This article is more than 3 years old

This article is more than 3 years old

Labor has signalled it plans to strengthen the bargaining power of workers and unions in an attempt to revitalise stagnant wages.

The party’s deputy leader, Tanya Plibersek, says there is a clear link between declining union membership, the lowering of workers’ bargaining power, and today’s low wage growth, and the link between labour productivity and wages must be restored “at the very least”.

Her intervention in the low-wages debate follows a speech last month by Brendan O’Connor, Labor’s employment and workplace relations spokesman, in which he flagged Labor’s intention to make it harder for employers to terminate enterprise agreements.

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He said it had become too easy, and too common, for employers to terminate enterprise agreements which had passed their nominal expiry date.

The practical impact of terminating agreements, he said, forced workers back on to award pay and conditions “possibly for significant periods before a new enterprise agreement is, hopefully, negotiated – which can result in workers seeing their take-home pay fall off a cliff”.

He said Labor was looking at how to change the Fair Work Act “so that, rather than resorting to the nuclear option of terminating agreements when negotiations fail, the system works to assist the parties to come to a resolution, and to do so on a level playing field”.

His policy announcement came after he and the Labor leader Bill Shorten met the ACTU leadership and affiliated unions, and the labour movement pressed the case for legislative change on several fronts.

It reflected the mood in caucus in favour of beefing up the existing workplace relations framework.

Plibersek, in a speech to the Sydney Institute on Thursday evening, said workers’ wages growth could be revitalised if the bargaining power of workers and their unions could be strengthened.

Official figures last month showed Australian wages had stagnated at a record low, growing just 1.9% annually. With the cost of living rising at 2.1%, it meant real wages have declined by 0.3% over the past year.

“The International Monetary Fund, historically no great supporter of labour unions, has acknowledged the links between low levels of unionisation on the one hand and low wages, inequality and increasing income for those at the top on the other,” Plibersek said on Thursday.

“Australia shows the truth of that. We’ve moved from centralised wage fixing to workplace agreements underpinned by a safety net of minimum conditions.

“Union membership has fallen from 40% of the workforce to around 15%, and yet inequality is at a 75-year high.”