Australian Government Puts Sector Bargaining Back On Agenda

Since the early 1990s, pay has been set in Australia through one of three mechanisms – minimum conditions such as the Modern Awards system, individual employment contracts, or an enterprise agreement.  All three arrangements are struck between the employee/s and one employer.  The negotiation of ‘pattern agreements’ – where workers in a particular sector or across multiple employers can join together to negotiate the same pay and conditions – has been banned.

The Unions have argued that this has impacted wage growth across many sectors, including the aged care sector which is struggling to find sufficiently skilled staff to meet demand.  Aged care is a federally funded service and has been the focus of significant negative media throughout the pandemic.  The industry has traditionally employed workers from marginalised groups (including women and migrant workers) who have lower bargaining power. 

Employers are unsurprisingly concerned about this proposal, which has found favour with the newly elected Labor government.  Stephen Smith (former Director of Workplace Relations at the Australian Industry Group) argues that the resulting sector wide industrial action, reminiscent of the 1970s (and which took place illegally in the 1990s), could lead to significant productivity losses and impact Australia’s position as a trading partner.  He highlights the ‘low paid bargaining stream’ within the existing Fair Work Act, which is available but not used by sectors such as aged care – and could be modified to better meets the needs of such sectors.

Outlook for Employers: In November 2021, as Shadow Treasurer, Jim Chalmers dismissed the notion of multi-employer bargaining.   Less than a year later, as Treasurer, he states that ‘sufficient common ground’ has been reached at the Jobs and Skills Summit to pursue multi-employer bargaining, despite employer fears of industry wide strikes.  As they say ‘watch this space’.