The trade union movement has called for sweeping changes to industrial relations laws, proposing a new framework that would end 25 years of cross-party consensus that workers should only bargain for pay rises with their direct employers.

Calling it a “blueprint to give Australia a pay rise”, the Australian Council of Trade Unions’ plan called for a radical shake-up of the awards system and, most controversially, an end to enterprise-only bargaining.

This would allow employees of different businesses to club together to petition for higher wages and better conditions, and as such would massively increase workers’ ability to pressure employers.

The ‘blueprint’ also includes proposals to introduce a living wage, re-instate penalty rates, mandate equal pay for women, and crack down on wage theft.

But it was the call to end enterprise-only bargaining that immediately raised the hackles of the business lobby.

The Australian Chamber of Commerce and Industry (ACCI) called it “a blueprint for strikes and increased union power at the expense of jobs”, while The Australian newspaper, which generally takes the side of business, called it a “bid for 1970s-style” industrial relations.

But ACTU general secretary Sally McManus said the plan would deliver “an immediate wage increase for 2.3 million working people”.

“The plan will also ensure that working people are not waiting for the non-existent ‘trickle-down effect’ to occur,” she said.

Profits are up and productivity is up, but wages are not. The only way to ensure working people get their fair share in pay rises is to ensure they have the power they need to negotiate them.”

Wage growth is currently at record lows, and has shown little sign of moving despite rising employment.

What is enterprise-only bargaining?

Introduced under the Hawke and Keating Labor governments of the 1980s and ’90s, enterprise-only bargaining rules impose significant restrictions on how workers can negotiate with employers.

Essentially these rules dictate that employees can only use industrial action to negotiate legitimate bargaining agreements with their own employer.

So while unionised workers can technically make multi-enterprise agreements (i.e. with more than one business), the rules mean the unions’ most potent method of persuasion – going on strike – is limited to negotiations with single employers.

Without the freedom to strike, workers have little leverage in the negotiations.

Why the ACTU says this must change

A spokesperson for the ACTU gave three scenarios in which enterprise-only bargaining does not serve workers.

First, you might work for a mining company, but technically be the employee of a labour hire firm. You might be working alongside direct employees of the mining company, even doing exactly the same job.

But because you are not technically an employee of the mining company, you cannot legitimately enter into collective bargaining agreements with that company. The ACTU says this is not fair.

The second example was that of the employee of a food supplier. As a business, food suppliers have very little control over prices. It is generally supermarkets that are the ‘price setters’ (as opposed to ‘price takers’).

Workers across industry may be able to band together to seek pay rises. Photo: Getty

That means it is the supermarkets, not food suppliers, that are in the ACTU’s language the “point of economic power”. The ACTU argues, therefore, that food supply workers should be allowed to negotiate bargaining agreements with supermarkets.

The same principle applies to supply chains in any industry.

Finally, the ACTU used the example of ‘sham contracts’ – an issue particularly relevant with the rise of the so-called ‘gig economy’.

The ACTU argues employers are increasingly hiring workers under contracts that describe those workers as businesses, even if they are in every practical sense employees.

Being hired as a business means you are ineligible to enter bargaining agreements. The ACTU says this needs to change.

But ACCI, the peak body for Australian business, was defiant, saying the ‘blueprint’ showed unions “want to return Australia to the dark days of 1970s industry-wide strikes”.

“The ACTU is walking away from an enterprise bargaining system that ushered in one of the great periods of prosperity, opportunity and middle class growth in Australia’s history,” an ACCI spokesperson said.

“Business is not willing to throw this away.”