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ABC News
ABC News
business reporter Gareth Hutchens

Wage suppression, a weak workforce, and undervalued jobs: Can multi-employer bargaining fix them all?

The Albanese Government wants to pursue "multi-employer" bargaining this year.

The idea caught some people by surprise when it was announced at last week's jobs summit.

Labor's national policy platform from 2021 made specific references to the idea, with the party pledging to improve access to collective bargaining if it won this year's election, but the party didn't make a huge deal of the idea during the election campaign.

So why does Labor think we need it? What's wrong with the existing system?

Multi-employer bargaining

Tony Burke, the Workplace Relations Minister, will begin consultations on multi-employer bargaining this week, with plans to introduce legislation to parliament this year.

But big business lobby groups are concerned about it.

They fear it could be a Trojan Horse for the return of industry-wide bargaining and widespread industrial action because it will help workers co-ordinate strikes across different businesses to try to secure better pay and conditions.

So, it's worth remembering how things stand at the moment.

If you treat industrial disputes as a proxy for workers' power and their ability to secure decent pay increases from rising productivity, have a look at the graph below.

Industrial disputes have been on life-support for decades.

Next, in recent material published by the Australian Council of Trade Unions (ACTU) that mentions multi-employer bargaining, the union's focus for the idea is on the care sector — child care, aged care, and cleaning and other industries.

It says these are feminised industries, in which the majority of workers are women, where wages are being suppressed partly because the majority-female workforces lack access to decent bargaining.

"Multi-employer bargaining would give millions of workers, most of them women, meaningful access to bargaining for the first time," ACTU President Michele O’Neil said last week.

And there's another graph that's worth keeping in mind.

A large change has occurred in the composition of union members in the last ten years.

Since 2012, female employees are more likely to be members of unions than male employees.

See below.

It's why politicians who still try to fearmonger about "union thugs" sound increasingly out of touch.

The ACTU says the work done by employees in the care sector is chronically undervalued, and conditions in the sector need to improve.

It says policymakers need to address not only pay but job security, workloads, and skills and career progression in the sector.

And it says multi-employer bargaining is just one policy that's needed, among a suite of others, to drag pay and conditions in the sector into the 21st century.

As Ms O'Neil said in her address to the Jobs and Skills Summit last week:

"We have a bargaining system designed for large male dominated workplaces, locking women in feminised industries out of the system and leaving them without power to join together with others and negotiate," she said.

"Let us be very clear. Arguments to keep our bargaining system in the past and only enterprise-based are arguments to cement women's low pay for generations to come."

Do other countries have multi-employer bargaining?

Dr John Buchanan from the University of Sydney, who has studied multi-employer bargaining for most of his academic career, told the ABC last week that Australia's experiment with enterprise bargaining had failed.

"Enterprise bargaining" refers to wage negotiations that occur between an employer and employees at a single enterprise (that is, a single business).

It is distinct from other forms of collective bargaining, such as sectoral bargaining that allows workers in an entire sector to bargain as one.

Enterprise bargaining agreements were first introduced to Australia in 1991, during the Hawke-Keating Labor era, with support from the ACTU's leadership and employer groups.

But they've fallen increasingly out of favour with employers and employees.

"Enterprise bargaining was only designed for a very small part of the economy," Dr Buchanan said.

"If you look at the successful economies that people want to be like, if you look at, say, Denmark, Norway, Germany, you know, countries which have strong standards of living but also have got inequality under control, they have multi-employer bargaining.

"If you look at the countries where things have gotten really bad, like the UK and the US, they have really attacked this capacity of people being able to get together across workplaces and ensure a fair standard.

"Some employer groups say [multi-employer bargaining] is a throwback to the '70s, I'd simply say to them no, the 30-year experiment with enterprise bargaining has failed at a number of levels, and it's time to recognise if an experiment's failed you move on, you actually embrace something that's recognised as working internationally," he said.

Dr Buchanan said fears from employers that multi-employer bargaining could lead to more industrial action would depend on how everyone behaved.

"To be honest, that depends on the stance that employers take," he said.

"There might be a slight uptick in strikes, but you usually find that where wages and conditions rise, and you have decent working conditions, rates of labour turnover drop.

"You've got to look at the total picture — if labour turnover drops, and if things like skills formation improve, which is commonly associated with multi-employer bargaining, you're usually better off."

See his interview below.

He said German workers were amongst the most productive in the world because employers there coordinated their bargaining around wages and skills, and it was similar in Switzerland, Denmark and Norway.

Expert says enterprise bargaining has not served workers

The old economy no longer exists

A few months ago, Anthony Forsyth, a Professor of Workplace Law at RMIT University, explained why enterprise bargaining had broken in Australia.

He said enterprise bargaining was designed for an economy that no longer existed.

"It's failing low-paid workers lacking bargaining power in particular, and is a big part of the reason for such poor wages in female-dominated professions such as aged care and child care," he wrote in The Conversation.

"Allowing employees and unions to only bargain and take industrial action for an agreement with a single business, or part of a business, works fine with large worksites, such as factories, with hundreds or thousands of workers with the same employer.

"But these types of workplaces are increasingly rare. Now, many employers in sectors such as food production, logistics, warehousing, building management and "big box" retail stores have hived off large parts of their operations, and workers, to other entities.

"They’ve used labour hire, independent contracting and outsourcing to distance themselves from responsibility for minimum employment standards – and collective bargaining."

Professor Forsyth said to lift wages, workers would need the boost to bargaining power that came from being able to negotiate — and strike — across entire industries.

"Labour hire workers must be able to bargain not just with the agency that technically employs them, but with the business for whom they are working –such as Amazon, which has relied heavily on outsourced labour in its Australian operations," he said.

"Workers who clean and provide security services in commercial buildings need to have the capacity to pursue pay increases from the lead firms that ultimately control labour's share of profits."

Writing the piece in June, Professor Forsyth also predicted the future of enterprise bargaining would probably be a "hot topic" at the jobs summit.

It's still about gender pay

But that's not to lose sight of the ACTU's push to remove barriers for women to earn more in the workforce.

The union says multi-employer bargaining would improve access to bargaining for childcare workers, aged care workers, and a host of others.

But it wants other things, too.

To get more women working, and working the hours they want, it wants early childhood education and care to be made free and widely available.

It has called for 52-week paid parental leave by 2030, with leave offered on a shared basis between parents, with incentives to drive equal parenting, and with superannuation paid on all parental leave.

And it wants a National Care Compact to address the crisis of overwork, low pay, job insecurity, lack of training and unsafe workplaces in the care sector.

In short, it wants the market to put a higher value on the work performed in the care sector and it plans to do that, in part, by reducing barriers for young mothers to work more, and reducing barriers for young fathers to work less.

And multi-employer bargaining would be one element in that plan.

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