More immigration, improved skills policy, and simplifying collective bargaining have emerged as three top demands from employers for the new Labor government’s jobs summit.
Experts suggest the forum could also pave the way for reforms, including wage theft legislation, which was dropped from the Coalition’s industrial relations bill, and action on union demands about insecure work.
The employment summit, likely to be held by September, comes at a time of record-low unemployment, as most workers suffer real pay cuts due to soaring inflation.
When he proposed it in 2021, the Labor leader, Anthony Albanese, described the summit as a chance to “identify barriers to full employment, tackle job insecurity and create a new agenda for national productivity”.
After unemployment fell to just 3.9% and headline inflation reached 5.1%, Albanese, now the prime minister, suggested the forum would bring unions and businesses together to discuss “how we can lift wages, lift profits, without putting pressure on inflation, by lifting productivity”.
One of the core problems of Australia’s industrial relations system is the decline of workplace pay deals, which lift wages higher than the award but are difficult to negotiate.
In roundtable negotiations in 2020, unions agreed to lower the bar for the “better off overall test” so that not all employees would have to be better off in all circumstances in return for union-approved pay deals being fast-tracked through the Fair Work Commission (FWC).
The deal, agreed with the Business Council of Australia, was rejected by other employer groups and the Coalition, which pushed instead for pandemic powers and other changes that could result in pay cuts.
The Australian Industry Group chief executive, Innes Willox, said the enterprise bargaining system “has become a minefield for employers” and should be a focus of the summit.
According to Willox, “radical reforms are not needed,” but “sensible changes” would include simplifying:
The better off overall test so hypothetical patterns of work don’t prevent pay deals from being approved;
The requirements for the FWC to be satisfied that a genuine agreement has been reached;
Employers must explain the terms of a proposed pay deal to employees before the vote.
“The employment summit is also an opportunity to recognize the central role that upskilling of the existing workforce can play in lifting work satisfaction, productivity, and real incomes,” he said.
Alexi Boyd, chief executive of the Council of Small Business Organisations Australia, said, “everyone is keen to pick up where we left off [during roundtable negotiations] – a lot of good relationships were forged while discussing the way forward might look like”.
Boyd told Guardian Australia that “wages are one of the small businesses’ biggest inputs.” Still, the inflation problems were pervasive, with petrol, freight, electricity, and inputs like ingredients for hospitality businesses all going up.
“We know that wages are increasing … and it’s harder for small business to compete with big business.
“We were disappointed with the lack of discussion of the worker shortage during the election campaign … We can’t function without employees.”
Boyd said there was “no silver bullet,” but better skills policy and migration were needed to fix “acute” shortages.
The Australian Council of Trade Unions secretary, Sally McManus, said: “the Australian people made it very clear on Saturday that they want wages to go forward, not backward”.
“There are a lot of big issues to discuss at the jobs summit, like skills and immigration, and we are up for that,” she said.
The Greens leader, Adam Bandt, said the government “needs to tackle casualization and insecure work”.
“Hopefully, this is the parliament in which we move beyond headline unemployment and look at the security of employment and underemployment.”
Prof Anthony Forsyth, a labor law expert at RMIT University, told ABC Radio unions would likely push Labor on “tackling the proliferation of insecure work” and legislate its promise for “same job same pay in labor hire”.
Ian Neil, an employment law barrister, said the summit would likely see business “pointing to the risk of a wage-price spiral of the very kind that precipitated recession on the occasion of the last jobs summit” convened by Bob Hawke in 1983.
Neil said the top priority would be “a return to productivity-based enterprise bargaining”, which helped bring inflation and unemployment under control during the Accord but had been “effectively abandoned” when the “no disadvantage test” was replaced with the better-off overall test in 2009.
Neil said striking workplace pay deals were “hopelessly complex”, agreeing with Ai Group that hypothetical work patterns should not block their approval.
“I think there will be action on wage theft. There is a consensus that wage theft is an issue.”