Negotiating An Enterprise Agreement Enterprise Bargaining
What are the Advantages?
What are the Advantages?
Enterprise bargaining is a valuable business tool which can encourage a culture of change, flexibility and continuous improvement throughout the workplace. It is a formal process put in place by the Fair Work Ombudsman which permits negotiation around the terms and conditions of employment in businesses.
When looking at ways to increase productivity, enterprise bargaining is a good place to start; increased productivity can provide higher profits to employers and lower priced goods and services to the public, higher wages to workers or more secure and satisfying work.
The practice is particularly effective as both employees and employers are considered equal partners throughout the negotiation process which truly facilitates the discussion of changes to how work is performed within the enterprise agreements. The final outcome is the creation of an Enterprise Agreement (EA).
Employers and employees who negotiate an EA are ultimately working together in good faith towards reaching a common goal long-run workplace productivity. EAs mutually benefit both parties by allowing the employee to enjoy more flexible employment terms and conditions and the employer to experience more efficient and productive workplace conditions. Neither party is obligated to make an agreement if they are not in favour of it; both parties may agree to disagree and if an agreement fails to be reached then the original arrangements may be left in place.
What are Good Faith Bargaining Rules?
Each employer and employee involved in negotiations will be covered by the appropriate union or employer organisation, the good faith bargaining rules under the Fair Work Act include:
Attending meetings
Disclosing relevant information
Responding to proposals made by other bargaining representatives in a timely manner
Genuinely and fairly considering the suggestions made and giving reason for all responses
When bargaining in good faith is not fairly practiced and the specific requirements mentioned above are not met, either party may apply for a bargaining order which is provided by Fair Work Australia. Before this occurs a note in writing must be put forward in order to give the party a chance to respond appropriately and reconsider the way they are approaching the negotiations. The aim of the bargaining order is to ensure that fairness is being practiced and it will set out the steps that are necessary for the enterprise bargaining process to reach a common agreement.
What is the Outcome of an EA?
The results from an enterprise bargaining agreement can include:
Flexible hours and rosters
Broader job classifications
New training and career opportunities
Profit sharing or other forms of performance related pay
Agreements to achieve efficiency gains such as new production targets or a reduction in wastage
Improved service delivery to achieve greater client satisfaction
Enterprise bargaining helps facilitate several HR initiatives such as family-friendly arrangements, child care facilities, job sharing, career breaks, improved employee grievances procedures or consulting on workplace issues.
What are the Legalities?
An EA has the equivalent legal force to an award and once the EA is certified it will take precedence over an award. Once an enterprise bargaining agreement has been set in place, industrial action cannot be taken until after the agreements expiry date. EAs tend to have a nominal term of up to three years however can continue to take effect if the parties involved in the agreement wish for this to happen or until a new EA is introduced.
Why Should I do it?
Stability: Workplace agreements give you stability by allowing you to bed down the workplace conditions and wages for your employees for up to 4 years.
Simplicity: You can replace layers of compliance and multiple awards, including new Modern Awards, with one, easy to understand agreement.
Flexibility: Enterprise Agreements are significantly more flexible than award provisions, so you and your employees can negotiate a win-win agreement in which your employees are better able to balance their work/life commitments and you can still fulfil the operational requirements of your business.
Efficiency: Consolidating rates of pay enables you to predict labour costs more easily and gives you the ability to roster more staff at busier times.
Offset award provisions: Enterprise Agreements can provide for aggregate flat rates of pay that incorporate loadings for a selection of penalties and allowances found within the award. You can provide your employees with a range of monetary and non-monetary benefits to offset award provisions.
Employee benefits: You can provide your employees with greater work and career progression opportunities.
Used to its full capabilities, an EBA can create a clear path to a productive and harmonious workplace; through good faith bargaining and maintaining excellent lines of communication. EIs legal team can assist in implementing Enterprise Agreements; we were instrumental in implementing the very first small business EA in New South Wales and remain the most trusted source for businesses in Australia.
We understand that frequent regulatory changes are challenging for employers. EIs legal team is expert in developing tailored workplace agreements that ensure youre well positioned to navigate any future changes in the law.
We can help you with:
Drafting and lodging fair EAs tailored to your workplace
Good faith bargaining
Representation before Fair Work Australia
Advice on matters arising from changes to state and federal law
by: Lily Horn
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