Enterprise bargaining update: good news … and bad

The Fair Work Commission (FWC) recently delivered its decision for the Annual Wage Review. See my previous post.

Throughout the review single-enterprise bargaining has continued and some unions have started multi-enterprise bargaining.

The FWC has just released its latest fortnightly data on enterprise bargaining.

The modern union movement – in general – accepts enterprise bargaining as the best way to lift workers’ pay, conditions and rights above the minimum standards in industrial awards.

The industrial wage is the starting point for the struggle over living standards. Besides enterprise bargaining 3 other methods may be used to “bargain” the industrial wage: 1) the Annual Wage Review, 2) one-to-one bargaining between worker and employer (manager) including genuine and “take it or leave it”, 3) lobbying government for specific workers to get a government supplement to the industrial wage. This year some unions have embarked on multi-enterprise bargaining under the new laws introduced by the Labor government. This new stream does not yet seem to have produced outcomes that appear in the FWCs data.

The Commonwealth Department of Employment and Workplace Relations supplements the FWC's fortnightly data with its own historical data.

Here is a snapshot summary of some important features about what is going on, restricted to just the FWC data for now.

New agreements

The first graph shows the number of new enterprise agreements per fortnight over the past 12 months.

We see that employers lodge many more agreements than unions.

However, we must remember an important qualification. First, lodging an agreement for FWC approval is different to negotiating the agreement.  A union(s) may have been actively engaged in the bargaining and decisive in achieving the result, and be covered by the Agreement, but leave it to the employer to lodge.

Union-lodged agreements are an indicator of how much unions are determined to maintain some control over the bargaining process.

The data does not show how many agreements cover the union as well as the workers employed. Agreements that cover the union may be lodged by the employers.

The dramatic spike in employer-lodged agreements in November-December should ring alarm bells.

In general, this suggests unions may not be the dominant force in the enterprise bargaining system, and that the system, from the point of view of workers, is as broken as ever.

Wage increases

In this next graph, we see good evidence of the “union premium” in the wage increase bargaining outcomes. There is good extra detail on this produced by the ACTU.

Also, we can see how union wage increases hold up better when worker bargaining power (for most) drops off at the end and start of each year.

The union wage premium appears to have strengthened since the middle of 2023.

However, about 10-12% of workers are members of unions. The enterprise bargaining regime ensures that many non-union workers get the benefits of the premium.

The union reach

The final graph shows the number of workers covered by enterprise agreements.

We see that union-lodged agreements – those that probably have unions with stronger influence over the bargaining process and outcome – cover a small number of workers relative to the total brought under coverage of an agreement.

Remember that there will be union members in employer-lodged agreements and that unions can be involved in bargaining and be covered in employer-lodged agreements. There is no data to tell us anything more precise.

However, it is fair to suggest that the union reach through enterprise bargaining is quite weak.

More to the story

Of course, there is a lot more to the enterprise bargaining story than has been covered in this update.

So far, we are not seeing any data that might show the benefits of the new multi-enterprise bargaining stream. That might happen soon.

That includes data items in the FWC report that have not been addressed and the supplementary data provided by the Department of Employment and Workplace Relations.

We can add that the penal powers in the system deny basic bargaining rights to workers that are not denied to employers, such as the right to withdraw labour relative to the right to withdraw or threaten to withdraw capital.

And, we have not connected – yet – enterprise bargaining to union density.

Nevertheless, the indicators suggest that overall, despite isolated positive examples, enterprise bargaining is a dead end for building union density and associated power.

Enterprise bargaining is about productivity improvement, not just wages and conditions. The logic is that each enterprise survives because it is more competitive. That is the antithesis of unionism.

Finally, the focus has been exclusively on wages. Yet wages are an expression of one-half of a social relationship. The other half is profits. There are no profits without the work done by the workers who are paid wages. Profit relative to wages is the rate of exploitation. I have tackled the rate of exploitation in Australia in several other posts on this page.

All of this suggests it makes sense to discuss what a different and better strategy might look like. More to follow.