Key Challenges of Enterprise Bargaining
A recent survey by law firm Ashurst, of 160 Australian employers from across all industries, has revealed some interesting findings on the current enterprise bargaining landscape and how some of federal Labor’s proposed changes to fair work legislation will impact businesses, if they are elected.
Labor’s IR Policy
One of Labor’s key proposals is to amend the Fair Work Act to re-introduce compulsory arbitration under enterprise agreements. The survey found 60% of employers are concerned by this with one respondent commenting that “unions will have us at the commission every other day”.
Labor’s proposal highlights the challenges for employers in achieving flexibility in the workplace when unions are increasingly seeking more and more prescription in industrial instruments, bolstered by access to arbitration.
A majority of employers surveyed were also concerned by Labor’s proposals to prohibit employer lockouts during bargaining, and to limit the ability to terminate expired enterprise agreements.
Survey – Key Findings on Bargaining
To many of you involved in negotiating enterprise agreements, the findings of employers’ experience when bargaining will be unsurprising. Some of the findings also underscore the complexities of the current enterprise agreement system and some of the risks involved with bargaining, including the following:
Increased Requirement for Undertakings
There has been an increase in requests for undertakings before approving agreements by the Fair Work Commission. Nearly 68% of employers surveyed had to agree to undertakings to get their agreements approve, with comments such as “an unprecedented requirement for further information and submissions”, “FWC requested undertakings that were not strictly required for approval” and “requests for obscure undertakings”; conveying a level of frustration with this aspect of the current system.
Increased Industrial Action
It is clear that industrial action remains a key feature of bargaining as 55% of employers surveyed indicated that approval for industrial action was sought or had occurred in their most recent bargaining. This represents nearly a 50% increase from the 2017 survey results and includes a rise in both protected and unprotected industrial action taken by employees.
Increased timeframes for negotiation
Almost 39% of employers surveyed indicated that it took them over 12 months to negotiate an agreement, and there was an overall increase in the length of time taken to negotiate agreements.
Increased scrutiny in the approval process
More than half of the employers surveyed faced difficulties in getting their most current enterprise agreement approved. Key reasons include not passing the better off overall test, the union opposing their application and also the requirement for undertakings.
Some employers noted that their current difficulties in obtaining Fair Work Commission approval for agreements were yet to be resolved, and in some cases, they were still waiting 6 months after applying for approval of their agreement.
In the past CCER has written to the Fair Work Commission seeking to speed up the approval of our enterprise agreements. Recent indications are that the Commission’s process takes up to 4 months for a hearing for approval and perhaps longer if issues are raised. Unfortunately, these delays detract from the needs of employers and employees for certainty of outcomes in conditions of employment (which relevantly, the survey found was one of main reasons that employers engage in bargaining).
As the Federal election approaches CCER will continue to monitor trends in agreement making and legislative developments and brief members on these through our Bulletins, at networking seminars as well as in other forums. If members have any questions or issues about enterprise agreements please feel free to contact one of our Employment Relations Specialists on T 9390 5255 for advice.
The Ashurst survey can be accessed here.
Julie Tran is an Employment Relations Specialist at CCER