Should employers brace for a rise in strikes?

With the cost of living increasing continually after nine interest rate rises – and more on the way – families are starting to feel the pinch, as are employers.

The knock-on effect to employers is that they don’t embark on new projects, halt hiring and look at ways to cut costs. And with employees feeling the pinch of escalating mortgage payments, higher fuel and grocery costs, union-based industries could start to strike.

Already in New South Wales, with a state election looming on March 25, the union movement has started rolling strikes in a bid to oust the Coalition after 14 years of government.

Rail workers, teachers and healthcare workers have undertaken industrial action in NSW in the past year, but could this spread country-wide?

Protest action ‘likely’

“I believe we are likely to see protest action if the cost of living continues to rise and real wages continue to fall,” Dr Sharlene Leroy-Dyer, senior lecturer in employment relations, The University of Queensland Business School, said.

Different economists expect Australia’s lower unemployment rate currently sitting at 3.5% to rise to as high as 4.5% in 2024 if the official cash rate continues to increase. It will mean that employers not only stop spending but start cutting staff if their bottom line profits are taking a hit.

“It is difficult to say which industries are most likely to go on strike, especially since mostly enterprise bargaining is currently done at the workplace level,” Dr Sharlene Leroy-Dyer, said. “In higher education, we have seen a spout of industrial action including strikes in relation to the breakdown in negotiations.”

While the right to strike is an internationally recognised human right, under Australian laws – the Fair Work Act, “strikes can only happen during the period in which a proposed enterprise agreement is being negotiated, and at all other times, they are unlawful and workers and their unions could face legal consequences,” she said.

Back in October, employer groups warned that changes to Australia's workplaces introduced by Parliament risked “taking the country down a path of more strikes, fewer jobs, centralised decision making and less trust within our enterprises.”

One way around strike action is civil unrest or protest action, said Leroy-Dyer.

“Protest action is less regulated, and anyone can take part in it.

The implications of strike action are varied, she said.

“From the workers’ point, there is a loss of pay, as under our Fair Work laws, a striking worker cannot be paid; however, this needs to be weighed against the costs of not striking. Collectively, workers have more bargaining power.

“From a management perspective, there is loss of productivity and a damage to the reputation of the organisation.”

The current climate is hard on everyone, said Leroy-Dyer, “however, business profits are rising, and workers in particular are paying the cost of this.

“Employers need to ensure they are bargaining in good faith with their employees over wages and conditions. Employers also need to listen to and act on the needs of employees, as they are the backbone of any organisation.”

Finding common ground to avoid strikes

Many experts don’t believe strike action will happen over cost of living but more so due to long standing issues with employers over conditions.

“Implications of strike action will depend on what the reasons are for the action and what industries are affected,” Sally Dillon, founder, Revolution Consulting Group, said. “There is likely to be more reasons for strike action during bargaining than just cost of living. I think employees and unions need to be mindful about trying to force unreasonable pay increases on employers due to the cost of living as this could actually cause unsustainable wages and job losses.

More will need to be done by the government in relation to cost of living and inflation increases, she said, “rather than the expectations being on businesses alone to shoulder pay increases.”

Dillon argues that both employers and employees need to pull together in tough times to find common ground, knowing that compromise from both parties will be essential to minimise disruption.

“I think the question here is ‘What can employers and workers do for each other?’ rather than ‘What can employers do for workers?’” she said.

“Employers don't have bottomless resources and budgets, especially since the impact of COVID is still being felt by many employers who had significant increases to PPE costs, sick leave and many added additional mental health support services for workers.”

Employers should be regularly reminding staff of any benefits they have available, said Dillon, including employee assistance programs, health programs, such as skin checks and flu shots, and any other benefits and discounts they have available for employees.

In September, Australia’s federal government agreed to a Digital and Tech Skills compact with unions and technology employers.