Multi-employer bargaining should not be legislated without full and prior consultation

The MCA is concerned about reports that the government will hastily incorporate sweeping measures to expand multi-employer bargaining into its Secure Jobs, Better Pay Bill next week.

Reintroducing multi-employer bargaining would be a fundamental departure from nearly 30 years of bipartisan support for company-level bargaining focused on increasing productivity and real wages.

Legislating this far-reaching change without consultation would negate the Prime Minister’s commitment to reinvigorate corporate bargaining through a new culture of business-union cooperation based on the common interest.

The Productivity Commission warned last week that:

“Any changes to the Fair Work Act to increase the use of multi-employer and industry/sector-wide bargaining are likely to have uncertain productivity implications…and must be addressed. undertaken with caution and subject to detailed, rigorous and transparent analysis.”

The case for extending multi-employer bargaining to high-wage industries like mining has not been made.

The Productivity Commission confirmed that:

“The primary cause of Australia’s low wage growth is low productivity growth, not the distribution of that growth between capital and labor shares.”

Employers and employees in the mining sector are already successfully negotiating at the company level for better than agreed wages and conditions. The mining industry pays the highest average salaries ($144,000 per year, compared to $95,000 across all industries) and the vast majority of mining workers are full-time (96%) and permanent (88%).

The steady increase in the number of highly paid, highly skilled and secure mining jobs over the past 20 years (from 87,800 to 277,600 direct employees) shows that corporate bargaining is not broken in the mining industry nor requiring radical surgery.

Nor can it be argued that wage growth has lagged behind productivity growth in the mining sector. ABS data reveals that while labor productivity in the mining sector fell by 8% between 2000-01 and 2020-21, the average weekly earnings of full-time workers increased by 99%.

Fifty-nine percent of mine workers are covered by individual agreements, the terms of which are superior to company agreements. Forty percent of mine workers are covered by enterprise agreements and only 1 percent depend on rewards for their wages and conditions.

/Public release. This material from the original organization/authors may be ad hoc in nature, edited for clarity, style and length. The views and opinions expressed are those of the author or authors.View Full here.