must be balanced with the need to reinvigorate enterprise agreement making. Amendments to this current requirement in the bill should ensure that proposed multi-employer enterprise agreements are not being unreasonably prevented from being voted on by employees.
2.194
The committee recommends section 180A of the bill be amended so that no party can unreasonably withhold agreement for a proposed enterprise agreement being put to a vote, and the Fair Work Commission should have the power to resolve disputes pertaining to this.
Senator Tony Sheldon
Chair
Labor Senator for New South Wales