Australia’s peak employer organisations have cautioned that proposed changes to workplace laws will have significant ramifications that raise the risk of higher unemployment, increased strike action and damage to our economic security.

The Australian Chamber of Commerce and Industry, of which CCIWA is a member, Business Council of Australia and Australia Industry Group said in a joint statement that with every Australian business and worker affected by the proposed legislative changes, the Government should “slow down and consult more widely and more meaningfully”.

“Business has deep reservations that any undue expansion of multi-employer bargaining risks jeopardising the important focus on encouraging employers and employees to reach agreements at the enterprise level,” they said.

“Any broader system of multi-employer bargaining must be voluntary and cannot lead to another layer of ill-suited, industry-wide terms and conditions.”

PC report warns against expanded multi-employer deals 

It comes after a Productivity Commission report, released last week, warned of a potential surge in strikes, supply chain bottlenecks, and a chain reaction of unsustainable wage claims if Australia’s workplace relations system is re-focused towards multi-employer deals.

Currently the Fair Work Act allows employers to engage in multi-enterprise bargaining if two or more employers agree to bargain together. The Fair Work Commission is restricted from implementing bargaining orders to force employer participation other than through low-paid bargaining, while employees participating in bargaining processes are also unable to undertake protected industrial action.

There were 48 current multi-employer agreements in March 2022, or just 0.4 per cent of all agreements, the report noted.

“Any changes to the FW Act to increase the use of multi-employer and industry/sector wide bargaining are likely to have uncertain implications for productivity (depending largely on the approach taken) and should be undertaken with caution and be subjected to detailed, rigorous and transparent analysis,” the report said.

It also found “removing restrictions on protected industrial action and bargaining orders would pose significant risks to productivity and real wages if it led to wider industrial action, with impacts on the broader economy”.

ACCI CEO Andrew McKellar said: “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.

“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.”

PC report findings

The PC report, the sixth interim report in its five-year Productivity Inquiry, also found:

• There are barriers that prevent or delay matching skills to labour market needs such as the requirement of new licences in different states.
• Employers should have greater capacity to directly employ migrants with high level skills.
• Platform-based business models present a number of positive contributions to productivity, including new and more efficiently delivered services.
• Simplifying the Award and enterprise bargaining systems could benefit all Australians.

“Enterprise Agreements and the bargaining process are often not focused on making genuine productivity improvements — as the system was originally intended,” said Commissioner Lisa Gropp.

“The need to revisit enterprise bargaining is highlighted by the fact that 56 per cent of employees covered by an agreement are on an expired EA.”

 For advice on your IR needs, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email [email protected].