Fair Pay Agreements - June 2018

15 June 2018

This amounts to re-establishment of the old award system – by stealth over time, if not immediately.  The spectre of demarcation disputes is there, with the group charged with “determining the scope of agreement coverage, including demarcating the boundaries of the industry or occupation and whether the Fair Pay Agreement system would apply to employees only, or a broader class of workers”. If you want more recent validation for these concerns, look at what happens in Australia with their so-called modern awards. 

As Winston Churchill famously said, “a nation that forgets its past has no future”.  Some of us can remember the perils of the past but very few on the working group, apart from two union representatives, have any real experience, which presumably was the intention. 

The concept appears to be that a few employers and unions will get together and set terms and conditions of employment for a whole sector or industry.  That will mean higher base rates, penal rates, a raft of allowances, double time overtime, additional leave benefits, excessively high redundancy compensation and so on.  The little guys will have no say.  There is something anti-competitive about this, in the sense that it will suit the larger, more traditional players who were unsuccessful or never tackled the old ways of doing things, to force their outdated terms and conditions upon the rest of their sector or industry. 

We know from history two things happen as a result – the little guys get squeezed out or are forced to cut back their operations by having to pay more than they can afford (both of which result in job losses), and a round of second tier bargaining follows as the big guys are asked to pay more. 

The Government says strike action will not be permitted during FPA bargaining, but that is of no consolation to an employer who doesn’t wish to be party to an FPA.  Even if in the end result an employer is able to opt out of, or not participate in, the first round of FPA bargaining, they may be safe for the first year or so, but as their collective agreements expire they will be picked off and subjected to strike action if they do not match the FPA terms. 

The working group is required to report to the Minister by November 2018, which suggests legislation could be in force from the second quarter of 2019, but there is a fair bit of water to go under the bridge yet.  If you’re bargaining currently or about to do so, go long with a three year deal and wait for the dust to settle. 

The irony of it all is that the more FPAs prescribe terms and conditions of employment for a sector or industry the further south union membership will head. 

You can access more information on the members of the working group and the terms of reference here: