Retailers concerned about biggest shake-up to workplace relations landscape in a decade

Sound workplace relations underpin our sector’s ability to ensure that retail and hospitality businesses remain resilient in the face of economic headwinds and retain the flexibility they need to drive productivity in response to changing trading conditions.  

Coming out of the Jobs and Skills Summit less than two months ago, I was encouraged by the common recognition that the current bargaining system is broken, and that reform is needed to further modernise awards and reinvigorate enterprise-level bargaining between employers and their employees. 

There was also a real sense of common purpose and goodwill about the path forward.  

We expected some changes to workplace relations policy as a result of the change in Government and the summit, but the scope of reform outlined in the Secure Jobs, Better Pay Bill is far more extensive than we’d expected. In particular, we are concerned about the inclusion of multi-employer bargaining in this Bill. 

 

Our full views are outlined in the ARA’s Submission and we encourage members to take five minutes to complete our member survey to provide your feedback about the proposed changes.

 

The ARA supports sustainable wages growth, more secure work for the retail workforce and more enterprise-level bargaining.  

We know that higher wages and secure jobs are good for employees and are critical prerequisites in driving productivity for employers. We also know that higher wages flow through to higher discretionary spending in our sector. 

We therefore welcome many aspects of this Bill, which will create benefits for employers and employees.  

  • The changes to the Better-off Overall Test will remove many of the existing barriers and disincentives to enterprise-level bargaining.  
  • The measures to address gender inequality, sexual harassment and discrimination in the workplace are vitally important for our sector, given that almost two-thirds of the retail workforce are women.  
  • And the increase in the small claims threshold will make it easier for more small businesses to access cost-effective mediation on pay disputes instead of lengthy and costly court proceedings, provided these provisions are used in good faith.  

However, we are deeply concerned about the inclusion of multi-employer bargaining in this Bill, both in terms of process and substance.  

  • We don’t believe that business has had enough time to contemplate these reforms to ensure they are relevant, fair and reasonable, or practical to execute.  
  • We don’t believe these changes will deliver higher wages or increased job security.  
  • And we don’t believe these changes will increase flexibility or improve productivity.  

These changes will have a significant impact right across the retail community without any guarantee of delivering benefits for employees. We believe that increasing access to multi-employer bargaining will add complexity and cost for business, which will most likely be passed onto consumers and add to inflationary pressures. 

As Australia’s most diverse peak body for the retail sector, we represent our country’s largest national retailers and small and medium sized retail businesses – who represent 95% of our membership.  

This means we are well placed to talk about the potential impact of these changes on a range of different businesses.  

For our smaller members, many of whom are still recovering from over two years of disruption, they don’t have the resources to work through a costly and time-consuming bargaining process with other employers and multiple employee representatives. We fear these changes will lead to more complex and more costly processes, without any guarantee that workers will be better off or delivering critically important improvements in flexibility and productivity for both employers and employees.   

And for larger businesses, we do not believe these reforms are workable in the real world. Nor do we believe they will drive wages growth in our sector, where a war for talent is already driving healthy competitive tension in pay and conditions. We need to get enterprise-level bargaining moving again, and increase flexibility in awards, because that will drive wages growth and create more secure work, at least disruption and least cost to our sector. 

It is also worth noting that improving and promoting enterprise-level bargaining would deliver on the Government’s objectives sooner than establishing a new framework for multi-employer bargaining.  

Our position is that the Government should respond to calls from cross benchers and other business groups to split the Bill, removing and deferring debate about the multi-employer bargaining provisions. We absolutely recognise that the government has a mandate to drive wages growth, but it did not take multi-employer bargaining to the election and there was no mention of it at the Jobs and Skills Summit.  

In terms of the process, the ARA believes that consultation has been rushed, which is likely to negatively impact the Bill’s design and implementation. As we enter the last parliamentary sitting weeks of the year, the Bill continues to be contested. The Government has already agreed to 153 amendments to its own legislation, with a further eight recommendations made by a Senate committee yesterday.  

It remains unclear if the Government has the support of key crossbenchers in the Senate to secure passage of the Bill in the upper house and the Prime Minister has flagged the possibility of extending Parliament to get the legislation through before the end of the year.   

What we know is that our members are not supportive of multi-employer bargaining. Initial results from a member survey issued earlier this week indicate that:  

  • More than 80% of respondents said they have always used the award, with some paying above the award. 
  • Less than 15% said that the changes would help to address the critical labour shortage in our sector, which currently has 46,000 vacancies.  
  • Less than 15% said that the changes would create more secure work. 
  • More than 65% agreed that the proposed changes would cause significant disruption and increase complexity for employers, without guaranteeing an increase in wages for employees.  
  • And more than 70% said that this increase in complexity would increase costs for business – due to having to engage consultants and advisors – and that these costs will be passed on to consumers. 

The ARA will continue to engage with a range of stakeholders as the legislation makes its way through parliament, to communicate these concerns from our members. We will also be running a series of information sessions once the legislation is passed to help members understand and plan for the agreed reforms. 

There are many positive elements of this Bill, but we are extremely disappointed that the Government has set aside less than three weeks to consult with business on some of the most significant changes to workplace relations in a decade.  

We will continue to urge the government to pause and reflect on some of the more contentious elements of this legislation to ensure that it does indeed create better pay and more secure work.  

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