Minister Tony Burke says IR system fails workers

Sep 6, 2022
Tony Burke

The jobs and skills summit produced some concrete outcomes in areas like migration, technical and further education, and workforce participation by older workers. Some processes based around tripartism (engagement between business, unions, and government) were established.

On industrial relations, tripartism was also a theme, though consensus was more elusive. The industrial relations news that has received the most coverage was that the government will consider allowing ‘multi-employer’ bargaining.

It seemed like a huge change — to some, a throwback to the past. Wages have allegedly been centred around ‘enterprise’ bargaining since the ACTU and the Hawke-Keating government agreed to it in 1990.

Enterprise bargaining was seen as a means for big corporations to shape their own workplace relations, powerful unions (especially in manufacturing) to secure wage increases for their own (male) members, workers to see the benefits of union membership, and the main tribunal (then the Australian Industrial Relations Commission) to be bypassed.

But Australia has changed a lot since then.

Unions represented 42% of employees in 1990; the proportion is more like 14% now. As many as one in five unionists were in manufacturing in 1990. Now it’s less than one in 17. Only 37% of unionists were women then; now it’s a majority, at 55%.

Enterprise bargaining is, itself, a policy that is hankering for a past that has gone. That is most obvious from the fact that, despite the lowest unemployment in half a century, real wages have not only failed to grow, they are presently in decline.

Outside of Australia, multi-employer bargaining has been common for a long time in many European countries, including several with higher productivity than Australia. Indeed, support for it has come from some unexpected quarters. In 2018, the Organisation for Economic Cooperation and Development (OECD) publicly endorsed multi-employer bargaining in its annual Employment Outlook.

It had long promoted decentralisation of wages. But now the OECD was saying that ‘co-ordinated collective bargaining systems are associated with higher employment, lower unemployment, a better integration of vulnerable groups and less wage inequality than fully decentralised systems’.

In Australia, multi-employer bargaining is seen as a way for many female-dominated occupations to improve their bargaining power and wages. Whether it does that will depend on the details and on what else happens in the industrial relations system.

Minister Tony Burke has signalled that he plans to end employers’ ability to unilaterally cut agreed pay and conditions after an agreement expires, something that could shift bargaining power significantly when agreements were being renegotiated.

There will  be policies to ‘strengthen tripartism’. There will be a new consultative body in the construction sector. There will be tripartite consultations over a potential living wage, on policies about work and care, on improving workplace safety, fairness and productivity, and (most contentiously) on amending the ‘Better Off Overall Test’ for agreements.

The Fair Work Commission will play a role in supporting cooperative relations and agreement-making for groups that have previously not engaged in it.

But there is one area where there was already a strong tripartite consensus, that on the surface appears contained to a single industry, but may have implications across some of the most vulnerable parts of the workforce.

Three days before the summit, a Roundtable, chaired by Minister Burke, discussed the road transport industry, and the need for an independent body to regulate it to ensure it is safe, sustainable and viable. The Government’s Summit Outcomes document suggests that this body would most likely be the Fair Work Commission itself.

That makes sense, as the closest model to this mechanism at the state level, Chapter 6 of the New South Wales Industrial Relations Act, is also administered by that state’s Industrial Relations Commission.

The level of agreement around the room was, in my view, remarkable. Participants included not only the major union and state-based transport federations but also major clients of the industry and even two key ‘platform economy’ firms. Some of the opponents of the short-lived Road Transport Remuneration Tribunal — abolished by the Turnbull government — were there.

A joint statement of principles was agreed upon by all industry participants in the room. While the Government did not fully commit to regulation in its Outcomes document, it looks like all that remains is to sort out the details. The question is not ‘whether’ but ‘how’.

This might also affect plans for regulating the rest of the ‘gig economy’. Minister Burke has been engaging in consultations over how the government should implement its commitment to empower the Fair Work Commission to regulate minimum standards for ‘employee-like’ forms of work. Again, the question is not ‘whether’ but ‘how’.

Here, the road transport industry might well provide a model for the rest of the gig economy. After all, owner-drivers of trucks have been doing delivery ‘gigs’ for over a century. They lived the gig economy long before apps and platforms were invented. The Chapter 6 regulation in New South Wales avoids the problem that has beset many jurisdictions of trying to redefine contractors (like owner-drivers) as employees. Instead, they retain their contractor status but their minimum standards are regulated by a specialist part of the Industrial Relations Commission.

The corporations power in the constitution is broad enough to permit laws that allow the Fair Work Commission to regulate the terms of contracts that don’t even directly concern employees, so long as the Commission was satisfied it was appropriate to do so and at least one of the parties was a corporation. It could set up specialised panels to do so and take evidence from industry participants and experts.

This could help contractors in the gig economy in areas such as aged and disability care, professional services, clerical and creative work. Such areas may not enjoy the consensus that dominates road transport, but the input of industry participants could be just as important. Very different solutions may be appropriate in different fields, be they in the form of piece rates, hourly rates or something else.

In their own ways, enabling multi-employer bargaining, and enabling the setting of minimum standards for gig work (starting with the road transport industry), could both signal major changes to the regulation of work. They may seem worlds apart, but in common is a focus on what the people in an industry know themselves.

Multi-employer bargaining is a way in which some (maybe most) participants in an industry set certain standards that apply across their workforces. The model of gig economy regulation that will emerge in the road transport industry will reflect the input of the participants from that industry.

The Summit’s existence showed government was looking for ways to hear from many diverse groups, even if for various reasons (be they political economic or equity) it did not agree. The reforms in industrial relations that may come out of it could institutionalise that industry focus, as constrained by the government’s ideas on equity and economic considerations.

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