A mandate for multi-employer negotiations? Without it, the wages of low earners will not increase

“The fact is that the government I lead was elected with a mandate to raise people’s wages,” Prime Minister Anthony Albanese said. told the House of Representatives last week as parliament debated the government’s bill to increase access to multi-employer collective bargaining.

The bill was passed by the lower house last Thursday, after the government made changes which Labor Relations Minister Tony Burke said would ensure the “primacy” of corporate bargaining. Other concessions may be needed to pass the Senate.

Employers’ groups argue that multi-employer bargaining arrangements could return Australia to a 1970s-style system with high levels of industrial conflict. They say this will lead to unions resorting to industry-wide industrial action to achieve their goals.

Importantly, the Council of Small Business Organizations of Australia, which supports multi-employer bargaining in principle, ended up opposing Labor’s provisions, saying they make the system more complex.

Nonetheless, Albanese has a point that Labor has a mandate.

He never made an explicit promise to expand multi-employer bargaining. He didn’t campaign on it. But he promised raise stagnant wages — especially for those working in feminized and low-paid sectors — and his government cannot achieve this without fixing a broken industrial relations system.

Provisions already exist

Multi-employer deals are, in fact, supposed to happen now, under the Fair Work Act passed by the Rudd Labor government in 2009.

The act authorized the industrial relations arbiter (known as Fair Work Australia until 2013, now Fair Work Commission) to allow multi-employer bargaining in sectors where employees are low paid and “have not had access to collective bargaining or who encounter significant difficulties in negotiating at company level”.

The Rudd government included these provisions – known as the Low-Paid Bargaining Stream – because of evidence that wages and conditions in areas such as childcare, elder care, community services , security and cleaning had stagnated under single enterprise negotiation.

Workers in these regions were disadvantaged by a range of factors. Casual and part-time employment rates were high. Many employers were small or medium-sized, with limited resources and bargaining skills.

In child care and elder care services, wages were effectively set by a third party – the federal government, the main funder of the services. Social workers were also more reluctant to strike as part of the negotiation process, due to the effect on customers.

But they just don’t work

In 12 years of the Fair Work Act’s existence, however, its multi-employer provisions have not led to a single negotiation.

Indeed, the law requires Fair Work Commissioners to consider complex considerations in determining whether multi-employer bargaining is in the public interest.

A 2011 request from the Australian Federation of Nurses to negotiate with general practice clinics and medical centers was rejected on the grounds that the nurses were not badly paid.

A 2014 request from the United Voice union to negotiate with five security service employers in Canberra was rejected because three employers already had company agreements.

Only one attempt passed the first step of obtaining permission. In 2010, United Voice and the Queensland branch of the Australian Workers’ Union asked for permission negotiate on behalf of 60,000 workers with federally funded aged care providers. It was about 300 employers.

Fair Work Australia agreed, but also excluded workplaces that had previously entered into a company agreement. This eliminated about half of the employers, undermining the collective strength needed to get the federal government to agree to fund any wage increases.

Whatever the merits of the arguments over the details of the government’s proposed bill, there should be no argument that the system needs reform.

The business negotiation was unsuccessful. Collective bargaining has become the exception rather than the norm. Over the past decade, the share of the workforce covered by a company agreement has halved, 12% of all employees.

Greater access to multi-employer bargaining is needed for fair wages and conditions for many employees, especially those in low-wage feminized sectors where staff shortages and high turnover are widely recognized as threatening quality care and compromising the sustainability of industries.

fiona macdonaldDirector of Policy, Center for Future Work at the Australia Institute and Deputy Principal Researcher, RMIT University, RMIT University

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