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My Workplace » Enterprise Bargaining » eas » Features in enterprise agreements under the Industrial Relations Act 1996
Features in enterprise agreements under the Industrial Relations Act 1996
Provisions to increase productivity and workplace flexibility have been a key component of enterprise agreements approved in New South Wales under the Industrial Relations Act 1996.
The most common innovative features fall into four broad categories:
- Work Organisation
- Conditions of Employment
- Work Environment
- Training
Agenda for workplace change and continuous improvement
Many agreements have objectives which reflect the environment that organisations operate. These objectives provide the context for change by outlining the intended future approach.
For example:
- "It is the objective of the parties to this agreement to implement workplace practices so as to provide for working arrangements which improve the productivity of the company, enhance job satisfaction and assist positively towards ensuring that {the company} becomes a more efficient and productive enterprise."
- "The aim of the Agreement is to ensure that through changes to management systems the Company's management and its employees can continue to work together to maintain and build on the Company's success as an innovative market leader in the manufacture of {products}.
- Parties agree that their objectives are based on participation, co-operation, teamwork, trust, and devolved responsibilities that focus on achieving real and sustainable improvement."
- "The aim of this agreement is to assist in the development of a new company culture which is flexible, committed and highly skilled."
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Functional flexibility
Another common feature in agreements is to improve the workforce flexibility. This includes:
- the removal of demarcation barriers and restrictive work practices;
- the introduction of multiskilling;
- broadening and redesigning of jobs to encompass a wider range of duties; and
- new classification structures and career paths.
For example:
- An agreement by a food manufacturing and distribution multinational incorporates an initiative between the AMWU and the NUW which provides the ability to interchange work, on a rotational basis, between the "Wet" and "Dry" product areas of the warehouse. This arrangement enables the organisation to meet short term needs and replace absences in both areas. Storemen and Packers have agreed that production will not stop as a result of staff absences. Rather, a suitably trained person may be asked to perform the work.
- Workers in the metal and electrical trades have agreed that suitably qualified production and store employees may undertake "straight-forward tasks" under the plant manager's direction. A plant fitter/electrician will advise of a person's competency. A log of employees competent in those areas is maintained by the plant manager, so they may be called upon to undertake those tasks when required.
- In other instances, employees undergo training and job rotation to become multiskilled. This allows them to perform a variety of other tasks not previously within their scope of skills, training and competence.
- A clothing manufacturer and distributor provides for employees to transfer and/or rotate between machines or operations, within their level of competence and the company's safety guidelines.
- An agreement for kiln operators provides employees with the opportunity to become skilled in all areas of the production process. Employees who take up this opportunity are required to apply the skill for a minimum number of hours every six months. They also undergo an annual competency test on those skills. On gaining competency, they will be able to stand-in for those tasks when required.
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Teams and teamwork
A "team" approach has been adopted by many organisations to improve employee communication and involvement within the workplace. By improving employee input into the production process organisations are able to enhance work organisation, quality and performance and reduce production costs.
Examples include:
- A manufacturing company provides for a "teamwork approach" in their agreement which involves the sharing of information, improved communication, employee commitment and involvement based on seven team areas.
- A foods manufacturer and three unions undertook the task of developing team working skills during the life of their enterprise agreement, as part of a "workplace modernisation" initiative.
- A city council is currently looking at the concept of introducing self managed-teams as a means of increasing employee job satisfaction and productivity.
- An enterprise agreement for a timber operation provides for semi-autonomous unsupervised teams. Training is provided to enable the transition to team-based work arrangements. The agreement also provides for job rotation through different areas of the plant's operation.
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Consultative arrangements
Consultation and consultative arrangements have been identified in almost half of the enterprise agreements approved to date, the most common being a consultative committee. A number of committees have been established as a result of the bargaining process.
Other forms of consultation in agreements include regular consultation with unions, information sharing and the commitment to provide advance notice of changes to work practices.
2. Conditions of employment
Probationary employment
This feature is included in over one quarter of all enterprise agreements approved to date. The most common arrangement is a probationary period of three months. Employees may then be offered permanent employment after a successful performance review at the conclusion of the probationary period.
Hours of work
Restructuring of ordinary hours of work to suit the operation of the business has been a major feature in many enterprise agreements.
Such changes fall into four broad categories:
- Changes to the level of ordinary working hours - the most common practice has been the increase in the ordinary weekly hours of work from 38 hours to 40 hours per week.
- Changes to the span of ordinary working hours - In most cases, the daily span of ordinary hours have been changed to align the hours of work for various trade or occupational groups or to meet business needs.
- New shift arrangements - either in the form of a longer shifts, to effect changes to shift rosters or to reduce breaks between shifts.
- Other flexible work arrangements - include the introduction of "hours banks", the ability to credit excess hours worked, flexible hours and changes to starting and finishing times to meet business demands.
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Payment of Wages
There are difficulties in extracting accurate data concerning wage movements in enterprise agreements. Therefore, the following information should be considered as indicative only.
The average wage increase for 1999 has been calculated to be 4.9%.
The average wage increase for 'union' negotiated enterprise agreements in 1999 was 5.3% while the average wage increase for 'employee' negotiated enterprise agreements in 1999 was 4.5%.
Changes to structures have also been identified and these fall into seven different categories. Some agreements provide for more than one change to their remuneration structure.
- Productivity-based payments - A wide range of criteria have been used to assess increases in productivity. Examples include: company profitability, improvements in output and sales, payments based on hourly and weekly allowances if production reaches targets and payments for the completion of measured tasks.
- Performance-linked payments – Payment is based on key performance indicators and other performance measures. In some agreements, pay increases have been staggered over a period of time, generally in instalments of about six months, with the last payment subject to the organisation meeting an agreed performance or productivity target.
- Bonus payments - Used as an incentive to improve performance. Productivity bonuses are an increasingly popular form of employee reward. A number of enterprise agreements provide some form of a bonus payment, in some cases this is in the form of an "attendance bonus" equivalent to the cash value of untaken sick leave.
- Annualised salary - This is usually a flat rate of pay which is inclusive of shift allowances, penalty rates, annual leave loading, overtime rates, bonuses and allowances or annualised salary arrangements.
- Pay Packaging - Permits employees to receive a range of benefits provided by the employer. For example, motor vehicles, home mortgages, rent, health insurance, child care and education, usually on a salary sacrifice basis.
- Profit sharing and gain sharing - Are another form of employee incentive to increase productivity and performance.
- Time-off-in-lieu of overtime payments - Makes overtime arrangements more flexible. While some agreements provide time-off at overtime rates of accrual time, others provide the ordinary time equivalent.
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Leave arrangements
A number of enterprise agreements provide employees with the option of cashing in their untaken sick leave balance. Some agreements provide for the full entitlement to be cashed out, others provide for a partial payment for untaken sick leave. In many agreements untaken sick leave is also available as family leave.
Increasingly, enterprise agreements are providing greater flexibility in regard to rostered days off (RDOs). For example, a manufacturer and distributor of personal care products recently introduced a new system to provide its maintenance and manufacturing staff with greater flexibility when taking their RDOs. Employees are able to "bank" up to 5 RDOs. RDOs banked in excess of the five days are paid out at the ordinary rate of pay. Credits in the RDO bank may be "cashed in" at any time.
To emphasise the importance of providing a safe work environment and one which fosters equity and freedom from discrimination, many workplaces incorporate provisions such as occupational health and safety and equal employment opportunity into their agreement.
Strategies to deal with harassment in the workplace are also a feature in some agreements. Agreements negotiated by a bedding manufacturer and a funeral home are just two examples of enterprise agreements which provide guidelines for dealing with harassment and victimisation.
Training provides an important foundation for many changes introduced in the workplace. A significant number of agreements registered to date provide for training and staff development.
Examples include:
- A program of modular training to facilitate the creation of a multiskilled workforce. Under the program, employees are paid an allowance (minimum 50c per week) for qualifying to operate various plant machinery;
- A formal development plan to be maintained and regularly updated as skill development occurs. Training is available in the form of structured on-the-job practice and off-the-job training. In assessing competence, the agreement provides for the Line or Team Leader to be responsible for identifying areas for further coaching or training.
- An "Implementation Committee" responsible for establishing a new training program for employees to learn new and appropriate skills. Programs with a focus on environmental practices such as recycling have also been introduced.
- Job rotation within a warehouse to facilitate skills acquisition and for all employees to undertake training courses. This includes training on one Saturday per year, to be paid at ordinary rates of pay for the first eight hours.
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