Labor is examining ways to encourage industry-level bargaining for low-paid workers as part of its efforts to tackle stagnating wages, Brendan O’Connor has said.
The party’s employment spokesman signalled the shift away from negotiating pay deals workplace by workplace as the Australian Council of Trade Unions ramps its calls for changes to industrial law.
The ACTU’s Change the Rules campaign argues that limitations on collective bargaining have contributed to four years of persistent low wage growth and the average household having less disposable income in real terms now than in 2013.
It is understood the campaign will demand a shift from enterprise bargaining to industry-level bargaining and even arbitrated wage outcomes in some circumstances.
In January, Labor suggested changes are needed to the minimum wage-setting process to ensure a “living wage” for award-reliant workers and the opposition is now also looking at methods to help low-paid workers access collective bargaining to lift themselves off minimum award rates.
The Fair Work Act preserves the system of enterprise bargaining and denies the ability to take protected action for pattern bargaining, in which employees seek common wages and conditions across two or more employers.
It contains an exception which allows the Fair Work Commission to authorise bargaining for an agreement to cover two or more employers where low-paid workers need the boost to their bargaining power.
O’Connor told Guardian Australia: “We are examining the low-paid bargaining stream.
“Frankly it didn’t work as intended – so we’re looking at a fairer way to get decent outcomes for low-paid workers.”
The low-paid bargaining stream has never been successfully used to allow pattern bargaining. An attempt in the aged care sector stalled when the FWC made a declaration that employees with different employers could bargain together only if they weren’t currently covered by an enterprise agreement, which excluded low-paid workers on expired agreements.
A professor at the University of Adelaide, Andrew Stewart, said there were many options to reform the low-paid bargaining stream but the bare minimum would be to remove the requirement that it can’t cover employees on existing agreements.
“With that blockage out of way, you can then see if the low-paid stream can be used as intended,” he said.
But Stewart suggested that option would be ineffective because pay is not just set by workers’ direct employers but also by companies at the top of supply chains and indirectly by the government through their funding of and procurement in sectors including community services, aged care, disability, childcare, security and cleaning.
“Nobody will make an agreement in the aged care sector for pay rises that can’t be funded,” he said.
Stewart said the opposite end of the spectrum of options was to “abandon enterprise bargaining and go back to a system of compulsory arbitration” for low-paid industries.
“That would be a complete rethink of the current system - it’s walking away from the principle that’s been at the heart of the federal system since 1993 that enterprise bargaining is the primary way conditions are set.”
Stewart said there were intermediate options such as the government agreeing to fund pay rises, as the Gillard government did in the social and community services after the Australian Services Union’s successful equal remuneration case.
Another option would be for the government to use its purchasing power to induce companies to increase pay in the private sector, as the Gillard government did with the fair work principles that required cleaning companies to pay workers above the award if they wished to bid for government work.
On Friday, the ACTU is releasing a survey of 57,959 people which finds widespread concern about the difficulty of achieving wage rises.
It found 81.4% of respondents said it’s hard to get a decent pay rise in their workplace. Some 95.6 % agreed unions should be able to bargain with economic decision-makers at the enterprise, franchise, sector or industry level.
The survey – conducted from September 2017 to February 2018 – had a sample of 91% union members.
