In response to a number of client requests, we’re pleased to introduce The Bargaining Coach series which will regularly appear on our blog, written by a member of our team.
If you have a question that you’d like the Bargaining Coach to answer, please respond in the comments.
This week, the Bargaining Coach was asked: “How is an enterprise bargaining negotiation different to other commercial negotiations?”
This is a great question because understanding the differences between enterprise bargaining and other commercial negotiations can help avoid the frustration which is often experienced by management, particularly senior management, when they enter enterprise bargaining. Here’s a few of the key differences:
The leverage equation is stacked: The capacity for unions to damage a business through protected industrial action leaves many employers vulnerable to making an unfavourable deal. Short-term pain (industrial action) is avoided but at a long term cost (the uncommercial bargain). Understanding the leverage ‘levers’ and maximising what you have is of fundamental importance in an otherwise stacked environment. The leverage equation is related to the ‘pain versus gain’ equation.
A party most impacted, is often removed: It sometimes feels like the employees are irrelevant to the negotiation as union bargaining representatives monopolise the information flow and the bargaining agenda. I recall the experience of one employer who put an agreement to an employee ballot without union endorsement. The employees rejected it with strong feedback about the agreement being too complex, too long and full of ‘unfriendly’ clauses. Yet this agreement was the employer’s existing one, with just a couple of changes and a healthy pay increase! It is easy to call upon ‘communication’ as a key need here. But it’s hard to execute well, as many employers will tell you.
Rules of the game: There are plenty of them and they impact what happens in and outside of the negotiation. Know how to apply these for maximum gain or protection.
You are negotiating from behind (usually): Unlike commercial contracts, enterprise agreements effectively endure. It’s near impossible to terminate them. They often include obligations that might have been suitable ten years ago, but not now. But the enterprise agreement is like granite, at best being chipped away, but otherwise further imbedded with every successive agreement. Those employers with a ‘burning platform’ for change are then pilloried, and often publicly so, for seeking “to erode terms and conditions” and “putting profit over people”.
The differences cited above raise obvious challenges for employers. Being aware of them is a first step to enhancing employer effectiveness in the negotiating room.
It’s important to understand that negotiation is a skill that, like any other, can be improved with knowledge and practice. Many employers put themselves at a disadvantage here. For example, line managers whose day job is to run a plant or keep customers happy are pitted against experts whose day job it is to negotiate.
Our bargaining coach service can help improve knowledge and skills for employers to navigate this unique form of negotiation.