Modest Enterprise Bargaining Agreement changes are just a first step

Enterprise Bargaining Agreement changes foreshadowed in today’s industrial relations Omnibus Bill are critically important to supporting jobs and businesses in distress, but more will need to be done if bargaining is to support Australia’s longer term recovery.

“Enterprise agreement making is supposed to be at the very heart of our industrial relations system, driving pay increases, job security, productivity and competitiveness, but enterprise bargaining has been in sustained decline for almost a decade,” ACCI CEO James Pearson said.

In June this year less than half the number of private sector employers were employing under in term enterprise agreements than in 2012.

1.4 million employees were covered by in-term private sector agreements, down from 1.95 million in 2013, notwithstanding that overall employment in Australia grew by more than 1.5m people in that period.

“Part of the problem is that the rules and procedures for collective bargaining are eye-wateringly complex and agreements are too often delayed or outright rejected on technical grounds. This makes employers too gun shy to use them.

“Getting an agreement approved is often harder than negotiating it – with many of the current rules the very definition of bureaucratic red tape. Which is why a change to ensure agreements are approved within 21 days is important – it improves certainty for businesses and ensures employees get their pay rises faster.

“Businesses in distress because of COVID-19 will also be able to use longstanding options to make emergency agreements which may not meet the BOOT in full for up to two years – this option was legislated by Labor in Government and unions should back it.

“This is critical to keeping businesses trading rather than insolvent and keep people in work and off the unemployment queues.

“Overall the changes in the Government’s package are a good start, but a lot more needs to be done to restore the regular use of enterprise agreements, and to get back to the effectiveness of the collective bargaining system prior to the Fair Work Act.

“Regrettably some changes in the Government’s package will do little for jobs or business confidence.

“It is difficult to see how automatically terminating long standing employment arrangements, or restricting when expired agreements can be brought to an end will help employers and employees tackle the biggest peacetime economic and jobs crisis in living memory.

“Although those looking for dramatic or structural changes will be disappointed, the package should deliver some critical changes which will make the system more predictable, reliable and better suited to the current challenges of COVID-19.”