The Future of Enterprise Bargaining Agreement
Enterprise bargaining came into play in 1993 so it has been around for at least 20 years now. Whilst I am sure that many organisations have benefited from enterprise bargaining, I am sure there are many that haven’t. Enterprise bargaining is costly and sometimes results in businesses not getting the benefits they’d hoped for. This can be for various reasons, whether it be because bargaining was power-based rather than interest based, there was a lack of strategy and planning to fit in with business goals or the burden of having to comply with the technical rules involved in making agreements.
These might be some of the reasons why we get queries about Enterprise Agreements (EAs) in general but more to the point, businesses wanting to get out of the agreement entirely or at least have some of their workforce removed from coverage. Is this an indication that it is time we need to look at another way? The Productivity Commission has recommended just recently a new employment instrument, the ‘enterprise contract’ to allow businesses the flexibility to vary award/s to suit their business operations.
The enterprise contracts are aimed to fill gaps between individual contracts and collective agreements. It’s thought that it will benefit smaller businesses daunted by the idea of having to find their way through the complex enterprise bargaining system. The proposal is for employers to be able to vary an award for a class of employees to suit the individual circumstances of the business without requiring a ballot or the involvement of any employee group or union – sounds great!
However, in the meantime, terminating or amending an EA is possible. All EA’s have a nominal expiry date, but under the Fair Work Act 2009, agreements continue to operate after their nominal expiry date until they are replaced or terminated by application to the Fair Work Commission. So it is important to stay on top of the agreement and follow the appropriate application procedures once it has expired, rather than assuming the agreement finishes with the expiry date. You can also alter or vary an EA through an agreement between employer and employee/s. The decision has to be mutual and it also has to be approved through the Fair Work Commission. Not only that, the variation needs to have voted endorsement and be lodged within 14 days of the change. It can be quite a complicated process and one that is confusing for small businesses. The best way to approach a variation is to seek assistance from industry professionals.
An alternative to Enterprise Agreement for award covered employees is what is known as an Individual Flexibility Agreement. An IFA is used by the employer to change the effect of certain clauses in the award and is put in place to make the award suit the needs of the employer and employee.
At HR Business Direction we can advise and / or negotiate an Enterprise Agreement and develop an Industrial Relations Strategy. Contact us here.
Leisa Messer BBus(HRM); GradDipIR; CAHRI; IRSQ
Managing Director | HR Strategist
leisa.messer@hrbd.com.au
07 3890 2066
www.hrbd.com.au