Business groups single out buried amendment in proposal seeking to ease Fair Work Commission's workload
Two of Australia's most influential business groups have condemned a measure buried inside the federal government's latest industrial relations legislation, warning it could corrupt public procurement.
The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026, introduced into the Federal Parliament on Tuesday, contains a provision allowing the Commonwealth government to preference enterprise agreements negotiated in good faith and genuinely agreed with unions, where appropriate to do so.
The government, however, stressed that the Commonwealth will not be obligated to do this, noting that how and when it would be appropriate to do so is being considered as part of the development of the Secure Australian Jobs Code.
The government has framed the measure as part of a broader reform package primarily aimed at helping the Fair Work Commission (FWC) manage a surge in applications driven by artificial intelligence and paid agents.
Employment and Workplace Relations Minister Amanda Rishworth said the bill would help the FWC "allocate its time and resources more efficiently so it can continue to effectively perform its vital role as our national independent workplace relations tribunal."
Concerning procurement provision
But business groups moved swiftly to separate the procurement provision from the rest of the package, arguing it represents a fundamental threat to procurement integrity.
Business Council of Australia chief executive Bran Black said the change was an integrity problem by allowing discrimination against businesses without union-covered enterprise agreements.
"This would give unions effective control over where taxpayer money goes. It is being introduced against every lesson the country has learned from the recent CFMEU investigations," Black said.
"Geoffrey Watson SC found some enterprise agreements in construction were bought for cash and awarded to criminals, and that these practices could drive legitimate businesses out of the market. Now, the Federal Government wants to make those same agreements a gateway to public contracts and grants. That creates a major corruption risk."
Black warned the consequences could extend well beyond a single government contract, noting that conditions could flow through an entire supply chain.
"The reach goes far beyond a single contract. A single Commonwealth project could impose these conditions on every business in its supply chain. The consequences would ripple through entire industries," he said.
Australian Industry Group chief executive Innes Willox also raised concerns about the Bill's potential to erode a foundational principle of the country's workplace relations system.
"A cornerstone of our workplace relations system is the principle of 'freedom of association,' which is the idea that workers have a right to join or not to join a union," Willox said.
"Legislation introduced into the Parliament today completely risks undermining this vital principle by opening the door to either the current or future governments forcing employers and their employees to strike deals with unions in order to commercially deal with the Government."
The AI Group chief executive pointed to state-level experience as a warning, citing cost overruns and scandals in Victoria and Queensland's construction sectors as evidence that linking procurement to enterprise bargaining outcomes has repeatedly failed.
"If this bill passes, the risk is that this won't only be an issue for the construction industry. The same problems could arise in other sectors if the Government was able to make the awarding of contracts or funding dependent upon particular enterprise agreement outcomes," he added.
Addressing the FWC's concerns
The new Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 has been introduced by the government in a bid to ease the workload of the FWC, which has been grappling with an AI-driven surge in applications.
"Importantly, this will ensure the Commission can continue to effectively perform its crucial functions, such as setting minimum wages, adjusting awards, approving enterprise agreements and resolving disputes," Rishworth said.
Under the proposal, the government removes a longstanding requirement for the FWC to resolve jurisdictional objections before proceeding to conciliation in general protections claims arising from dismissal, according to the Australian Business Lawyers & Advisors.
"This means that there is no longer a jurisdictional barrier to commencing the General Protections claim if a dismissal has not occurred - provided a dismissal has simply been alleged," said Luis Izzo, managing director, and Tamsin Lawrence, associate director, of the organisation.
The proposal also seeks to allow the FWC to determine matters on the papers without the need for a formal hearing.
It will empower the FWC to dismiss unfair deactivation or unfair termination applications that are "frivolous, vexatious, or have no reasonable prospects of success."
Additionally, the FWC will be able to prevent a person whose application has been dismissed as frivolous, vexatious, or with no reasonable prospects of success from making a further application.
The FWC had received 44,039 lodgements by the end of April, close to exceeding the 44,075 total lodgements received across the entire 20240-25 financial year, which is so far the highest number of applications received by the Commission.
FWC General Manager Murray Furlong said the increased workload is placing strain on every element of the Commission's operations.
"However, applications continue to rise without any signs of slowing, further increasing pressure on existing and future resources. This is unsustainable and we cannot continue to operate in the same way," Furlong previously said.
