As Australia's economy struggles with high inflation and recession fears, discussions of wage increases, negotiations and framework enterprise agreement in the country have returned to the headlines
Collective bargaining is a key element of Australia's industrial relations system, but there is broad consensus among stakeholders that the system is not working as it should, although opinions on why and to what extent differ widely.
Nevertheless, data from the federal governmentg on company contracts provide a clear picture of the steady and progressive decline in the number of new company contracts approved, as well as the number of existing company contracts - specifically those contracts that were in force during the nominal period and not terminated in the mentioned period of time.
Intensive discussions on bargaining within enterprises have resumed in the run-up to and during the Jobs and Skills Summit hosted by the federal government in September 2022. Stakeholder talks were further fueled by the issuance of an agreement aimed at committing to the status quo. The second purpose of this document was to simplify the general text of BOOTs. This agreement was issued by the Australian Council of Trade Unions (ACTU) and the Business Council of Australia (BCA). The cited regulation is a set of legal provisions that the Fair Work Commission (FWC) must apply when deciding on the approval of a business agreement that is negotiated between the parties.
Under the Fair Work Act, which came into force in 2009, in order for a contract to be approved, a framework contract must ensure that the employees to whom it applies would be generally better off than if there had been no such contract at all. Over time, this has proven to be an extremely laborious technical process, often involving detailed analysis of contractual clauses as well as financial analysis of real and hypothetical work scenarios.
At the Jobs and Skills Summit, Employment and Workplace Relations Minister Tony Burke said the federal government was fully prepared to take immediate and concrete action to remove unnecessary complexity for both workers and employers. However, the government has also indicated that it prefers consensus-based reforms and consultations are therefore expected to continue in the near future. Therefore, as of today, it is not known exactly how the final resolution of this issue will take place.
It remains to be seen how any proposed reforms will differ from those proposed by the previous coalition government in the IR Omnibus Act. Specifically, the 2020 Amendment to the Fair Work Act to support Australia's jobs and economic recovery. This regulation entered into force at the end of December 2020, but in practice it was completely abandoned. The only exception in this regard are the reforms related to casual employment.
If you have any questions about the labor market in Australia, the lawyers from the Eberhard Advisory law firm will be happy to answer them.
