The problem of wage stagnation: declining union collective bargaining power under the fair work act

Abstract

This thesis will argue that the reduction of the bargaining power of unions and employees through legislative mechanisms is a central reason in the ‘crisis’ of wage stagnation in the Australian workforce. Chapter one will show the causal relationship between the economic conditions of low wage growth and the neoliberal ascendance in labour legislation leading to the shift away from industry bargaining under the conciliation and arbitration system to the dominance of enterprise bargaining, and consequent loss of union bargaining power. Chapter two will interrogate the method of collective bargaining under the Fair Work Act 2009 (Cth) (FW Act or ‘the Act’), and specific provisions that undermine the ability of unions to bargain collectively. Whilst there are many mechanisms in the Act that do this, such as the restrictions on union right of entry and prohibited content in collective agreements, this thesis will focus on the key provisions that undermine bargaining, the good faith bargaining provisions, and the prohibition on pattern bargaining and restrictions on protected industrial action. These provisions weaken unions’ bargaining capacity, by reducing their bargaining scale, restricting industrial pressure unions use to bargain with, and allowing employers to refuse to make agreements. Together, these provisions severely the capacity of unions to use collective agreements to achieve wage increases. Chapter three will offer a legislative solution, designed to increase the collective bargaining power of unions and thus to improve wages and conditions for the Australian workforce. These recommendations involve removing restrictions on the scope of bargaining and encouraging the use of multi-enterprise bargaining, amending the good faith bargaining provisions, and repealing some of the restrictions on protected industrial action