Multi-employer bargaining the final blow to Australia's lagging productivity

Multi-employer bargaining will threaten the very existence of some businesses and set Australia back decades—it must be comprehensively reversed before it worsens the nation's productivity crisis and wipes out jobs.

H.R. Nicholls Society President Frank Parry KC said the short-sighted changes would allow unions to dictate terms of agreements, to the detriment of smaller or less-resourced businesses. 

"This is a real movement away from the focus of bargaining being on the enterprise, to employers being lumped together to bargain for one agreement," Mr Parry said.

"Employers, often competitors, are being put into one room to 'bargain' for an agreement. Some have higher margins, and therefore higher employee conditions, than others. Some have higher costs. Some may be balancing the books by the skin of their teeth. How can the needs of each employer be addressed by such a process? 

"How can anything productive be agreed for one employer concerning rosters, hours, bonuses or working patterns? The answer is, it can't. The most expensive and least productive practices will prevail.

"Respectfully, I have to disagree with the optimistic view of the Business Council of Australia—we're not just taking 'incremental' steps backwards. 

"This is a major step back from what is said to be one of the main Objects of the Fair Work Act, being the promotion of productivity through an emphasis on enterprise-level collective bargaining."

The Objects, as outlined in Section 171 of the Fair Work Act, are "to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits". 

"There is nothing simple, flexible or fair about forcing employers who compete with each other to the same bargaining table, particularly for the less-resourced businesses," Mr Parry said.  

"This is a movement back to the days of Paid Rates Awards, where standard conditions were ordered by the Conciliation and Arbitration Commission across employers and industries. For those with short memories, that was before the introduction of enterprise bargaining over 30 years ago.

"Today, with the Fair Work Commission able to arbitrate when bargaining parties cannot reach agreement, a decline in genuine enterprise agreements is inevitable. The result will be a further deterioration of Australia’s already stagnant productivity, threatening both business viability and job security."