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Australians have waited too long for a pay rise - the Senate needs to pass the Secure Jobs, Better Pay Bill

16th November, 2022

Anthony Forsyth, RMIT University and Labour Law Down Under Blog.

One of the Albanese Government’s main pre-election commitments was to get real wages moving for Australian workers.

We have had a decade of wage stagnation in this country. And in the last 12 months, inflation has leapt way ahead of workers’ incomes.

A key factor in low wage growth is the collapse of enterprise bargaining. Enterprise agreements are the only avenue to above-award improvements in pay and conditions for most workers. But the coverage of current workplace agreements has fallen from 27% in 2012 to 15% in 2021.

Millions of workers – including many women working in vital sectors like aged, disability and child care – are stuck on award wage rates. They can’t access bargaining across multiple employers, which international evidence tells us is critical to obtaining higher levels of agreement coverage.

The Secure Jobs, Better Pay Bill tries to address these problems. It includes a Supported Bargaining stream which would enable workers in funded sectors to reach agreements with multiple employers, finally lifting them out of low-paid work.

The Bill also includes an expanded Single Interest Employer Bargaining stream. This aims to extend multi-employer bargaining more widely throughout the economy.

These provisions in the Bill are complex. They include many tests which a union would have to meet before the Fair Work Commission could grant an authorisation allowing Single Interest Employer Bargaining.

Two of these tests are really quite onerous.

First, it would have to be shown that there are “common interests” between the multiple employers a union is seeking to make an agreement with. Relevant factors here are the geographic location of the employers; whether they are all subject to a similar regulatory regime; and the nature of the businesses (and the employment conditions applying in them).

Bargaining for one agreement to cover a group of regional universities might meet this common interests test, as might an agreement to apply to all of the stores in a fast-food chain. But the test would be harder to satisfy across all of the businesses in a supply chain, or where businesses like Qantas have outsourced functions to external providers.

Secondly,  the union would have to prove it has the support of a majority of employees at each of the enterprises that would be covered by the proposed multi-employer agreement.

This latter requirement is proposed in a Government amendment to the Bill, part of a suite of amendments intended to gain the support of the Senate cross-bench.

Winning a majority at each enterprise means the union would have to win a workplace campaign for the hearts and minds of workers, with many opportunities for employers to counter the campaign with obstructive tactics.

I argued in a submission the Senate Committee inquiring into the Bill that even the threshold originally proposed in the Bill – a majority of employees across all the enterprises to be covered – was too high.

I pointed to New Zealand’s new system of Fair Pay Agreements, where the process for getting sector-wide negotiations can be triggered by a union showing it has support from 10% of the workforce or 1,000 employees.

In my view, then, the Secure Jobs, Better Pay Bill is not perfect. But it must be passed, because even with those imperfections it is a considerable improvement on the current Fair Work Act.

Unlike the current law, the Bill at least provides workers and unions with the chance to bargain across multiple employers. It presents unions with a strategic challenge: how to make the most effective use of the new law at the workplace level.

The Bill is the best hope we currently have of lifting workers’ wages.

Given the onerous requirements I have explained, there is no way these proposed changes will take us back to the “dark days of the 1970s” and industry-wide strikes.  

That is the predictable refrain of business and employer groups.

They are now amping up the dial in their hysterical opposition to the Bill, with talk of “sovereign risk” and “capital flight” if multi-employer bargaining is expanded.

What this is all code for is simple: they are determined to prevent workers from ever winning pay rises.

The Senate has the opportunity in coming weeks to back in Australian workers.

Businesses won’t voluntarily boost wages to match inflation.

Some statutory levers are needed.

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