19 March 2025
4 min read
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The 2023 Secure Jobs, Better Pay amendments to the Fair Work Act aims to reduce the barriers to collective agreement making, thus encouraging the coverage of more single-enterprise collective agreements.
In the 2 years since its passing, the incidence and coverage of collective bargaining has seen a 27% increase in the number of employees covered by a collective agreement.
An employer planning to make or remake an enterprise agreement must thoroughly prepare to ensure the agreement supports business objectives and harmonious employee relations.
In this article, we discuss some key tactics and strategies employers can adopt to achieve an effective bargaining process.
Employers need to develop a clear bargaining strategy that all internal players can work with. The strategy needs to be founded on what the business needs and wants to achieve from bargaining. To implement that strategy, employers should have:
Having insight into the competing interests of union bargaining representatives and their relations with workplace delegates and employees will assist in developing a bargaining strategy. Reviewing the union’s prior log of claims can assist in anticipating bargaining issues and union motivations. Consider recent industry challenges and trends, as well as political intelligence to assist in predicting potential claims.
It is important for employers to understand their own stakeholders, such as investors, government, customers, and creditors, and consider the impact these might have on bargaining, particularly if there is industrial action, organised consumer boycotts or social media campaigns.
Employers need to have a clear and precise understanding of the cost of each claim sought by the union bargaining representatives. This will enable them to meet the principles for good faith bargaining enshrined in the Fair Work Act, which require bargaining positions and claims to be supported with relevant information and reasons in a timely manner.
The Secure Jobs, Better Pay amendments give the Fair Work Commission more powers to push employers and bargaining representatives into concluded agreements. The intractable bargaining regime is an example, but the PABO compulsory conferences are also useful. Any bargaining strategy should build in options for Commission intervention.
In the case of an employer renegotiating an enterprise agreement, a legal review should be undertaken at an early stage to identify the provisions that would need adjustment to be approved by the Commission in a future agreement.
Employers should view bargaining as a collaborative process and always show respect during negotiations. Employers should set a clear bargaining schedule, participate, and ensure that meetings are at reasonable times. Making things more difficult for unions will only prolong the process. Remember, when the deal is done everyone has to work together.
The Fair Work Act requirements for the making of enterprise agreements need to be understood and followed. Common errors arise in the issuing of the Notice of Employee Representational Rights (particularly when the employer agrees to bargain for an expanded scope of agreement mid-way through bargaining) and preparing explanatory material for the vote on the agreement. While the Fair Work Commission has more power to overlook technical irregularities, the Commission will not hesitate to refuse an approval application if warranted.
Elaborate compromises in bargaining can sometimes lead to complex agreements that foster disputes about their meaning and add to payroll compliance. This is often made more problematic by rushed drafting of agreement clauses at the last minute. In our experience, it is never too early to put pen to paper for the proposed agreement.
Enterprise bargaining can be a long and complex process, and it is important that employers get the best advice to achieve their bargaining objectives. Employers can make this process significantly easier by ensuring that they prepare well and early. Reviewing recent legal changes, potential compliance issues, and getting to know the relevant unions will assist employers in identifying potential claims early and allow them to prepare. Having a strong understanding of an employer’s internal expectations can also help determine the implementation impacts of any potential claim.
If you have any questions regarding preparation for enterprise agreements, please get in touch with a member of our team below.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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