A potent tool for cleaning up misconduct in the financial services industry is being overlooked by the Royal Commission. The Centre for Future Work proposes that a system of sector-wide collective bargaining could establish clear and ethical benchmarks for compensation, avoiding the problem of ‘conflicted remuneration’ which is behind much of the misconduct the Royal Commission has exposed.
Key proposals:
- Compensation in each job tied to qualifications and experience, with clear and enforceable limits on sales- or revenue-based incentives
- Sector-wide collective bargaining in which employer and union representatives negotiate standard compensation patterns across the whole industry
- Enforcement of compensation standards as part of regular collective agreement administration, not just government regulators
“Under a sectoral agreement, hundreds of managers, union officials and delegates throughout the financial industry would be responsible for enforcing the ethical pay practices spelled out in the agreement,” said Dr. Jim Stanford, Director of the Centre for Future Work.