Goodbye job applications, hello dream career
Seize control of your career and design the future you deserve with LW career

7 in 10 entities not factoring ESG into bargaining

An enterprise bargaining survey conducted by Ashurst reveals that 72 per cent of respondents did not factor environmental, social and governance (ESG) considerations into their bargaining, and 51 per cent predicted multi-employer bargaining would hurt their organisation.

user iconJess Feyder 04 April 2023 Big Law
expand image

The Australian industrial relations landscape is undergoing significant changes, seeing legislative reforms, such as multi-employer bargaining, which is set to affect Australian businesses.

Global law firm Ashurst has published its fourth biennial Bargaining Survey Report, which includes participants from various industry sectors — infrastructure, finance, healthcare, higher education, energy, technology, and not-for-profit.

The respondents include Australia’s Top 200 ASX-listed companies and major government departments and agencies. 

Advertisement
Advertisement

The report revealed the impact of the legislative reforms and the increased cost of living on enterprise bargaining and how employers’ priorities have shifted compared to pandemic times.

The survey revealed that while many organisations and regulators focus on environmental considerations, social and governance issues are not considered during most employers’ enterprise bargaining processes. 

Despite the increased global and national emphasis on modern slavery, diversity and inclusion, psychosocial risks in the workplace, and the impact of climate change on work, it appears that ESG issues have not yet started to impact the bargaining process for most employers.

The key findings of the survey include:

  • Seventy-two per cent of respondents did not factor ESG considerations into their most recent bargaining;
  • Fifty-one per cent said multi-employer bargaining would create worse outcomes for their organisation;
  • Ninety-seven per cent of respondents said the cost-of-living pressures in the form of wage increases is a top priority for unions and employees; and
  • Unions are increasing their role in the bargaining process. Fifty per cent of respondents said that unions or bargaining representatives were seeking clauses in enterprise agreements to provide for employee/union meetings, up from 27 per cent of respondents in 2021.
The survey also found that employer-initiated bargaining has been increasing since 2017.  In 2023, the proportion of employers initiating bargaining increased to 53 per cent, up from 40 per cent in 2017. 

Sixty-five per cent of 2023 respondents intended to start bargaining in the next six months.

The time taken to negotiate agreements is still faster than in 2019, when 38 per cent of respondents said agreements took in excess of 12 months to negotiate, compared to 32 per cent in 2023. 

Without the uncertainty of the pandemic, it seems parties are now taking a more robust approach to bargaining, leading to longer negotiation time frames, with 47 per cent of respondents saying it took six to 12 months to negotiate their current agreement(s).

The impact of the cost-of-living pressures on bargaining is significant, and the role of unions is increasing, the report found.

Fifty per cent of respondents said that unions or bargaining representatives were seeking clauses in enterprise agreements to provide for employee/union meetings, up from 27 per cent of respondents in 2021.

Protected industrial action is increasing post-pandemic, up from 8 per cent of respondents in 2021 to 17 per cent of respondents in 2023, but the general long-term trend continues downward for industrial action, down from 28 per cent of respondents in 2019. 

Stephen Woodbury, global practice head of the Ashurst employment group, commented: “2023 represents a big year of changes for employers.” 

“Since our last report in 2021, we’ve seen the Australian government pass reforms to the Fair Work Act, which ushered in sweeping changes to enterprise bargaining and other industrial relations issues,” he noted, along with “the impact of the pandemic, which is still being felt across some industries through the continued work flexibilities offered to employees; and the changing economic outlook with cost-of-living pressures affecting bargaining outcomes.”

“Our 2023 Bargaining Survey Report shares the latest feedback from employers about these changes and the priority shifts which will impact them for the coming year.”

You need to be a member to post comments. Become a member for free today!