AS part of our ongoing advocacy for a modern, flexible workplace relations system that supports employment and investment in Australia’s national resource industry, AMMA has developed ‘5 workplace relations reforms over 5 years’ that we are campaigning for during the lead-up to the 2016 Federal Election and beyond.

These reform priorities have been identified by AMMA members as key areas for workplace change through the 2016 AMMA Federal Election Survey.

This week, we take an in-depth look into the first of our 5 key reform priorities: Focusing enterprise bargaining, and ensuring legally protected strike action can only be taken over claims pertaining to the employment relationship, not union ‘wish lists’ of claims.

Enterprise bargaining under the Fair Work Act:

Resource employers continue to report that the limited agreement making options available under the Fair Work Act 2009 are not providing a supportive foundation for productivity and competitiveness.

From 1993 to 2009, when the Fair Work Act commenced, enterprise agreements were only able to include terms that related to the employment relationship and unions could only take legally protected industrial action in pursuit of such claims.

Under the Fair Work Act, the range of permitted matters greatly expanded to include matters which are often unrelated to the employment relationship, including restrictions on employer decision making and matters more related to union business than employer or employee interests.

This is why one of the first reforms over 5 years needs to be refocusing Australia’s enterprise bargaining framework on the needs of employers and employees only, and ensuring protected industrial action can be taken over such claims and not wider union ‘wish lists’ or agendas.

Evidence shows a range of problems:

Evidence shows an enterprise bargaining system that is not ‘fit for purpose’ in our modern economy; a system creating barriers to productivity improvements; and a constant threat of strike action hanging over employers for matters not related to the employment relationship, which should remain the fundamental focus of workplace relations.

Not ‘fit for purpose’:

In April 2016, AMMA’s 2016 federal election survey found that enterprise bargaining under the Fair Work Act simply isn’t working.

Just 7% of respondents, or only 1 in 13 employers, believe that enterprise bargaining under the Fair Work Act is meeting the needs of both employers and employees. Further, 73% of respondents said that union opposition to changing existing terms and conditions is a ‘moderate’ or ‘major’ concern.

Productivity and excess:

Most concerning in this challenging environment for resource companies is that 87% of respondents to AMMA’s 2016 survey are concerned that unions continue to seek excessive increases in wages and conditions without any improvements in productivity or efficiency.

These results are consistent with a previous survey of AMMA members by RMIT University in 2011. More than 80% of respondents to that survey were unsuccessful in their attempts to negotiate productivity improvements in agreements.

Constant threat of strikes:

Further supporting evidence comes from a report prepared by KPMG for AMMA’s submission to the Productivity Commission’s inquiry in 2015.

The KPMG report, Workplace Relations and the Competitiveness of the Australian Resources Sector, showed the number of AMMA members who rated their workplace environment as unacceptable due to industrial conflict had increased five-fold since the introduction of the Fair Work Act. It said that ‘this increase is primarily attributed to the increased capacity to take legally protected industrial action over issues that are often perceived to be unrelated to the employer-employee relationship’.

Unfortunately, things have not improved.  This negative trend has continued with 2016 AMMA’s federal election survey finding 72% of respondents had ‘moderate’ to ‘major’ concerns over unions seeking terms in enterprise agreements that do not pertain to the employment relationship.

In terms of specific restrictions sought by unions in bargaining, 7 out of 10 employers reported ‘moderate’ to ‘major’ concerns that unions continue to seek terms which restrict the use of contractors, labour hire or casuals.

Experiences of resource employers

First-hand accounts of resource employers operating under the Fair Work Act further underscore that allowing unions to pursue claims in their own interests, rather than the interests of the employer or employees who will work under an enterprise agreement, can be detrimental to the bargaining process.

In AMMA’s 2016 federal election survey, one mineral processing / smelting respondent commented that:

bargaining is slanted too heavily in favour of employees and unions … [it] makes a nonsense of bargaining being genuine. Bargaining pays little attention to the realities of small business. It remains an effort to extract as much as possible … and unions could not care less’.

It is not surprising that 87% of respondents believed that high income employees should have more freedom to tailor their wages and conditions directly with their employer and 9 in 10 employers believed employees should be able to enter into a collective agreement without the need for a union party.

As KPMG noted in its report:

‘[t]he threat and incidence of protected industrial action has a significant impact on resources industry businesses and the broader economy by imposing costs and creating uncertainty for businesses, customers, employees and other stakeholders. Improving the framework that defines industrial action has the potential to reduce uncertainty and improve the attractiveness of the Australian resources sector for investors. This has implications for the cost of capital and potentially the viability and competiveness of major resources projects’.

Where to from here?

AMMA’s detailed submission to the Productivity Commission’s inquiry into the Australia’s workplace relations system and supporting research from KPMG, secured positive recommendations for change from the PC in the area of bargaining.

In its final report, the PC recommended that matters pertaining to relationship between an employer and a union be removed from the bargaining framework, and that clauses imposing restrictions on contractors, labour hire and casuals should not be able to be included in an enterprise agreement (and by implication cannot be used to justify legally protected strike action).

In the 2016 Federal Election campaign AMMA is advocating that the next Australian Government not only adopt and implement this recommendation but further commit to reforming the Fair Work Act to ensure the enterprise bargaining framework better meets the needs of employers and employees, and of the general community through increased productivity, economic activity and job creation.

A critical outcome of this should be that industrial action can only be taken over matters pertaining to the employment relationship, and not any wider ‘wish list’ of union claims that have more to do with how the union wants to conduct its business, than the interests of employers and employees working in businesses

AMMA’s road map for reform [see page 4 here] summarises key changes AMMA proposes to address the current failings and shortcomings associated within the agreement making and bargaining framework under the Fair Work Act 2009.

KPMG research found that implementing all of AMMA’s recommended reforms could add up to $30.9 billion to Australia’s GDP and create up to 36,000 jobs.

For regular updates on AMMA’s workplace relations advocacy during the 2016 Federal Election campaign, visit our ‘Getting Back on Track’ campaign page.

Stay tuned for next week’s AMMA News Update, where we’ll explore the second of AMMA’s ‘5 Reforms over 5 Years’ – union workplace entry laws.