Enterprise Bargaining: History, Importance and Future in Australia

Running head: ENTERPRISE BARGAINING
Enterprise bargaining
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1ENTERPRISE BARGAINING
Introduction
Enterprise bargaining refers to the negotiation of working condition and wage structure at
the individual level of organizations with specific focus in Australia. This essay will deal with
the future of enterprise bargaining in the Australian system of employment relations. This
process involves negotiation between the employees, employer, stakeholders and their
bargaining representatives with the aim of making an enterprise agreement. The employers and
employees are legally bound with the implementation of the enterprise bargaining agreement.
The trade union is often involved in this process of enterprise bargaining to play the role of
employer or employees (Financial Review 2018).
The collective agreements of enterprise bargaining is usually applied to the workers of
one employer. The system of agreement is not similar to awards, which offer same standards for
all workers in the whole industry under a specific category of reward. As per the history of
enterprise bargaining, it can be said that the collective agreements benefit the employers by
incorporating flexibility in terms of performance. However, collective agreements are beneficial
for the workers because they increase the pay and allow additional leave (Amma.org.au 2018).
This particular essay on enterprise bargaining will focus on the history of enterprise
bargaining in Australia and seek out the reasons behind its introduction. It will also highlight the
importance of employment relations in Australia and the current threat faced by it to gather
information about the future of this agreement.

2ENTERPRISE BARGAINING
Discussion
Enterprise agreement is a deal made at the enterprise level among the employers,
employees and trade union members regarding the norms of employment (Actu.org.au, 2018).
This process can involve more than one employer making an agreement with a group of
employees. There is minor difference between awards and enterprise bargaining. Awards
consider fewer amounts of pay and other benefits within the structure of industry. However,
enterprise bargaining include particular arrangement for a specific enterprise. In general, the
content of award can be considered as a least standard of enterprise bargaining agreement. The
latter one is not permitted to provide anything less than its basic standard as per the national
Employment Standards (Financial Review, 2018).
There are two dominant stages of enterprise bargaining- the negotiation stage and the
stage of contract administration. At the negotiation stage, few proposals are introduced to seek
for the possibilities of the acceptance. It provides an opportunity for mutual agreement among
the employers and employees after proper reflection and thoughtfulness. It further involves the
three steps of preparation, procedure and follow- up action.
At the stage of contract administration, the contract is signed by strict adherence from
both the parties. The process of contract administration need not be ended with the award of a
contract. However, it seeks legit knowledge and advice. The elements of contract administration
include scheduled delivery, supervision of staffing, workplace safety rules, security clearance,
site conditions and others.
According to International Labor Organization, enterprise or collective bargaining is a
negotiation about working conditions and means of employment between an employer and a

3ENTERPRISE BARGAINING
group of employees with a perspective of defining industrial relations with one another (Bray
and Rasmussen 2018). Economic and political provisions are the two issues that play major role
in collective or enterprise bargaining.
Hicks Bargaining Model can be referred to in association with enterprise bargaining. This
particular model stresses on the length and cost of work strike. He suggested that trade union and
the negotiators of management need to create stability between the costs and benefits of a work
strike while negotiating. The prime focus of this theory was on the functional association of
wage acceptance by one party and the extent of strike that will be followed to settle on that wage.
This bargaining model of Hicks was contradictory to the Bargaining range theory because
the former one focuses on a fixed wage settlement unlike the latter one. Bargaining range theory
of A. C. Pigou described the process of wage settlement between the labors and the employers
with a final settlement. As per this theory, the fixed settlement point of wage will depend on the
negotiation or bargaining skills and the potential of the management negotiators.
Enterprise bargaining was first introduced in Australia as per the Prices and Income
accord in 1991. It was later on revised in the year 1993 and became the major part of industrial
relations system in Australia. The trade union act was passed during the 19th century, which
permitted the workers to negotiate with the employers for their wages and working conditions by
forming a group. The era of 1860s and 70s when trade unions began initiating in the Australian
working environment which faced success in terms of negotiating specifically, during labor
scarcity, or gold rush (Amma.org.au 2018).
The success of the enterprise bargaining act was first experienced by the stonemasons in
Melbourne who won their demand for an eight hour shift. The severe depression of the 1890s let