Statement from Innes Willox, Chief Executive, Australian Industry Group
The FWC's significant decision to grant a supported bargaining authorisation covering a group of disability sector employers provides further validation of industry concern over the foreseeable impact of changes to expand the scope of multi-employer bargaining.
As a consequence of the decision, a range of small not-for-profit organisations in the disability services sector in regional Victoria will now be dragged into costly bargaining with unions against their will, regardless of their clearly limited resources and it not being established through a majority support determination that their workforces actually support this process.
While the new bargaining laws enable the Commission to compel funding bodies, including the federal Government, to participate in bargaining under the supported bargaining stream, the Commission can't order such bodies to actually cover the costs that employers will inevitably face as a result of the new laws.
Given the employers who have been caught by the approved bargaining authorisation are largely reliant on NDIS and other government funding arrangements, the key question is whether the Government will now commit to picking up the cost of any increased terms and conditions that these organisations will be pressured to provide through bargaining. The real barrier to lifting wages in this sector has always been the all too often deficient level of Government funding.
The Government consciously introduced major changes to bargaining laws designed to help unions press for improved wages and conditions in funded sectors, so it should now expect to be met with calls from both unions and industry for it to pick up the resulting tab. Employers in the disability sector face clear challenges to remain viable under what is widely regarded as inadequate current Government funding arrangements, including in particular those operating under the NDIS.
Crucially, if the Government does agree to implement funding changes in light of the now authorised multi-employer bargaining, it will need to look at how it provides equivalent support to employers and employees in the sector and not just those roped into bargaining for a union agreement. This is what it has done in the context of the early education and care sector, where it has offered to subsidise wages for all employees in that sector for a period of time.
The Full Bench clearly placed significant weight on the fact that the employers who have been authorised to bargain are covered by 'zombie agreements'. Its decision to carve out some other employers from the union's application is welcome. Nonetheless, it also observed that most of its findings in favour of making the authorisation are likely to be available in respect of most, if not all, disability services funded by the NDIS in Australia.
The decision clearly raises the spectre of employers in this sector being very broadly roped into multi-employer bargaining under the expended supported bargaining stream. The broad conduct of multi-enterprise bargaining in the NDIS sector has the obvious potential to significantly impact the Federal Budget.
This outcome must also be viewed against the backdrop of recent historically significant Fair Work Commission decisions to grant very large rate increases to employees in not only the disability sector, but the social and community services, early education and health care sectors.
Although we always warned from the time leading up to the September 2022 Jobs and Skills Summit that the implementation of radical changes to bargaining laws would be a 'slow burn', the implications and risk of the amendments are clearly now starting to be demonstrated. The challenge will be for Government to deliver a clear plan for ensuring that the outcomes of these changes are sustainable. Improving productivity outcomes, including in funded sectors, must be a part of the equation.
