Enterprise bargaining has served Australia well and needs to be preserved

business meeting stock image

“Australia’s enterprise bargaining system has been a major contributor to Australia’s strong economic performance and growth in living standards over the past 25 years. The key merits of the system have not altered over time. It is in the interests of businesses and their employees to reach agreement on the wage rates and conditions of employment that suit the needs of each business and its employees, provided that minimum legislative and award standards are not under-cut,” Australian Industry Group Chief Executive, Innes Willox, said.

“A key reason for the recent decline in enterprise agreements has been the lack of discretion that the Fair Work Commission has had to approve enterprise agreements when very minor procedural or technical errors have been made by one or more of the parties. This issue has led to the bargaining process becoming a ‘minefield’ and many employers deciding that the enterprise bargaining system is just too much trouble to be bothered with. Fortunately, this issue has been addressed through changes to the Fair Work Act that come into operation as a result of the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act which passed through Parliament.

“Other steps that could readily be taken to refresh Australia’s enterprise bargaining system, include:

  • Governments devoting more resources towards promoting the benefits of enterprise bargaining;
  • Addressing a few other technical problems in the Fair Work Act, including changes to the Better Off Overall Test to ensure that it is applied to logical groups of employees; not every employee;
  • The Fair Work Commission implementing better systems to streamline enterprise agreement approval applications and to ensure that a more practical, less pedantic approach is taken.

“An industry bargaining system would be beneficial only for unions – not for employees, businesses or the broader community.

“There is no country in the world that has both an award system and an industry bargaining system. Australia’s modern award system provides a very comprehensive set of legally enforceable wage rates and conditions of employment at the industry level. Industry bargaining makes no sense in the Australian context because industry agreements would oust the operation of industry awards.

“Industry bargaining operates in some continental European nations, but these nations do not have an award system. Industry agreements in these European countries set minimum wages and conditions at the industry level. In Australia, this is the role of industry awards.

“The unions not only want an industry bargaining system, they want the right to take strike action across entire industries, which would be crippling for the Australian economy. All political parties need to reject the unions’ industry bargaining proposals, and preserve Australia’s enterprise bargaining system,” Mr Willox said.

Source: Ai Group