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‘Not enough’: PM’s warning for working Australians

Lucy Dean
·3-min read
CANBERRA, AUSTRALIA - NOVEMBER 12: Prime Minister Scott Morrison holds a news conference in the Blue Room at Parliament House on November 12, 2020 in Canberra, Australia. Morrison announced the set up of a special prosecutor to deal with any Australian servicemen accused of war crimes in Afghanistan, with the findings of the Brereton Inquiry to be released next week. (Photo by Sam Mooy/Getty Images)
Scott Morrison has delivered a warning. (Photo by Sam Mooy/Getty Images)

Complex bargaining processes are keeping workers from securing better pay and employers from improving productivity, Prime Minister Scott Morrison has warned.

However, a radical overhaul of Australia’s enterprise bargaining system is also unlikely to please everyone, he warned at the Business Council of Australia AGM.

The Morrison Government in June established five industrial relations working groups, one of which was tasked with investigating how Australia’s enterprise bargaining system could be improved.

Speaking on Thursday, Morrison said that in terms of enterprise bargaining, there are “not enough” agreements delivering what workers and businesses need, and the whole system needs an overhaul.

He said detailed and overly prescriptive procedural requirements are making the process “just too difficult to undertake”.

“They're just too difficult to get approved, both employers and unions have recognised that this system needs fixing through this process. And the government has identified various issues that need to be addressed and will be. The test for approval of agreements should focus on substance rather than technicalities.”

Morrison’s comments come after a Government-commissioned report found Australia's enterprise bargaining system is dysfunctional, with workers unable to sufficiently argue for wage increases and businesses stymied by rigid processes.

Australia’s enterprise bargaining system was introduced in 1993 to allow companies and workers to craft deals that fit their individual circumstances, rather than being stuck to industry-wide conditions and pay.

However, the number of Australians employed under enterprise bargaining agreements (EBA) has plummeted in recent years. The report from Boston Consulting Group found that EBAs struggle to pass the “better off overall” test due to the complex simulations required and the Fair Work Commission is also powerless to encourage employers and workers to arrive at an agreement.

Morrison said EBAs need to be assessed on foreseeable circumstances and the Fair Work Commission needs to work quickly to assess them.

“Key protections like the better off overall test will continue to be an important part of the framework,” Morrison said.

“However, our goal is to ensure it will be applied in a practical and sensible way so that the approval process does not discourage bargaining, which is what is happening now. And that must change.”

He said planned Government reforms won’t have people parading in the street, nor will there be universal agreement from unions.

“Businesses won’t see their version of industrial utopia for some either. But it will be genuine in its attempt to fix real practical problems in a way that provides shared benefits.”

While he didn’t detail what the reforms will be, Morrison said they will be significant enough to “shift that needle” for businesses and workers.

Industrial Relations Minister Christian Porter is currently finalising the reforms.

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