Reflecting on the significant changes coming for Australia’s industrial relations framework, AREEA Chief Executive Steve Knott AM has penned the following opinion piece explaining why the Albanese Government’s IR policies are “barking mad”.

“The Employed Majority Need a Voice Too”.

On 17 April 1991, our nation’s industrial relations (IR) tribunal said the industrial parties (unions, employees and employer organisations) weren’t mature enough to enter into enterprise bargaining.

In effect what the Australian Industrial Relation Commission (AIRC – as it was called then) was saying was they knew best how to set wages and conditions for Australian employers and employees.

The then-ACTU Secretary Bill Kelty described this as a “sickening” decision before famously adding “there is no reason for the trade union movement to eat the vomit”.

Against the AIRC’s April determination, later that same year enterprise bargaining agreements were introduced in Australia under the Prices and Incomes Accord.

The influence of the ACTU on the Hawke/Keating ALP Government and the AIRC was understandable. Over 40% of Australian workers at that time belonged to a trade union.

Fast track 31 years and union membership has declined to around 14% today; in the private sector less than one in 10 employees are trade union members.

Of the near 14 million Australians employed today only 12% have their terms and conditions regulated by enterprise bargaining agreements. It is probably even less than this given employers often provide additional benefits over and above enterprise agreements terms.

Against this background it was both sad and wondrous in September 2022 to witness both trade union and employer groups talk about reviving enterprise bargaining as a key objective of the Albanese Government’s farcical “Jobs and Skills Summit”.

These calls were reminiscent of the well-known Monty Python “dead parrot skit” involving a shopkeeper discussing the fate of the Norwegian Blue.

Despite overwhelming evidence the shopkeeper denied it was bereft of life by stating …..”no, no, ‘e’s uh, ….. he’s just resting”.

Well enterprise bargaining in Australia is not resting. The undisputable facts reflect the reality; that is for most Australian businesses and employees it has “run down the curtain and joined the bleedin’ choir invisible!”

Talks of reviving enterprise bargaining agreements and having today’s IR tribunal (the Fair Work Commission) arbitrating wages and conditions for Australian employers and employees is likely to viewed by the investment community as more frightening than enlightening.

Not a single member of the FWC has had to raise capital required for a multi-billion dollar investment project let alone build or run such a project. Further, what is frightening is less than a handful have ever run a multi-million dollar business. I can think of two and I’ve met most of them.

Late last century most resources and energy businesses in Australia moved beyond enterprise bargaining.

In its place has been direct, cooperative and mutually rewarding relationships between employers and employees at the enterprise level.

This industry has never been shielded from international competitive forces, thrives by continuous improvement initiatives and improved leadership and management practices. They have no choice but to run fast to stand still in delivering and developing world competitive enterprises.

Australia is the only nation in the world with an industrial award system; a system that sits on top of legislated minimum employment standards.

Further to this we have an enterprise bargaining system that, thanks to the Albanese Government’s new legislation set to take effect in June this year, will again see the national IR tribunal exercise supervision and control over setting actual wages and conditions in business enterprises.

Put simply, this development is barking mad.

Australia needs an IR system designed for 2023 and beyond, not one belonging to an pre-internet, closed economy era characterised by high levels of union membership.

As has been its place for over 105 years, AREEA will continue to push back against this backwards IR thinking of the Albanese Government and advocate assiduously for a modern, flexible and competitive regulatory environment that will help our members and our industry flourish.

Contact [email protected] to learn how you can get involved.