How will Labor’s ‘rushed and confusing’ industrial relations bill affect the workplace?

The federal government is trying to hurry a set of changes to industrial relations rules through Parliament before the end of the year.

They’re facing opposition both from crossbench senators who want to look at the detail and from employer groups wary of workers gaining more bargaining power for better pay and conditions, especially across multiple employers.

What is the bill?

The “Secure Jobs, Better Pay” bill tinkers with rules for fair working conditions and collective bargaining.

The stated aim is “getting wages moving” — as repeated over and over by federal government ministers in recent weeks — and to achieve gender parity.

“To promote job security, to close the gender pay gap, to get wages moving — we need to change the law,” Workplace Relations Minister Tony Burke told Parliament last Thursday when he moved the bill.

What would change if it became law?

The bill makes workplace regulation changes, many of which are broadly popular among the senators who will decide its fate.

It would alter the better off overall test (BOOT) — simplifying the approval requirements for enterprise agreements, which Burke said were currently “onerous, complex and unnecessarily prescriptive”.

The BOOT requires that any new enterprise agreement leaves workers better off than basic award conditions do.

The new bill would make gender pay equity an objective of the Fair Work Act, ban secrecy clauses, and give the Fair Work Commission (FWC) two new specialist panels on the care and community sector, and on pay equity.

The bill also adds language to the Fair Work Act to ban sexual harassment, among other changes. There are other reforms that are more complex and more controversial, including changes to multi-employer bargaining relating to the ability of workers in separate workplaces to band together to negotiate pay and conditions.

What is the current situation with multi-employer bargaining? 

It is technically already allowed under the current rules in two distinct ways, University of Adelaide law professor Andrew Stewart told Crikey.

“There are situations in which multiple employers can be part of a single-enterprise agreement, for example, a bunch of Catholic hospitals or Lutheran schools,” he said. “The second is a multi-enterprise agreement, which basically gives no leverage for workers and no way to force employers to bargain together in good faith, so they’re very rare.”

Stewart said the bill proposes two sets of changes to those rules: “one of which is clear, and one of which isn’t”.

The clear-cut changes involve splitting multi-enterprise agreements into two categories — one similar to the existing multi-enterprise model called a “cooperative workplace agreement”, and the other would be called a “supported bargaining agreement”. It would allow a group of employers and employees to get together to negotiate, provided the FWC can be persuaded there’s a good reason to allow it.

“That involves taking into consideration whether these employers have some kind of common interest, what kind of pay and conditions there are in the industry — are they low paid, are they all subject to the same regulatory regime, are they all in the same location,” Stewart said.

“It’s meant to cover industries like childcare and aged care where you have a bunch of employers who compete with one another but whose pay and conditions are heavily dictated by government funding.”

Another example would be cleaning companies, who would get work from a common group of property management companies, Stewart said.

Stewart said the “unusual” component of that part of the bill was that it would enable the FWC to require third parties, like a government or property management company, to be part of the negotiation.

“And industrial action would be able to be taken,” he added.

So what is everyone confused about? 

The changes Stewart believed were less clear-cut have to do with the so-called single-interest bargaining stream.

Under those current rules, which Burke has called “unnecessary red tape”, franchisees and employers with a common interest can be covered by a single-interest enterprise agreement, but they need the personal approval of the minister for employment and workplace relations before being able to apply to bargain together.

Stewart said the bill proposed to allow that kind of bargaining in a wider range of situations, including possibly allowing unions to apply for authorisation.

“But there are problems with the drafting, and at the moment I’m effectively forced to tell anyone who asks that I’m not sure what it’s meant to cover,” he said.

“I’m pretty sure the government has an idea, but if it does, it hasn’t communicated that particularly well so far.”

Why are employer groups opposed?

Businesses have raised fears the bill would give unions the power to strike across employers.

They worry they will be forced to negotiate together simply because they’re located geographically close to one another and share similar work and regulatory regimes.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar told The Australian Financial Review it would expose the nation’s economy to strike action and disrupted supply chains. Mining lobbyists have told The Australian that executives in that sector feel “white-hot anger” about the bill and have warned a multimillion-dollar anti-bill campaign is in the works.

The Coalition is against the bill as well, fearing it will, in opposition treasurer Angus Taylor’s words, “create a toxic industrial relations environment, more strikes, less jobs”.

Why is the government in such a hurry to pass it?

If you ask Labor, the reason for the rush is that families and households who need better pay can’t wait a single day longer. Others believe Labor is fearful employment groups and other lobbies will mount a fierce campaign against the bill. Getting it done quickly would neutralise that threat somewhat.

There are few sitting weeks left before Christmas, which means the Senate won’t get a lot of time to hear from stakeholders and go over the fine print of the bill. A suggestion from independent ACT Senator David Pocock to pass some of the less contentious changes now, and allow more time to consult on the tougher ones, has been rejected by Labor.

A Senate inquiry into the bill began hearing public evidence earlier this morning and is due to report on November 17.

The final sitting day of the year is December 1.

Why do senators feel unsure?

Labor assumes the Greens will support the bill, meaning the parties would have 38 votes in total, or one vote short of a majority. 

On the crossbench, there are three senators who haven’t made up their minds and who will be key to the bill’s passing: Pocock, Tasmanian Senator Jacqui Lambie, and Lambie’s only party mate, Tasmanian Senator Tammy Tyrrell. 

Crikey understands all three senators are broadly supportive of the bill, but share the concerns outlined by Professor Stewart above: there are unclear elements in the part of the bill dealing with multi-employer bargaining. 

Pocock’s office said, as an example, that Burke hadn’t yet shared the details of a set of amendments he told Parliament were still being drafted when the bill was presented to the lower house. 

Burke said during his second reading speech that stakeholders like unions and businesses had pointed out the need to “clarify certain issues”, and listed five areas, including making sure votes for multi-employer agreements are “fair, democratic and workable” and that either party would have to bargain in good faith for a “reasonable period” before resorting to arbitration. 

The Australian reported on Friday morning that Labor was negotiating behind the scenes with business groups and unions over amendments that would set grace periods of six to 12 months when employers couldn’t be made to enter into multi-employer bargaining. 

“It is worth looking at what an appropriate period of time for workers and their employers to recommence good faith single-enterprise bargaining before multi-enterprise becomes an option would be,” Pocock told the newspaper.

“However, I do not believe this alone would address all the ­concerns that have been raised with the legislation, from both ­unions and employer groups. There is a lot of work to be done to ensure we get this huge bundle of legislation right.”

Lambie told Sky News Australia earlier in the week she felt the multi-employer bargaining elements appeared to be “suiting all the unions’ side of it” and that she didn’t think the unions should be “getting it all their goddam way”.

“It will cause more strikes,” she said. 

Both Pocock’s and Lambie’s offices have said the senators felt rushed by the process and wished there was more time to get into the details of the bill. 

Lambie’s office said it was possible, but not likely, she and Tyrrell could vote differently on this bill. They’ve voted the same way on every division so far, but it isn’t a party requirement, Lambie’s office told Crikey.