New legislation favours unions in government procurement
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New legislation favours unions in government procurement
The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 has recently passed through Parliament. One of the perhaps unexpected components of this legislation is to do with giving organisations with enterprise agreements preference in Commonwealth Government procurement. So what does that mean and what should you be doing about that?
Background
The Albanese Government has managed to get a legal change through Parliament with the help of the Greens that might have a significant impact on Federal government procurement decisions.
The Explanatory Memorandum for the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026: “The amendments would allow the Commonwealth to preference employers whose employees are covered by an enterprise agreement (or a type of enterprise agreement), or who are covered by an enterprise agreement that covers an employee organisation, when making a grant of financial assistance or procuring goods or services. In these circumstances, such a preference will not constitute discrimination under subsection 354(1) of the Fair Work Act.”
Is it discriminatory?
My initial reaction was that this seemed to potentially compromise the freedom of association project in the Fair Work Act and I think it potentially will in practice when it is implemented.
However, it has been worded to preference employers who have employees covered by an enterprise agreement or ones whose employees are covered by an enterprise agreement that covers an employee organisation.
So what that technically says is that the basis for discrimination is the presence of an enterprise agreement, not that the workforce is unionised.
Of course, there is also the fact that the vast majority of enterprise agreements (85%-90%) have been made with unions so, in reality, unions will be the primary beneficiaries of this change.
What does this mean in practice?
It is quite common already for head contractors on major projects to require subcontractors to have an enterprise agreement because, while that is in its nominal operating period, any industrial action taken will be unprotected. That is a disincentive to unions because they don’t want to be fined for breaching the Fair Work Act.
Of course, this comes at an odd time given all of the publicity there has been in Victoria and Queensland in particular about alleged corruption and criminal associations of unions and head contractors. Employer associations are understandably crying “foul”.
For employers who want to be able to work on government projects or sell services to the Commonwealth, you do have the option of putting in place your own enterprise agreement.
How we can help
We have been helping businesses put in place their own non-union enterprise agreements for over 20 years, primarily in civil construction but also other trades, manufacturing and childcare.
It is a complicated process with a number of tests to be satisfied and strict timelines and procedures to be observed. It also requires the specific approval of a majority of the employees who would be covered by the instrument.
Just fill out and submit the “Tell us what you need help with” form below and we’ll be in touch to organise a chat about your needs and ways to deal with those.
CONTACT US
Ridgeline Human Resources Pty Ltd
ABN : 24 091 644 094
enquiries@ridgelinehr.com.au
0438 533 311
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