The challenges facing the Australian economy at present are significant and unprecedented. The shortage of workers is causing significant problems to businesses across a range of industries from the airline industry to hospitality, aged care and child care. Australia’s transition to a post-COVID economy is not proceeding smoothly.

With labour shortages, we would normally expect to see wage increases but Australian wages continue to stagnate and workers’ share of growth in GDP continues to decline.

On 1 and 2 September 2022, the newly elected Labor Government held a Jobs and Skills Summit, inviting business and union leaders as well as Government and academics, to discuss ways to address the unusual situation the employment market finds itself in.

In welcome news for employers and employees, the Government has committed to increased funding for training and migration. More visas will be offered as will more funding to visa processing.

The more complicated issue of driving better bargains that improve wages whilst delivering productivity gains for employers remains the subject of commitments and legislation yet to be drafted. It is proposed that amendments to the Fair Work Act will be introduced which will:

• Reduce the complexity in the agreement-approval process (ie the BOOT to be simplified);
• Change the process for termination of enterprise agreements (including sunset clauses for “zombie” EAs);
• Protections for employers and employees to negotiate in good faith for agreements which affect them and for employers and employees who already successfully bargain to continue to do so;
• Include options for parties to engage in multi-employer bargaining and agreements (to be restricted to particular industries).

The latter proposal has raised the concern of many members of the business community who see this as the “thin edge of the wedge” and that the introduction of multi-employer bargaining will re-introduce pattern bargaining which in turn will reduce the ability of business to negotiate flexible deals with productivity gains. Employers are concerned that this approach will make the system more rigid and drive up costs. There are also concerns that cross-sector industrial action in support of claims will be possible.

Work on the amendments to the Fair Work Act has already begun. It will be interesting to see what the many generalised “commitments” and assurances to harmonised workplaces will result in. Until we see such amendments and the availability of multi-employer bargaining, including the curious “opt-in” proposal, employers should refrain from alarm. Our Employment and Safety Team will be keeping a close eye on the amendments and will alert our clients to the changes as soon as they are introduced.

As a preparatory step, business should look to their data collection on gender and pay as further reporting requirements are introduced.

The short term proposals for tackling labour shortages in the form of more visas and funding are to be welcomed. Dentons has a skilled immigration team able to assist you with any queries you have about visa arrangements.