Speech to the Sydney Institute

Part I: Acknowledgements

• Good evening.
• I acknowledge the Gadigal people as the traditional custodians of the land we are meeting on.
• I pay my respects to their elders, past and present.
• Thank you to Anne and Gerard for the invitation to speak at the Sydney Institute.
• Gerard, your IR Club essay encouraged us to question our workplace relations systems.
• And we should absolutely always be questioning: have we got it right?
• Because fundamentally, workplace relations is about fairness and the kind of society we want to live in.
• Tonight I want to talk about how we can move past the notion of workplace relations as just a zero-sum game where only workers or employers can succeed.
• I want to talk about some of the outcomes we are seeing as a result of the Albanese Labor Government’s workplace relations reforms.
• And I want to highlight how these outcomes are actually facilitating cooperative workplace arrangements, which can deliver mutual benefits.  

Part II: Labour – not just another economic commodity

• But before we get to the work place – I’d like to talk a little about work itself.  
• It delivers obvious economic benefits.
• A decent pay cheque pays the bills.
• It lets people plan for their future.
• It means you can work to live – not live to work. 
• But work can – and should – also fulfill some of our deepest psychological needs.  
• Accomplishment, community, connection.  
• Work is intrinsically tied to us as human beings. 
• So as a workplace input, a worker is not separable from their labour.  
• Labour is more than just another cost of production or a cog in a machine. 
• In 1911, Frederick Taylor famously argued that: 
• “In the past, the man has been first. In the future, the system must be first.” 
• But we know better now.  
• We understand that the engagement of workers is key to boosting discretionary effort.
• Things like problem-solving, adaptability and collaboration.
• And engagement is shaped by incentives.  
• Incentives like job security, agency and remuneration.  
• Companies that recognise this fact can derive a real profit advantage.
• Because a company’s workforce is its competitive edge.
• Now you might think I would say that, as a Labor Member of Parliament.
• But the research backs it up.
• A recent meta-analysis conducted by Gallup, covering over 3.3 million employees globally, found that businesses with highly engaged workers had 23% higher profits than those with low engagement.
• So the way a company engages its workers has a direct effect on business success.
• But I also believe that treating workers fairly is fundamental to a strong, competitive economy.
• And that is why Government has a role in regulating the workplace.
• Of course, our interest in the workplace goes beyond just economic impacts.
• Because Government also has a role in shaping our society.
• People’s working conditions have a real impact on their social circumstances.
• How secure they feel.
• How fairly they are treated.
• How confident they can be about the future.
• And that was front of mind for our Government when we delivered our significant reform agenda in the last Parliament.
• During that process, there was some criticism we had gone too far, in favour of workers and unions.
• But that criticism overlooks the fact these reforms are delivering benefits for business, too.  

Part III: Rejecting the ‘pendulum’

• And this is why the common cliché of the workplace relations pendulum is too simplistic.
• Many of you will have heard it before.
• The pendulum metaphor relies on the idea that if workers win, then employers lose – and vice versa.
• It gets a run in The Australian or the AFR at least once a month.
• Former Qantas chief Alan Joyce publicly rehashed this idea just in November last year:
• “The pendulum of industrial relations can go too far one way – or too far another way.”
• Mr Joyce also said:
• “The pendulum, for some time, has been in the wrong spot.”
• But the pendulum metaphor is limiting.
• It pushes people into their respective corners.
• And this mindset can have real consequences.
• As we saw at Qantas under Mr Joyce, who oversaw an approach to workplace relations that the Federal Court described as ‘combative.’
• An internal review, reported in the AFR, said that this adversarial approach did ‘considerable harm’ to the airline’s relationship with its staff and stakeholders, along with its reputation.
• That’s why the pendulum idea is damaging: it precludes the ability to see workers and their unions as partners, rather than adversaries.
• Now, my glasses are not rose-tinted.
• I’m not going to pretend that the interests of employers and workers are always aligned.
• Nor am I suggesting that government can eliminate disagreement through legislation.
• But rejecting the pendulum does not mean denying differences.
• It means recognising that there are also often opportunities for cooperation.
• Because cooperative workplaces are productive workplaces.
• Productivity is not something done to workers.
• It is something achieved with workers.
• Cooperation builds trust – and research shows that trust substantially boosts an organisation’s performance and employee engagement.
• Which, as I have already highlighted, delivers higher profits for business.
• But trust can’t rely on goodwill alone.
• It needs mechanisms that facilitate real cooperation.
• And unions are a legitimate part of that.
• Our Government’s workplace relations reforms did clearly demarcate a role for unions in the workplace.
• For example, we better defined the role of a union delegate and put specific rights for them into law.
• Because a common understanding of the ground rules makes it easier to work together – and build trust.
• And when a relationship is based on trust – between unions and employers – neither side needs to see each other as a threat.
• I know that not everyone in this room will agree with me on this point.
• But international evidence shows this type of cooperation can actually reduce conflict.
• In Denmark for example, the relationship between employers and workers is far less conflict-based than in Australia. 
• In 2024, Denmark lost just 1.5 working days per 1,000 employees to industrial disputes.  
• That's compared to 10.5 days for Australia.  
• This is in a country with almost 70% union density.
• One study showed that 77% of Danish employers thought that union delegates were important for developing their organisation.  
• And 89% believed their relationship with union delegates was based on a high degree of trust.
• So cooperation cuts down conflict.
• And it can even lead to practical innovation – like in the Danish model, where employers and unions jointly manage the skills and training system.
• So when we stop thinking in terms of a pendulum, we can see real opportunities for everyone to benefit. 

Part IV: Better Pay

• When the Albanese Government introduced our first term reforms, people quickly reverted to the familiar pendulum metaphor.
• People said our laws were too pro-worker, at the expense of business.
• Now, I will not apologise for recognising workers benefit from higher wages and better job security.
• But our reforms provide opportunities for business to benefit, too.
• When we came to office, enterprise bargaining had declined to historic lows.  
• The rules were so broken that the normal 12-week timeframe for approving agreements had dragged out to 12 months.  
• As a result, employers defaulted to awards – meaning they couldn’t negotiate bespoke conditions for their enterprise.
• Workers, meanwhile, missed out on meaningful real wage growth for the better part of a decade.
• Each one percentage point loss of bargaining coverage has been associated with a reduction in annual wage growth of 0.15 percentage points.  
• Getting wages moving again was a clear priority for our Government.
• Because wages are a critical element of that economic freedom I spoke about earlier.
• But one of the ways we wanted to deliver these wage increases was by reinvigorating enterprise bargaining. 
• Because enterprise bargaining delivers more than just higher wages for workers.
• It delivers for employers too.
• Companies can have agency in the process of negotiating reasonable wage increases.  
• And they can tie wage growth to greater productivity enhancements.
• Research from the RBA shows the relationship between wages and company productivity is much weaker when firms rely on industry awards.  
• And I’d like to stress this point: our bargaining reforms do not mandate wage increases.  
• They enable negotiation.  
• And where productivity improvements are available, enterprise bargaining allows those gains to be shared.  
• So I’m proud that our reforms were focused on promoting bargaining.
• Reforms like: simplifying the Better Off Overall Test.
• Streamlining the agreement approval process.
• And making it easier to restart or initiate the bargaining process.
• Those changes are facilitating beneficial outcomes for workers and their employers.  
• Let me give you an example.
• In 2020, Bunnings had to abandon the process of negotiating a new agreement because it had simply taken too long.  
• After our reforms, they were able to restart bargaining for their expired agreement, and get it approved in a timely manner.  
• Bunnings and the SDA have now negotiated a landmark agreement that benefits workers through decent wage rises and flexible work provisions.
• But it also benefits Bunnings by positioning them as a preferred employer in a tight labour market.  
• Their chief people officer, Damian Zahra, said that: 
• “We want to attract and retain a high-performing team by providing industry-leading benefits and a great culture – and the new agreement plays an important role in doing that.”
• And the numbers show that they are not alone.
• We are seeing an uptick in enterprise bargaining across the country.  
• Since we came to office, the number of employees covered by a collective agreement has increased by more than 50%.
• Our reforms also provided more options for employers, workers and their unions to make multi-employer agreements.
• I know that there was some criticism of these changes.
• But can I be very clear: we didn’t create a new system.
• Our reforms simply updated the existing multi-employer pathways to make them more workable.
• Supported bargaining for low-paid workers, for example, is not a new invention – but the barrier to entry was just too high.
• Like in the childcare sector, where many small businesses simply didn’t have the resources to bargain.
• We changed the rules to make it easier for these businesses, their workers and unions to come together.
• Coming together allows resources to be shared – and mutual gains to be realised.
• Workers are now seeing better pay and conditions.
• And employers are seeing direct benefits through better staff retention, allowing them to offer high-quality services.
• I know some employers were resistant to the single-interest stream of multi-employer bargaining.
• But our Government saw it as an important mechanism to avoid a race to the bottom on wages and conditions.
• Of course, if an employer has an existing enterprise agreement, they will not be captured by a multi-employer one.
• And despite some of the hyperbole we saw at the time, pattern bargaining remains unlawful under the Fair Work Act.
• Our Government also made it easier to access the cooperative stream for voluntary multi-employer bargaining, creating a genuine opportunity for businesses and workers to achieve mutual gains. 
• I’d urge any business owner – especially smaller operators without the resources to bargain alone – to consider this pathway and the shared benefits enterprise bargaining can deliver.
• The reason I am so passionate about bargaining is not just the outcomes.
• It’s because the process itself delivers benefits.
• It fosters consultation, communication, cooperation.  
• It gets parties together around the table, understanding each other’s perspectives – including points of difference.
• Which, as I have already outlined, is important for building trust.  

Part V: Secure Jobs 

• Having job security is critical to a worker’s economic and emotional wellbeing.
• That’s why our Government passed reforms to promote job security, like Same Job Same Pay and a simpler pathway to permanency for casuals who want it.
• There was some criticism from business about these reforms as well.
• But I strongly believe these reforms will also deliver mutual gains in the long run.
• Our Government knows flexibility is important for productivity and to meet industry needs.  
• But like I said at the beginning: workers are not robots.
• Having security in a job ensures that people are engaged.
• It ensures they will invest effort into their work.
• And this is backed up by research.
• A recent meta-analysis from the Chartered Institute of Personnel Development found that job security has the single strongest positive correlation to employee commitment.
• Engaged employees, as I’ve said, deliver better profits.
• But secure jobs are also important for broader economic growth.  
• They allow workers to invest in themselves, their families, their future. 
• That is why our Government is unashamedly supportive of encouraging permanent, direct employment.
• Labour hire can, of course, be an efficient tool where it meets genuine short-term or specialist needs.  
• But when it undercuts wages for identical work, it distorts competition and erodes trust.   
• Because the relative deprivation of doing the same job as your colleague, but getting paid less, is incredibly demoralising.  
• Last year, I met Alanna, a flight attendant who is one of the thousands of workers who have benefited from our Same Job, Same Pay reforms.  
• She is finally getting paid the same as her colleagues, after more than a decade of working under different pay scales.  
• Alanna said: 
• “We have seen significant morale improvements amongst the crew working together in the same cabin.”  
• Alanna’s story shows that where our laws deliver benefits to workers through better job security, employers also benefit through a more engaged and committed workforce.  

Part VI: Right to Disconnect

• Another reform that was perceived to just be on the side of workers, but is actually also good for business, is the Right to Disconnect.
• When we passed this law, there was a lot of commentary that only viewed this reform through the lens of the pendulum metaphor.
• Critics said it was overly prescriptive and would exclusively benefit workers.
• And yes, our law does give workers the legal certainty to refuse unreasonable contact outside of business hours.
• They can properly clock off, spend time with their families and reset their work-life balance.
• But last year, the Australian HR Institute surveyed over 600 senior business decision-makers about the Right to Disconnect.
• And the results may be surprising to our critics.
• More than half of those business figures said the right to disconnect had improved employee engagement and productivity at their organisation. 
• Now of course, a survey is not quite a randomised control trial.  
• But it does indicate that both workers and employers actually needed the clarity that our laws provided.
• It has helped create a common understanding in workplaces about the important issue of work/life balance – which reduces the likelihood of conflict.
• And despite the dire predictions of some, we have not seen big disagreements in the Fair Work Commission about this measure.
• This just shows that the pendulum metaphor narrows our view – and stops us from appreciating the mutual benefits that can be achieved through reform.  

Part VII: Tripartism 

• As I have outlined, real mutual gains can be realised by employers and workers and their unions working together and having constructive dialogue.  
• But there is an important role for government as well.  
• As Minister, I am committed to embedding a tripartite approach wherever possible.  
• Because I truly believe in the ability of tripartism to deliver better decision-making through shared understanding and trust.   
• Safe Work Australia is a clear example of this.
• Its tripartite structure is widely recognised as a strength, including by business groups and unions.  
• They can have confidence that they are making a real contribution to the development of model laws for safe, healthy workplaces.   
• The National Construction Industry Forum is another example.  
• For the first time, we have stakeholders engaging in a collaborative way to address systemic problems in the sector.  
• Some critics have said that tripartism slows decision-making or gives undue influence to vested interests.  
• But reforms imposed without stakeholder buy-in tend to be short-lived.  
• Whatever your feelings about unions or businesses, cutting them out of the picture simply does not work.
• Because in my view, exclusion breeds antagonism.  
• Tripartism does not require decisions to be unanimous.  
• Let me assure you – when I attend these forums, we are not sitting around the table, singing Kumbayah.  
• We are having – at times – pretty frank conversations.  
• But this process does increase stakeholder confidence in decisions by ensuring their concerns are ventilated.  
• That is why I will continue to foster tripartism in our institutions.
• Not just as window dressing – but for meaningful decision-making.
• For example, at the Fair Work Commission, I am committed to making balanced appointments to ensure employer and employee perspectives are recognised, along with legal expertise.
• And our Jobs and Skills Councils are embedding a tripartite approach in the skills sector to shape Australia’s future workforce.
• As I said earlier, I know there will often be contestability.  
• But understanding each other’s perspectives allows us to understand what we are actually disagreeing about.
• The many business leaders and unions I have engaged with in this portfolio have demonstrated a willingness to lean in through these forums. 
• They recognise it is better for everyone when we can work together.  

Part VIII: AI as example of post-pendulum 

• Artificial intelligence will be the next test case of our capacity to work together. 
• We all know AI will change the types of jobs people do.
• But it won’t just affect what people do.
• It will also reshape how they’re managed and treated at work.
• And AI can’t make those human judgements about fairness or dignity in the workplace on its own.
• That’s why trust and transparency matter so much.
• And it’s why involving workers and unions in decisions about how AI is introduced is absolutely critical.
• We can’t afford to treat AI in the workplace as another zero-sum game where if employers win, then workers lose.
• Research from Jobs and Skills Australia shows that businesses get the best return on AI when they involve their workers.
• And in this new age of AI, workers can’t be treated as disposable.
• Employers need to invest in their people’s skills and show that there is a secure, valued place for them in the future.
• Because workers need confidence that they are not just training their own replacement, but are contributing to the business’s ongoing success.
• And it’s the workers – with their knowledge and understanding of the business – who are essential to making sure the technology can deliver real value.
• A core pillar of our Government’s National AI Plan is making sure that we are seizing the opportunity and sharing the benefits.
• My job as Minister is to examine our current workplace frameworks and legislation, to make sure they are fit for purpose for the expansion of AI in the workplace.
• And if there are gaps, then I will progress appropriate reforms to ensure we continue to have fair, safe and cooperative workplaces.
• Employers, workers and government all have to work together to ensure we avoid the obvious pitfalls.
• One of the ways I’m doing this is through the tripartite AI Working Group – bringing parties together around the same table to work through the risks and develop shared solutions.
• And we’re already seeing businesses and unions embrace this cooperative approach.
• For example, last month Microsoft and the ACTU signed an MoU to establish a framework around AI in the workplace.  
• In their statement, Microsoft specifically emphasised the importance of workers’ voices in the successful implementation of technology.  
• It’s just another example of what is possible when parties focus on what can be achieved together through trust and cooperation.  

Part IX: Broader Social Benefits 

• Because if we don’t have trust at the workplace level – there can be broader social implications.  
• When people see systems as unfair, they withdraw trust.  
• Not just from employers, but from institutions more broadly.  
• Findings from Australian Barometer public surveys show that when people perceive income inequality to be high, then they are less satisfied with democracy.
• And a study across 18 European countries found that job insecurity generates lower levels of trust in political institutions. 
• So ensuring sustainable wage growth is important – but not enough on its own.  
• Australia has a proud history of minimum workplace standards to ensure we do not let people fall through the cracks and maintain their trust in the system.
• That tradition underpinned our reforms for gig workers.  
• A failure of adequate regulation meant gig workers were locked out of a basic level of remuneration and protections that other working Australians enjoy.
• When we listened to business, workers and unions – it was clear that the answer was not to force them into a traditional model of direct employment.
• But we did need to ensure these workers had minimum remuneration and protections.
• Because a society in which people work hard, but can’t achieve a basic level of economic security, is not just bad for that individual’s living standards.
• It will lead to an erosion of faith in our democratic institutions.
• A strong safety net rewards people’s faith in the system.
• And ultimately – faith in democracy.  

Part X: Conclusion 

• In conclusion, I believe that we have an opportunity to think more broadly about how our workplace relations system can deliver benefits for employers and workers. 
• We cannot let the narrow pendulum metaphor dictate our approach to workplace relations.  
• There will always be different priorities between the interests of capital and labour.
• But there are real, significant opportunities to find mutual gains.
• As Minister for Employment and Workplace Relations, I never forget the privilege and responsibility I have.  
• The institutions and policies I steward play a major role in shaping how people experience the world of work – and their broader social circumstances.
• That’s why cooperation, trust and shared prosperity will remain my priorities.
• Because that will deliver economic gains and higher living standards for all Australians. 

And because that will create a world of work where Australians can succeed together, not at each other’s expense.