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Submission, Senate Education and Employment Legislation Committee Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022
Read the full submission here:
Executive Summary
The Minerals Council of Australia (MCA) cannot support the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (the bill) in its current form.
The MCA urges the Senate to provide for proper consideration of the bill to ensure that the mining industry – and the many thousands of businesses across Australia that supply it – are not impaired by reduced productivity, industry-wide strikes, lengthy delays, surging costs, falling revenue, job losses and foregone opportunities.
The MCA supports the bill’s changes to enterprise bargaining, the application of the better off overall test, provision for voluntary cooperative workplace agreements and gender equity reforms.
However, the MCA is concerned that the bill unjustifiably expands the scope for multi-employer bargaining, fails to articulate clear parameters around where multi-employer bargaining would be available and undermines the system of enterprising bargaining that has delivered many significant benefits to Australia.
The major changes the bill would introduce will undoubtedly have severe unintended consequences economy-wide – on investment, productivity, economic growth, job security and wages.
The MCA supports the reform objective of ensuring Australia’s workplace relations system reinforces a productive, competitive economy that attracts investment and delivers highly paid jobs. This is best achieved through incentivising enterprise bargaining on a voluntary basis, encouraging high productivity workplace arrangements and enabling businesses and their employees to find the best possible outcomes given their widely variable circumstances.
The MCA stands for sustainable real wages growth, noting that for low-paid workers, the best and most appropriate way to deliver wage rises is to amend modern awards in low-paid industries.
Providing significantly enhanced rights for unions to force pattern agreements on non-consenting employers is the very antithesis of an economically responsible approach.
Mining is Australia’s largest export industry, generating a record $413 billion in exports in 2021-22. The industry paid $43.2 billion in tax and royalty payments in 2020-21 and accounted for 30 per cent of all company tax paid that year.
But the spread of multi-employer bargaining to all parts of the economy will replace flexibility with rigidity and stifle the ability of businesses to grow, innovate, compete and be productive. In the mining industry, this will lead to poorer wage outcomes and fewer jobs.
Access to enterprise-level bargaining and tailored employment arrangements has been critical to supporting a sustained increase in highly skilled, highly paid, and secure mining jobs. Direct mining employment has trebled over the past 20 years from approximately 88,000 workers in 2002-03 to 278,000 in 2021-22.
Only one per cent of mining workers are dependent on awards for their pay and conditions. Forty per cent are covered by enterprise agreements. The remaining 59 per cent are covered by individual agreements on terms above awards and above enterprise agreements.
Choice and flexibility in employment arrangements allow Australian mining to pay the highest average wages – $144,000 a year, compared to $95,000 a year across all industries.
In its Jobs + Skills Summit Outcomes document, the Australian Government committed to allowing ‘businesses and workers who already successfully negotiate enterprise-level agreements to continue to do so’. However, the bill belies this commitment, dramatically expanding the power of unions to force businesses into multi-employer agreements – and take industrial action across supply chains.
The bill also expands compulsory arbitration to situations where an enterprise agreement has not been reached, undermining the principle that workers and employers should be able to freely agree their employment arrangements. Once in place, the bill makes it very difficult for multi-employer agreements to be unwound, or to be replaced by more efficient single enterprise agreements.
Recommendations
The MCA recommends that:
1. The government reaffirm its commitment to proper and genuine consultation, particularly on major economic and regulatory reforms that could have significant adverse unintended consequences
2. The Senate allow a reasonable time for the provisions of the bill to be scrutinised – especially parts 10 (Fixed term contracts), 11 (Flexible work), 15 (Initiating bargaining), 18 (Bargaining disputes), 19 (Industrial action), 20 (Supported Bargaining), 21 (Single interest authorisations), and 22 (Varying agreements)
3. The Senate pass the bill’s changes to enterprise bargaining reforms in Part 14 and changes to the application of the better off overall test in Part 16
4. The Senate pass the bill’s changes to ‘cooperative workplaces’ multi-employer bargaining agreements on the basis that participation is voluntary
5. The provisions of the bill related to multi-employer bargaining be refocused on low-paid industries where workers have low bargaining power, in line with the government’s commitments at the Jobs + Skills summit by:
a. Not making any changes to the single-interest stream
b. Amending the supported bargaining stream ensure it will not capture high paying industries.
6. There be no expansion of arbitration without consent of all bargaining representatives, including for ‘intractable bargaining’
7. Any changes preserve workplace democracy, including by ensuring that multi-employer agreements can be unwound where workers and employers prefer alternatives such as single enterprise agreements and that employee representatives cannot ‘veto’ workplace votes
8. There be no expansion of opportunities for protected industrial action across multiple employers – and if these are introduced, that they be balanced by a stronger public interest test
9. Prior to introducing legislation, the government and parliament provide for the bill to be reviewed to better understand adverse unintended consequences on:
a. The international competitiveness of Australian businesses and their ability to attract investment
b. Sustainable wage increases
c. Competition and competition law
d. Business confidence
e. The government’s objectives of increasing Australian manufacturing.