Employers warn anew against multi-employer bargaining

Employers across Australia are once again sounding the alarm against multi-employer bargaining following the findings of an interim report from the Productivity Commission (PC).

The commission's interim report, 5-year Productivity Inquiry: From learning to growth, noted that depending on the design, multi-employer bargaining could "improve overall bargaining position of employees" and reduce transaction costs for some small employers.

However, it said that could also diminish the productivity benefits associated with firm-level bargaining, pointing out that it could prevent firms from attracting "higher productive workers" and discourage firm-level productivity improvements.

It may also require firms to "compromise" some requirements and flexibilities, the report said, adding that it could encourage "cost-collusion" and could lead to increased prices or reduced quality for consumers.

Read more: Minerals Council of Australia rejects multi-employer bargaining

National employer organisation Ai Group said the report fires a "very clear warning shot" that multi-employer bargaining could hurt the economy and workplaces.

"The report reinforces alarm that recent union calls for multi-employer employer bargaining to be extended to sectors, such as road transport, will translate to increased industrial action and costs being heaped on already stressed supply chains," Ai Group chief executive Innes Willox said in a statement. "The commission's plea that changes need to be undertaken with caution and be subject to detailed, rigorous, and transparent analysis mustn't be ignored. The PC report is a brutal reality check for unions proposing radical reform in this area. Any proposal that would undermine enterprise bargaining, increase industrial action and disruption in already fragile supply chains would be fiercely opposed by business."

The Australia Chamber of Commerce and Industry (ACCI) also said the report "confirms" that a move away from enterprise negotiations would pose risks to jobs, productivity, and businesses.

Read more: ACTU raises 'multi-employer bargaining' ahead of Jobs and Skills Summit

"We must heed these concerns. Excessively broadening the scope of multi-employer agreements will lead to industry-wide strike action which we simply cannot afford," ACCI chief executive Andrew McKellar said in a statement. "If the government is committed to multi-employer bargaining playing a greater role for some industries, this should remain the exception, rather than the rule.  At most, there may be scope to adjust some of the detail and procedures for existing multi-employer mechanisms under the Fair Work Act."

According to McKellar, enterprise bargaining should remain the "cornerstone" of Australia's workplace relations system to boost job security, competitiveness, and pay.

"The commission's proposals to reduce the complexity of the better off overall test must be considered,” McKellar said. “Practical and reasonable reforms, including simplification of the existing awards system, are an urgent priority, particularly small businesses."

Read more: Enterprise bargaining: To make it work, all it needs is a tweak

However, the Australian Council of Trade Unions, an advocate of multi-employer bargaining to lift wages, dubbed PC's report a "politicised relic" of the previous government.

"One of the last acts of Josh Frydenberg was to charge them with attacking workers' rights. They have no idea how wages bargaining works, do not consult & ignore international research. No credibility," ACTU Secretary Sally McManus said in a tweet.