For everyone The Law & You: A bigger bite of the biscuits

The Albanese government’s Secure Jobs, Better Pay Bill seeks to widen employees’ right to bargain with multiple employers as a key path to higher wages. AEU industrial officer MICHAEL McIVER explains the benefits – and the challenges.

In his Guardian article comparing Gina Rinehart to Margaret Thatcher published in 2014, musician Billy Bragg recounted a parable that always seems apposite when talking about income distribution: [A] rich man, a worker and a poor man are sitting around a table. On the table are 12 biscuits. The rich man takes 11 of the biscuits and says to the worker: “That poor man wants your biscuit.”

The federal Labor government has introduced legislative reforms to improve enterprise bargaining – the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 – in a bid to give workers a fairer share of income.

There is a declining percentage of employees covered by enterprise agreements – falling to just 22% in 2018 (the latest year for which data is available), as cited in a new Australia Institute report. This is a problem, because employees employed under enterprise agreements are, in general, paid better. Hence, the Secure Jobs, Better Pay Bill seeks to increase the percentage of employees covered by agreements through improved access to multi-employer bargaining, with the idea this will then lead to higher wages.

Multi-employer bargaining

Multi-employer bargaining currently exists under the Fair Work Act 2009 (Cth) where:

  • The Fair Work Commission grants a ‘single-interest employer authorisation’ – this is an authorisation that allows non-related employers and their employees to bargain for an agreement

  • Employers and employees agree to bargain for a ‘multi-enterprise agreement’ (MEA)

  • A ‘low paid authorisation’ exists – this form of authorisation allows employees in industries that have traditionally not had access to enterprise bargaining to have access to enterprise bargaining facilitated by the Commission.

Where a single-interest authorisation exists, employees can bargain with any number of employers and unions, and their members can take industrial action in support of their claims. A good example of this type of enterprise agreement is the Victorian Early Childhood Teachers and Educators Agreement 2020 (VECTEA), which covers AEU members working for 383 different employers in the early childhood sector. The difficulty is that employers need to agree to seek a single-interest authorisation, which few are prepared to do, making these types of agreements rare.

Multi-enterprise agreements allow employees to bargain with multiple employers. The difficulty with this form of agreement is that employees are not able to take protected industrial action in support of their claims. The AEU has bargained for MEAs in the TAFE sector and in the disability sector. This has been due to a lack of willingness on the part of employers (and government) to agree to pursue a single-interest authorisation.

The problem with MEAs subject to a low-paid authorisation is the Commission has interpreted the provisions of the Fair Work Act in such a way that low-paid authorisations have not been sought by employees and unions to any meaningful extent. In fact, they barely exist, with only five applications made in 13 years!

The changes being introduced

Federal Labor’s Secure Jobs, Better Pay Bill seeks to improve multi-employer bargaining by:

  • Amending and renaming ‘low-paid authorisations’, which is now to be called ‘supported bargaining’. This kind of bargaining will produce ‘Supported Bargaining Agreements’ (SBAs)

  • Amending the provisions relating to single-interest employer authorisations

  • Making amendments in relation to MEAs, which will be called ‘cooperative workplace agreements’ (CWAs).

SBAs are intended to be the main avenue for increasing wages through multi-employer bargaining. The Bill contemplates that in granting a supported bargaining authorisation, the Commission will take into account the prevalence of low rates of pay in an industry or sector; the common interests of employers and employees; and the likely number of bargaining representatives.

The amendments in the Bill would improve access to single-interest employer authorisations by allowing employees to apply for the authorisation (i.e. no longer relying on employers to do so). However, unions and their members will need to jump through some significant hoops – the main one being establishing that a majority of employees wish to bargain. Logistically, it will be challenging establishing those wishes in circumstances that exist in the early childhood sector under the prevailing VECTEA, for example, given that hundreds of employers are covered by the current agreement.

At the time of writing, Labor was confident that the Secure Jobs, Better Pay Bill will pass the Senate before the end of the year, following separate deals with the Greens and with independent senator David Pocock (It did on 2 December 2, editor) No doubt, big business will continue lobbying hard to try to keep hold of as many biscuits as possible.

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