What Multi-Employer Enterprise Bargaining could mean for small & medium business

Key takeaways

• The Albanese government has proposed an ambitious industrial relations agenda that has the potential to significantly affect small and medium businesses.
• A key feature of that agenda is likely to be multi-employer enterprise bargaining, which could see small and medium business brought into the fold of collective bargaining.
• Small and medium business may want to monitor developments in this space, which could have significant impacts on workplace relations and minimum entitlements.

The recent Jobs and Skills Summit facilitated by the Commonwealth government and attended by government representatives, business leaders, employer groups, unions and industrial relations academics has brought multi-employer enterprise bargaining into the spotlight.

What is multi-employer enterprise bargaining?

Multi-employer enterprise bargaining is where workers and employers across a particular industry or sector join together to bargain for an enterprise agreement which will apply more broadly than a single enterprise.

Currently, collective bargaining almost exclusively occurs at the enterprise level, i.e. between an individual employer and its workforce, or a part of its workforce. The result of enterprise bargaining, an ‘enterprise agreement’ made between the employer and its workers, once approved by the Fair Work Commission, will displace the terms of any applicable modern award to set the minimum entitlements for employees covered by the agreement in the workplace.

What are the proposed developments?

The Australian Council of Trade Unions (ACTU) and the Council of Small Business Organisations Australia (COSBOA) have reached an agreement on various proposed industrial relations reforms, including multi-employer enterprise agreements. The Minister for Employment and Workplace Relations, Tony Burke, has lauded the proposed reform agreement as opening up opportunities for small businesses “forever locked out” of enterprise bargaining.
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Currently, enterprise agreements for small businesses are relatively uncommon, but unions are starting set their sights on this space within the economy. Earlier this year, Sydney-based bookstore Better Read Than Dead and the retail workers’ union broke new ground when they negotiated an enterprise agreement for its 18 employees, emboldening the union to commence negotiations with other independent booksellers.
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From the government’s perspective, the proposed reform agenda means that more small businesses, which generally do not have human resources or specialist industrial relations departments to assist them with enterprise bargaining, will be able to take advantage of efficiencies that may be created by multiple smaller businesses bargaining at once. The government has gone so far as to indicate its intention to "amend the Fair Work Act to give the Fair Work Commission the capacity to proactively help workers and businesses reach agreements", including small and medium businesses.

However, support for multi-employer enterprise bargaining is far from unanimous. The Australian Industry Group has called multi-employer enterprise bargaining a “clear red line for industry”, and many businesses remain to be convinced of the merits of wholesale enterprise bargaining reform introducing industry-wide bargaining.

What could the proposed reforms mean for small and medium business?

Multi-enterprise bargaining has the potential to significantly change the industrial relations landscape for Australian businesses. It could possibly see collective bargaining, traditionally the preserve of larger businesses, increasingly become a feature of small and medium business.

On one hand, smaller enterprises could leverage efficiencies created by multiple businesses working together to negotiate more bespoke minimum terms of employment for their workplaces. On the other hand, it could lead to a new layer of workplace relations complexity, an increased compliance burden and increased costs for smaller enterprises. It may also increase the likelihood of protected industrial action (e.g. strikes) impacting smaller enterprises in the event that multiple employer enterprise bargaining negotiations break down.

In summary

Small and medium businesses may want to monitor developments in this area as the Albanese government rolls out its legislative agenda for the future for industrial relations in Australia.         

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