When the news filtered through on Sunday that the Government had worked out a deal with crossbench Senator David Pocock to ensure the passage of its controversial Secure Jobs, Better Pay Bill, the business community held its breath. Not its collective breath as one might want to say, because beyond the franchise world, no two businesses are the same. They’re not easily grouped under a single banner. They have different ownership, people, structures, and personalities. What they do have in common comes at them from external forces — rising costs, staff shortages, interest rate hikes, falling consumer demand – and in the weeks, months, and years ahead, increasing industrial relations challenges.
The sheer size and complexity of the Bill meant that it took a while to gain public and media attention. It was easily dismissed as another business vs union stoush when it deserved deeper consideration. In fact, that has been the issue from the outset. The most significant piece of industrial relations reform in decades was presented to parliament with just a couple of weeks to review, consult, debate and discuss. The urgency with which it was to be rushed through before the end of December, suggested it had been promised to someone as an early Christmas present.
However, like playful puppies and cute kittens, legislation is not just for Christmas and the concerns of businesses as to the potential negative impact this Bill will have is very real.
The public message from the government has been that this is all about getting wages moving, when the reality is, it is much more than that and may indeed have the opposite effect. I’m yet to meet a business owner who is uncomfortable about sensible wage growth linked to productivity increases, but this Bill will take that opportunity away as businesses lose control over their destiny.
What our members tell us is that this Bill will lead to increased costs for business, loss of jobs, less innovation, a decline in global competitiveness and a disincentive for investors to get on board and back our risk-takers. That’s hardly a ringing endorsement and suggests the government has made the wrong call in not removing the contentious parts of the Bill for proper consultation before proceeding. I say contentious, because in an omnibus Bill of this size, there are parts that make good sense, for example addressing wages for those lower-paid workers in sectors such as aged care.
While business has a right to be concerned about the legislation of changes regarding wage secrecy — spoiler alert: it will be gone — and being compelled to meet employee demands around job flexibility, it is the collective bargaining piece that has most employers confused and alarmed.
This legislation would see businesses grouped together and unable to develop their own individual enterprise bargaining agreements, effectively placing the control in the hands of the unions. The definition of what would constitute a “collective” is extremely broad and poses far more questions than it answers. Should a microbrewery in McLaren Vale be forced to bargain with a global brewer in the Melbourne CBD? Do businesses really want to be bargaining together with their opposition, effectively losing the opportunity to be dynamic, and flexible and gain a competitive advantage?
The only certainty is that these changes will lead to more arbitration and industrial disputes, regardless of whether businesses and their staff have the appetite for it.
Senator Pocock has negotiated to remove businesses with fewer than 20 staff from this confusion, while businesses of under 50 staff will be able to test to see whether they are comparable with other businesses and be compelled to group together or not.
What doesn’t change is that the costs to businesses in navigating these changes will be significant. Small businesses with more than 20 employees can still be forced to adopt a workplace agreement and pay rates they had no role in negotiating, and competitors can still be forced to bargain together. It’s hard to see any winners outside of the arbitration practitioners and legal fraternity.
As it stands, this Bill will not shift wages, but it will put businesses and jobs at risk. That is unless you want to work at the Fair Work Commission, they look like having their hands full for a long time to come.
