Business leaders alarmed by IR reforms

Michael Chaney has led a chorus of criticism of the federal government’s proposed workplace laws, after plans for multi-employer bargaining and other changes were detailed this morning.

Mr Chaney was more conciliatory than many others, saying the changes appeared to have some positive and some concerning elements.

Speaking at Wesfarmers’ annual meeting, he welcomed the proposed changes to the Better Off Overall Test in enterprise agreements.

“We're also pleased the government has said they are open to working in good faith, to improve the legislation, and that enterprise agreements will have primacy, so companies like Wesfarmers, with a history of bargaining and paying our workers above award, can continue to do so.”

He quickly added that the government’s multi-employer bargaining proposal was a significant industrial relations reform that should not be rushed.

“While the government is intending to incorporate some safeguards against unintended detrimental outcomes, we are concerned that it could result in more efficient, individual businesses being disadvantaged and a “lowest-common-denominator” approach to wages,” Mr Chaney said.

“It's unclear how the proposal drives productivity, which is always the foundation of wages growth.

“We are also concerned that the government hasn't accelerated the critical work to simplify awards, which underpin most Australians' employment arrangements.

“They're excessively complex and need to be made simpler and clearer so they can be understood by everyone.”

Workplace Relations Minister Tony Burke introduced the bill to parliament on Thursday as part of the first round of reforms to workers' rights.

Under the changes, employers will be legally required to reach an agreement with employees who request flexible work hours.

Workers would be able to take the case to the workforce watchdog if their boss refuses.

The bill would also aim to close the 14 per cent gender pay gap and ban secrecy clauses on pay.

The reforms would also see the Fair Work Commission given new powers to resolve long-running disputes.

Mr Burke said the laws would help to boost wages for workers at a time of flat-lining pay cheques.

The former coalition government's controversial Australian Building and Construction Commission will also be abolished under the new legislation, as well as the Registered Organisations Commission.

Changes will also see new limits placed on rolling-term contracts so employees can't be put on long probation periods.

The workplace bill will clear the way to multi-employer bargaining, a measure facing stiff resistance from business groups over concerns it could lead to more strikes and risk jobs.

Commenting on the proposed multi-employer bargaining, Mr Burke said the laws would remove unnecessary limitations from the bargaining system.

"We're not creating new streams of bargaining, we are varying the existing streams to make them work and to get wages moving," he said.

"These reforms will provide flexible options for reaching agreements at the multi-employer level, this is intended to deliver more equitable and inclusive wage outcomes which benefit more Australians."

Treasurer Jim Chalmers also backed the reforms.

“The enterprise bargaining system has not provided over a long period, really the last decade or so, the kinds of wages growth that Australian workers need and deserve,” he told ABC radio.

“And so something needs to give.”

Mr Chalmers also asserted the laws were “about more agreement, not more conflict”.

“And the reason I believe that is because they’ve got embedded in them a bigger role for the Fair Work Commission to help employers and employees come to agreements.”

Business group, by contrast, were alarmed by the prospect of the Fair Work Commission having a bigger role.

Chamber of Commerce and Industry of WA chief executive Chris Rodwell said the proposed laws were a threat to economic prosperity.

“The proposal exposes more WA businesses to strikes and creates the risk of sector-wide strikes,” Mr Rodwell said.

“It would force businesses with little in common to bargain together, against their choice. 

“This would pose one of the biggest threats to productivity in a generation, and stifle competition between businesses.

“It would result in complex, unsuitable, and expensive conditions being imposed on small and medium businesses.”

Mr Rodwell welcomed the updates to the Better Off Overall test but said this was far overshadowed by other changes that were hard to distinguish from pattern bargaining. 

“It is critical that the Government enable this system to be ‘opt in,’ and consult with industry to amend the proposal,” he said.

The Australian Resources and Energy Employer Association was particularly strident in its criticism.

“The Albanese government is delusional if it believes its radical pro-union industrial relations changes will help Australia’s economy grow and create jobs,” said chief executive Steve Knott.

The changes would see employers compelled into multi-employer bargaining campaigns, strikes take place across entire industries and the Fair Work Commission have an increased intervention role.

“This is a throwback to the bad old days of widespread union-led strikes and unproductive centralised wages and conditions fixing by an out-of-touch national IR tribunal,” Mr Knott said.

Business Council of Australia chief executive Jennifer Westacott, who is also a Wesfarmers director, sought to be more constructive.

“We welcome the minister’s acknowledgment that substantial amendments will be needed to avoid the worst unintended consequences, we expect this process to be comprehensive and the government to act in good faith,” she said.

“We’re pleased that we have brought the government back to the negotiating table on critical changes to make this legislation at least workable.

“It’s good news that the government has committed to amendments to protect the primacy of single enterprise bargaining; provide for democratic bargaining processes in each workplace; and prevent anti-competitive conduct between competing businesses.

“If the government is intent on making these sweeping changes, at the very least these amendments must be included.”

Ms Westacott said the key to getting wages moving was to revive the single enterprise bargaining system.

“We are worried that as currently proposed the new multi-employer bargaining streams will leave workers waiting longer for pay increase while unions and lawyers squabble over who can even be at the table,” she added.

“We are deeply concerned that the new system could see small businesses swept up in a complex system dominated by unions and lawyers, currently one large workplace could vote to pull smaller workplaces into an agreement.

“There is also a significant risk that this bill would see large competitors forced into lowest common denominator wage settings and it could see an end to the enterprise bargaining system that works.”

ACCI chief executive Andrew McKellar said the changes abandonded enterprise bargaining, the key driver of productivity-based wages growth, in favour of compulsory multi-employer bargaining. 

“Enterprise bargaining is the cornerstone of our workplace relations system, and any significant change requires an extended period of robust and transparent public consultation.

“If enacted, this legislation would drag multiple employers to bargain against their wishes.

“Businesses will be forced to adopt one-size-fits-all terms and conditions, which may be unaffordable and ill-suited to the needs of their workplaces. This is not opt-in.

“Today’s bill does not provide adequate safeguards to ensure businesses with limited similarities won’t be compelled to bargain together. This endangers the sustainability of businesses, risks jobs, and creates unnecessary complexity.

“The significant broadening of the ‘single-interest employer’ test exposes the Australian economy to sector-wide strike action, disrupting supply chains and key industries at a time of extraordinary global volatility.

“In a throwback to centralised wage fixing, the legislation will also see bargaining disputes quickly referred to compulsory arbitration.

“This gives the Fair Work Commission the power to dictate terms and conditions of employment for workplaces around the country, at the expense of employer and employee priorities with limited ability to appeal.

Master Builders Australia CEO Denita Wawn said workplace laws need to encourage workplaces to drive productivity at the individual enterprise level, not take us back to a ‘one size fits all’ approach last seen in the 1970’s.  

“For almost half a decade our entire industrial relations system has aimed to provide a safety net of minimum conditions and entrusted workers and employers to negotiate working conditions that suit their own specific needs,” she said.

“This bill completely undoes this progress and will force workplaces to cop deals they don’t want and subject workers and business to industry-wide industrial action they don’t support.”

Ms Wawn also expressed concern about the abolition of the Australian Building and Construction Commission.

“Banning the CFMEU from the proposed multi-employer bargaining stream won’t make a skerrick of difference, and no-one should fall for this legislative ‘sleight of hand’ approach.

“The CFMEU will still keep all their existing rights to pursue existing avenues that force builders into adopting their ‘one size fits all’ pattern deals, an approach that this bill will now entrench across all industry sectors and make lawful for all unions right across the economy.

“It makes no sense to create laws with exclusions for unions who break workplace laws, when those very same laws abolish the only workplace regulator that can effectively hold unions to account for breaking workplace laws.

ACTU secretary Sally McManus said the laws would help to get wages moving.

"The wages crisis will not be fixed unless workers have a modern collective bargaining system that gives them the ability to win fair pay rises," she said.

"People are working hard, but they are now seeing their wages go dramatically backwards after a decade of seeing them go nowhere."

The union leader expressed concern that too many employees would be shut out of the new bargaining system.

"The bill does not simplify or remove the red tape that makes the process of obtaining protected industrial action for workers unnecessarily long and difficult, in fact it adds more red tape."