In a previous blog, we’ve mentioned the decline of enterprise bargaining in Australia.

Some data to support this follows in this blog. Both agreement numbers and employees covered by in-term agreements are in decline. Point 7 and 8 highlight the challenges faced by parties making agreements and the Fair Work Commission in processing agreement approvals.

Enterprise bargaining in Australia: the state of play

A printable PDF version of the data is available here.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

In yesterday’s blog, we commented on the state of play in enterprise bargaining in Australia.

So what’s the outlook for enterprise bargaining in Australia? Here’s the top 7:

  1. Collective bargaining remains unlikely to be the answer for productivity gains – as has been the case for some time. Nor will it deliver the across-the-board wages growth sought. Of course, there will be exceptions to the rule. But my observation here is one generally about the ability of the system to generate productivity gains. Of course, there are some sectors where deriving and measuring such gains is very difficult, if not illusory, in any event.
  2. Complexity is here to stay. The rules surrounding the making of agreements, laudable in their aim in providing protections for employees, make the process and approval regime demanding on employers, and the Fair Work Commission.
  3. The key determinant of bargaining outcomes will be power. The pendulum of “power” at the negotiating table will, to some extent, move with the market – but not completely. Over the last 10-20 years, claims have moderated as economic conditions deteriorated. We have seen, for instance, more moderate claims in Western Australia in construction as the resources tap tightened.
  4. Large and high-profile employers will remain in union sights. They are vulnerable to aggressive campaigns and effectively set the wages for others.
  5. Pattern-style bargaining became more prevalent by stealth. The TWU made this prophecy real just last week.
  6. Employers who influence a worker supply-chain such as major retail will become an increasing target of “activism”. Will we see GetUp involved in this space?
  7. Collective bargaining will continue to decline as workplaces become more fragmented and the incentive to bargain decreases. Power will dictate the incidence of enterprise bargaining.

This all assumes no, or only limited change, to the Fair Work Act.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

A consistent theme in recent years for both employers and unions is that enterprise bargaining is broken.

The genesis of enterprise bargaining in the mid 1990’s lay in its potential to generate productivity gains at a time when workplaces were strangled by terms and conditions set for whole industries and occupations, divorced from the particular needs of a workplace. At the time, enterprise bargaining presented opportunity. But this potential is all but exhausted.

Most negotiations are now centred on squeezing a wage outcome. Employers jump on the bargaining merry-go-around every three or four years to avoid protected industrial action. Thus the process for many employers is one of risk and its avoidance, rather than opportunity.

For unions, enterprise bargaining is not delivering sufficient wage growth. Unions also argue that the process can be easily stymied by employers who are alleged to “game” the system – meaning that they find ways to avoid bargaining or work around the spirit or intent of the bargaining laws. There’s another challenge for unions. Resourcing every negotiation isn’t easy. There are, after all, around 5000 agreements made each year.

The system relies on “power” based bargaining – at least in key sectors. The party with the most power prevails. Ironically, it’s large employers that are vulnerable to the power of a union to disrupt the business through the power of industrial action or some other campaign. Business decision making focuses on the short term, as agreements are reached to avoid the immediate impact of industrial action (which it needs to be acknowledged can have longer term impact). However, the long-term impact of doing the deal is often under-estimated.

The higher education sector is a great example where the union has successfully secured excellent outcomes and leap-frogged them across the sector. These outcomes include highly restrictive provisions around workplace change that rival anything on, say, the waterfront.

Collective bargaining is on the wane in the private sector with rapid declines in the numbers of agreements and employees covered. A sharp decline has occurred under the watch of the Fair Work Act despite it promoting “enterprise-level collective bargaining” as one of its seven objects. The reasons for this are varied and will be the subject of a further blog.

Tomorrow we will identify our top 7 on the outlook for enterprise bargaining in Australia.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

The debate on what is to be done about slowing wages growth of Australian workers is, understandably, receiving an increased focus in the midst of an intense election campaign.

The Labor Party has described this election as “A referendum on wages”. The Australian Council of Trade Unions, under its “Change the Rules” campaign, argues that the workplace relations system is biased in favour of employers’ who are choosing to keep wages low and taking this labour share in the form of corporate profits. The solution, we are told, is further regulation and to increase union rights and bargaining power so that unions can extract better wage deals.

This paradigm disregards significant and powerful international and Australian economic research which examines the root cause of slow wages growth, and concludes that the major factor is advances in, and reductions in the price of, increasingly sophisticated technology and the emergence of global supply chains. The material referred to does not suggest that declining union density or bargaining power have had any material impact. Misdiagnosis of this problem is very likely to result in poorly targeted solutions which will be at best ineffective and, at worst, exacerbate the problem being solved for (such as adding higher unemployment to slowing wages growth).

This wealth of research shows that slowing wages growth is not a uniquely Australian problem. It is a prevalent phenomenon across many advanced economies, irrespective of the architecture of their industrial relations system. Advances in many forms of technology have induced companies to chase productivity and efficiency by moving away from labour and toward capital with the effect that the labour share of income has steadily declined. The effects on workers have been most pronounced in advanced economies where labour costs are highest. The historically low interest rate environment (reducing the cost of investment) has played its part. Businesses of all shapes and sizes must continually make these choices if they are to succeed in a hyper competitive global market.

To take a snapshot of the available learning: in 2013, two University of Chicago Booth School of Business economists, in a paper published by Oxford University Press, concluded that the global labour share of income has declined consistently and by at least 50% since the 1980’s in the large majority of countries and industries. In 2017 the International Monetary Fund examined the problem in its World Economic Outlook, noting that in advanced economies wage growth had flatlined. Closer to home, in November 2017 the Australian Treasury in its “Analysis of Wage Growth” reached similar conclusions and noted that “the relative price of investment to wages has fallen over time due to large falls in the price of machinery and equipment and computer software”. In 2018 an OECD report concluded that across 24 OECD countries, real median wage stagnation has occurred concurrently with a decoupling in productivity growth (which has also slowed) mainly due to technological progress and the expansion of global value chains. Finally, last month the RBA in its paper “Is declining union membership contributing to low wages growth” concluded that the declining trends in unionisation rates are unlikely to have materially contributed to the decline in wages growth.

So if slowing wages growth is a global, macro, advanced economy problem, what is the solution? The answer inevitably will be multi-faceted and context driven. Ensuring Government policy incentivises investment in knowledge based capital is a common recommendation in the research. Bringing Australian workers as high up the skills value chain as possible is paramount. Constant innovation; supporting growth industries and training or re-training employees to work in them; stronger partnerships between Universities and business, will all form part of the mosaic. We could do worse than consider the recommendations of brilliant Philanthropist and self-made billionaire Ray Dalio, who clearly cares deeply about these issues.

Artificially lifting wages or increasing labour market regulation and union power will not work, at least beyond the short term sugar hit. As concluded in a 2017 OECD Economic Survey:

Ensuring competitive and flexible product and labour service markets is particularly important in Australia. The country’s geography separates markets, compromising competition for goods, services and labour. Whilst Australia’s regulatory and policy frameworks are already relatively flexible and supportive, further improvement would enhance the economy’s ability to absorb innovation and increase the share of businesses operating at the frontiers of technology and best practice”.

Ultimately, ensuring Australian companies have every chance to compete and succeed, buttressed by Government and business support, gives us our best chance of ensuring that Australia’s workers receive the high wages they deserve, and minimising the dislocation that can unfortunately occur in a rapidly changing global economy. Solution myopia in the face of new global problems will not serve us. It will set us back by distracting us from what really needs to be done to prepare for and thrive in a different world.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

Our clients care deeply about innovation and technology. We know this from our engagement with clients including discussions triggered by reflecting on the findings of the CSIRO’s Workplace Safety Futures report.

Our clients care about “machines” (including “robots”, artificial intelligence, biometrics and the harnessing of big data) being developed as a result of innovation and technology because of the unprecedented efficiencies and improvements in safety they unlock.

These benefits come with a potentially profound human cost. Depending on which research you turn to, the predictions are that between 9 and 50 per cent of jobs will be replaced by machines in the next decade.

This rapid pace of change has caused leading scholars to argue that some, if not a large majority of humans face a fate worse than redundancy: complete irrelevance.

The jobs of the future will involve “caring” and other “soft” skills machines can’t replicate  

This sobering thought caused us to reflect on what the skills of the future should be to counter this impending irrelevance. The current thinking from some quarters (including most Governments in the Western world) is that science, technology, engineering and mathematics are the subjects of the “future” and that we should be teaching more students these subjects in our schools, technical colleges and universities.

Cybersecurity and understanding the potential vulnerabilities of machines and how to fix them is one growth area. Estimates are a near 40 per cent uplift in the number of people needed with these skills in the next decade.

At the same time, leaders of businesses are arguing that one of the hardest skills to recruit for is the ability of candidates to write and speak publicly to communicate ideas clearly. Chairman and CEO of Goldman Sachs, David Solomon, has said that “[h]ow you communicate with other people, how you interact with other people, how you express yourself will have a huge impact on your success”.

The bigger question though is how we, as a society, prepare for the future?

Embedded in this question are further intrinsic questions around what it is that machines cannot do, or what it is that machines cannot do better than humans? An understanding of the answers to these questions is necessary if we attempt to protect ourselves from redundancy and, worse still, irrelevance.

It’s heartening to hear that across all reports that communication skills remain valuable in the “new world” of work.  This is good news for lawyers and many professions.

Knowledge of machines + deep understanding of people = recipe to thrive

Perhaps the focus here should be on the things that, for now at least, machines can’t replace. In the main these are the very things that make us human and make us feel. This includes the joy we experience through art, literature, movies, theatre, dance or music. It also includes the empathy we feel that comes from human care and kindness.

Leading organisation are already harnessing “blended” skill sets

Leading organisations with which we work have already recognised the need to combine a knowledge of machines with the “caring” and “feeling” skills, so called “softer” skills, that machines can’t replicate. These organisations seek out and promote, through lifelong learning, essential skills in communication, creativity, innovation and intercultural competency.

The future is impossible to predict with accuracy. One thing though is clear –  the impact of machines on the jobs we have today is inevitable. If we set ourselves on a path to learn only the skills which machines can potentially replace, we set ourselves on a dangerous path.

Based on the inevitability of the machines replacing humans, combined with the focus on the “softer” skills associated with creativity, we are working with our clients to do just that get more creative.

Creativity is not only one of the key skills that will relate to employability in ever increasing ways but we are seeing employees seek out organisations that hold creativity as a core value. Why? They will be sustainable long term. We might care about machines, but as yet they don’t care about us.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

It is widely proclaimed that we are in the midst of the “Fourth Industrial Revolution” (4IR). The leaps and bounds that are being made daily in information technology and biotechnology signal the end of homo sapiens or provide liberating freedom for the working masses, depending on which commentator’s view you believe.

For us, the daily lived experience of the 4IR in working and home life is not yet as cataclysmic nor as emancipating as the commentators proclaim. However, the ever growing use of technological, timesaving solutions, the ‘gigification’ of the workforce, the blurring of the lines between work and home and the rising issue of workplace psychological health all signal shifting global trends.

Regional trends that are responding to the 4IR

The 4IR is shaping workplace laws. Working across regions we see examples that point to trends in laws responding to the new world of work arrangements such as non-traditional labour models. As an example, recent amendments to the Occupational Safety and Health Act in Korea have expanded the scope of statutory protections to “persons providing labour” (as opposed to “employees”) and introduce an obligation on franchisors to take preventive measures for workplace accidents suffered by franchisees and their workers.

Positive regional trends can be seen in how workers are protected by existing laws. The latest amendment to the Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases on 4 November 2017 and recent cases indicate a trend in Beijing and Shanghai that the enforcement of health and safety at work is in focus, more comprehensive and increasingly strict.

Debates on how we face the future

Australian Governments are grappling with the challenge of laws that are responsive to the 4IR. A key recommendation from the 2018 review of the model Work Health and Safety Laws is that Safe Work Australia develop criteria to continuously assess new and emerging business models, industries and hazards to identify if there is a need for legislative change, new model WHS Regulations or model Codes.

Laws continue to be tested against the explosion in reporting of workplace sexual harassment. A number of unions are calling for WHS laws to specifically include sexual harassment as a risk that must be eliminated or minimised by duty holders. Regulators are encouraging anonymous whistleblowing to facilitate investigation.

The battle lines have also been drawn for the Federal election later in the year, with the Australian Labor Party committing to a wide suite of industrial and safety changes including a commitment to support national industrial manslaughter laws – a position supported by the 2018 review of the model laws.

Rising issue of workplace psychological health – a focus for regulators

In Victoria, recent presentations from WorkSafe have detailed plans for its inspectors to be trained to assess workplace psychological health. We can expect more enforcement action in this space.

Exploring ‘megatrends’ for the future will help us prepare for change

It is more important than ever to understand the risks associated with the constant change in workplaces. The Workplace Safety Futures report commissioned by Safe Work Australia explores the six megatrends predicted to re-shape workplace health and safety – including the gig economy, the blurred lines of work and home life and workplace psychological health. It’s a highly recommended read.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

We are excited to announce that Erin Hawthorne has been promoted to partner. Although we have grown through lateral partner appointments over the past few years, Erin is the first promotion to partner from within the team since the Australian offices of Seyfarth Shaw opened in Australia.

“Erin has been a leader in our team since Seyfarth opened doors in Australia, and her promotion to partner recognises this”, said Australia Managing Partner, Darren Perry. “An experienced employment and industrial relations lawyer with in-house experience, Erin is known for her ability to provide clients with advice through a lens of practicality”.

As an experienced litigator, Erin is adept at using the opportunities presented by difficult employment and industrial relations issues to deliver commercial outcomes when representing employers. Erin has the game plan needed to protect or attack when litigation is unavoidable or advantageous.

As the first promotion from within the team at Seyfarth Shaw in Australia, Darren explained that “the team sees this as a milestone moment in the growth and development of our firm” marking the moment when “one of our talented lawyers has been promoted into Seyfarth’s partnership”.

“We recently celebrated our fifth anniversary in Australia. Since opening, our team has established itself as a market leading labour and employment and workplace health and safety practice. The promotion of Erin is part of our strategy to continue the growth of the practice and take it to the next level.”


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

On 12 December 2013 Seyfarth Shaw announced our Australian offices were officially open for business. Today marks five years since those doors opened.

What better way to reflect than to ask ourselves, what have been the biggest changes in our specialist areas of law over those five years?

“It has become increasingly difficult to make enterprise agreements that are compliant, genuinely enterprise-focused and fit for purpose due to increasing modern award complexity combined with the unworkable approach adopted in decisions of the Fair Work Commission and Federal Court to the BOOT and other procedural aspects of agreement making.”
– Rachel Bernasconi

“Over the past five years, I have observed the tension between sharing improved safety lessons and legal risk. I am concerned about compounding this potential unintended consequence with the rise of the industrial manslaughter offence.”
– Paul Cutrone

“I think the biggest development in employment and industrial law is how courts and tribunals are grappling with modern expectations of what ‘working’ looks like. This means they are looking at how to deal with the gig economy, flexible working arrangements (including working from home and telecommuting), employees wanting lengthy periods away from work and ‘portfolio’ careers. There is a real tension as employers seek flexibility to ensure customer demands are met while balancing the costs of labour vs employee representative groups seeking to pull the other way, seeking automatic casual conversion rights and laws that treat gig workers as employees. The next five years will see this tension play out in the policy debate.”
– Ben Dudley

“The most significant change I have seen is increasing employee mobility. Employees of large international organisations are spending more time on assignment in locations throughout the Asia Pacific, on both a short-term and long-term basis. We see this occurring as a result of organisations expanding their operations throughout the region. Employers are increasingly seeking specialist employment advice on both a single jurisdiction and multi-jurisdiction basis, including to confirm compliance with new frameworks and to ensure the appropriate arrangements are in place.”
– Luke Edwards

“The last five years has cemented a realisation that has been brewing for the last ten years. Enterprise bargaining amidst the current regulatory environment has reached its use-by date for many employers. Enterprise bargaining is no longer an opportunity to secure win-win outcomes but rather a process aimed at reducing the risk to on-going operations.”
– Chris Gardner

“There has been a shift away from spending money on large, wordy paper systems written by lawyers. I question whether anyone is any safer once they are developed. Smart organisations are investing heavily in understanding their key risks, controls and testing the effectiveness of those controls. This is where their efforts need to be.”
– Jane Hall

“One of the most significant developments I have seen in the last five years is the rise in the influence of workplace regulators. Consistent with the overall dynamic facing corporate Australia, we are seeing far more active, better resourced and assertive regulators across various workplace issues. The environment is one of heightened focus on compliance with workplace and safety laws; the financial and reputational stakes are higher than ever for employers who fall short.”
– Darren Perry

“Over the past 5 years, we have seen a number of areas where our Fair Work Commission cannot speak with one voice. While many parts of its jurisdiction have been affected, it is most noticeable in individual claims. How the Fair Work Commission balances even very serious conduct against mitigating factors remains unpredictable and has resulted in flip-flopping which creates ongoing uncertainty. This is costly and time consuming. Faced with cost and uncertainty we are seeing our clients feel pressure to settle rather than defend a sound and rational decision to uphold reasonable standards of conduct. The absence of clear statements of principle from the Fair Work Commission (such as we had in the past) and its increasingly subjective approach creates uncertainty, inefficiency and unfairness of a different kind.”
– Henry Skene

“The changes have been many and varied. What I am seeing is increased competition across a number of industry sectors, which means there is a war to retain and protect the most talented staff, who are the engine of the business. This has led to a big uptick in restraint of trade work – a highly specialised area which can be compared to a game of chess. We are passionate about this area of law and have built a specialist service model that in our opinion is market leading – whether it be getting into court within a matter of days when necessary, to defending applications for injunctions or damages. Our clients recognise that a good restraint is a business asset, and invest accordingly.”
– Michael Tamvakologos

On behalf of the team, we would like to thank the truly valued supporters of Seyfarth Shaw in Australia. We are excited to continue to work with you into 2019, and beyond.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

After several years of reports and recommendations, the Australian Parliament has passed the Modern Slavery Act 2018—carrying an imperative for businesses in Australia to take action on their modern slavery risks and responsibilities.

Updates to the legislation

The Modern Slavery Bill generated impassioned debate in both the House and Senate, passing with bipartisan support and several amendments to the legislation:

  • Explanations for failure to comply: If the Minister is reasonably satisfied that an entity has failed to comply with the reporting requirements, the Minister can request that the entity provide an explanation and/or undertake remedial action. The Minister can publish information about entities that have failed to comply with a request.
  • Minister’s Annual Report: The Minister must prepare an Annual Report assessing implementation of the Act, including an overview of compliance by entities and the identification of best practice modern slavery reporting under the Act during the year.
  • Three-year review: The Government agreed to a review of the legislation in three years’ time, which will include whether additional compliance measures are needed.

Labor has signalled that it will push for further amendments if elected into Government next year, including civil penalties for non-compliance, an Independent Anti-Slavery Commissioner, and a public list of entities required to report.

Clarity on reporting requirements

Businesses now have clarity on their modern slavery reporting requirements: All entities operating in Australia, with an annual consolidated revenue of over AUD $100 million, will need to publish a Board-approved modern slavery statement under the federal legislation within six months of the end of their financial year.

Organisations with employees in NSW and a turnover of over AUD $50 million will need to publish modern slavery statements under the NSW law. The Government has stated that businesses reporting under the federal legislation will not need to do so under the NSW law.

If not now, when?

The UN Working Group on Business and Human Rights recently released a report on corporate human rights due diligence with a key takeaway for businesses: just get started. Human rights due diligence and risk management has become an expected norm around the world—requiring proactive, ongoing investment from businesses to know and show that they are meeting their responsibilities to respect human rights. With the passage of the Modern Slavery Act, this should now be at the forefront of the corporate agenda here in Australia.

A proactive and strategic approach

Here are our next steps for Australian businesses.


We are already working with our clients to ensure they comply with their modern slavery reporting obligations – contact us if you would like to know more.

Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.

This week’s data released by the Workplace Gender Equality Agency (WGEA) shows some modest improvements in workplace gender equality in the entities required to report to WGEA (those with 100 or more employees).

There was an ever so slight increase in the proportion of women in senior management roles. And I guess the “biggest single-year drop” of 1% in the gender pay gap is something to celebrate (at least it didn’t go up!) notwithstanding that men still earn 21.3% more than women on average and pay gaps persist in every occupation and industry – even those which are heavily dominated by female workers, such as health & social assistance and education & training.

The stats also disclose that:
  • access to employer-funded paid primary carer’s leave has gone backwards. This disproportionally impacts women who still account for 94.9% of all primary carer’s leave utilised, with men accounting for only 5.1%
  • more than 35% of boards and governing bodies in the data set have no female members
  • although there was a 4% increase in organisations analysing pay data, 40% of those employers took no action to close the gap
  • although almost 75% of employers have a gender equality strategy or policy, only 31.4% have implemented KPIs for managers relating to gender equality outcomes.
Narrowing the “action gap”

The “action gap” – having policies and strategies in place but not making managers accountable for embedding them in their workplaces – has not narrowed. It has been 18 months since I published this blog on diversity and inclusion noting that:

It is trite and well-trodden ground that without buy-in from the top, progress towards true diversity and inclusion will not be made. However, general statements of commitment at the Board or corporate policy level will also never lead to change without integration and implementation at each business function and unit level.

Sadly, although obvious, it is still true. Whilst these policies and initiatives remain stuck within departments for example, seeing them as an HR responsibility not a broader management responsibility, and aren’t part of a broader organisational change conversation, things will never change.

With such little progress being made on gender equality, I’m disillusioned about the prospect of achieving meaningful diversity beyond gender in our workplaces (ethnicity, age, national origin, disability, sexual orientation, educational background, religion, parental status and socio-economic status) anytime soon, until we begin to close the gap between corporate rhetoric and reality.


Subscribe to receive the next Workplace Law & Strategy blog direct to your inbox.