In a previous blog, we’ve mentioned the decline of enterprise bargaining in Australia.
Some data to support this follows in this blog. Both agreement numbers and employees covered by in-term agreements are in decline. Point 7 and 8 highlight the challenges faced by parties making agreements and the Fair Work Commission in processing agreement
So what’s the outlook for enterprise bargaining in Australia? Here’s the top 7:
The genesis of enterprise bargaining in the mid 1990’s lay in its potential to generate productivity gains at a time when workplaces were strangled by terms and conditions set for whole industries and occupations, divorced from the particular
“It has become increasingly difficult to make
One observation was the importance of “patience“ – with which we would wholeheartedly agree.
So it got us thinking about ingredients for success.
Here are some key ones, borrowed from our
A key tenet
The target of the changes seems to be enterprise agreements that are voted on by one group of employees, but have the potential also to cover a much broader group, or to cover a similar group who will be employed in a different geographic location. The Shadow Minister referred to these situations as employers “gaming the system”.
However, we note that the Fair Work Act already contains a number of safeguards to prevent “gaming the system”, including that agreements are genuinely made, that employees who vote to make the agreement are “fairly chosen”, and employees are not coerced to vote or not vote for an agreement.
While we do not have the benefit of any detail (such as a draft Bill) – there are some things to be said about the potential effects of the foreshadowed changes.
The concept put forward by Shadow Minister O’Connor in his speech would allow an agreement that has been made, to be challenged and potentially reversed on the basis that the employees who made the agreement are not “representative” of those who will be covered by it.
This raises a number of important questions including:
These questions may not be answered unless and until the provisions are enacted and tested by the many varied situations real life throws up.
Our initial impression is that any amendments that allow agreements that have been made to be effectively “undone” could cause enormous problems that go well beyond the immediate issue being addressed. This exemplifies the danger of focussing on first order consequences, at the expense of equally (sometimes more) important second and third order consequences. By trying to plug a perceived gap in the legislation, these amendments have the potential to open up a new form of “litigation sport” – where agreements that have been made are subject to lengthy legal challenges and then undone much later down the track. There are many industrial reasons – which have nothing to do with the supposed problem being addressed – which might provide motivation for such challenges.
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Enterprise bargaining is down. That’s the big call out from the Department of Employment Report on Enterprise Bargaining February 2017. Comparing private sector agreement numbers from 2014 there is a reduction by a third overall, with close to 50% less in retail and construction and around 20% in most sectors.
As a result, the number of employees covered by current agreements (ones that haven’t expired) has declined. The decline is felt in respect of both union and non-union agreements.
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