THE federal government may soon require employers and employees to discuss productivity improvements during negotiations toward new enterprise agreements, if the next tranche of Fair Work amendments is passed into law.

Employment Minister Senator Eric Abetz intends to introduce the amendments before the year is out, and said the Fair Work Commission would need to be satisfied that productivity had been considered before it would approve a new enterprise agreement.

The amendments would target negotiations that resulted in wage increases unaccompanied by productivity improvements.

“When you get wage increases of 30% occurring in the maritime sector …. and then the union brags that there was no productivity offset, well, that tells you that someone is gouging big time at the expense of someone else, and that must have repercussions elsewhere on the employment front,” Senator Abetz told The Australian newspaper.

Senator Abetz also said the proposed Fair Work changes would require unions to meet more stringent standards before industrial action could be taken against an employer.

The proposal indicated the Fair Work Commission would need to be satisfied that claims made in negotiations were not ‘manifestly excessive’, were ‘fair and reasonable’ and ‘would not have a significant adverse impact on productivity’.

“Productivity is ultimately going to be a factor that keeps a business going, that, as a result, it keeps people in jobs,” Senator Abetz said.

“Too often it has been asserted that there has been an inequality of power, or imbalance of power, and certain organisations have been basically forced to sign agreements.

“What we are putting up in lights is that the Fair Work Commission should ensure, or satisfy itself, that the issue of productivity has, in fact, been addressed.”

The proposed amendments are currently being drafted and are expected to be tabled by the end of this year.

A potential win for AMMA members

This latest move from the Australian Government to amend the Fair Work laws to better support productivity outcomes and realistic wage claims during enterprise bargaining, reflects yet another area of workplace relations reform driven by AMMA’s advocacy in recent years.

AMMA supports the Fair Work Commission considering productivity outcomes before sanctioning enterprise bargaining outcomes that come before it in future. AMMA looks forward to engaging with the detail however will seek to ensure this new requirement does not add unnecessary complexities to getting workplace agreements approved.

An additional requirement for Commissioners to be satisfied that wage claims during bargaining are not ‘manifestly excessive’ could have a particularly positive effect in highly remunerated areas of Australia’s economy such as the resource industry.

AMMA will keep its members up-to-date on any developments in this important policy area, in particular as the details of the amendments emerge. For any intermediate enquires please contact [email protected].