Lots has been said recently in the press about enterprise agreement making and the approval process by the Fair Work Commission (FWC). In short, the numbers of agreements being made is down and approval times are “long”. The graph below, recently cited in an AFR article, demonstrates a possible link between approval times slowing and

Within eight days of each other Bill Shorten and ACTU head, Sally McManus, have called for changes to the enterprise bargaining regime which is a central feature of Labor’s own Fair Work Act. Whilst we will no doubt hear more on this these statements would be chilling to many an employer who regards the current

In his book Bargaining with the Devil, Harvard Professor Richard Mnookin probes the challenges and options available when negotiating with “a devil” – anyone you perceive as a harmful adversary. The Devil Brad

“The devil” is usually a traditional “power-based” negotiator who is win/lose orientated, adopts extreme positions, makes small concessions, and uses threats as a key tactic to enhance negotiating leverage. Sound familiar?

Power or “positional-based” negotiations have dominated Australian workplace relations and remain a feature of enterprise bargaining – in a system which, to be fair, legitimises the threat and reality of industrial action.
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ColourIn 1993, the Keating government passed laws to move Australia towards a “system based primarily on bargaining at the workplace, with much less reliance on arbitration at the apex” (Laurie Brereton MP, Minister for Industrial Relations, 28 October 1993).  The embrace of enterprise bargaining instead of industry-wide, centralised wage fixation was to be the end of a creaking “Australian settlement” that had been overtaken by modern values and economic reality.

Enterprise level bargaining has undoubtedly been a positive move away from the system that preceded it.  Nevertheless, over 20 years since its introduction, an observer might feel skeptical about the promise of agreements that would be tailored to the needs of individual workplaces and their employees, under which “employees and employers alike can and will benefit”.  
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Retail, like other industries, is facing challenging times. As we mentioned in our recent ‘HR Now’ blog, employers are facing a world characterised by:

  • continuous change – including rapid digitisation and globalisation of service offerings,
  • doing more with less – this is especially so in retail, where customers continue to demand more value for lower expenditure, while wage costs continue to rise, and
  • the emergence of ‘retailtainment’ – not just engaging with customers in-store, but using tools like brand ambassadors to get customers interested and in the mood to buy. The name of the game is to create a ‘customer experience’, which goes beyond merely the hard sell.

What does this mean for employers in the industry? There are three key issues facing retail employers in the next 12 months:
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Leverage in collective bargaining negotiations is so important in a regulatory framework which condones its use.

When does an employer in a collective bargaining negotiation in a tough environment typically close the deal? So often, the employer’s capitulation point arises where the cost of industrial action (and any other pressure which is applied) is perceived to outweigh the cost of making the agreement. One cost reflects the need to alleviate what is short term pain, but often with longer term consequences. The other is one which whilst not felt immediately, becomes increasingly burdensome over the long term.
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In our article about the 7 lessons for successful bargaining, we wrote that successful bargainers seek to control the bargaining agenda. They do so with a view to achieving their ultimate goals. But we also wrote that successful negotiations also involve planning in advance for BATNA [Best Alternative To a Negotiated Agreement] and fallout. A key challenge in achieving change, especially when it comes to the human beings involved in workplaces, is how to deal with a situation that isn’t panning out as hoped. Do you have adequate contingency plans?
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Last year, we wrote about the 7 lessons for successful bargaining which highlighted that “tit for tat” communications rarely lead to a successful bargaining outcome.  We regularly see that leading the communication agenda with employees is imperative in achieving any workplace change including enterprise bargaining.

Unfortunately, some union officials see enterprise bargaining as a fight between the union and the employer. Invariably the ‘campaign’ arrives.  Flyers put a spin on what’s happening inside and outside the negotiation.  Employers feel compelled to react and this plays into the ‘tit for tat’ game that the union thrives on.
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This week we suggested a ‘kitchen table’ letter for a client in the midst of a bargaining impasse and a swirl of industrial action.

The kitchen table letter is one sent to the home of employees. Its aim is to ‘speak’ directly to the employees and potentially others in their family.

It reminds us of a manufacturer that bargained for most of last year. A ‘kitchen table’ letter was a small but important part of the mix.
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