Enterprise bargains ‘a colossal failure’
Enterprise bargaining had been a colossal failure and should be dismantled, with industry bargaining revived and the states given the power to lift minimum wages above the federal minimum wage, former senior ACTU official Tim Lyons says.
Mr Lyons told the Outlook Conference that low wages growth reflected the weakness of key labour market institutions, including unions, the award system and enterprise bargaining.
He said these weaknesses were compounded by underemployment and the power of employers, including major companies such as Coles and Woolworths, to affect the wages of tens of thousands of workers throughout supply chains.
He said “enterprise bargaining needed to be regarded as a colossal failure” because most workers had not been able to exercise enough combined power at an enterprise level to get pay rises.
Mr Lyons, a research fellow with think tank Per Capita, said the dimensions of wage theft in Australia were enormous while employers were using the “weapon” of applying to terminate enterprise agreements.
While aggressive wage policies by federal and state governments had contributed to low wages, he said unions needed to accept their share of the blame as they had failed to develop new ways to take effective collective action beyond traditionally unionised industries.
He said strikes had become “statistically extinct” and Australia effectively had “zero rates of industrial action”.
He suggested enterprise bargaining should be dismantled and replaced with a system that allowed for industry and sectorwide bargaining.
Labor has left open legislating to allow workers to strike in support of sector-wide pay claims, and unions insist industrial action in support of sector-wide pay claims would be a “last resort”, dismissing Coalition and employer warnings that the union movement’s wage policy was a return to the 1970s.
During the current low-wages environment, unions in the construction sector have continued to secure annual pay rises of 4 and 5 per cent, but Mr Lyons said employers in the sector passed on the costs of enterprise agreements and it would be absurd to exclude the sector from industry bargaining because it had a high rate of unionism.
Under his industry bargaining model, workers across companies in one sector or industry would receive the same wages for the same work. They would work the same base hours and receive basic entitlements including superannuation and annual leave.
Management and workers could negotiate at an enterprise level over different productivityenhancing practices including work practices and the exact pattern of working hours.
Mr Lyons said the Fair Work Act should be amended to allow the states to determine higher minimum wages than the federal minimum wage. Under proposed changes to federal laws, states would have the capacity to set up their own tribunals that would determine whether higher minimum wages were justified at a state level.
Mr Lyons said the federal minimum wage would act as the “floor” for the proposed state jurisdiction.
He said wages could be further lifted though stronger equal-pay provisions and changes to the lowpaid bargaining stream, which had delivered zero outcomes for workers.