Submission 167 Australian Council of Trade Unions Workplace Relations Framework Public inquiry

Industry and pattern bargaining

The PC has identified an “overarching concern “as the extent to which bargaining arrangements allow employees to genuinely craft arrangements suited to them- a broad issue for stake holders in this inquiry⁴⁸⁶ . The current restrictions on agreement content and the form of bargaining parties wish to engage in, highlight the FW Act’s current obstacles for parties “ crafting agreements suited to them”.

Briggs, Buchanan and Watson identify in their research that pattern bargaining is often initiated by employers.

“Pattern agreements flow down supply-chains. Enterprise agreements amongst assemblers commonly refer to the requirements of ‘Toyota Production System’, ‘Ford Production System’ or ‘Holden Production System’. Within the construction industry, identical agreements are crafted by employer associations and passed down from head-contractors to sub-contractors”⁴⁸⁷.

The PC issues paper also notes some employer groups have identified a role for pattern agreements⁴⁸⁸.

The FW Act also recognises, albeit in a limited way⁴⁸⁹ , that multi- employer bargaining is an effective and efficient form of bargaining, see for example the provisions for multi employer bargaining in “genuine” new enterprises, low paid bargaining and single interest employer authorisations, and low paid workplace determinations. These forms of bargaining conceptualise a role for multi-employer bargaining under the FW Act however the scope is limited.

The presumption seems to be that if workers are given the same tools to apply to the job of multi-employer bargaining – such as protected industrial action, good faith bargaining orders, majority support determinations and access to bargaining dispute resolution – the economy will come to a standstill. The hysteria extends to the point of the Minister – not just the FW Commission - being provided with a veto on what types of business structures amount to a “single enterprise”⁴⁹⁰, which is the criterion for each of these tools either being available or locked away. All of this fails to appreciate the benefits that might be brought by multi employer bargaining, the trace levels of industrial action in the economy and the fact that our international obligations necessitate a different outcome.

It is important to appreciate that in the modern economy, many industries operate on the basis of joint production. Enterprise bargaining at the workplace in such situations is highly inefficient – multi employer agreements would be a preferred option not only ensuring equity to the workforce but in providing less complex project governance arrangements and to protect the interests of less powerful contractors in the supply chain. These issues are examined more fully, by way of case study concerning the construction industry, in Appendix 7. Once the efficiencies of integration are fully understood, it seems incongruous that the construction industry in particular has in recent times been subject to a regulatory environment that frowns on, and in some cases positively prohibits, multi-employer agreements.

Pattern Bargaining is defined at s.412 of the FW Act. The definition reflects a decision of Munro, J⁴⁹¹ that pattern bargaining cannot be constituted merely by a claim for similar matters. A charge of pattern bargaining can only arise in the context of prosecuting such matters. The s.412 provisions add a layer of complexity and potential for frustration in circumstances where all parties have been negotiating a pattern bargain and an employer chooses to withdraw arguing s.412(1) as a bargaining tool. It does however recognise that seeking the same terms and conditions in negotiations with multiple employers, while maintaining a preparedness to negotiate, is legitimate.

Industry Wide Bargaining

The FW Act is contains no facilitation or support for industry parties negotiating arrangements which have industry impact. This is a serious omission and once which attempts to squeeze economy-wide or industry-wide issues into a format digestible to the individual employer and an agreement made under the Act.

An issue such as training, including apprenticeships, is essential for industry-wide or economy-wide productivity. Good training means that workers work smarter, with more skills. But training needs can’t be achieved by an individual employer in the short term. Apprenticeship completion rates are showing small signs of improvement however securing the long term and sustainable supply of the skills Australia requires is an industry-wide problem requires industry-level solutions.

Enterprise-level solutions are exactly that, limited to the enterprise –they value competition within an industry at the expense of the greater good. If training is bargained for with an employer, often “workplace-specific” training is on the agenda, not training for a broad skillset that will be useful to the worker and the wider economy once the job or the project is done.

One employer will train its workers to increase that employer’s profits. The more short term the employment of the worker by that employer, the less interested the employer will be in the formation of skills that will be transferable outside that employer’s business. Project work in the mining sector is a prime example of this, but its not the only example. Labour hire work, casual work and other precarious employment reduces skill-sets, a missed opportunity for productivity growth.

A broad industry approach delivered the restructuring of award classifications and skilled based training in the metal and engineering industries. .⁴⁹². The FW Act’s focus on enterprise bargaining and its void regarding industry structures and processes risks winding back the gains. The implication of agreements with only job-specific training is a depletion of the amount of trained workers in the economy, so that other sectors’ are deprived of potential productivity increases.

15	Collective Bargaining: (2) Barriers to fair, efficient and effective agreement making in the Public Sector