Ashurst Bargaining Survey 2023 72 of respondents did not factor ESG into recent bargaining

The Australian industrial relations landscape is undergoing significant changes, from legislative reforms, such as the introduction of multi-employer bargaining, to reactions to changing market conditions and to business adjustments from COVID, all affecting Australian businesses.

Global law firm, Ashurst, has published its fourth biennial Bargaining Survey Report, which reveals 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 also found 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 survey includes participants from various industry sectors, including 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.  

Findings include:

• 72% of respondents did not factor Environmental, Social and Governance (ESG) considerations into their most recent bargaining. A further 14% of respondents were unsure whether ESG was a consideration during the bargaining process.
• Employer-initiated bargaining has been increasing since 2017. In 2023, the proportion of employers initiating bargaining increased to 53%, up from 40% in 2017. 65% 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% of respondents said agreements took in excess of 12 months to negotiate, compared to 32% 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% of respondents saying it took 6-12 months to negotiate their current agreement(s).
• 51% of respondents said multi-employer bargaining would create worse outcomes for their organisation, and 26% were unsure how their organisation would be impacted.
• The impact of the cost of living pressures on bargaining is significant.
• 97% of respondents said the cost of living pressures in the form of wage increases is a top priority for unions and employees. 
• Employers are achieving more variable wage increases over the life of an agreement, compared to our previous surveys.  These indicate some post-pandemic "catch up" increases (such as 5% per annum), followed by steadier increases at 3% or 4% per annum. 
• The role of unions is increasing post-pandemic. 50% of respondents said that unions or bargaining representatives were seeking clauses in enterprise agreements to provide for employee/union meetings, up from 27% of respondents in 2021.
• 54% of respondents are concerned about 'Same Job Same Pay' reforms because they use labour hire, contractors or outsourcing arrangements.
• Protected industrial action is increasing post-pandemic, up from 8% of respondents in 2021 to 17% of respondents in 2023, but the general long term trend continues downward for industrial action, down from 28% of respondents in 2019. 
• The majority of respondents indicated few concerns about the Respect@Work reforms.

Stephen Woodbury, Global Practice Head of the Ashurst Employment Group, said:

"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; 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."