NEW IR LAWS HAND POWER TO UNIONS ON ENTERPRISE AGREEMENTS
There are number of important employment and industrial law changes set to become law in a matter of days.
Perhaps the most important issue for employers at this stage, is the change to enterprise agreement making and the re-introduction of industry pattern bargaining and the potential roping-in or inclusion of employers who have never ever had an enterprise agreement previously in place at their establishment.
Unions will be able to seek an authorisation from the FWC, to compel an employer or multiple employers to bargain for an enterprise agreement. Unions can also apply to have an employer roped-in to a newly made enterprise agreement made between other employers and unions, where the business has geographic and/or common interests and/or is reasonably comparable to other like businesses, for example your competitors.
A majority of employees at a business must want to bargain (this will be determined by a vote) and at least 1 employee to be covered by the agreement will need to be represented by a union. However, it will not be difficult for unions to use the right of entry laws to enter workplaces to garner support from non-member employees to bargain with the employer for wage increases.
The new laws apply to your business if you have 20 or more employees.
There are limited options available for employers to resist a union bargaining authorisation. Only those employers that have an existing enterprise agreement in place with their employees (at the commencement of the laws) or had an agreement in place over the previous 5 years with a good history of agreement making or can argue it is not in the public interest to bargain, will be exempted from the laws.
These provisions are set to commence from a date to be confirmed in June 2023.
This means that employers have between now and June 2023, to consider making an enterprise agreement directly with their employees under the existing laws or face the real possibility of having to make an enterprise agreement with unions or being roped into a new agreement made between other employers and unions in the medium term.
The ramifications will be a higher wages bill. Almost certainly, any wage increases sought by unions will be at least or more than the present underlaying inflation rate of about 8%. From experience, union’s ambit claims are on the high side. The other consideration is that the maximum term of enterprise agreements is 4 years, so it is possible that employers may be locked into large percentage wage increases for each year of the life of the agreement, regardless of whether the economy improves, and inflation decreases over time.
McPherson Lawyers will provide further detail of all of the changes affecting your business in the New Year and will be available to advise employers who wish to consider making their own enterprise agreement before June 2023.
In the meantime, feel free to contact us if you have any questions.