A Threat to Workers' Income !

 It was generally conceded that Australian workers were due for a pay increase before the coronavirus roared out of China and disintegrated the world economy.  Company profits were increasing but pay levels were stubbornly resisting upward movement.

Now we are in the recovery phase and the government has decided that pay levels are best set by enterprise bargaining.   About twenty percent of Australia's 2.1 million workforce are already governed by enterprise bargaining, but the Industrial Commissioners who approve new agreements have been told that for the next two years they are not required to ensure that workplace minimums are attained or that they meet the " better overall test ".

It is possible that where industry is in distress because of the coronavirus,  the outcome could be a wage cut and that is of great concern to the unions.There are protocols where this was used in the past.

Several decades ago the world steel industry was in chaos when over production in China saw steel dumped on world markets at below production cost.  Several iconic steel companies in Amereica and Euope closed their doors and applied for Chapter 11 protection. It looked like our steel manufacturing plant in Wollongong would suffer a similar fate.

Production economies were implemented and the workforce agreed to a pay cut which saved the company and saw it eventually return to profit. It was a rational decision and it both saved the company and the workers jobs.

The secretary of the Australian Council of Trade Unions supports bargaining to improve wages but fears that some companies will use enterprise agreements to slash pay.   It is essential that both sides that sit at the bargaining table do so in good faith ands deal honestly.

Under this new law, the existing but rarely used power for Fair Work Commissioners to tick off deals with a " short term crisis "  will be broadened for two years.  Pay deals that leave workers worse off will be approved if workers vote for them and they are in " the best interests ", based on the effect of the coronavirus and the company's circumstances.

A company seeking a pay cut will need to get the approval of its workers and will need to present a compelling case that withstands scrutiny.  The profitability of many Australian companies has actually improved by the withdrawal of some overseas competition and it is likely that such circumstances will result in pay increases.

Enterprise bargaining was the aim of Paul Keating when he was prime minister and he envisaged it setting wages faster and more efficiently to deliver the twin goals of productivity growth and higher wages. That will be the ourtcome if both sides recognise the benefits from a fair agreement that eliminates industrial strife and delivers a harmonious market place.

The factor that will be needed is " common sense " !