Historically low wage growth indicates that the enterprise bargaining system is not working well for employees. Last year the sense that workers were losing out while companies profited reached a peak when company profits grew by 22% – the second fastest annual growth in the past 30 years, while total wages and salaries grew by just 1.4% – the slowest growth outside of a recession or the GFC.

While bargaining is producing low outcomes for both men and women, women have lower outcomes from bargaining than men (Fair Work Commission 2015).

The bargaining system is breaking down. Newly-negotiated agreements have fallen dramatically: from around 2,000 EAs in 2010 to only 68 in 2017. There has been a massive acceleration in agreement terminations. In the private sector the number of current agreements has almost halved, and the number of employees covered has dropped by 34 per cent since end-2013 (peak year), a decline of 662,461 employees. Only 12 per cent of Australians employed in the private sector are now covered by current agreements. In the past four years the number of private sector workers covered by enterprise agreements has dropped by 25% (On the Brink, The Australia Institute, p. 4).

The governor of the Reserve Bank, Phillip Lowe, last year argued workers needed to be bolder in their wage demands, that they were more concerned about the security of their job than getting a pay rise (Australian Financial Review, 6 September 2017). There are reasons why employees have such concerns.

The reasons why insecurity has grown include strategies to casualise, outsource and deunionise the workforce, an imbalance in the legislative framework around the respective bargaining rights of employers and employees, and particular decisions of the FWC including one which triggered a rush of unilateral agreement terminations by employers.

 

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