Advocacy Services
Enterprise Bargaining
Enterprise Bargaining
Collective, or enterprise, bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers.
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A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more employees, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.
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Fun fact: The term "collective bargaining" was first used in 1891 by Beatrice Webb, a founder of the field of industrial relations in Britain. It refers to the sort of collective negotiations and agreements that had existed since the rise of trade unions during the 18th century. Martha Beatrice Webb, Baroness Passfield, (22 January 1858 – 30 April 1943) was an English sociologist, economist, women's rights champion, and social reformer. She was among the founders of the London School of Economics and played a crucial role in forming the Fabian Society. Additionally, she authored several popular books, with her most notable being The Co-operative Movement in Great Britain and Industrial Democracy, where she coined the term "collective bargaining" as a way to discuss the negotiation process between an employer and a labor union.
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Representation and Negotiation Process
Employers and employees may appoint any person as their bargaining representative for a proposed enterprise agreement. Bargaining representatives are entitled to bargain for enterprise agreements and depending on the type of agreement will usually be entitled to apply to the Fair Work Commission for orders and determinations relating to enterprise bargaining. Bargaining representatives are also entitled to represent a person in other types of matter before the Commission.
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Bargaining representatives and employers are required to meet the good faith bargaining requirements. Non-compliance with these requirements exposes a bargaining representative to bargaining orders. (This only applies to bargaining representatives for a single-enterprise agreement or bargaining representatives for multi-enterprise agreements in the low-paid bargaining stream.) Once bargaining for a proposed enterprise agreement has commenced, all bargaining representatives are required to recognise and bargain with the other bargaining representatives for the proposed agreement.
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Role of unions
A union is the default bargaining representative for an employee if:
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the employee is a member of the union, and
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the union is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.
However, the union will not be the employee's bargaining representative if:
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the employee revokes the status of the union as his or her bargaining representative; or
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appoints another person, or appoints himself or herself, as bargaining representative for the agreement.
A union or an official of a union (whether acting in that capacity or not) cannot be a bargaining representative of an employee unless the union is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.
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Are enterprise negotiations worth it?
The Trends in Federal Enterprise Bargaining report, released by the Department of Employment and Workplace Relations today, shows that Australian workers who are covered by a new federal enterprise agreement in the 2024 September quarter have received an average pay rise of 3.6 percent (AAWI – Average Annualised Wage Increase).
The Fair Work Commission approved an extra 933 enterprise agreements in the September quarter 2024, covering more than 340,000 employees. That means enterprise bargaining has positively impacted 1.26 million employees across both the public and private sectors over the last 12 months alone – the highest number of workers covered by new agreements in any 12-month period on record.
Since 1 July 2022, 9,483 enterprise agreements have been approved, covering 2.26 million employees. Enterprise agreements are good for workers and good for businesses. Workers get better pay and conditions, and businesses get more flexibility and productivity.
The data also showed wages growth in the private sector is outpacing the public sector, with newly approved agreements in the private sector seeing average wages growth of 3.9 percent, compared with 3.5 percent in the public sector during the September quarter.
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