Briefing paper

How non-union agreements suppress wage growth – and why the Omnibus Bill will lead to more of them

Publisher
Wages growth Enterprise bargaining Wages Industrial relations Legislation Australia
Description

The federal government’s omnibus Industrial Relations bill proposes sweeping changes to labour laws which will generally enhance the power of employers to hire workers on a just-in-time basis, and will put further downward pressure on Australian wages (already growing at a record-low rate).

One outcome of the bill will be an acceleration of enterprise agreements (EAs) written unilaterally by employers, without negotiation with any union. These non-union EAs will be favoured for several reasons if the omnibus bill is passed: EAs will be exempted from the current Better Off Overall Test, employer-designed EAs will be subject to less scrutiny at the Fair Work Commission, and employers will have less stringent tests to ensure their proposed EAs are genuinely approved by affected workers. All of these changes will lead to a significant increase in employer-designed EAs that reduce compensation and conditions, rather than improving them – signalling a return to the WorkChoices pattern of EA-making.

This report assesses the major ways in which the IR bill will accelerate non-union EA-making, and considers three specific ways this in turn will undermine wage growth in Australia compared with existing collective bargaining laws.

Publication Details
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All Rights Reserved
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open