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BEERG Newsletter - Australia: Developments worth watching

EU Member State governments must transpose the Minimum Wage Directive into national law by the end of 2024. One of the provisions of the Directive is that governments should take measures to ensure that collective bargaining coverage hits 80% of the workforce. Unions and some commentators argue that the only way this can be done is through a return to sectoral collective bargaining. But, as a recent UNI Europa paper admitted, employers do not want to go there.

So, it might be worth keeping an eye on developments in Australia which has just introduced new legislation, the Secure Jobs Better Pay Act, here. The law was adopted by the Labor government earlier this year and is now being rolled-out on a phased basis. June 6 last saw provision on multi-employer bargaining come into force. Australian unions are hoping that the new legislation will give a boost to their membership numbers. They badly need such a boost.

According to data compiled for the The Australian Financial Review by the Australian Bureau of Statistics union membership in the private sector has shrunk to a record low of 8% after a loss of more than 176,000 members over the past six years. The data shows 779,700 private sector employees were members of a union in their main job in 2022 compared to 956,200 in 2016 – a decline of 176,500 or 20%. The proportion of public sector employees who are union members has dropped from 38.8% in 2016 to 33.7% last year. The nurses’ union has the highest union membership with 322,065 members.

Australian Council of Trade Unions (ACTU) president Michele O’Neil told the Financial Review the drop in membership was the consequence of anti-union laws and suggested the government’s recent changes would help grow membership.

  • “After a relentless decade-long campaign of constant attacks on working people, anti-union legislation, discouragement of collective action and suppression of worker’s rights by successive conservative governments, it’s not surprising that union density has continued to decline,” she said. With the much-needed change in Australia’s workplace laws the ACTU is focused on lifting wages and improving working conditions for working people.

The possibility to create multi-employer/sectoral bargaining structures is a major feature of the new law.

Applications to set up multi-employer bargaining structures must be approved by the Fair Work Commission (FWC), a government body which regulates labour relations in Australia, if it is satisfied that:

  • at least some of the employees that will be covered by the proposed agreement are represented by a union. (BEERG note: the law does not define any numerical thresholds)
  • the employers are certain franchisees or common interest employers, as they:
    • carry on similar business activities under the same franchise and are either franchisees or related bodies corporate of the same franchisor (or a combination of these), or
    • have clearly identifiable common interests with the other employers, it is not contrary to the public interest to make the authorisation, and the employers’ operations and business activities are reasonably comparable.
  • the employers and the employee bargaining representatives have had the opportunity to express their views (if any) on the authorisation to the Commission, and
  • certain additional requirements are met (as applicable). For more details see here.

As these provisions of the legislation are only in force for over a month there is little to report yet. However, the United Workers Union launched the first request for multi-employer bargaining on the day the law came into force to cover Early Childcare Workers (i.e., daycare centres). See here.  

Under the new legislation, if the parties, either in a single enterprise or in a multi-employer bargaining unit, cannot reach agreement then they can apply to the FWC for an “intractable bargaining declaration” which opens the door to the FWC ultimately being able to issue an “intractable bargaining determination” which sets the terms and conditions for the bargaining unit. Essentially, binding arbitration by another name. 

There is nothing in the law that we can see that would oblige any employer to join a multi-employer bargaining structure. Any agreement, or “bargaining determination”, resulting from such sectoral bargaining would only apply to the employers included in the group represented at the bargaining table. What incentive there is for employers to join multi-employer bargaining structures is unclear. 

Is what is being done in Australia really “free collective bargaining” where the outcome of negotiations is decided by the economic strength of the parties or is it government determination of terms and conditions through the FWC? We might call it “political bargaining” instead of “collective bargaining”, with the law rather than strikes giving the unions leverage.

Will this new system lead to a growth in union membership? Maybe, but then why would anyone join a union and pay their subscription if they are going to benefit anyway? Is this not what happens in France where only 8% of the workforce are unions members but 98% of the workforce have their terms and conditions set by union-management agreements, made legally binding by government erga omnes provisions? 

Could the Australian legislation provide a template for other countries where the future of collective bargaining is under discussion? The introduction of such legislation requires the wholehearted backing of the government, and the coalition nature of European politics is unlikely to deliver such backing. There is a unique relationship between the unions and the government in Australia that is not found in European countries, even in the UK. 

But what is happening in Australia is worth watching.  

Many thanks to my Asia-Pacific colleague, Michelle Swinden [email protected] for her help in putting this piece together and pointing me in the right direction. If your company is interested in what is happening in the Asia-Pacific region, drop Michelle an email and she will provide details on our HR Policy Global Network there. 

Tom Hayes

Director of European Union and Global Labor Affairs, HR Policy Association

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Michelle Swinden

Executive Director, Asia-Pacific, HR Policy Global

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