Event: Joint press conference with the Australian Industry Group, the Business Council of Australia and the Minerals Council of Australia.
Speakers: Jennifer Westacott, chief executive of the Business Council of Australia; Innes Willox, chief executive of the Australian Industry Group; Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry; Tania Constable, chief executive of the Minerals Council of Australia.
Date: 20 October 2022.
Topics: Proposed changes to Australia’s workplace relations system.

E&OE

Jennifer Westacott chief executive, Business Council of Australia: Good afternoon, I’m Jennifer Westacott from the Business Council of Australia. I’m joined today by Innes Willox from the Australian Industry Group, Andrew McKellar from the Australian Chamber of Commerce and Industry, and Tania Constable from the Minerals Council of Australia. We represent all sectors of the economy. We stand for Australians having higher wages and better living standards. We stand for an Australia where people can realise their full potential. The industrial relations bill that has been introduced by the government this week in its current form, will not deliver higher wages or better living standards to Australians. The bill in its current form has many problems. We’re worried about Australian workers. We’re worried that they won’t get their wage increases on time, because the system is too complex and it will be bogged down in legal arguments for months and months about who is at the bargaining table. We’re worried about small business. We’re worried that small business is going to get dragged into conditions that it did not agree to. Strikes it did not agree to because the way the legislation is currently worded means that highly unionised. Large employers in a particular sector will be dictating the terms and conditions to small employers with 50 or 60 employees who are happy in their workplace or are working well with their employers. And we call on the government to stay true to its commitment this week that it will work to fix some of these problems. In the first instance, fixing the first problem that people who are bargaining will be allowed to bargain. And this particular small business case, going back to the democratic principles that for people to be part of a multi- employer agreement, or to be part of protected industrial action, strike action, that there must be more than 50 per cent of people at each side. We’re worried about Australian consumers because we believe this legislation opens the door to widespread industrial actions. Consumers waiting for their trains, people not being able to get their services and goods on a timely manner, because supply chains are disrupted. We’re very worried about the idea that large competitors will be forced to bargain together, which will potentially push wages down. Which goes against every single thing about competition in Australia, and which potentially will have a very adverse impact on many small businesses. In its total, this legislation will not deliver those wage increases, it will not make Australia more competitive, it will not create the conditions for things to be made in Australia. We welcome the fact that the government says it’s willing to sit down and fix these aspects of the bill. We think that has to be done in good faith, in its current form it will not deliver the kind of Australia that we all stand here wanting to achieve. I’ll hand over now to Innes Willox.

Innes Willox, chief executive, Australian Industry Group: Thank you. I’m Innes Willox, the chief executive for the Australian Industry Group. We wouldn’t be standing here today like this if this bill wasn’t so fatally flawed. We would not have to stand up for the rights of employers and their workforces who are confronting a vastly different industrial relations system going into next year than what we have now. What this legislation does in its current form is emasculate enterprise bargaining, as we’ve known it. Enterprise bargaining has been the cornerstone of our prosperity over 30 years. What this legislation in its current form will do is to take away the ability of many businesses large and small, to negotiate at the enterprise level for what they believe to the best with their workforces for that workplace. The legislation has been rushed, it has been put together very quickly, with far too little consultation. There are over 40 significant changes that have been already identified as a result of this legislation into the way workplaces will operate. Each of those has enormous consequences for the workforce, for employers and for the economy as a whole. We need time with the government and with the parliament to work through these changes to ensure that the worst unintended consequences of this legislation don’t come to pass. There is real concern among employers, alarm even, that what this legislation does is take control of their workplaces with their employees out of their hands and puts it in the hands of others, including unions. We’re now going to have the case where competing companies large or small are going to be forced into almost coalitionary situations when it comes to setting wages and conditions. This is not going to work in the Australian context. We have an awards system which has underpinned our employment now for a very long time. This is going to be put on top of the awards system, it’s going to complicate workplace relations and industrial relations, far more than necessary. The multi-party bargaining stream has been considerably widened and it’s been widened to impact right across the economy. No employer as things stand are potentially immune from it. That is why we are here representing manufacturing, mining, retail, hospitality, transport, construction sectors, because our members across those important parts of the economy are deeply alarmed around what the impact of this legislation could be. The low income stream of multi-award bargaining has already been in place. The problem with this is, that these are government funded sectors: aged care, disability care, childcare. If the government wants to get wages up in those sectors, it really needs to look at how we fund those sectors, because they are the main funder and the main provider for those sectors. You see, the NDIS is already under enormous stress. Aged care providers are reporting enormous financial stress. The capability to squeeze more wage rises out of that sector is incredibly difficult. It’s very important, we can’t over-stress this, it is very important that the government and the parliament take its time to get as much right as possible here. This should not be a rushed process. As things now stand, we are expected to have submissions into a Senate inquiry by the 11th of November with a report by the 17th of November. This is an incredibly compressed timeline. We need time to go back to our members, to consult, to get their feedback and to get the best outcome for employers, employees and the economy. Final point is the budget made clear that we are facing very strong headwinds for our economy. Rising inflation, slowing employment, rising unemployment, declining business investment. We don’t want to exacerbate those trends. By implementing legislation like this, as it currently stands. We’re here in the best interest of the economy. We’re here in the best interest of employers and their workforces. We want to make our industrial relations system work. We don’t want to turn it into a centre for conflict. We don’t want to go backwards, we need to look forwards. Thank you.

Andrew McKellar, chief executive, Australian Chamber of Commerce and Industry: Thanks very much Innes. Indeed, look I just want to reinforce that I think here, the government is rushing this. We think that this is being brought forward too quickly without the chance to undertake a proper review. To ensure that all of those unintended impacts that could arise from this bill are properly considered, looked at, evaluated and give the Senate the opportunity to ensure that the legislation will achieve its intended consequences. And of course, we have to work through that detail. So, to be expected to do that over the next three weeks is a ridiculous timetable to have to work to. We think there should be a full and proper open inquiry in this process, more consultation undertaken, time to work through more detailed amendments and ensure that we can make the best out of the proposal rather than stumble into a series of risks. This bill really is to a large degree, a Trojan horse, the Trojan horse that is delivering a situation where there will be greater risk of industrial action, where businesses and employees will lose control over the right to enter into agreements which they support and which deliver real benefits to them. And equally, if we all take away control from businesses, from business owners and deliver it to the Fair Work Commission and to unions. These are not the sort of outcomes that we want to see coming out of this bill. It is the Trojan horse and we will stop it from coming through the gates.

Tania Constable, chief executive officer, Minerals Council of Australia: Good afternoon. My name is Tania Constable I’m the CEO of the Minerals Council of Australia representing what is the most important industry right now to the economy. And that was demonstrated on Tuesday night, where the Treasurer talked about the underpinning of the economy by commodity prices; the iron ore, the coal, the gold, the minerals that our industry represents. Which are going to be there for the long term and are necessary if we’re going to get the economy moving to a net zero economy by 2050. This bill in its current form is very fraught. We need time to consider the bill in its entirety and some of the industries across Australia saw this bill for the first time, only in the last 24 hours. It is expansionary. It provides a lot of power to the union movement. And for the mining industry, we’ve been working very well with unions and other interested stakeholders in enterprise bargaining arrangements over a long period of time. The mining industry has 99 per cent of its workers working at above award wages. 51 per cent are on individual awards. 40 per cent are on enterprise agreements, and only 1 per cent are on awards. That’s saying that our current system is working. We’re working very well with all interested parties. So to move to a multi-employer approach undermines the great work that has already been done between employers and employees. This industry, as well as other industries represented today, need time to consider the impacts. Need time to consider what really needs to be done to get wages growth moving in Australia. The mining industry already has a great wages outcome. In the last 20 years, we have doubled our wages in the mining industry, we’ve more than tripled jobs within the mining industry. That should be saying to the government and to the economy that indeed, things are working for big business. We can’t afford to decouple productivity from wage growth. Productivity adds to wage growth at the end of the day. Just moving the whole economy and all employees to higher wages, doesn’t give you a good outcome on productivity. So, we’re asking government to slow down, to consider what is being said here today. To consult properly, with all parties, with industry groups, with employers, with unions and other interested parties to make sure that we get this deal right and we get a good outcome economically for Australia. For the people that work in our industries, for the people that really need to have high wage outcomes. We need to slow this bill right down and make sure that there is a proper parliamentary process, that the upper house and the lower house are able to consider this bill so that we get a good outcome for the economy. Thank you.

Journalist: You’ve articulated the concerns, but what are the specific changes?

Jennifer: If we go though the areas that I’ve outlined and I’ll get my colleagues to jump in. So the first one is that at the Jobs and Skill Summit, the government made a commitment that employers and employees that were already in the bargaining process would be allowed to bargain. So, the good thing in the legislation is the changes to the Better Off Overall Test, it’s much more simple, much easier to use. What we want to see is an amendment that allows employers who are currently bargaining, bargaining successfully to be allowed to bargain. Not to be dragged into six months of discussion about who is at the bargaining table, that will hold back wage increases for workers in Australia. The second area that I raise is our concern that a small business will be roped into this whether they like it or not, by virtue of the way it’s drafted at the moment. So, a large employer who has got say 5,000 workers is unionised, can be telling another employer in the same sector, who has got 50, 60, 70 people who are all happy, ‘you’re going work with these conditions, we’re going to take industrial action when we say so,’ and we think that is not democratic. Now the government has indicated to one of the areas it’s willing to look at. So, we want to see an amendment that puts in place, embeds democracy into our industrial relations process with 50 per cent, more than 50 per cent of workers at each site having to vote a) to be in a multi -employer agreement, b) to take protected industrial action in other words to go on strike. The other issue we’re worried about, as I talked about is that this opens the door to widespread industrial action. And the unions have said themselves, we want to see widespread industrial action. I don’t think the Australian community wants to see widespread industrial action. We don’t think Australians want to be waiting for their trains, trying to find things in supermarkets because they’ve been held up at distribution centres. Australians want to know that they can get the stuff they need and get to the places they want to go to. And that’s very much about this whole idea of opening it up for people to dictate the terms, particularly to small business. And the final area that we want amendments on is this idea that large competitors are going to be forced to bargain together. Think about that. Think about all the supermarkets, all the banks, that’s going to have three big risks. The risk that you end up with the lowest common denominator wages. That you end up working completely against competition and innovation, which is what drives up wages. And that small businesses, particularly very badly impacted by that. So they are the amendments that we sought, the government has indicated yesterday in those areas, that it’s willing to make amendments in those areas, we want them to act in good faith.

Innes: Can I just add, we’ve gone through this legislation, and so far we have identified 40 areas of concern. A lot of them are technical, within the operation of the legislation and of the current Act and how the current Act relates to the new legislation. So they’re not easy to explain simply. The other point is that we have a set of member briefings on this legislation next week. I cannot overstate the amount of interest from members of ours, businesses are clamoring to put forward their views, to find out more. And that’s part of this; business needs to find out more around what is being proposed here and work it through. Just a couple of quick points. We need some clarification around what role unions will have in allowing enterprise agreements to go to votes, even if they’re a very small unionised component of the workforce. As things stand, it may be maybe that unions have a veto over that enterprise agreement going to a vote, we need that clarified. We need to radically reduce the ability of unions to take industrial action in support of multi- party claims to rope in others through supply chains, across industries, to stop big parts of our economy functioning. That’s what we need to make sure. There’s a whole range of measures here. Your question is a good one. And the more businesses look at the legislation, the more questions they have.

Tania: Let me give you a practical example of one area that we don’t like as part of the part of the bill, and that’s a common interest test being expanded. So, a common interest test could be expanded to a geographical area, or to a particular transport example that takes in strikes at the moment that relate to rail being expanded out to buses and ferries. For the mining industry, looking at a geographical area and somewhere like Port Hedland. Because we’re very concerned about widespread industrial strikes, if there was a six-week strike in Port Hedland, applying to that port, then, and we’ve got about 1.4 million tonnes of iron ore going out of that area, the loss to Australia is about $9 billion in revenue, and $500 million in royalties for Western Australia alone. That’s a lot of hospitals. It’s a lot of police stations. It’s a lot of a lot of the teachers and schools that that we have to have in Australia in every state. So that’s a practical example of the economic loss that we will face through this bill.

Journalist: You use the very punchy metaphor of a Trojan horse. Has the government been negotiating in good faith at least?

Andrew: I think we’ve had some very initial consultations with the government. I think it’s been brought to legislation before it’s ready. I think it is premature. But we see real risks in the legislation as has been outlined here. And the impacts across business, particularly for small business, they need to be explored. We need to work through those. We’ve already identified multiple areas where amendments need to be made. I think there are some areas in this bill, which will be less contentious and which can be progressed, but there are parts of this bill, which absolutely, we need to go into much more detail, they need to take the time to do that. And I don’t think that their consultation process is anywhere near finished at this point. There needs to be the opportunity for amendment, government amendments, and we need to look at amendments in the House of Representatives, and obviously in the Senate, in terms of what will be brought forward there.

Journalist: Is the minister being accurate when he says that consultations have been constructive?

Andrew: I think we’re all discussing this in a mature and responsible way. But we need to work through that detail and that process needs to occur. Now, I think the government has prided itself on the fact that it is trying to open up a stronger dialogue with all of the parties that are involved in an important policy decision that it has to grapple with. And we saw that very constructively with the Jobs and Skills Summit. But if you’re going to continue through on that commitment, then there is no requirement to be in a mad dash to get this legislation through. They’ve got to take the time to try and get it as right as possible. And if they can do that then ultimately, I think they will get a reasonable outcome.

Innes: Can I just add, just one quick point. In these negotiations or consultations with the government for many employer groups it has been like wrestling with smoke. There have been no formal proposals put up until the very end. A lot of hypotheticals but nothing firm that we could work with and from. Some of us saw the legislation for the first-time last Friday, some of us only saw the legislation after it was introduced. That doesn’t equate to great consultation. But the fact is the consultation really in earnest needs to begin now.

Journalist: The bill contains new [inaudible] on industrial action, there’s compulsory conciliation before going on strike. There’s greater arbitration of intractable disputes, which could actually mean that, you know, rail and port disputes in very militant sectors come to a conclusion much sooner. So, my question for all of you is are employers really concerned about more strikes or are you concerned about the prospect of having to pay higher wages?

Innes: Employers are never concerned about having to pay higher wages when there is a productivity return for that, because that is the sustainable way to increase the business with sustain, and the economy can sustain. So this is not an argument about trying to prevent wage increases, far from it. But part of the concern we have is that the way it has been established is that unions can make ridiculous ambit claims on employers, to force them to arbitration across the board, so they don’t even let employers have the opportunity of having proper negotiations with their workforce rather than unions will make a claim that is completely unsustainable, and then take it to the Commission for arbitration, which rules out the role of the employer really. That’s where part of our big concern here is. So this is not about an argument about employers not wanting to pay more wages, we want a prosperous, successful economy, but we also want a sustainable economy.

Jennifer: We’ve been clear all the way through. And we were all clear at the Jobs and Skills Summit, we want Australian’s to be paid more, but we want that payment to last, and we want that not to come at the expense of higher unemployment. We want that not to come at the expense of widespread industrial action. What we want to see is the enterprise agreement system, a system invented by Labor, which basically brought people together at the enterprise level, sitting down together, employees, employers working out how to make that enterprise more successful. And how to share in the gains through better wages and better conditions. But driven through higher productivity and more successful enterprises. That’s the system that has not been working and that is the system that needs to be restored. We do not believe the legislation in its current draft will drive people back to that bargaining table in good faith. And that’s what we’re concerned about and that is the way to get higher wages. People on enterprise agreements now earn on average $100 a day more than people on awards, we want that system reinvigorated. We don’t want to bogged down in legal complexities. We want people to be paid more. But we’ve got to make sure that enterprises are successful, that things are more productive, and that we can make those wage rises stick.

Journalist: You’ve all indicated that the process is rushed, what do you think would be a realistic timeframe on this legislation?

Andrew: Well, look, I think, I mean, we’ve had, we’ve had discussion with a number of the different representatives in the Senate. And we saw some discussion on that yesterday. Honestly, if you look back at what’s happened in the past with significant industrial relations changes, then I think, an average sort of period has been a three-month period for an inquiry or consultation. Now, I think that’s much more reasonable. Here, we’re looking at three weeks. Honestly, I think that’s ridiculously short, it doesn’t give everyone the opportunity to really work through to consult, as Innes said, we’ve got to go out, we’ve got to talk to our members, they haven’t seen the bill up until now. I think they’ve got to be properly briefed. They’ve got to be able to work through and understand how this is going to apply in their businesses. That’s one thing at the very big end of town. But as you’re talking and seeking to inform and engage with smaller and medium sized businesses, that’s a process that’s got to be conducted properly, as well. And I think really, you know, if the government was serious about having a mature and transparent review of this bill, that’s the sort of process that they’d be outlining now.

Journalist: You’ve all spoken about how deals at the enterprise level are more appropriate and more productive, are you going to be advising your members now to include enterprise agreements and pay above award rather than be sucked into the multi-employer streams that you all dislike so much?

Tania: To talk about the mining industry, we are already the highest paying industry in Australia, we’re not worried about paying higher wages, that’s going to come with discussions around higher productivity. So, in terms of being above awards, as I, as I mentioned, only 1 per cent of the mining industry in Australia is at award, the rest are above award. So, there’s 40 per cent are within enterprise bargaining arrangements, and over 50 per cent are under individual awards. So, there’s no concern about paying above award wages, we just need to make sure that we’re not decoupling productivity and wage growth. That’s really important to every business, whether it’s small business, or big business in Australia. So, the more that we can to do bring those two issues together, and make sure that employers and employees have the ability to bargain, that we’re not thrown together and have compulsory arrangements put into place that, that doesn’t allow that relationship to continue. That’s better for overall wages in Australia.

Innes: Can I just add one point. All the data from the OECD, for those countries that have multi-award bargaining, and those data shows that the multi-award bargaining outcomes are worse for employees in terms of outcome. So the most success comes from, in the OECD more broadly, but in Australia, obviously, from where agreements and arrangements are reached at the enterprise level. That’s because the employers and the employees know their business better than anyone else. Better than a union, better than the Fair Work Commission who would be dragged into this. What that’s telling you is that unions shouldn’t expect that they’re going to get wonderful wages outcomes out of multi-employer bargaining. In fact, just the opposite perhaps. We want enterprise bargaining to work. It is the cornerstone of our prosperity. And we need it to work. The multi-party bargaining will just bring, as it’s now structured, industrial chaos to Australia, for potentially not much gain.

Journalist: [inaudible]

Jennifer: Well, I think that’s not our understanding of how the legislation is drafted because of the way that the majority support determinations have been worked through. But just to kind of reinforce your point, we have always been encouraging employees to bargain. We have been out there for years saying we want people to bargain because it gets better outcomes for people. It reflects the enterprises that they work in. What’s important to note is what the budget this week factors in the wage increases that are part of the industrial relations, and they are extremely modest. So, we may pay a very high price for very modest wages, whereas we know that the wage benefits that come from increasing productivity are very substantial, and very sustained. So, we want people at the bargaining table. The other point that we haven’t talked about this morning is the award system. There’s no effort here in this bill to fix the award system. Now, admittedly, the government made a commitment that they would look at awards, and awards simplification, but we still have a system that is in a quagmire of awards; 122 awards, clauses that are decades out of date, employers, particularly small business trying to get their head around a massively complex system. We still want the government to commit itself to fixing that awards process, for many workers will still be on awards, and it’s important that those awards work more smoothly.

Journalist: I’ve just got one question for all of you. It’s about something that Minister Burke pushed out earlier in his second reading of the speech yesterday about one of the amendments. That’s to ensure agreements don’t go to a vote without union involvement. I think that was something [inaudible]. I’d just love to know how you’d characterise that basically?

Innes: We have to work this through with the government exactly what they intend by that. And this is part of the problem, we need to have further consultation and discussion. But the fact that the minister has raised this has set off alarm bells across industry. What it means is that it gives unions the veto right to stop a vote even though the union may have a very minor role within in a workplace. It puts all the power in the hands of a union, even though it may a virtually non-unionised workplace. It gives the unions sort of unfettered control, essentially, over what is put to the workforce and basically takes away the right of management and the employees more generally to work together for the best outcomes for the business. We need to work this through with the government. It’s not exactly clear to us how they envision that will operate. That’s one of many things, one of the 40 things, I mention that we really need to sit down and work through. You’re not going to be able to do this properly in three weeks.

Journalist: One more. Is there anything about the bill you’ll accept?

Jennifer: Well, as I said, the Better Off Overall Test is a vast improvement on the test. And that has been the thing that has held back enterprise bargaining, the application of that test. So it was an important commitment at the summit. But it will mean nothing, if people are caught up for 6 months in deciding who is at the table bargaining, which is why we’re calling that one of the crucial amendments is that people who are bargaining be allowed to keep bargaining. And that we don’t bog that down in months and months of legal argument, because the only people whose wages are going to go up in that scenario is a whole lot of lawyers.

Andrew: Yeah, I’d agree with that. I would say there are parts of the bill were I think we can have a very sensible and constructive discussion. So, whether that’s around the objectives and trying to support gender pay equity. Obviously, that’s something that business supports, we’ve got to look at how we achieve that. And there are other measures as well, I mean the supported bargaining stream. If we can make what is currently the low paid stream of work more effectively for those sectors where people are not getting the sort of incomes that they probably deserve, then that’s something that can be looked at. But we have concerns that lumping in some of these concepts with other aspects, including expanding the right to strike, including taking away control and democracy from businesses and employees, opening them up to the risk of industrial action, dragging them into agreements that they fundamentally don’t have control over. These things are not desirable. And that’s where we rule a red line.

Tania: I think there are elements of the bill that certainly could proceed. We’ve already talked about gender pay equity. Sexual harassment is another aspect of the bill, that we’re in complete agreement with. The supported stream as already has been indicated. I think the biggest issue we have with the bill is the multi-employer bargaining arrangements that are there. That has to be completely slowed down. And I would like the government to consider that when they’re looking at the options they might take forward in regards to this bill. The good aspects of it, I think we’re all in agreement that that we would like to see some of those things proceed. But it’s the multi-employer bargaining that creates the biggest loss economically for Australia. That’s the area that we are very concerned about and should be slowed down.

Innes: One last thing. There’s a lot here that business can work with. It’s all been mentioned, gender equality, sexual harassment, the Better Off Overall Test, that still needs a bit of technical work, but directionally, it’s heading in the right direction. So, there are bits of this legislation that employers can work with and are very happy to work with. The problem is that the bad bits of the legislation are really bad.

Jennifer: So just to close, I think we stand together to work constructively with the government to work constructively with the union movement. We all want Australians to get ahead, we want them to have better wages, better conditions. We want our economy to prosper. There are good things in the bill and we will work with government to get those done. But we need to fix the things that are not going to work and they’re not going to work for Australian workers and they’re not going to work for Australian consumers and they need to fix them urgently. Thank you.