A new age of tripartism?
Natalie James, Department of Employment and Workplace Relations
Monday 31 July, 2023
Why tripartism is essential for good public policy…
Thank you for inviting me to speak.
The Australia Industry Group PIR conferences are a key event in the calendar for workplace relations and HR professionals. I’ve attended many over the years. The last time I stood before you at this forum it was 2019, I was a partner at Deloitte and Chair of the Victorian Inquiry into the ‘On-demand Workforce’.
When the Victorian Government approached me to do that piece of work, I recall thinking ‘what work might a state government have to do here?’ given the national system of employment regulation’? I always thought that any regulatory response other than a national would be sub-optimal. As it turns out, so did most of the stakeholders.
From my point of view, it’s a good thing that this conversation has now moved into the federal sphere.
I know many of you are anticipating the ‘employee-like’ reforms with keen interest.
In the 20 or so years I have worked in industrial relations, as a regulator, advisor or drafter of work laws, I have seen many reforms come and go.
Some make it through the Parliamentary process and others don’t.
I was genuinely surprised and disappointed when the Supporting Australia’s Jobs and Economic Recovery Bill (the Omnibus Bill) by and large failed to pass the Parliament in 2021.
I was a mere spectator on that occasion. But as an adviser to business I was of course keenly interested in its fate.
Perhaps, knowing what is involved in the development of such a substantive Bill, I was mostly feeling empathy for the team that would have put so much work into developing the Bill and supporting the Government in seeking to secure its passage.
But many hours were also put in by people like you – stakeholders and partners with a vested interest in making workplace relations work.
You learn, in industrial relations, never to get too attached to any particular set of measures. I recall supporting at least three versions of a Secret Ballots for Industrial Action Bill through the Parliament before one passed.
There is no failsafe playbook that guarantees the delivery successful reform. But in my view, one of the essential ingredients is genuine consultation.
As a crafter of laws, I can tell you introducing a Bill without the robust pressure testing that comes with consultation with worker and employer representatives is not a comfortable feeling.
There is a multitude of different workplaces and types of work. An enormous array of arrangements and practices in place. Drafters try, but cannot consider the infinite number of scenarios without information about what happens on the ground.
The framework for engagement on the current reforms that the Government is working on is based on longstanding practices but also tailored to fit our circumstances.
There are tripartite structures set down in legislation that that recognise the roles and interests of government, business and workers in the workplace relations system.
The National Workplace Relations Consultative Council or NWRCC, chaired by the Minister for Workplace Relations and comprising business and union representatives is the formal tripartite forum that inform workplace relations and health and safety reform.
Its enabling legislation is dated 2002, but I’m reliably informed similar structures have operated since 1977, which means formal tripartism has been part of the landscape almost as long as I’ve been on the planet. Ai Group is a longstanding and constructive member of this forum.
Tripartism and supporting social dialogue is a priority of this Government. Tripartism is cool again. Tripartism is not only a priority in the portfolios I’m responsible for as Secretary - workplace relations, skills and employment. Engagement with experts and those people impacted by reforms is a priority for the government across the board – covering a wide range of social and economic policy.
Let’s take a look at what we’ve seen so far during this government’s tenure.
Jobs and Skills Summit
Australia’s Job and Skills Summit brought together unions, employers, civil society and governments to address shared economic challenges.
This was a strong and successful demonstration of social dialogue in practice at the national level.
Productivity, Education and Training
One of the outcomes of the Summit was the establishment of the Productivity, Education and Training Fund.
Key employer and worker representative organisations, including Ai Group, will receive grants to engage with Government on reforms and support training and education for members.
The government recognises the value of representative organisations as a trusted adviser to businesses and workers.
You have the trust, insight and the connections to reach people at the workplace level who need support understanding the new laws.
National Construction Industry Forum
Another key outcome of the Summit is the establishment of the tripartite National Construction Industry Forum. The Forum will be chaired by Minister Burke, who recently announced the appointment of the 6 representatives of employers and employees. The Forum will tackle a range of issues facing the construction industry, including safety, productivity, skills and training, workplace relations, industry culture, diversity and gender equity.
I was especially thrilled to see equal numbers of men and women appointed. Gender equity will be a priority for the forum. We have one of the most gender segregated labour markets in the world. Women currently make up 12.8% of this sector. That includes admin and managerial roles.
And at the same time we are experiencing a shortage of people with the rights skills and qualifications for the jobs we need into the future. I think unions and employers wholeheartedly agree that the future of the construction sector must see more women working in it, and better flexibility for all.
I especially call out the persistent, brave work Alison Mirams of Roberts Corporation has done to pioneer 5 day working weeks on construction sites and other measures to increase flexibility and gender equality in the sector.
We hope the Australian Skills Guarantee, with targets for apprentices and trainees and for women within this cohort will help support cultural change.
But it has to come from the sector. This forum – tripartite in nature and coming out of a national tripartite forum – provides an opportunity to lead that change.
Net Zero needs
The government has also recently set up the Net Zero Economy Agency. This is a precursor to the establishment of a legislated Net Zero Authority. The Authority will work with the complex array of communities and organisations impacted by and in a position to contribute to supporting the transformation to a clean energy economy.1
And there are many: state, territory and local governments, existing regional bodies, unions, industry, local business, government service providers, investors and First Nations and community organisations. Staff in my Department across skills, workplace relations and employment will be supporting this work.
And we’ve also seen my other minister, Minister O’Connor put tripartite consultation at the centre of the institutional framework he is working to build for skills.
Jobs and Skills Australia
The new Jobs and Skills Australia and Jobs and Skills Councils will play a central role in shaping the skills and training landscape. It’s critical we align the skills and training system to the needs of the labour market going forward. Both of these reforms feature tripartite governance and practices:
- We have an interim JSA at the moment – its Consultative Forum to JSA is independently chaired and includes people with expertise with a range of perspectives: union, education and vocational training, small business, industry, and representatives from state and territory governments.
- Your own Megan Lilly, Head of Education and Training at Ai Group, is a crucial and thoughtful member of this forum, for which I thank her.
- We have seen constructive (often robust) dialogue in this forum. This bodes well for embedding tripartism into the framework from the very beginning.
- And the legislation currently before Parliament (Jobs and Skills Australia Amendment Bill 2023) this forum will evolve into a tripartite Ministerial Advisory Board.
- We have had NWRCC in WR but haven’t had something comparable in Skills governance.
- JSA’s partnership with Jobs and Skills Councils (JSCs) further embeds two-way collaboration, including the establishment of a regular Jobs and Skills Councils CEO Forum.
- These Councils will be responsible for industry workforce planning, development of Vocational Education and Training products, and industry stewardship.
- Their boards all have business and worker representatives from across industry to ensure that training is relevant, contemporary and informed by practical, on the ground knowledge.
Another example, the Review of the Migration System, published March this year, recommended renewing and strengthening the role of the Ministerial Advisory Council on Skilled Migration,2 as a tripartite advisory body, of which Ai Group’s Mr Willox is Chair.
We are seeing this desire to embed tripartism. So why is this important?
So why is this approach and these examples important?
Foremost, it demonstrates that the government wants to hear from those impacted by its initiatives in the design and delivery of government policy and programs. The government’s commitment to tripartism reflects its broader desire to genuinely engage with partners and those impacted in policy reform.
Tripartism in WR – history and spirit of tripartism
While workplace relations has had structural tripartism, through the NWRCC and other committees I mentioned earlier, it’s a valid to ask whether the spirit of tripartism is truly embedded. The early establishment of an industrial relations system based on conciliation and arbitration, put the industrial parties at the centre, but often at odds with one another in very adversarial system.
It was of course born out of an era of volatile strikes and adversarial contest.3 The maritime and shearer’s strikes of the 1890s informed Australia’s industrial relations system. The strikes set the tone for a political movement dedicated to workers’ rights.4 Following Federation, the Commonwealth Court of Conciliation and Arbitration was established.5 It was the first body of its kind in the world and aimed to put employer and worker representatives on equal footing.
Our current terms and conditions emerged from this framework in the form of awards which have given us the highly valued core entitlements enjoyed today like sick leave, annual leave and minimum wage rates.6
We have evolved significantly since those times. Industrial action remains at an all-time low. And our system is no longer based on the concepts of conciliation and arbitration constitutionally or practically.
But we can still see the signs of its originating DNA. Conflict has been institutionally placed at the centre of the system, and even as the system has evolved it has arguably not fully matured beyond this conflict reflex.
How do other nations do tripartism in WR?
Tripartism is common in other countries.
In June this year, the Council of the European Union adopted a Recommendation on strengthening social dialogue in the EU. Calling on Member States to, among other things:
- involve social partners in policy design,
- ensure social dialogue frameworks are fit for the future of work; and
- help social partner organisations build capacity.7
Germany features informal tripartite processes in industrial relations, with the federal government largely absent from engagement with employers and unions over workplace outcomes.
- In recent years, tripartite consultation at the national level has comprised 'concerted action', not the least of which, to tackle inflation.8
- Industry-wide and regional collective agreements are typically more common than enterprise level agreements.
The German industrial experience demonstrates that it is possible to utilise tripartism outside of formalised structures.9
The Minister and I met with our Austrian counterparts at the Austria Connect Australia 2023 Conference in May this year described how business and worker representatives collaborate to set labour conditions by collective agreement. Those agreements are then concluded by an independent third party.10
- This system intends to ensure minimum wages, standards and working conditions are set without the involvement of the state.
Tripartism also delivers results on the ground. It sounds very difficult. It sounds like a lot of work and will slow us down.
There is evidence that tripartite approaches deliver better results on the ground. It’s about listening to different voices.
Associate Professor Chris Wright from the University of Sydney Business School suggests that collaborative relationships between business and workers are important for economic productivity.11
Firstly, a collective worker voice in company decisions can improve its economic performance. Diverse voices can drive innovation to adopt productive work practices.
Secondly, workers having the position to negotiate fairer wages and conditions means that, by feeling that they are treated fairly at work, worker turnover is reduced.
We are all keenly aware in the current labour market of the need to hang on to our talent, and just how much it costs to attract, hire and train new employees.
Working together can be mutually beneficial.
As stewards of the workplace relations system, I believe we have an opportunity, to truly embed tripartism beyond the formal structures and embrace its spirit in an enduring way.
All parties, all governments, benefit from adopting an open posture.
Sustainable reform only comes I believe through genuine consultation. That pressure tests ideas, ensure they will work practically and ideally, builds trust and buy in.
This doesn’t mean anyone is being asked to abandon their interests or positions.
Representation of member views and concerns are at the core of organisations like the Ai Group, raison d’être and that is understood.
Similarly, we all understand that proposals that are clear government policy, and especially when they were election commitments, will pursued by the Government of the day.
Fundamentals, core aspects, might not be up for argument, but the scope and approach can be honed based on better understanding impact and constructive engagement.
So how are we going?
We’ve seen a lot of different approaches taken to engagement in workplace relations.
I have been involved in quite a few – big and small… and no two processes are exactly the same.
Some are more successful and enduring than others.
And I know Ai Group has been there through the journey and I thank you for your commitment, persistence perhaps patience and engagement at these various points in time.
I know Minister Burke also greatly appreciates the engagement from business groups, including Ai Group, over the last year.
In February this year, the Minister committed at his Press Club address to enhance consultation on workplace relations reforms.12
In delivering the first tranche last year there was an urgency, and I will thank Brent for his positive feedback on the recent consultations.
My department has worked to provide those opportunities. We have and are still running an extensive program of consultation made up of the full range of engagements – from formal discussion papers and submissions, to round tables, to bilateral discussions on detailed policy proposals.
We provide for confidentiality in these processes, for a few reasons. It enables us to share with you the government’s thinking while it is still shaping its approach. And you can provide honest, frank and commercially sensitive feedback.
As with the consultations last year, and the Minister has reiterated, consultation on workplace reforms is not about whether the government proceeds but about how.
For Ai Group, this has meant more time, as well as consultation that is in-depth and allows for open discussions on the detail of proposals.
So, where do we think we’re at with the spirit of tripartism in all this?
What I have seen, are the policy and legal experts in my department dedicating hours of time to discuss policy proposals in detail with business, worker and community representatives.
We have met with any party wanting to provide input.
These have been genuine discussions and have been invaluable to the policy development process.
We, in particular, value the evidence, examples, case studies and practical insights provided critical.
These discussions and submissions have included hearing your concerns, as well as aspects you support, or that you can live with. Both are important.
While we continue to build the trust and partnerships necessary for a strong tripartite spirit to flourish, I think we are on the right track.
I think it will produce better outcomes.
My expectation is that through developing workplace relations policy and laws in this way, we will deliver more sustainable reforms that get the balance right.
At the end of the day, tripartism, in workplace relations or in other social and economic policy areas, is about designing robust, fit for purpose, policy and programs. And then, not just set and forget, but continuing to monitor and refine to make sure they are delivering for the labour market and the community.
Working closely with impacted parties is a key ingredient to achieving this. Minister Burke genuinely believes that the reforms progressed this year and the legislation in the works – are better as a result of continued consultation with you.13
This is a sentiment I echo.
Where to from here?
So where do we go from here?
The government will continue to inject tripartite governance and practices where appropriate, to ensure both worker and industry voice and experience is considered. The Government and my department are looking to continue working constructively with partners to design better policy and deliver it in a way that works.
But of course, we should keep evolving and learning how to create constructive, positive exchanges. We could move beyond the combative reflex that tends to be a feature of industrial relations debates and adopt a more open and collaborative posture. This need not and should not require the abandonment of different interests, rather a focus on making the system work.
For my part I will commit to supporting the important role my department can play in creating the space and the trust for genuine collaboration and partnerships that allow tripartism to flourish.
In that spirit, I look forward to working productively with the Ai Group and all of you on tackling important workplace relations and broader societal challenges in partnership with unions and the community.
1 Prime Minister the Hon Anthony Albanese MP, Treasurer the Hon Dr Jim Chalmers MP, Minister for Climate Change and Energy the Hon Chris Bowen MP, ‘National Net Zero Authority’ Media Release, 5 May 2023. – Return to speech
6 Ibid. – Return to speech
7 European Commission, ‘Council takes action to strengthen social dialogue in the EU’ 22 June 2023. – Return to speech
8 German Federal Government, ‘Concerted Action at the Chancellery to fight high prices: Working together to tackle inflation’ 4 July 2022. – Return to speech
11 Chris F Wright ‘Stronger union rights provide sustainable workplaces’ Saturday Age, 15 July 2023. – Return to speech
12 Minister for Employment and Workplace Relations, the Hon Tony Burke MP ‘Address – National Press Club’ 1 February 2023. – Return to speech
13 Minister for Employment and Workplace Relations, the Hon Tony Burke MP ‘Address – National Press Club’ 1 February 2023. – Return to speech