Enterprise Bargaining

Enterprise Agreements are agreements struck by an employer and their employees which sets out the pay and conditions of employees. It is an agreement that applies to a particular business.

The bargaining process commences by a log of claims being submitted by the relevant Union(s) and/ or their bargaining representatives. The log of claims contains the demands the employees have and outlines their positions on wages and working conditions the employees want to secure under an enterprise agreement. Employee representatives engage with the people that they represent at the workplace level. Bargaining representatives are nominated by employees to represent them.

Once the log of claims is submitted the bargaining process commences. Often employers will also submit a log of claims in order to set out their own demands.

Bargaining representatives will need to keep the following in mind:

1. Parties need to keep attending meetings and not to create unnecessary delays in the process. The parties are also required to bargain in good faith.
2. Whilst parties need to keep to their log of claims in the process of negotiations for an enterprise agreement both sides will usually make c However asking for demands that exceed those originally sought in a log of claims or retracting previously agreed positions could mean a breach of the obligation to bargain in good faith or any bargaining orders the Fair Work Commission might make in the course of negotiations for an enterprise agreement.
3. At the completion of the bargaining, an enterprise agreement can only be made “in-principle” due to the fact an enterprise agreement must be approved by a ballot of all staff that will be covered by the enterprise agreement.
4. An enterprise agreement must contain conditions that are better off overall, than a relevant applicable award; the Better Off Overall Test (BOOT). This means that for if for example a proposed enterprise agreement does not contain penalty rates, but the relevant applicable award does, the proposed enterprise agreement must contain higher rates of pay to compensate the employees for the loss of those penalty rates. The rates of pay need to be high enough to leave employees better off overall than the award. The BOOT test needs to apply to all employees not merely a majority of employees.
5. Enterprise agreements need to contain an Individual Flexibility Arrangement (IFA) clause. If such a clause is not in the agreement, it will be taken that the modern clause applies. IFAs can be used for things such as varying hours of work. For example an employee may wish to work from 7:00 AM until 3:00 PM rather than the standard 9:00 AM – 5:00 PM.

Whilst Enterprise Agreements can provide a means by which employees can work collectively together with their unions or agents to protect and improve their pay and working conditions, enterprise bargaining is not a one way street. Enterprise bargaining is a process employer’s use for the opposite end; a reduction in pay or the removal of more beneficial working conditions.

Turn to Turner Freeman