Unions fear big project deals could lock workers out of pay rises for years

Unions were willing to agree to longer pay agreements for major construction projects during secretive industrial relations talks last year as long as Australian jobs, apprentices and workplace diversity were made a legal priority.

But employers rejected the unions’ plan for five-year agreements, seen by this masthead, on the basis that it would not do enough to stabilise labour costs and encourage investment.

Unions fear workers could be locked out of real pay rises for years on big construction projects such as for stadiums.Credit:Brook Mitchell

The Morrison government’s proposed industrial relations overhaul would instead let pay deals run for up to eight years, rather than the current four, on big projects. The Construction, Forestry, Maritime, Mining and Energy Union fears this will leave workers with negligible wages growth for almost a decade.

Business representatives and unions spent months last year in secret negotiations on the future of Australia’s industrial relations system after the government urged both sides to find a consensus to get Australians back to work post-pandemic.

Among the changes proposed by the Morrison government after that process are new rules for “greenfields agreements”, which are pay deals that apply to projects worth over $500 million, or $250 million if the minister signs off. They operate primarily on major construction sites and resource projects and determine the pay and conditions of sometimes thousands of workers.

“Minuscule wage rises, 0.1 per cent per annum, would be allowable [under the new agreements],” CFMMEU national construction secretary Dave Noonan said. “Senators should vote for this if they want real wage cuts for Australians, otherwise they should vote against it.”

Greenfields agreements are struck before the prospective employer takes on any staff to give them certainty about a project’s cost and can be approved if, after six months of negotiations with relevant unions, there is no agreement. Under the government’s bill, they must contain annual pay rises if they extend longer than four years and pass the same safeguards as other enterprise agreements.

Steve Knott, from the Australian Mines and Minerals Association, which was also part of the government’s IR working groups, said the longer agreements were critical to ensure big projects could attract investment by preventing the spectre of strikes part way through construction.

“These mega resources projects bring many thousands of jobs to Australia, and provide billions of dollars in taxation and royalty revenues to governments, for decades,” Mr Knott said.

The government’s industrial bill is before Federal Parliament, where its fate rests with the Senate crossbench. In a committee hearing on the bill on Friday, independent senator Jacqui Lambie signalled she would not be supporting the bill, asking unions whether it included any of their priorities from the working groups.

A document summarising the unions’ position during the working groups shows they proposed greenfields agreements for five years for projects worth more than $5 billion, with a provision for the Fair Work Commission to arbitrate, taking into account the impact on Australian jobs and apprentices, if both sides could not agree.

“The proposal was clearly not something put forward in good faith with a view to fixing well-known industrial relations problems and encouraging job-creating investment,” Mr Knott said.

Employers have previously proposed agreements with no fixed end date if they are worth more than $50 million, which Minerals Council of Australia chief executive Tania Constable said were available in the US and Canada.

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