Unions and collective bargaining in Australia in 2021

Incidence and coverage of collective agreements

The number and coverage of collective agreements continued the overall trend of decline in recent years. Over 2021, the number of current collective agreements steadily increased following the initial shock of the pandemic. However, these agreements continued to cover fewer employees (Figure 1). The number of agreements increased from 9995 in the December quarter of 2020 to 10,646 in the December quarter of 2021. However, the number of employees covered by these agreements decreased from 1.65 million to 1.90 million employees over the same period. Comparing aggregate data of employee coverage across the years, the average number of employees covered by current agreements also dropped over the 2020–2021 period. While this trend can partly be explained by long-term structural factors associated with barriers to bargaining (see Pennington, 2018), this specific period shows that employee coverage of current agreements has been falling since the start of the pandemic due to the large number of agreements that have expired without replacement. The number of newly approved agreements also showed a different trend from the previous year, suggesting some bounceback from the initial impact of the pandemic in 2020. While in 2020, there were 3281 new agreements approved, this increased to 4360 agreements approved over 2021.

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Figure 1.

Current agreements and employee coverage (December quarter 2018 to December quarter 2021). Source: Attorney General's Department (2021), Workplace Agreements Database. Trends in Federal Enterprise Bargaining Report, December quarter 2021.

The number and coverage of non-union collective agreements showed a similar pattern to 2020, being low across both incidence and coverage. The number of new non-union collective agreements increased slightly over 2020–2021 from 734 to 796 approved. But their proportion compared to all agreements remained relatively low; non-union collective agreements continued to represent around one-fifth of all new agreements (22% in 2020; 18% in 2021). The data on current non-union collective agreements showed a slight decline over 2020–2021. The proportion of employees covered by non-union agreements also remained very low at 6.5% of all agreements. However, this was a slight increase from 2020 where the proportion of employees covered by non-union agreements was 5.8%. Non-union agreements also continued to operate for a longer duration than union agreements over 2021 (3.5 years compared to 2.9 years, on average).

Developments in enterprise bargaining

While the ‘IR Omnibus Bill’ failed to bring about changes to Australia's enterprise bargaining system, discussed later in this review, there were, however, some developments in the enterprise bargaining system during the year. Employer commentary in early 2021 criticised how the failure of the Bill could jeopardise future wages growth (Marin-Guzman, 2021a). Chief Executive of the Business Council of Australia, Jennifer Westacott, commented on the enduring complexity of the system, decrying how ‘the changing interpretation of the better off overall test…has contributed to a more flawed system that is more procedurally complex and harder to navigate’ (Marin-Guzman, 2021b). Indeed, McDonalds and Dominos also confirmed they would not return to enterprise agreements following the failure of the proposed enterprise bargaining reforms (Marin-Guzman, 2021c). However, the Fair Work Commission (FWC) promised to speed up the approval of enterprise agreements, revealing new targets (e.g. to approve 50% of compliant agreements in 10 working days rather than 3 weeks, and 95% in 20 days instead of 100% in 8 weeks) (Hannan, 2021a).

Wage outcomes

The decade-long trend of low wages growth continued to be a serious problem for the Australian economy in 2021. Wages returned to a regular pattern of modest growth by the end of 2021 after disruptions due to COVID-19 throughout 2020 and early 2021 (Figure 2). Over 2021, the Wage Price Index (WPI) rose 2.3%, rebounding from a low of 1.4% in 2020. Within these aggregate numbers, annual wage growth over the year ranged from 3.5% for the ‘Accommodation and food services’ industry (influenced by the payment of two FWC annual wage increases in 2021) to 1.3% for the ‘Electricity, gas, water and waste services’ industry. The highest wage growth was in Tasmania with a rise of 3.0%, while Western Australia recorded the lowest rise through the year of 2.0%.

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Figure 2.

Annual wage growth by sector, seasonally adjusted.

While private sector rates of pay returned to their ‘pre-pandemic pattern’ after labour market disruptions, public sector rates remained low. Through the year, private sector rates of pay rose 2.4%. The ABS attributed this to various reasons including sustained demand extended across industry groups (previously visible in only isolated pockets) which resulted in larger increases to attract and retain skilled staff, and a greater proportion of award-based wage rises during the year. In the public sector, rates increased by 2.1% over the year, up from a record 24-year low of 1.3% in June quarter of 2020. However, wages in the public sector remained low despite the very high workload and work demands that were placed on key areas of the public sector workforce, including teachers and nurses, during the pandemic (see Adelson et al. 2021; Wilson et al. 2020).

Public sector wage caps continued to be blamed for contributing to wage stagnation. For example, in NSW, public service pay rises have been capped at 2.5% annually for the last decade (Gavin, 2019) and a near pay freeze was instigated by the NSW government in response to the pandemic in 2020 (Workplace Express, 2021a). Beyond 2021, the Reserve Bank of Australia forecasted that wages would increase over the next 2–3 years, but ‘only gradually’. The Governor of the Reserve Bank, Philip Lowe, indicated that this was partly due to issues with ‘Australia's wage-setting processes, which create inertia in aggregate wage outcomes’, including renegotiation of enterprise agreements only every 2–3 years and public sector wages policies (Lowe, 2021). It is worth noting, however, the history of the RBA's ‘poor forecasting record’ in overstating prospective wages growth (Keating, 2021a).¹

Regarding wages under enterprise agreements, as usual, wage movements continued to be higher in workplaces covered by enterprise agreements than the generalised numbers reported in the WPI. However, they did not increase much faster than the WPI in 2021, namely due to pandemic-driven pay caps and freezes at state and federal levels. Compared to the WPI of 2.3% over 2021, the average annualised wage increase (AAWI) for agreements approved over 2021 ranged between 2.6% and 2.7% for private sector agreements, and 2.1% and 2.7% for public sector agreements. Wage increases in newly approved union agreements also continued to be higher compared to non-union collective agreements during 2021 – between a range of 2.4%–2.7% compared to 2.1%–2.5%, respectively.

Increases in the national minimum wage were more generous in 2021 compared to 2020. Off the back of a 1.75% increase in 2020 (the smallest increase in 12 years), the FWC announced a 2.5% increase in the minimum wage, stating that the circumstances of 2021 were different from 2020. Submissions to the FWC annual wage review panel emphasised that the performance of the economy had exceeded expectations.

Industrial disputes

The level of industrial disputation in 2021 continued the long-term trend of being considerably lower than in the 1980s and prior decades. However, there was a very modest rise in the number of industrial disputes in late 2021 compared to the drop in disputes in 2020 due to the pandemic (Figure 3). The ABS reports data on industrial disputes, including general strikes, unauthorised stop work meetings, lockouts and other types of industrial action, if the work stoppages amount to 10 or more working days lost (WDL) within a month. There were 130 disputes over 2021 compared to 77 in 2020 (a 69% increase). These disputes involved a total of 116,600 WDL, which was 83,000 more than the previous year. Towards the end of 2021, most WDL were in education, health care and social assistance industries. This may reflect campaigns by unions in these industries for improvements to salaries and working conditions, particularly given increased work demands in the public sector during the pandemic, discussed later in this review.

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Figure 3.

Industrial disputes in the last 10 years, Australia.

Transport and logistics

With enterprise agreements for all major trucking companies expiring in June, the Transport Workers Union (TWU) led a coordinated bargaining campaign – deferred in 2020 due to the pandemic – with companies including Toll, Linfox, StarTrack and FedEx. At the heart of negotiations were concerns around threats to job security from an expanding gig economy and competition in the sector. However, difficult negotiations prompted an almost year-long dispute and sparked rolling national stoppages at a time of reliance on the delivery of vaccinations and household goods during lockdowns. The TWU sought greater restrictions on the use of outsourced staff and labour hire workers who were being paid less than unionised direct employees, plus a commitment to paying the same rates for labour hire workers performing the same work as employees (Workplace Express, 2021c). The union also sought pay and superannuation increases, citing large profits of these companies.

Thousands of workers at Toll commenced the first wave of strikes in the industry with a 24-hour national strike in late August following stalled negotiations on overtime for permanent staff and pay parity for external hires (Marin-Guzman, 2021f). This stoppage was the first national strike in road transport in more than a decade (Marin-Guzman, 2021f). Hundreds of StarTrack drivers took similar action in late September demanding stronger job security guarantees (Janda, 2021). An effort by StarTrack to cancel the planned 24-hour strike failed. The FWC stated that StarTrack showed ‘little evidence’ that the protected action would jeopardise lives or health by delaying essential supplies. This was predominantly due to the fact that the TWU provided assurance that delivery of essential medical supplies, including the COVID-19 vaccine, would be exempt from the industrial action (Janda, 2021; Workplace Express, 2021d).

Further threats of industrial action prompted an in-principle agreement being reached between Toll and the TWU, followed by an agreement struck with StarTrack. These agreements included industry-leading superannuation rates, improvements in pay and outsourcing, as well as commitment to further consultation and auditing of jobs (Hannan, 2021b; Workplace Express, 2021e). Agreement was also reached with FedEx for improved pay, superannuation and job security provisions, but not before thousands of FedEx workers walked off the job and threatened further action (Workplace Express, 2021f).

Public sector

Disputes occurred in the public sector in relation to worsening pay and conditions, at times in response to COVID-19. Early in the year, Queensland nurses raised concerns around appropriate personal protective equipment (PPE). This prompted the Queensland Nurses and Midwives Union to take Queensland Health to the Industrial Relations Commission (IRC) over fears that nurses were not being fitted properly with PPE (Stewart, 2021b). In NSW, nurses and midwives took stop work action at hospitals in South-West Sydney in a dispute with the state government over the state wages cap and nurse-to-patient ratios (White et al. 2021; Workplace Express, 2021g).

Teacher unions in the Victorian and New South Wales public education systems also led industrial campaigns in response to stalling salaries, unsustainable workloads and worsening teacher shortages. In NSW, public sector teachers took industrial action for the first time in a decade, following a stalemate in award negotiations with the NSW Government. The Teachers’ Federation sought pay increases of up to 7.5% per year, additional planning time for teachers, and reduced workloads (Gavin, 2021). Underlying this industrial campaign were also demands for greater professional respect for teachers. The Federation was particularly concerned over the government's failure to prioritise teachers as part of the vaccination rollout (Baker, 2021a). Despite a ruling by the NSW IRC not to engage in strike action, the union held a 1-day strike in late 2021. In response, the NSW Education Minister accused the Federation of being ‘an obstructionist protection racket’ that was ‘hell-bent on hanging students out to dry for political purposes’ (Baker, 2021b). As of early 2022, the industrial campaign by the Federation continues.

Food manufacturing

With several enterprise agreements in the food manufacturing industry expiring in 2021, unions also took action against large food manufacturers that profited during the pandemic. Workers at McCain's Smithton plant in Tasmania sought 4% annual pay rises over 3 years to lift their wages to those of equivalent McCain employees on the mainland (Hannan, 2021c). However, they were locked out after the Australian Manufacturing Workers’ Union (AMWU) gave notice that employees intended to take protected industrial action. The lockout occurred despite no industrial action having been taken by the workers. A Full Bench majority of the FWC found the lockout by the employer was unlawful (Workplace Express, 2021h). Commenting on this ruling, ACTU President Michele O’Neil emphasised that ‘it makes clear that companies cannot use lockouts as a pre-emptive weapon to intimidate workers seeking a fair deal’ (Workplace Express, 2021h). The AMWU reported that it reached an in-principle agreement for wage increases of at least 9.8% over 3 years (Workplace Express, 2021i).

Workers at McCormick Foods’ manufacturing site in Clayton, Victoria also found themselves on indefinite strike in an attempt to force their employer to agree to pay rises following the nominal expiry of their enterprise agreement in 2016. At issue in negotiations were penalty rates, overtime and paid meal breaks, as well as a push for a wage increase of 9% over 3 years (Workplace Express, 2021j). Meanwhile, workers at General Mills in Rooty Hill, NSW, also took action for pay increases to keep up with the cost of living. During the pandemic, it was reported that General Mills saw an operating profit increase of 17%, however, such increases were not matched in the pay offer to workers (Falzon, 2021). After 3 weeks on strike, workers secured a wage increase of 9% over 3 years without any trade-off in conditions.

International shipping

The country's ports were affected by industrial action which interrupted supply chains in an industry already in turmoil from pandemic-related disruptions. Members of the Maritime Union of Australia (MUA) division of the CFMMEU in the Port of Fremantle took part in a suite of industrial actions from July to mid-October as part of enterprise bargaining negotiations with Qube Logistics. The dispute centred around the notification of start times. The MUA argued that the current rostering arrangements made it difficult for casual workers to plan their lives outside of work and that more notice needed to be provided (Hudson and Hayes, 2021). However, the dispute ended with limited progress. Ahead of Attorney General Michaelia Cash's planned intention to approach the FWC to terminate the industrial action due to concerns of economic damage, a new workplace deal was reached, but with the company's shift notifications unchanged (Marin-Guzman, 2021g).

The MUA's dispute with Patrick Terminals also saw industrial action involving multiple terminals, including Sydney and Fremantle. With bargaining for a new agreement having gone on for 19 months (since February 2020) and some 12 months of industrial action, an impasse was reached. The union was dissatisfied with Patrick's ‘final’ pay offer and also sought more control over manning levels and hiring of workers. The agreement in place provided for MUA consent before the company hired new workers, but Patrick was attempting to remove this requirement. In late September, the MUA escalated industrial action and notified that workers would strike for 48 hours at Port Botany and commence 12-hour stoppages 3 days a week at its Melbourne port amid a continued bargaining stalemate (Marin-Guzman, 2021h). Patrick, claiming threats to the national economy with an ‘unrelenting barrage’ of stoppages and bans that were threatening ‘serious damage’ to the economy, applied to terminate the protected industrial action (Hannan, 2021d). Agreement was reached in the FWC that both parties would resume negotiations (Hannan, 2021e). A current Productivity Commission inquiry is examining Australia's maritime logistics system and issues contributing to supply chain disruptions. While the inquiry is specifically focusing on long-term structural issues affecting productivity and efficiency on the waterfront, part of it is also considering relevant workforce and IR issues (Martin, 2021).

Safety at work

At the federal level, the ACTU has, for some years, been campaigning for legislative change to address sexual harassment in workplaces and secure paid family and domestic violence leave. Public pressure has been on the Federal Government to address workplace sexual harassment, prompted by allegations of serious sexual misconduct in Parliament House and stalling efforts to act on recommendations from the Australian Human Rights Commission's (AHRC) ‘Respect@Work’ report. In response, the Federal Government released its ‘Roadmap to Respect’ and accompanying legislative reforms to address this issue. The ACTU, however, criticised the government's legislative reforms for not going far enough to eliminate sexual violence and harassment at work (ACTU, 2021a). In particular, the peak union body was critical of the Federal Government's failure to enshrine in workplace law key recommendations from the AHRC's report that would oblige employers to prevent and eliminate sexual harassment at work.

The ACTU also renewed its campaign for paid family and domestic violence leave in a submission to the FWC (ACTU, 2021b). The FWC's 2021 review of family and domestic violence leave terms in modern awards – which continues in 2022 – will consider existing (unpaid) entitlements and whether provisions should be made for paid family and domestic violence leave.

Wage theft and insecure work

‘Wage theft’ continued to be a focus for unions in 2021. A growing body of evidence by unions and academics has observed widespread non-compliance in the Australian horticulture industry and problems with the piece rate system that pays workers according to how much produce they pick (see Howe et al. 2019; Unions NSW, 2021). Following an application by the Australian Workers’ Union to the FWC to amend the Horticulture Award, the FWC ruled in favour of the union that the existing piece rate system was ‘not fit for purpose’. Instead, farm workers should be entitled to minimum wage protections (Marin-Guzman, 2021i). Unions also pursued wage theft matters in other sectors, such as tertiary education and financial services. The National Tertiary Education Union continued to pursue its casual underpayment dispute, securing millions of dollars in back pay for casual workers across universities (see NTEU, 2021). In late 2021, the Finance Sector Union was also preparing a lawsuit against the National Australia Bank against excessive unpaid overtime and workloads (Butler, 2021).

Nationally, the ACTU continued its campaign to address insecure work. Its submission to the Senate Select Committee on Job Security emphasised how the economic downturn and more recent economic recovery was dominated by insecure work and that legislative reforms failed to ensure more secure jobs (ACTU, 2021c). There was some promise of reform with respect to labour hire, however. The Federal Opposition in late 2021 introduced a private member's bill which would ensure that workers employed through labour hire would receive the same pay as workers directly employed by the same employer (ACTU, 2021d).

Outsourcing

Before the courts, the TWU attempted to challenge a major corporate outsourcing exercise undertaken by Qantas. The TWU argued that Qantas took advantage of the pandemic to outsource all (mostly unionised) ground staff, despite being in receipt of JobKeeper, a government programme designed to ensure businesses retained their employees (Forsyth, 2021). The union argued that the outsourcing decision breached the Fair Work Act because the affected employees were targeted on the basis of their union membership and were prevented from exercising their workplace rights, namely the right to organise and engage in collective bargaining and take protected industrial action relating to renegotiation of an enterprise agreement (Mitchell, 2021).

Qantas, however, argued that the timing of the outsourcing decision was primarily motivated by the financial hit to the airline from the pandemic (Janda and Khadem, 2021). The Federal Court found in its ruling that Qantas was partly motivated by a desire to avoid future IR disputes with the unionised workforce. Forsyth (2021) argued that the decision represented an important and overdue check on decades of business outsourcing initiatives that have undermined workers’ job security and driven down wages. While the court dismissed the TWU's application for the sacked workers to be reinstated, in late 2021, it was deliberating a fine for Qantas and the requirement to pay compensation to the workers (Patty, 2021).

The IR Omnibus Bill

Following ‘roundtable’ talks between government officials, employer groups and unions that failed to establish meaningful consensus on IR reforms in response to the pandemic, the Coalition subsequently introduced the Fair Work Amendment (Supporting Australia‘s Jobs and Economic Recovery) Bill (‘IR Omnibus Bill’) into Federal Parliament in late 2020 (Hannan, 2021f). The Bill faced union opposition. ACTU Secretary Sally McManus stated: ‘These laws will harm our economic recovery, they are a recipe for keeping wages low and jobs insecure’ (ACTU, 2021e). Contested areas included a proposal to suspend the ‘better off overall test’ for COVID-affected businesses and union concerns around a proposal to criminalise certain deliberate instances of systemic underpayment, although this was initially supported by unions in an effort to combat ‘wage theft’ (Peetz, 2020).

Most of the Bill was withdrawn. Facing significant opposition in the Senate, of the five elements of the Bill, only one reform area was passed – limited changes to the definition of casual employment, where employment would be defined by contract as opposed to relying on the subsequent actual conduct of the employment relationship. Such reform was considered a move to reduce the liability of employers found to have misclassified casuals and safeguard employers against ‘double dipping’ by casuals³ (Hannan, 2021f). The reforms also provided a mechanism for casual employees to convert to permanent employment in certain circumstances. Unions claimed victory in halting most of the proposed reforms (although the government also withdrew some areas of the Bill supported by unions). However, unions criticised the changing definition of casual employment which they believed would fail to restrict the growth of insecure work and would retrospectively remove the rights of misclassified workers to recover their entitlements (ACTU, 2021e).

The vaccine rollout

Since 2020, there have been ongoing discussions between the IR parties on how to manage the vaccine rollout to protect workers and livelihoods (Ferguson and Hannan, 2021). Confusion and criticism surrounded the capacity for employers to mandate vaccination to keep workers safe and their businesses running. Limited direction from the Federal Government only added to this confusion such that early in the vaccine rollout, some major employers began developing policies requiring vaccination of their workforces. Such policies were often met with union opposition. Fruit and vegetable processing business SPC was the first employer nationwide to mandate vaccinations, sparking criticism from the AMWU around the apparent lack of consultation with workers over this decision (Cook et al. 2021). Other major corporations followed, including Qantas, Telstra, Westpac and BHP, in a sign that mandatory vaccination was gaining more acceptance across industries.

The trade union movement supported vaccinations, with most unions arguing that high vaccination rates should be achieved through education and access, rather than employer mandates (Tham, 2021). In a joint statement, the BCA and ACTU supported the fact that vaccination may be necessary for some high-risk workplaces and where required through public health orders, but otherwise argued that vaccination should be voluntary and encouraged (Tham, 2021). With some success, the ACTU also lobbied the Federal Government to provide paid vaccination leave and paid travel time for workers to increase vaccination rates (Tham, 2021).

Meanwhile, employer groups, frustrated over the lack of clarity from the Federal Government on employers’ rights or protections around encouraging or requiring vaccination, called for more national leadership (Cook et al. 2021). Some hope of cooperation on this issue came with Minister Cash organising a meeting of employer groups, unions and key regulators to discuss how to best support the vaccine rollout in workplaces (Bonyhady, 2021). But the meeting produced limited outcomes. Employer groups criticised the Federal Government for failing to address their concerns about the potential legal consequences for businesses from the vaccine rollout (Hannan, 2021g).

The Federal Government maintained its position in ruling out mandating vaccines across the board. Instead, the government held the view that vaccination would generally be voluntary for Australians. It emphasised that requirements for vaccination could be made through state/territory public health orders, but that employers and employees should also work together in discussing the issue at a workplace level (Keating, 2021b). This reaffirmed position also prompted the Fair Work Ombudsman to update its advice on mandatory vaccination, moving away from earlier guidance that employers are ‘overwhelmingly’ unable to introduce mandatory vaccination policies, and making it clear that employers had more scope to make vaccinations mandatory (Keating, 2021b).

This conflict between parties on the matter of (mandatory) vaccination sparked clashes in some industries. While the building and construction industry essentially stayed ‘open’ during the pandemic, new restrictions were imposed in the industry in Victoria as it became clear that COVID-safe rules were not being followed on some building sites (Workplace Express, 2021k). While the CFMMEU opposed these changes, introduced suddenly, some of the union's members saw the union as complicit in the issue of mandatory vaccinations for construction workers, sparking several large-scale violent protests in the Melbourne CBD. This prompted the Victorian Government to impose a 2-week snap shutdown of construction sites in metropolitan Melbourne. Union leaders remained firm that most people who attended the protests were ‘professional protesters’ and far-right activists, not union members (Workplace Express, 2021k).

The ability of employers to mandate vaccination was also tested before the FWC. In mining, BHP had mandated vaccines for workers at its Mt Arthur coal mine in the Hunter Valley, despite no public health order being in place. The FWC subsequently ruled that BHP had failed to adequately consult with workers about vaccinations, seemingly adding to the confusion around this issue (Workplace Express, 2021l). Even within the tribunal, controversy ensued around the issue during a Full Bench matter on mandatory vaccinations (not the COVID-19 vaccine). Deputy President Lyndall Dean's personal view that vaccine mandates are a form of ‘medical apartheid’, as expressed in the decision, attracted strong criticism from the NSW Supreme Court in a case that later attempted to rely on DP Dean's reasoning, and which also saw her temporarily excluded from full bench work and directed to undertake further training (Marin-Guzman, 2021j).