The Australian Industry Group and the Australian Constructors Association have filed a joint submission strongly supporting a proposal in an Attorney-General’s Department discussion paper to allow greenfields agreements to continue for the life of a project even if this is longer than the current four-year limit on the nominal term. Many major projects continue for longer periods; for example, the Snowy Hydro 2.0 Project is projected to continue for five to six years.
The submission argues that:
- It is in everyone’s interests for enterprise agreements covering work on major projects to be permitted to continue for the life of a project, even if this is longer than four years. Enterprise bargaining is typically resource-intensive and disruptive. During the life of the project, resources are best devoted to ensuring the delivery of the project on time and within budget, and that high standards of safety and quality are maintained.
- This reform should not be limited to greenfields agreements. Regular enterprise agreements commonly regulate work on major projects.
- A key industry concern about greenfields agreements is the current power imbalance that exists between unions and employers when negotiating these agreements. A head contractor usually needs to have an enforceable agreement in place prior to the commencement of a project to manage industrial risks and costs on the project. The tight timeframe gives unions substantial leverage to demand excessive wage rates and conditions.
- To address the power imbalance, and to give employers the ability to negotiate a fair, project-life agreement, the following two supplementary reforms need to be introduced:
- Employers need to have the ability to enter into a greenfields agreement with any union eligible to represent any employees on a project, as was the case under the Workplace Relations Act 1996 between 1996 and mid-2009; and
- The six-month ‘notified negotiation period’ for negotiations with the relevant unions, before an employer can have a greenfields agreement approved by the Fair Work Commission without the agreement of the unions, needs to be reduced to three months.
The full joint Ai Group-ACA submission can be found here.