Australia’s economic recovery from the COVID-19 impacts is at risk of being painfully slow without an overhaul of the nation’s enterprise bargaining system.
According to the latest Trends in Federal Enterprise Bargaining report from the Attorney-General’s Department, in June this year less than half the number of private employers were employing under in-term enterprise agreements than in 2010.
The figures show 1.7 million employees are covered by in-term agreements in the private sector, down from 2.6 million in 2010, despite overall employment growing by two million in that period.
AREEA has been a vocal advocate for reform to enterprise agreement making, reflecting concerns of members and the broader industry.
“Employers have been saying for years that the unpredictable and often unreasonable timeframes for getting new enterprise agreements approved by the FWC is the key reason behind the dramatic fall in the use of enterprise bargaining,” Steve Knott, AREEA Chief Executive said.
In its February 2021 submission to the Australian Government’s Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, AREEA detailed the significant frustrations, delays and costs associated with negotiating and certifying a new Enterprise Agreement – issues that are rapidly turning resources employers away from EAs as their preferred industrial instrument.
“These issues have greatly contributed to a rapid decline in the number of Australian workplaces utilising enterprise agreements. Despite enterprise-level collective bargaining supposedly being the cornerstone of Australia’s industrial relations system since the early 1990s, today only 10.7% of Australia’s total private sector workforce is covered by an enterprise agreement,” AREEA’s evidence reads.
Significantly reforming Australia’s enterprise bargaining system will continue to be a key industrial relations campaign priority for AREEA. As the nation draws closer to the next Federal Election, AREEA will be writing to each major party asking how they would again bring employers and employees back to the bargaining table.
AREEA will not be alone in this campaign. The Australian Chamber of Commerce and Industry recently highlighted the slump in enterprise agreements would be a significant roadblock to the nation’s revival.
“Enterprise agreements should be fundamental to our industrial relations system, driving pay increases, improving job security and boosting productivity and international competitiveness. However, enterprise bargaining has crashed over the past decade,” ACCI chief executive Andrew McKellar said.
“Current enterprise bargaining laws are stymying productivity growth and forcing down the international competitiveness of Australian businesses. Workers are also suffering from stagnant wages and jobs that could be far more secure,” Mr McKellar added.
“Pointless procedures, unduly rules and bureaucratic red tape mean that enterprise bargaining is excessively complex and unreliable for employers and employees alike. With agreements delayed or unexpectedly rejected on technical grounds, more and more workplaces are abandoning enterprise bargaining altogether.
“Employers and employees need greater confidence to use enterprise agreements that suit their needs. The failure to pass moderate bargaining changes in the industrial relations Omnibus Bill was telling – we need to do better.
“We must get back to an effective collective bargaining system that delivers jobs, grows wages, enhances productivity and fosters business dynamism.”
To share your experiences with the FWC’s EA approvals processes and/or discuss any of the matters within this article, contact [email protected].
