Deakin MMH709: Enterprise Bargaining, Productivity, and the Law

This essay delves into the core concepts of enterprise agreements and their relationship with productivity within the framework of employment relations. It examines the legal obligations imposed on employers, employees, and trade unions during the bargaining process, as defined by the Fair Work Act 2009. The essay explores the rights and responsibilities of bargaining representatives, including good faith bargaining requirements and the procedures for seeking approval of enterprise agreements. Furthermore, it analyzes the concept of productivity, differentiating between labor productivity and multifactor productivity, and discusses how enterprise bargaining can impact productivity growth. The essay also covers the process of dispute resolution, including bargaining orders and the consequences of breaching good-faith bargaining obligations. The content is highly relevant for students studying employment relations and organizational effectiveness.

Q 1
The process of marketing can be labelled as a procedure under which one or more employers and
employees (or their unions) decide the terms and conditions that are going to be a part of an
agreement. In such cases, either party can be represented in this course by a bargaining
representative. The bargaining regarding the planned enterprise agreement starts when the
employers increase to bargaining or starts the process of bargaining or when the mainstream
support resolve comes into action or the range orders become operated or a low-grade
authorization specifying the employer comes into action. This period is called the notification
time. In this regard, the lone enterprise agreement date calculator is an instrument provided by
the Fair Work Commission, which can help the employers, their representatives and bargaining
representatives in making sure that the process adopted by them for making the agreement and
the application for approval is according to the legislative time framework (ABS 2001).
In this regard, there are certain legal responsibilities and rights that have to be witnessed by the
employers, employees and their representatives (Barrett, R.1995). These can be described as
follows
The law provides that the employees under an obligation to take all sensible strides for notifying
the workers regarding the entitlement to be represented as soon as practical and it should not be
more than 14 days after the period of notification. The notice ought to be given in the form of a
precise reproduction of the notice of employee representative rights. That is mentioned in
schedule 2.1, Fair Work Regulations, 2009. It is also mentioned under the law that there can be

no other content present in the notice (Belman, D.1992). The notice is required to be given to
each employee who is going to be covered by the agreement and who has been employed at the
time of the notification. In case any new person has been employed after the time of notification
and the notice has already been given to the other employees, then it is not necessary that the
notice should be given to such person. In this regard, he needs to be mentioned that according to
the law a vote cannot take place until no less than 21 days after the last notice of representative
rights has been given.
There are certain categories of persons who can act as bargaining representatives. Therefore the
following persons can act as bargaining representatives (Buultjens, J.1994). An employer who is
going to be included by the agreement; any union member, who is going to be included under
such agreements (unless it has been specified in writing by such member that he does not want to
be represented by such union); any union that has applied for low-pay authorization related with
the agreement; or any person who has been mentioned in writing as the bargaining representative
by either the employer or an employee who's going to be covered by such agreement.
In this regard, it is required by the law that the organizations that are going to it as bargaining
representatives, including the employers, their organizations and unions regarding a planned
enterprise agreement are under an obligation of disclosing some financial advantages that they
are or may receive on account of any term mentioned in the proposed agreement. The disclosure
is required to be mentioned in the document with particulars of pertinent financial advantage,
and it is known as the disclosure document (Campbell and Brosnan, 1999). The employer who
produces the disclosure document is required to provide it to the employees. The union or
employer organization, which has created the disclosure document, is required to give it to the
employer, who will then provide this document to the employees.

Requirements of good faith bargaining: it is required by the law that the bargaining agents should
take action in good faith during the procedure of bargaining in case of planned enterprise
agreement. The good faith bargaining requirements that are applicable in case of a bargaining
representative can be described as follows:
 Attending and taking part in the meetings at reasonable times;
 Disclosing relevant information (apart from confidential or commercially sensitive
information).
 Responding to the proposals that have been made by other bargaining representatives
regarding the agreement.
 Genuinely considering the proposals that are going to be made by the other bargaining
representatives and giving reasons for the response to such proposals.
 The bargaining representatives should not behave in an unfair or capricious manner
which undermines the freedom of association/collective bargaining.
 They are also required to recognize and bargaining with other representatives for
completing the agreement.
However, it needs to be mentioned that it is not required by good faith bargaining necessities that
the bargaining agent should make concessions during the agreement bargaining, or they should
arrive at an agreement on the terms that are going to be a part of the agreement (Dabscheck,
1995). Before the enterprise agreement has been permitted by Fair Work Commission, they
should be contented that endorsement of the agreement is not going to result in undermining
good faith bargaining by one or more agents regarding a particular enterprise agreement. Apart

from it, the bargaining agents of the employee who is going to be covered by such an agreement
is also under an obligation for not to be involved in pattern bargaining regarding the agreement
(Evatt Foundation, 1995). Pattern bargaining takes place when the bargaining representative is
going to represent two or more proposed enterprise agreements and seek, in terms of the
agreement with two or more employers. However, it will not be considered as pattern bargaining
if the agent is generally making efforts were arriving at an agreement.
There are certain steps that need to be taken for seeking the approval of an enterprise agreement.
After the parties have completed bargaining and they have created a draft enterprise agreement,
such agreement needs to be voted upon by the employees were going to be covered by such
agreement (Freeman and Medoff, 1984). Therefore before the vote for approval of the employees
can take place regarding the agreement, it is the obligation of the employer to make sure that:
Within the period of seven days before voting on the agreement, the workers have been provided
a copy of the agreement as well as any other substance that is a part of the enterprise agreement.
Similarly, the employer is also under an obligation to notify the employees regarding the time
and place where the vote is going to take place and the voting method that is going to be used.
The employers are also under an obligation for taking all reasonable steps for the purpose of
making sure that the terms of the agreement and their influence have been properly clarified to
the workers.
The clarification of the terms has been provided in appropriate manner (Hawke, 2000). It should
be suitable for young workers, the workers coming from culturally varied circumstances and
workers who did not have the bargaining agent.

On the other hand, the employees are required to approve the agreement by voting. However, the
vote on the agreement cannot take place till at least 21 days from the day when the workers were
informed regarding their entitlement of having a bargaining agent.
Bargaining dispute: There are separate suit in which a bargaining dispute may arise, for instance,
one party has not bargain in good-faith. Therefore, in case of a bargaining dispute that is not
possible to be resolved by the representatives, disposable for the bargaining agents indulged in
applying to the Fair Work Commission for its help in dealing with the disagreement (Hawke and
Drago, 1998a). When required, the commission issues a bargaining order regarding the proposed
agreement. Such bargaining order is going to include the actions that the commission may
require to be taken, the actions that should not be taken and other matters that are considered to
be necessary by the commission for promoting just and effectual bargaining. While making a
bargaining command, the commission should be contented that:
The relevant bargaining representative has been notified by the applicant regarding their concern
(unless it is considered by the commission that it is suitable that this had not taken place) and
either:
 One or more relevant bargaining representative regarding the agreement has not fulfill the
requirements of good-faith bargaining
 The bargaining process is not working, fairly or inefficiently due to the reason that there
are multiple bargaining representatives present regarding the agreement.

Breach of bargaining order: The breach of good-faith bargaining order can be examined by the
Fair Work Ombudsman (Hawke and Drago, 1998b). Therefore, if a person has breached a
bargaining order, the ombudsman can take proceedings resulting in penalties up to $10,600, in
case of a person and $63,000, in case of a company. Otherwise in case, one or more bargaining
orders have been breached by a bargaining agent, their representatives can apply to the
Commission for the existence of the commission in dealing with the dispute.
Therefore the above-mentioned legal obligations and entitlements are present in case of the
parties were going to be involved in enterprise bargaining.

(2)
This context, productivity can be described as the ratio of index of outputs, as compared to the
the index of inputs. Therefore in its simplest form there is only one output and only one input,
the productivity is going to be measured on account of the products produced by par power of
labor (Hawke and Wooden, 1998). Therefore in such a case the measure of the productivity of
labor is going to be available. On the other hand, when two or more inputs (or outputs) are
involved in the course of production, it becomes necessary for constructing an index related with
all the outputs and also an index of all inputs that are tangled in the procedure of production. An
expansion in productivity is going to take place if either
 An augmented level of output is formed for a given level of inputs; or

 A reduced level of inputs is required for producing the specified amount of output.
Therefore preferably the level of productivity can be the degree of the present state of technology
and also the variations in productivity that revealed underlying technological edges in the
economy.
Types of productivity measure: generally there are two specific measures of productivity that are
used commonly.

The labor productivity is the ratio of output to labor input, where the output has to be measured
as value added (McCallum, R.B. 1994). Veteran labor input has to be evaluated by hours
worked, the productivity of labor is the amount of output produced every hour worked.
The multifactor productivity (MFP) can be described as amount of output that is produced as a
result of the use of labor and capital. In this context, S. present in the form of equipment,
machinery and buildings.
It is very significant that the measures of productivity should be interpreted with care.
Particularly the productivity of labor should not be interpreted literally, as the measure of the
efficiency of the workers (Nickell, Wadhwani and Wall, 1992). Therefore even if the efficiency
of the workers have an impact on labor productivity, there are several other influences that are
present in this regard. The amount of capital that is available for worker also has the most
significant effect in this regard. In this regard, a simple example can be given where one person
can produce a lot more output in a single powered by using a deal done instead of a hammer. At
the same time, the quality of management also has an impact on labor productivity. The reason is
that it affects the total amount of output produced by the workforce.
Due to the reason that the measure of labor productivity is significantly affected by the capital
intensity of production, generally the MFP measure is given preference wherever it is available.
This is due to the reason that MFP reflects how well the two major inputs of labor and capital
have been used jointly for producing goods and services. It has been revealed by the figures that
the measurement of the productivity of labor as the ratio of outputs to only one input, the hours
worked. However, the level of labor productivity and its growth is also impacted by all of the

inputs that have been left out of this measure. The other inputs, usually beyond the control of the
workers, can be large in case of its significance and number (Parham, 1999). It has been seen that
the productivity of labor is more concerned with how hard the employees are working, both
collectively and individually.
Productivity is significant because the reason that if the resources available are used in the
manner that results in more output, they also generate more income. The outputs are sold in the
market and the income generated can be used for paying for the material, wages and the return
on investment. And it hasn't productivity gains can be distributed among the customers in the
form of lower prices (Rogers, 1999). The employees can be given higher wages and higher
profits can find the business or the return to the shareholders as well as more tax for the
government. In this way, productivity growth is a significant source of improvement in material
living standards in the long-term. Increased participation by the workers and employment are a
good method of increasing income per head of the people. Favorable shifts in the terms can also
result in increasing the living standards of the people and it has been revealed by recent
experience. However during the long term, improvements made in productivity can result in the
most significant manner of increasing average income (Wooden, 2000).
Still, a balance needs to be maintained in the pursuit of productivity. It needs to be noted that
productivity is not the ultimate objective and it is only an intermediary goal. The purpose of
productivity is to improve the material well-being of the people in Australia. However, there are
other sources of well-being that also require consideration and any cost that is related with the
actions taken for enhancing productivity should also be considered. For example, employment
dislocation may take place, which results in a disruptive effect, particularly for some time

(Stewart, A. 1994). It has also been seen that, the actions can be taken for improving productivity
in the long run without basic conflict with social or the environmental goals.
The productivity performance of Australia has been a combination of the growth among the
available opportunities for improvement in productivity and to realize these opportunities. There
are certain opportunities in most areas related with productivity growth, and at the same time,
several worldwide developments, particularly in case of technology. However, these
opportunities may be lost if the right factors that enhance productivity are not in place.
Opportunities for productivity growth: the traditional view in this regard is that the opportunities
for the growth of productivity present in case of advanced economies of lies with the
development in new technologies that mainly take place in case of the manufacturing sector.
Therefore in advanced economies, productivity rises in the era of industrialization, and he takes
place through two mechanisms. First of all there is a shift of production resources from low
productivity agriculture to manufacturing which is high productivity. The second is the
opportunities for relatively high productivity growth in case of manufacturing by adopting the
latest advancements in technology. When the advanced economies become richer, the service
sectors in case of these economies also grow stronger. However, most of the services will
consider to be and shown as presenting smaller opportunities related with the growth of
productivity (Wailes and Lansbury, 1997). This traditional view related with the chances of
productivity growth has a strong basis in science and technology. On the other hand from the
perspective of international business, the pattern of the growth of productivity in case of
developed economies has been impacted by companion elements of 'catch up ' and 'technological
leadership'. This view is also in accordance with post-WWII pattern where the United States was
considered as overall leader in science and technology and also in productivity (Wooden, 1999).

On the other hand, Japan and European countries were involved in the process of technological
and productivity catch-up. It has also been shown by Australia regarding catch-up, but at a
slower rate.

(3)
It is widely recognized and institutional arrangements relating workplace employment
relationships in Australia have undergone a significant change in the 1990s. The result is that the
tribunal based system of arbitration and conciliation, forming the label management relationships
since the beginning of the century are now playing a less central role. The system of awards is
still being directed by different tribunals are also less central in resolving wages and other
employment situations. Before the late 1980s, conditions of employment and wages of most of
the employees in Australia were profoundly reliant on centrally arbitrated awards. By the end of
the century, the wages and the employment conditions applicable in case of the employees were
much likely to be stated in the arguments that have been negotiated either at the level of
enterprise, workplace or individual. One significant feature of this change is that all the major
parties concerned in this process, including the groups of employers, unions and the government
both at Commonwealth and State level have started to endorse the concept of enterprise
bargaining. After the March 1987 national wage case, all the parties concerned have started a
headlong rush "for embracing enterprise bargaining" although there were some exceptions. The
main reason behind the consensus that is present in favor of enterprise bargaining is the widely
held belief that workplace and enterprise bargaining as the potential of stimulating a higher level
of productivity. While justifying the importance of agreements and parliamentary amendments, it
has been indicated that the major purpose of new agreements necessities is to enable workplace
agreements that result in the growth of productivity and also for improving standards of the
employees. . It has also been stated in this regard that the new bargaining stratagem is intended
for creating more stimulating and financially gratifying employments. For this purpose, it
stimulates greater involvement of the workers in all aspects related with the operations of the

industry and workplace and in this way, driving enterprise reforms and also a rising productivity
levels.
Probably more significantly, those persons having the most responsibility regarding the
implementation of enterprise agreements, have these views regarding the hypothetical
productivity advantages that arise from enterprise bargaining. However, despite the presence of
this apparent consensus, there is a lack of evidence that can support the link that exists between
productivity and enterprise bargaining. It has also been argued that the widely publicized
productivity gains arising out of enterprise bargaining have been considerably indefinable. One
major reason behind this situation is simply the lack of appropriate data on which this hypothesis
can be tested. Ideally, in order to found convincing evidence regarding the existence or the
nonexistence of a relationship between productivity and enterprise bargaining needs data that can
keep on top of the output performance of workplaces and firms over the period. Therefore the
need is for revisiting the relationship that exists between productivity and enterprise bargaining.
In this regard, at least there have been two avenues through which the shift away from
centralized resolve of working conditions and wages near enterprise bargaining may result in
facilitating higher productivity. According to the first thought, it can be presumed that the firms
are not functioning as proficiently as they could, and enterprise bargaining can assist these firms
in moving nearer to best practice by increasing the inducements for introducing effectual
management and work practices. An example in this regard can be given on a situation where
relatively centralized wage determination is present and the rate of wage increase has very little
or no similarity at all with the performance of the firm or the functioning of the individuals, in
such a case, there is get it sent a present for the employees to cooperate in removing the work
practices that have proved to be inefficient. As compared to it, enterprise bargaining provides a

chance to the employers for taking off wage increase with the change in work practices and in
this way, leaving both the individual workers and the firm in a better position. Under the
circumstances, it can be stated that enterprise bargaining is mainly related with discussing the
exclusion of inefficient management and work practices. The efficiency gains made by the
process of enterprise bargaining will be there for achieved only once. Productivity is going to
increase for the short term, but after these inadequacies have been detached, there is no further
growth in productivity from this foundation.
As compared to this situation, the second avenue in, which is that enterprise bargaining could
have a constant effect on productivity as it affects the rate of development in productivity in the
long run. This may take place if enterprise bargaining is allowed to encourage more cooperative
relationships at employment and in return possibly promoting invention, facilitating the adoption
of novel knowhow and also encouraging the skill advancement among the workers and in this
way, allowing a shift outwards in the function of production. It has also been argued that certain
experts that all the basic determinants of the growth in productivity depend basically on
operation and effective participation by the employees. However, such participation and
cooperation will be available only with the work relations are branded by trust and where the
employees also sense that they have a stake present in the long-term success of the company.
On the other hand, certain other experts have argued that the. Trust is created by the rights of the
workers which they compare with the strong market institutions like wage settlement and highly
concentrated sectoral bargaining, extending to the non-union sector. Therefore it is claimed by
them that encouraging corporative and productive relationships at the workplace needs strong
external institutions which regulate the relationship of employment in the firm. Such arguments
can be described as highly contentious. As mentioned above, if the wages of the employees and

the working conditions are decided on a national and sectoral basis, the incentive for the
cooperation behavior which enhances productivity it going to be weak and had not announced.
On the other hand, testing and corporative relationships can certainly be assisted by the
regulations and institutions that increase and protect the rights of the workers. However, such
regulations should be firm on workplace based. It is also widely recognized in this regard that
trade unions also have the potential of increasing productivity by the "voice effects" provided by
them. At the same time, unions also provide a level of countervailing authority, which effectively
under rights the cooperation of the workers at the management (Johnson et al., 1981).
Therefore, the arguments made by the experts alert us that the productivity impact of bargaining
structure significantly relies on how they have an impact on the behavior of the workers. Hence
the structures that are capable of fostering competitive, rivalrous behavior among the workers at
the workplace can result in stifling productivity growth. This view has always got support in the
literature related with organizational behavior. Therefore the recent emphasis on individual
agreements may prove to be counter-productive.
However it is surely correct that it does not appear to be the view that is also held by the
managers in offices in Australia where such agreements are present. In the same way, if
enterprise bargaining results in an increase in the prerogatives of the managers at the cost of
consultative methods of practice, then it can be anticipated to raise a environment of distress and
resentment among the employees.

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