Federal Government urged to axe 'better off overall' test to streamline EBA process

ABC News
August 10  2019


Enterprise bargaining agreements have become "Downton Abbey-sized laundry lists" and need to be "unscrambled" to lift productivity and wages growth, the Business Council of Australia says.
Key points:   

    The council said the "better off overall test" is a "productivity killer" and unworkable
    They want the test replaced with the "no disadvantage test", which was recommended by the Productivity Commission
    Both Federal Labor and the unions have opposed the proposed changes

The council said new research showed enterprise bargaining agreements have "served Australians well", but contain too many items that risk stalling negotiations.

The organisation's report found that wage growth for those on active EAs was "relatively strong" and slightly higher than the economy-wide average, but that the number of people employed on active EAs dropped sharply between 2014 and 2017.

"[Too many items] bogs down negotiations, and agreements are taking too long to conclude," chief executive Jennifer Westacott said.

"We can't allow the EBA system to die the death of a thousand cuts."

Ms Westacott wants the Morrison Government to remove the Fair Work Act's "better off overall test" (BOOT) which requires all employees covered by the agreement to be better off overall than under the relevant award.

Wage weakness deepens as EBAs slide
The latest batch of enterprise agreements from the first three months of the year point to a further slide in wage growth, entrenching ongoing weakness in workers' pay rises.

She said the test was a "productivity killer" and unworkable.

    "The problem with the way BOOT is operating now is that it prevents trade-offs," she said.

The council wants the test replaced with the "no disadvantage test", which was recommended by the Productivity Commission in 2015.

"It's a tough, competitive world and it's in everyone's interests that workers and their employers can come together to adjust quickly to changing circumstances such as new competition and technological change," Ms Westacott said.

"Employers need the ability to adjust and change their operations quickly and ensure the benefits of improved productivity are passed through to workers with higher wages and better conditions."
'The Government should rule that out straight away'

Acting Shadow Treasurer Katy Gallagher said Labor would oppose the proposed changes given company profits are at record highs and wages are stagnant.

Why is wage growth so low?
Why is Australia experiencing its slowest wages growth since World War Two? There are countless theories, but many come back to a shift in power between workers and employers.

"It's working people who aren't getting their fair share at the moment," she said.

"We would absolutely not support that, and we think the Government should rule that out straight away.

    "It's always working people that are the ones who have to give up something when people start talking about reform and productivity."

ACTU secretary Sally McManus said the council's suggestion would lead Australia down the "wrong path".   

"At a time when working people are suffering from record low wages growth, the big business lobby wants to allow employers to pay people even less," she said.

"This suggestion would let employers pay people lower than the current legal minimum standards, and make good employers who pay fairly compete with those who just want to cut wages."

Industrial Relations Minister Christian Porter launched a review of the workplace relations earlier this year.

Geez! GetUp! must have put a bomb under the old union propaganda parrot BlackDay cause now he is squawking so hard he fell off his perch.

He is chundering GetUp! propaganda out post after silly post.

The Libs must have a death wish. Does anyone really believe that they would win an election if they tried Workchoices 2? That's how Labor would brand it - and it will stick, HARD.

Quote:


The Boot test is about the weakest part of the fair work legislation and does need to be replaced with something that works, I suspect that what the Business groups want is no such thing.

The above statement is a lie, there is no intent that every worker will be better off and in fact in many cases it isn't even the majority of workers.

To explain how it works: the Boot test is measured against the modern award (safety net) which is the lowest standard.

i.e. if you are currently on an agreement which is paying 8% above the modern award and the offer is a new agreement which is 2% above the modern award it will pass the boot test even though everyone is 5% worse off.

The boot test is absolute rubbish it is successfully used to keep wages low and to remove working conditions and there is no defence against it.

The boot test forces wage outcomes to line up with the modern award numbers and the modern award numbers are the lowest for the industry and considered as the safety net position.

The boot test is likely the main reason that fair work has been an utter failure, it is faulty at the root of its design.