What’s the Deal? Getting what you bargain for in an enterprise agreement.
Cawley Hennings, Special Counsel at IRiQ, offers monthly, practical insights into all things industrial.
Three months after the bulk of the Safer Jobs, Better Pay reforms commenced, we share a few of the things that employers can do to get the most from bargaining under the new laws.
What are some of the key tips after the changes?
Employers should start planning and preparations well before the nominal expiry date of their current agreement – an approach which has always been helpful. Following the changes in June, an employee representative is now permitted to start bargaining, so it is even more important for employers to be prepared.
However, despite the changes in June, the most common challenges – and the best practices to overcome these – remain unchanged.
What are some best practices for employers to consider?
Plan the process – simple mistakes early on – for example, when issuing the initial notice – can impact the later stages. Have a draft agreement ready before formally commencing bargaining – even if the draft isn’t tabled until the later stages of bargaining. Don’t bargain for a document or fight over wording – use a tight agenda focusing on issues and topics, not details.
Employers should develop a direct relationship with employees and understand what is important to them. An employer’s wish list or “log of claims” should include items of importance to employees, wherever possible.
A key benefit of bargaining for an enterprise agreement for employers is to modify the terms of modern awards. It is essential to know the terms of any modern award which an agreement proposes to replace or enhance. On that note, it is essential to be clear about whether an enterprise agreement will incorporate and supplement a modern award– or completely replace it.
The terms of enterprise agreements must dovetail with the National Employment Standards and the terms and conditions within individual contracts of employment. Adopting established industrial principles – and in many cases, the established industrial terminology – ensures that enterprise agreements operate predictably and harmoniously. Simplicity is key – for example, consider consolidating benefits into fewer, more generous entitlements. The “common defects” page of the Fair Work Commission’s website is a very helpful resource for information and guidance on agreement content.
Compliant agreements are valuable. One benefit is to minimise the risk that an employer must give undertakings – which are unpredictable and may be costly. A compliant and well-drafted agreement is easier to implement for payroll, operational managers and other stakeholders. With national laws to criminalise wage theft before the Australian Parliament, it is even more important for employers to ensure they comply with obligations, including those in their own enterprise agreements.
What are some common things to reconsider or avoid?
Some of the most significant compliance issues arise where employers have created new agreements from a “copy and paste” of their current agreement – or after adopting a poorly drafted pattern agreement template that was presented to them. The resulting compliance issues can significantly impact both the application for approval, as well as the ongoing implementation of the agreement.
Employers should not assume that a new agreement will pass the Better Off Overall Test (“the BOOT”) because their current agreement was previously approved without any problems. It is common for modern awards to change significantly in just one year, much less three or four. The BOOT itself was changed by the Safer Jobs, Better Pay reforms. New agreements are assessed against current legislation and modern awards – not the current agreement.
IRiQ Law can put structure and support around the complexities of the bargaining process.