Employers bid for 5 year union-based greenfield agreements

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Employers bid for 5 year union-based greenfield agreements

Employers are arguing for all greenfield agreements under the new IR system to have a life of up to five years – except those greenfield agreements which employers negotiate with themselves rather than with unions, which will be limited to one year.

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Employers are arguing for all greenfield agreements under the new IR system to have a life of up to five years – except those greenfield agreements which employers negotiate with themselves rather than with unions, which will be limited to one year. 

The Federal Government’s IR Bill, currently the subject of a Senate inquiry, limits all greenfield agreements to one year, after which unions can take protected industrial action to force a new agreement. 

The concern of employers is that the one year provision for both kinds of greenfield agreements makes major construction projects, such as mines or oilfield development, vulnerable to industrial action at a time which could seriously damage the project. 

Negotiating with unions becomes more attractive

A longer term union agreement would remove this fear. However, if employers are successful with their argument, a consequence for them and the Federal Government will be that longer term greenfield agreements with unions will become a much more attractive option – at a time when the Federal Government is trying to keep ‘third parties’ (that is, unions) out of the agreement making process.

One mitigating factor is that Greenfield agreements will be able to be supplanted by enterprise agreements or AWAs during the life of the agreement, but without the employees being able to take protected industrial action.

Position of Federal Government

It is understood the Government has opted for the one year period for greenfield agreements because its whole IR philosophy is based on agreement-making at the workforce between employers and employees. Obviously this has not occurred if the agreement is between the employer and the unions, or the employer and the employer. 

Submission by employer group

Australian Business Industrial (ABI – the registered industrial entity for Australian Business Limited) says in its submissions to the Senate inquiry that currently greenfield agreements are treated in the same way as other agreements, that is, they may have a life of up to three years. 

It says ABI does not support the change to one year.

‘If the reason for treating the nominal life of greenfield agreements differently from other agreements arises from the introduction of employer greenfield agreements, then ABI submits that these new greenfield agreements could be differently treated, rather than all greenfield agreements being given a nominal one year life,’ the ABI submission states.  

‘Of particular concern is the implication of one year agreements for projects such as social and economic infrastructure construction and factory/plant construction or expansion.   

‘Large projects of this kind inevitably involve unions, and unlike ongoing operations which have to adjust their running costs as they continue, the size and certainty of the initial capital investment is an important determinant of the investment decision.   

‘One year agreements can only encourage the development of “short-termism” identified by the Building Industry Royal Commission.’ 

ABI submitted that the Bill should at least provide for greenfield project agreements which operate for the life of the project subject to a maximum of 5 years.  

The Australian Mines and Metals Association has also voiced its concern to the Federal Government about a one year term limit for greenfield agreements. 

Related 

No strikes if life or economy endangered, say new IR laws - Second Reading summarised

Role of future agreements: proposed workplace legislation

 

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