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Enterprise Bargaining in Brief

Enterprise bargaining is about introducing changes in the workplace - with everyone sharing the benefits. It is an opportunity for an employer and his/her employees, either directly or through their union representatives, to undertake cooperative negotiations.

Enterprise bargaining is a way to discuss how work is performed, conditions and productivity improvements that will benefit both employer and employees. This can foster a culture of change in the workplace which can be a valuable tool in the process of continuous improvement. It can assist in the creation of vital, responsive and flexible enterprises and improve productivity and efficiency.

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Enterprise agreements

Enterprise agreements set out the minimum conditions of employment for employees engaged in particular types of work in an enterprise in the same way as an award does. They have the same legal force as an award and must be approved by the Industrial Relations Commission of New South Wales.

However, unlike most awards, enterprise agreements are specific to a particular enterprise or project and can be tailored to suit the special needs of that enterprise. Enterprise agreements are negotiated voluntarily between an employer and either the employees concerned, or a union on behalf of those employees.

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Employee representation

Before negotiations between an employer and his/her employees can begin, a decision needs to be made as to how the employees are going to be represented. Factors to assist in the decision are:

• the number of employees at the enterprise;
• the role of the trade unions at the enterprise;
• existing consultative arrangements;
• whether the enterprise is located on one site or several sites;
• the number of trades or occupations to be covered by the agreement; and
• the degree of industrial expertise of the employees.

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Union involvement

Employees can choose to have a trade union represent them because they feel that the union has more expertise in negotiation than they do. If negotiations are undertaken by a union there is no requirement for the employees to approve the enterprise agreement by way of a secret ballot, unless the rules of the union require it.

When negotiating an enterprise agreement without union involvement, an employer must notify the Commission's Industrial Registrar who will then notify the relevant unions. The Registrar will also assist the Commission to determine whether the agreement should be approved, by preparing a report comparing the proposed agreement against the prevailing award conditions.

Relevant unions will have a right to be heard when the Commission is processing an agreement, but will not have a right of veto over the agreement. State peak councils, the President of the Anti-Discrimination Board and the Minister for Industrial Relations also have a capacity to intervene in such proceedings.

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Negotiations

The emphasis of the negotiations should be on:

• establishing an environment of mutual trust within the workplace;
• sharing a commitment to achieving the organisation's objectives;
• open and two-way communication;
• ensuring the involvement of all employees and their representatives to be covered by the agreement in the bargaining process; and
• cooperative negotiation rather than a conflict/adversarial approach.

The Principles for approving an enterprise agreement place particular emphasis on the need for consultation in the negotiation process. The following matters must be considered:

Consultative mechanisms

An enterprise agreement should where applicable, facilitate the establishment of a consultative committee and procedures appropriate to the size, structure and needs of the enterprise for consultation on matters affecting their efficiency and productivity.

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Information sharing processes

During the negotiation of the agreement, consultative processes should encourage the participation of all affected groups and categories of employee. This may include part-time, casual, employees from non-English speaking background (NESB), women employees as well as employees with disabilities. The negotiation process should therefore ensure that:

1. reasonable steps are taken to consult all employees who are to be covered by the agreement;
2. reasonable steps are taken so that employees who are to be covered by the agreement understand the agreement and its effect;
3. employees are informed of the intention to have the agreement approved by the Commission and the consequences of the Commission's approval;
4. employees have access to the proposed agreement and the relevant awards; and
5. employees have had reasonable time to seek advice independent from the employer (extract from the Principles for Approving Enterprise Agreements, December 1996).

There are five steps to successful negotiation of an enterprise agreement.

1. Understand the process
2. Prepare thoroughly
3. Understand the enterprise
4. Bargain in good faith
5. Implementation & evaluation

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Secret ballots

Secret ballots are required:

1. To obtain approval for the enterprise agreement from the individual employees.
2. To vary an agreement
3. To terminate an agreement

The Commission hearing

The parties to the enterprise agreement will be notified of the presiding Judge or Commissioner, time and date of the hearing before the Commission and the court room in which the matter will be heard.

All parties will be expected to appear in Court on the day notified.

The applicant or the applicant's representative will generally be invited to present his/her case first.

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Getting an enterprise agreement approved by the Commission

The following issues should be addressed for the Commission to approve the enterprise agreement:

• the parties to the agreement;
• the involvement of the parties and/or their representatives in the negotiation process;
• the parties understand the effect of the agreement;
• that the parties did not enter the agreement under duress;
• which award/s or enterprise agreement (if any) the agreement will replace if approved;
• how the agreement complies with relevant statutory requirements;
• the major points of comparison between the agreement and the relevant award/s to ensure that on balance there is no net detriment to employees;
• how the agreement complies with the Principles for Approving the Enterprise Agreement;
• or, if the agreement does not meet the Principles, how the departure from those principles does not prejudice the interest of any of the parties to the agreement;
• if the agreement does not cover all employees, the basis on which it is contended that the Commission may approve the agreement; and
• the conduct of any secret ballot held.

Further information

Enterprise agreement advice is available through Workplace Advice.