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Do you want to bargain?

Do you want to bargain?

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Federal government changes to the current bargaining system may expand the presence of the unions into the largely non-unionised residential building industry.

Melissa Adler

HIA Executive Director – Industrial Relations and Legal Services

 

You may have heard about the federal government’s agenda to improve access to enterprise bargaining including through multi-employer or industry-wide bargaining.

Multi-employer bargaining involves a number of different employers – usually in the same industry – and their employees bargaining to secure an agreement that will apply to all of those employees even though they are employed by different businesses. This type of approach could mean that despite having different employers, employees in the same industry would be subject to the same terms of conditions of employment, including, for example, the same wages.

This is particularly concerning for the residential building industry since it is dominated by independent contractors, who are potentially working across both the (non-unionised) residential sector, and the more heavily unionised commercial and civil construction industry, which utilises enterprise bargaining agreements.

Currently, multi-employer bargaining can take place where two or more employers voluntarily agree to bargain together. Another form of multi-employer bargaining focuses on the low paid where unions can compel separate employers to bargain together.

This is different to the general approach to enterprise bargaining where employees negotiate separate agreements with each of their separate respective employers.

Be aware of federal government changes

Enterprise bargaining that results in genuine productivity improvements accompanied by real improvements for employees can offer some advantages. However, it has been a long time since bargained outcomes have led to such results with industrial action, such as strikes, a key feature of enterprise bargaining.

Legislation recently introduced into federal Parliament looks to fundamentally change the enterprise bargaining framework to broaden the scope of multi-employer bargaining. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 brings to life both government and union rhetoric regarding the need to make multi-employer bargaining broadly accessible.

The unions have always seen the ability for employees who work for multiple employers to negotiate collectively (and possibly across a whole industry) as offering greater leverage and bargaining power, therefore helping them secure more favourable employment terms and conditions.

However, by its very nature multi-employer or industry-wide bargaining fails to consider the needs of a specific business and its employees. This makes it difficult to secure productivity gains for employers through bargaining, given that the ultimate bargain may not be specific to a particular employer’s enterprise.

If the Bill passes Parliament, and under certain circumstances, multi-employer or (essentially) industry-wide bargaining could also make it possible for all employees, across different employers, to take industrial action at the same time to increase the pressure on the employers to make concessions. It then becomes possible that industry-wide strikes could bring businesses to a standstill, a significantly concerning outcome.

The prospect of industry-wide strikes may concern crossbench senators and should also concern Minister for Employment and Workplace Relations, Tony Burke. Industry-wide strikes could have significant political consequences and turn the public against the government.

Moves towards industry-wide bargaining could also rubber stamp the current practice of ‘pattern bargaining’ where unions seek common wages or conditions in two or more agreements with two or more employers under an enterprise agreement. Where superior entitlements have been secured at one workplace, unions use that example to demand the same entitlements from another employer. These one-size fits all pattern agreements are routinely forced on employers and employees by unions with no real opportunity to negotiate. Such agreements can result in increased costs with little or no productivity growth.

The battles would turn the current system on its head. HIA will be monitoring the government’s plans closely 

 

While the minister has confirmed that the prohibition on pattern bargaining will remain, aspects of the Bill could certainly be interpreted as permitting such arrangements. For example, only businesses already covered by an enterprise agreement will be protected from a multi-employer agreement. The expiration of a single enterprise agreement provides an opportunity for unions to ‘lock in’ multi-employer agreements. In essence, this secures a pattern agreement across multiple businesses who have a ‘common interest’ and in circumstances in which bargaining is supported by a majority of employees across all businesses involved.

On the surface the proposed approach of the Albanese Government may look to only tinker with the current bargaining arrangements rather than taking more strident moves towards industry-wide bargaining. However, we all know how the saying goes… ‘if it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck’.

The battles would turn the current system on its head. HIA will be monitoring the government’s plans closely, make representations on behalf of the industry as appropriate and keep members informed of any pending change.

Published on 15 November 2022

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