Event: Tim Reed opening remarks to the Senate, Education and Employment Legislation Committee
Speakers: Tim Reed, president of the Business Council of Australia
Topics: Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022
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Tim Reed, president, Business Council of Australia: I’m Tim Reed, the President of the Business Council of Australia, and I’m here with Chief Executive Jennifer Westacott.
Thank you for the opportunity to appear before you today.
Let me start by saying that the Business Council unequivocally wants to ensure that real wages are growing and continue to grow on a sustainable basis.
As the PC have made clear, the only way to achieve this is by increasing productivity. Indeed almost all real-wage growth since Federation has been due to productivity improvements. This does not mean working harder – indeed since that time average hours worked have declined from around 46 hours a week to around 33 hours a week – productivity is about working smarter to get more outputs from less inputs.
Working smarter is the result of ingenuity – the creativity of people; and investment – investing in new tools and equipment. This has been proven to occur best at the enterprise level and therefore enterprise bargaining should also happen at the enterprise level.
The number one objective of this bill should therefore be getting enterprise bargaining working again. It worked well for over a decade. We made changes that broke this successful EBA model and need changes to the BOOT to re-invigorate the single-enterprise bargaining model.
Before Jennifer and I go too far into the current bill, however, I think it is important to understand Australia’s workplace relations framework.
At the base we have National Employment Standards, which are the minimum for every single worker across the nation. Modern awards are built on top of these and are interpreted for specific industries.
On top of this, we have enterprise bargaining. Through bargaining, the concept is that both parties should end up in a better place than they would be if they just relied on the award. People on enterprise agreements typically earn $100 per day more than employees on awards and employers are happy to pay these higher wages.
Historically, we’ve had the multiple streams through which an enterprise bargaining agreement can occur with the predominance coming through the single employer stream. There is currently a “single interest” stream which allows for multi-employer bargaining when a business operates in a collaborative structure. For example, one EBA to cover an entire franchise structure.
What the Bill being discussed today is attempting to do here is to substantially change the concept of a “single interest” and broaden it out to cover large numbers of businesses who may have nothing in common and indeed, may be in direct competition with one another.
This is a huge change from the original “single interest” multi-employer bargaining, which was designed for different legal structures of what was effectively a single business.
With the proposed changes, we risk seeing a fundamental shift in Australia’s workplace relations landscape where multiple players in a single industry can leverage the “single interest” stream.
Jennifer will talk through our specific concerns in more detail, but much of the debate has been around:
- How do we preserve the primacy of single enterprise bargaining focus, recognizing this is the place we know innovation occurs and productivity gains are greatest?
- Following on from there how do we prevent the proposed provisions from pulling people out of the single enterprise stream, even when they want to stay?
- How do we ensure multi-employer bargaining is only used only where there has been a case made for it to be used?
I believe it is also very important to recognize that as we saw in the budget last week our economy remains fragile. Australia faces strengthening domestic and global headwinds; economic growth has been downgraded to just 1.5 per cent and productivity over the last decade was the weakest in six decades.
This backdrop demonstrates the risks of ending up with a workplace relations system that increases uncertainty, one that causes delays, legal stand-offs and the potential for widespread industrial action and higher unemployment is very high.
As I said, we all want real wage rises, and lifting productivity is the only way to sustainably put more dollars in the pockets of Australian workers.
And that is why we are deeply concerned about tipping the balance away from single enterprise agreements, which have a proven track record of increasing productivity and delivering higher wages.
I will now hand over to Jennifer.