What is the sticking point in Labor’s industrial relations bill and how would it work?
Labor likely needs David Pocock to pass its industrial relations bill, but the ACT senator has called for the most controversial element to be split off and debated next year.
The so called single-interest stream had sparked wide-ranging concerns from a broad range of stakeholders, Pocock said in a Senate inquiry report.
But what is the single-interest stream, whose pay is it designed to lift and why is it so controversial?
Multi-employer bargaining
Labor’s secure jobs, better pay bill expands the options for multi-employer bargaining while preserving the ability for employers to negotiate a separate pay deal with their workforce.
The theory is that pay deals that will cover more than one employer help
employees in sectors with many different employers, such as early childhood education, band together for a bigger pay rise.
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The bill contains three streams of multi-employer bargaining: the cooperative stream, where employers optin to bigger pay deals; the supported stream, for low-paid sectors; and the single-interest stream.
Single-interest stream
The “single-interest stream” would allow the Fair Work Commission to authorise workers with sufficient “common interests” to bargain together, where it is in the public interest for them to do so.
The commission will consider common interests like geographical location, whether the businesses have the same regulatory regime, the nature of the businesses and their terms and conditions of work.
The single interest stream requires the majority of employees at each employer to agree to take part in a multiemployer pay deal.
Small businesses are exempt from the single-interest stream. The threshold is currently businesses with 15 employees, but the Senate inquiry has recommended this be raised to 20, signalling a likely government amendment.
The bill also exempts the entire commercial building and construction sector from the single-interest stream.
Why is this controversial?
First, it’s not clear which businesses and workers it will apply to.
Industrial relations expert, Adelaide law school professor Andrew Stewart, told the Senate inquiry there was a “a lack of clarity as to what counts for this purpose as a common interest and the criteria the Fair Work Commission should use”. Stewart called for this section of the bill to be “withdrawn and reworked”.
Secondly, employers (other than small businesses) can be compelled to take part in the single-interest stream if their workers vote for it, and employees can take industrial action.
However, it’s important to note that employers are already compelled to bargain for enterprise agreements if the majority of their employees vote to. All the usual safeguards around industrial action apply, plus a new requirement for conciliation before a strike.
Thirdly, there is some concern multi-employer bargaining will replace enterprise bargaining, which Pocock noted Manufacturing Australia had raised in the inquiry.
The bill is not intended to do this, because employers with a current enterprise agreement cannot be drawn into the single-interest stream.
The workplace relations minister, Tony Burke, has made further amendments to ensure the “primacy” of enterprise bargaining, allowing the FWC to refuse authorisation for single interest bargaining if an employer and its workforce are bargaining in good faith for a separate pay deal.
There is also a grace period of six months after the expiry of a pay deal obtained through enterprise bargaining before multi-employer bargaining can be brought in, which the Senate inquiry recommended be extended to nine months.
What does the government say?
At the National Press Club on 16 November, Burke made the case that the single-interest stream is “essential as well”.
Burke said:
Burke said calls for further definition and conditions of common interest would make the stream “impenetrable”.
He said the commission would determine any “ambiguity” about common interest and the public interest with reference to the objects of the Fair Work Act, such as productivity and the impact on the economy.
Which workers need this?
At the Press Club, Burke argued the single-interest stream was needed to prevent employers who want to pay above the award being undercut by other employers in a “race to the bottom” on wages.
He cited sheet metalworkers and cleaners as examples of sectors where companies “want to offer a better deal to workers” but can’t.
A cleaning company in such a position would “be undercut by a new entrant and then they lose their contract, and everyone loses their job and you’re back to where you started on wages”, he said.
Burke also cited Victorian early childhood educators, who have negotiated what is effectively a multi-employer agreement at separate workplaces, paying 16% above the award.
“The single interest stream will be their only way to be able to make sure they can continue bargaining from their current base,” he said.
“We don’t want to have a situation where we then say, “You’re on a wage freeze now until you fall back down to the minimum.”
The Independent Education Union was also a strong supporter of the single-interest bargaining stream at the Senate inquiry, as a means to help solve intractable disputes like the one facing 25,000 employees in the Victorian Catholic education sector.
Debra James, the general secretary of the Victoria and Tasmania branch, told the inquiry that, under the current law, employees don’t have “any rights” to take protected industrial action or seek FWC conciliation if multi-employer bargaining breaks down.
“We don’t want to be in the position of having to take wildcat, unlawful action,” she said. “We want to play by the rules, but we just need rules that are actually fair.”
So, will it stay?
Burke has not ruled out splitting the bill if necessary, instead saying that the government wants to get as much through this year as possible.
Given Pocock has said he supports “80-90%” of the bill, the government may have to hit pause on single-interest multi-employer bargaining to get the rest of the bill through.