Enterprise bargaining decline confirms reform needed

Without an overhaul of our enterprise bargaining system, Australia risks a slow and painful recovery from the COVID-19 crisis.

“Enterprise agreements should be fundamental to our industrial relations system, driving pay increases, improving job security and boosting productivity and international competitiveness.  However, enterprise bargaining has crashed over the past decade,” ACCI chief executive Andrew McKellar said.

According to the latest Trends in Federal Enterprise Bargaining report from the Attorney-General’s Department, in June this year less than half the number of private employers were employing under in-term enterprise agreements than in 2010.

The figures show 1.7 million employees are covered by in-term agreements in the private sector, down from 2.6 million in 2010, despite overall employment growing by two million in that period.

“Current enterprise bargaining laws are stymying productivity growth and forcing down the international competitiveness of Australian businesses.  Workers are also suffering from stagnant wages and jobs that could be far more secure,” Mr McKellar added.

“Pointless procedures, unduly rules and bureaucratic red tape mean that enterprise bargaining is excessively complex and unreliable for employers and employees alike.  With agreements delayed or unexpectedly rejected on technical grounds, more and more workplaces are abandoning enterprise bargaining altogether.

“Employers and employees need greater confidence to use enterprise agreements that suit their needs.  The failure to pass moderate bargaining changes in the industrial relations Omnibus Bill was telling – we need to do better.

“We must get back to an effective collective bargaining system that delivers jobs, grows wages, enhances productivity and fosters business dynamism.