Business, industry groups warn against multi-employer bargaining

On Friday (14 October), the Productivity Commission released its sixth interim report in its five-year Productivity Inquiry and warned of a potential surge in strikes, supply chain bottlenecks, and a chain reaction of unsustainable wage claims if the Australian workplace relations system is refocused towards multi-employer deals.

Australia Chamber of Commerce and Industry chief executive Andrew McKellar said the commission’s report confirmed that any significant move away from enterprise negotiations by rapidly expanding multi-employer agreements would pose a significant risk to jobs, productivity, and business.

“We must heed these concerns. Excessively broadening the scope of multi-employer agreements will lead to industry-wide strike action which we simply cannot afford,” he said.

“Recentralising terms and conditions, that take decision making away from employees and employers, would be particularly damaging given already serious global risks and uncertainty.

“If the government is committed to multi-employer bargaining playing a greater role for some industries, this should remain the exception, rather than the rule.  At most, there may be scope to adjust some of the detail and procedures for existing multi-employer mechanisms under the Fair Work Act.

“Instead, bargaining at an enterprise level should remain the cornerstone of our workplace relations system, to grow pay packets, improve job security, and boost international competitiveness.

“The commission’s proposals to reduce the complexity of the better off overall test must be considered. Practical and reasonable reforms, including simplification of the existing awards system, are an urgent priority, particularly small businesses.”

Business Council CEO Jennifer Westacott said with the global economy faltering, the Productivity Commission is right to warn of the risks of unintended consequences of overreaching on workplace reform.

“In the face of global economic uncertainty our great strength is record low unemployment, so we have to tread carefully on reforms that could put it at jeopardy,” Ms Westacott said.

“We agree with the Productivity Commission that our focus should be on sensible changes to fix the Better Off Overall System and restore the bargaining system that benefits workers and increases pay and living standards as well as making businesses more productive.

“We want a system that gives workers and their employer the chance to sit down together, solve problems, produce more and find innovative ways to work, creating the conditions for safer, better jobs and higher wages and conditions.

“No-one wants to return to the uncertainty and disruption of a workplace relations system that saps productivity by stoking conflict and strike action, that’s bad for workers, bad for consumers and bad for businesses.

“The best way to get wages growing is by reinvigorating bargaining at an enterprise level to drive productivity.”

Innes Willox, CEO of the national employer association Ai Group, said the Productivity Commission’s report fired a very clear warning shot that an expansion of multiparty bargaining risks damaging our economy and workplaces.

“The last thing we need as Australia struggles to stave off a recession is out-of-control union-led strikes and industrial action,” he said.

“The report reinforces alarm that recent union calls for multi-employer employer bargaining to be extended to sectors such as road transport will translate to increased industrial action and costs being heaped on already stressed supply chains.

“The Commission’s plea that changes need to be undertaken with caution and be subject to ­detailed, rigorous and transparent analysis mustn’t be ignored. The PC report is a brutal reality check for unions proposing radical reform in this area.

“Any proposal that would undermine enterprise bargaining, increase industrial action and disruption in already fragile supply chains would be fiercely opposed by business.”