The Great Disappointment that is Enterprise Bargaining

7 October 2022

Leading into, and out of, the recent National Jobs and Skills Summit, a lot of discussion revolved around the failing enterprise bargaining framework.  Central to the discussions, was the question of whether enterprise bargaining is ‘broken’ and therefore in need of fixing. 

In my view, there is little doubt that enterprise bargaining in its current form, is failing all parties.  To describe bargaining in two words…..inherently disappointing.

Employees come in to each round of negotiations with high hopes, that this time, decent pay increases are going to be won.  Equally, employers commence with the intention of achieving productivity gains, that would allow for improvements to employee terms and conditions.  In most cases, both parties walk away from the negotiations with little of what they hoped to achieve.

The almost inevitable costs of bargaining include the significant resources required to produce a new enterprise agreement that is able to be approved by the Fair Work Commission [“FWC”], along with the often intangible costs associated with rebuilding a relationship between management and the workforce that has just endured months (or years!) long ‘battle’.

In my experience, the only ‘winner’ is Dan Murphy’s, as at least my visitation of that establishment tends to fluctuate directly with the amount of bargaining that I am participating in!!

So, what measures could be implemented to revive this troubled framework…..

  1. 1.       Fast track approval, in instances where participating Unions have signed off on the agreement.

This concept was identified prior to the Jobs and Skills  Summit.  It makes sense for several reasons.  Participating Unions tend to have a much greater understanding of workplace practices, than does the FWC.  As it stands at the moment, FWC often apply hypothetical scenarios that would never occur in reality, when assessment of the Better Off Overall Test [“BOOT”] is undertaken.  The FWC should be able to allow the relevant Union(s) to consider any BOOT issues whilst at the negotiation table.  If the Unions are not content that the BOOT issues have been resolved in bargaining, they have the ability to identify those concerns during the approval process.

The benefits of this change are two-fold.  Firstly, the FWC approval process will be streamlined and the Union sign-off of an agreement will provide greater leverage within bargaining, to achieve better outcomes for employees.

  1. 2.       Longer agreements

Allowing employers and employees (Unions) to agree to longer agreements would provide employers with certainty and reduce the resource burden involved in bargaining (because it would occur less often).  As with the above, Unions would have an ability to leverage better employee outcomes in return for longer agreements.

It is always the case that employers and employees can agree to apply for a variation of an existing agreement.  If there was an ability for longer agreements, e.g. maximum eight years, there would be the safety mechanism of a variation, if something occurred mid-agreement that necessitated an amendment.

Finally, because I am a ‘glass-half-full’ kind of guy, I did want to identify one positive aspect of bargaining.  It is quite common within negotiations for employees to raise what I would regard as ‘operational issues’.  Employers should be listening carefully for when these issues are tabled whilst negotiating.  It is often the case that these operational issues can be easily remedied.  Not through changes to the enterprise agreement but through management listening and taking action.  Improvements to systems and processes, as a result of issues being raised at the bargaining table can be real and meaningful ‘wins’ that are typically appreciated by employees.

As an example, in a recent round of negotiations, a self-appointed bargaining representative highlighted that their work-group felt increasing detachment from the organisation, due to their remote work locations and corporate communications predominatly occurring electronically.  This cohort of employees did not have corporate email access and in some instances, the employees had little to no computer literacy.

The organisation was able to quickly respond by scheduling a team meeting, to start the process of issuing email accounts and providing some training, along with identifying corporate locations where the employees could log in, if they did not have their own computers.

The efforts of Management to respond quickly to the concerns raised were very well received by the employees.  It is definitely an example of the old adage that actions talk louder than words.

For any enquiries please contact David Tozer 95100366