Enterprise bargaining and wage competition

‘Pattern bargaining’ is practically a dirty word these days, as if there’s something corrupt about workers organising across workplaces within an industry. It’s now illegal to strike over it. John Buchanan, speaking at Politics in the Pub the other week, said the abandonment of the right to pattern bargain was the most disappointing aspect of Labor’s new industrial relations policy, and would make organisation very difficult.

At one level it’s easy to see why business would want to keep what’s left of collective bargaining to an enterprise level, since it severely weakens unions. But at the same time, that can create problems for firms because it exposes them to competition over wages: other firms can out-compete them because they pay lower wages for the same work, or because they poach workers with higher wages. Remember that for a long time in Australia business favoured centralised industrial relations and feared enterprise bargaining for this reason, and also because in the postwar full-employment period workers in many industries were able to win higher wages and better conditions at an enterprise level.

So it is not so much of a surprise to see complaints like Telstra’s in the Financial Review on Monday. [Mark Skulley, 18 June, 2007, “Fairness test ‘unfair’ to Telstra”]

The Telstra submission [to the Senate inquiry on ‘fairness test’ legislation] said the legislation would require the authority to undertake the fairness test by reference to an enterprise award, an industrial instrument specific to a business or company rather than to an industry or occupation.

It argued the enterprise awards had had little application to salaries at Telstra for many years and were a product of its public-sector origins.

“Indeed, subject to the Workplace Authority directors’ confirmation, Telstra enterprise awards (in many parts of the business) are in the order of 20 per cent higher than comparable hourly rates that are likely to apply to our competitors,” it said. “In Telstra’s view, this would be unfair.”

Telstra said the authority should designate an industry award to ensure its competitors were covered by the same minimum salary standards.

Published in: on 20 June, 2007 at 10:34 pm  Leave a Comment  

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