Tips and Traps for Bargaining in Enterprise Agreement Negotiations

10 May 2017

Many council’s are commencing or are currently in the midst of negotiations for new Enterprise Agreements. It is easy to lose sight of the objects of enterprise bargaining as the process gathers momentum.

Section 73 of the Fair Work Act 1994 sets out the objects of enterprise bargaining as:

1.          to reach an agreement that has the support of a majority of the employees and which can be approved by the Commission;

2.        to complete the bargaining process without adding to the natural tensions that exist in many workplaces;

3.        to establish an agreement that has regard to the particular circumstances of the organisation and the employees, and how it applies to the setting of remuneration and conditions;

4.        to have an approved agreement that furthers the interests of the employees, and adequately protects those interests, whilst maintaining a focus on improved performance; and

5.        to ensure that the process commences with an understanding by all parties of the existing rights and entitlements and concludes with an informed decision to embrace new arrangements.

The aim of enterprise bargaining is to ensure that the best possible agreement is reached. There are a number of tips that can assist those involved in the negotiating process, including:

• being a reliable source of information rather than ‘drip feeding’ information or opinion only when you believe it benefits your interests;
• understanding that the circumstances of ‘the employer as a whole’ need to be considered (by both sides) when determining respective positions on wages. This may require a move away from a “trade-off” mentality and a move toward genuine resolution of differences;
• being consistent with your approach and the rationale for it throughout the process;
• the broader and more inclusive the process, the greater the chance of positively impacting organisational performance;
• productivity and efficiency not being seen just as a narrow “cost” based exercise. Rather the agreement should appropriately contemplate, measure and reward improvements in employee contribution and achievement of the organisation’s objectives;
• clear definition of performance targets, and consequences and strategies to deal with non-achievement should be reached and recorded;
• understanding that incremental, rather than radical, change is often more likely to be acceptable and usually involves the workforce “owning” the outcome;
• consistency of representation is important to ensure a full understanding and reliable message. When possible, quality training of representatives, particularly in the area of conflict resolution, can be helpful;
• not under-estimating the power of employees to make an informed judgment when provided with information in the right context;
• not underestimating the need for the parties involved to have access, within the process, to advice and assistance. Particularly with respect to existing entitlements and rights and the drafting of what will be a legally binding instrument with the power to establish and modify those entitlements; and
• acknowledging that meaningful workplace change requires a high level of confidence in the integrity of the process, including the negotiations, the implementation of the agreement and the approval process itself.

While the Act sets out a number of processes to be followed in negotiating Enterprise Agreements, the underpinning is the requirement in Section 76A to engage in ‘best endeavours’ bargaining. This includes such things as:

1.          meeting at reasonable times and places for the purpose of commencing and furthering the negotiations;

2.         clearly stating and explaining a position on the questions at issue to all other parties involved;

3.         disclosing relevant and necessary information;

4.         acting openly and honestly;

5.         not altering or shifting the ground of negotiations by capriciously adding matters for consideration or excluding matters from consideration;

6.         adhering to agreed negotiation procedures;

7.          adhering to agreed outcomes and commitments; and

8.         meeting any agreed timetable for achieving agreement.

For Councils commencing or, even, in the midst of, Enterprise Agreement bargaining, we recommend the following questions be considered:

• What are the current barriers (if any) to performance and development and how can these be overcome with an enterprise agreement?
• What is the workplace culture to be promoted and how will the Enterprise Agreement assist?
• What is the most appropriate group of employees? Is it all staff or should employees under the Municipal Salaried Award and those under the Local Government Employees Award be separated?
• What existing instruments apply? (i.e. existing Enterprise Agreement, Award etc).
• What wages and conditions are appropriate for the duration of the Agreement?
• What process will allow for full participation and understanding of the processes?
• Is advice or assistance in negotiations appropriate or desired or necessary?

Enterprise Agreement negotiation can be a tense time for both those tasked with negotiating on behalf of the Council and those employee representatives who are actively involved in the process on behalf of employees. Recognition of the objects and processes of best endeavours bargaining, and of Enterprise Agreements, can help parties engage in meaningful negotiation towards a successful outcome.