Article by Steven Amendola the West Australia.

It is another week in which WA businesses are coming to terms with another wave of changes to industrial relations laws drafted by people who do not really understand how a resources-focused economy works. It will be interesting to see how a “right to disconnect” works in a remote mining camp when you want to check on the welfare or fitness for work of a worker who is residing in premises operated by you during their non-working time.

At this stage it is really only possible to speculate on what the impact of the changes will be. One of the challenges of the various waves of legislation, probably by design, is their varying commencement dates. Rather than a single start date after a 12-month familiarisation period, the changes have taken effect in a very haphazard way. This is why we are only now starting to see the impact of one change from the first wave of reform. The rubber is about to hit the road as to how multi-employer enterprise bargaining provisions are going to work. It is happening in the black coal mining industry in Queensland so the implications for WA’s hard rock mining and hydrocarbons industries are clear.

Last year, the Collieries Staff and Officials Association applied for a “single interest employer authorisation” in an attempt to get a first multi-employer agreement across the resources sector. The employers that are the subject of the application are Peabody Energy, Glencore, Whitehaven, Delta Coal and Wollongong Resources. This, notwithstanding the protestations of Minister Tony Burke in 2022 that multi-employer bargaining would not significantly impact the mining sector. They are opposing the application.

How does a union get to make a “single interest” multi-employer bargaining application? There are two key criteria they must meet. First, there can’t be a current enterprise agreement that applies to the workers in question, and secondly a majority of employees at each employer have to support the making of such an application. The latter is being contested by the employers.

If these criteria are met, the onus is then on the employers to show that they don’t have clearly identifiable common interests, that it is contrary to the public interest, or that the operations and business activities of the employers are not reasonably comparable.

How these tests are applied by the Fair Work Commission will determine the extent to which these provisions are used by unions to proliferate multi-employer agreements in the future.

If the FWC sets the tests in a way that allows unions to corral multiple employers no matter what differences in their economic model, financial pressures, cost structures, and markets and product pricing, you can expect a flood of applications by unions in the future and a major push to homogenise wages and conditions across many employers. They can do this by taking across the board industrial action to pursue those homogenised demands.

But wait, there’s more. If an agreement is reached with any two of those employers, that agreement can be leveraged by unions making applications to rope in the other employers. The thing to know about this process is no bargaining is involved, and if an employer is roped in, the document is called an “agreement” even if the employer does not agree. To describe this process as bargaining is misleading.

It also is blatantly anti-competitive.

The likely outcome over time is the creation of a series of oligopolies where employers who can’t bear the cost of the imposed “agreement” on them leave the market and a significant barrier to entry into a market is created. For a Government so concerned about the anti-competitive effect of restraint of trade provisions in individual contracts of employment, the irony of this should not be lost.

However, Mr Burke did give the game away somewhat with some of his comments about the DP World dispute where, in criticising DP World, he said that “Australians are sick to death of having highly profitable companies say everything is the fault of them having to pay their workforce the same as their competitors”.

In the case of multi-employer “bargaining” we might as well call them what they really are, and that is more costly awards. What is old is new again, but query whether it is taking nostalgia just a bit too far in effectively reintroducing centralised wage fixing, except on a paid rates basis. That’s an impressive set of steak knives but the problem is the resources sector is beholden to international factors which might make them worthless.

What happens if unsustainable conditions are negotiated across the industry in a boom without the ability to adjust in a bust? As we have seen recently in lithium and nickel, a downturn can happen quickly. If everyone’s labour costs are chained together at unsustainable levels the whole sector is wiped out. The canary looks pretty sick.

Steven Amendola is a partner at law firm Kingston Reid.