Analysis of Factors Contributing to Enterprise Bargaining Decline

This essay examines the decline of enterprise bargaining in Australia, a system designed to protect employee rights and working conditions, introduced in 1991. The essay explores the reasons behind the decline, citing factors such as declining union density, the rise of part-time workers, and the issue of low wages, particularly within the context of the Fair Work Commission's "Better off Overall Test" (BOOT) and its limitations. The analysis delves into the challenges faced by trade unions, the impact of globalization, and the preference for individual agreements or organizational award policies. The essay also discusses how changes in the workforce, like the increase in part-time employees, have affected the bargaining process and the role of unions. The study further investigates the diminishing effectiveness of trade unions, employer preference for direct communication with employees, and the limitations of the BOOT framework in the fast-food and retail sectors, concluding with observations on the evolving dynamics between employers, employees, and trade unions.

Running head: ENTERPRISE BARGAINING
Enterprise Bargaining
Name of Student
Name of Employee
Author Note

1ENTERPRISE BARGAINING
Enterprise bargaining is a framework that has been built in order to protect the rights
and the working conditions of the employees in a certain organization. The framework of
enterprise bargaining was introduced in Australia in 1991 (Pursued, 2014). Afterwards, it
became one of the major systems in industrial relations in Australia. This enterprise
bargaining policies consist of agreements, that has to be signed between an employer and an
employee. Moreover, the framework has been implemented in order to make the workplaces
more favorable and flexible for the employees. However, it has been noticed that the
framework has failed to deliver the promises that it has made. The idea of enterprise
bargaining hence seems to be irrelevant in the present context. The factor that is aggravating
the condition more is the lack of flexibility of the framework. In this essay, the factors that
are playing influential role in the decline of enterprise bargaining have been discussed. Lack
of flexibility and improvement, emergence of part time workers and low wages are some of
the factors that are affecting the enterprise bargaining largely.
As seen from recent studies, the number of organizations using enterprise bargaining
is decreasing significantly. According to the reports published by the Department of
Employment, the number had declined around one third over the span of six years. Although
Crabtree & Chamberlain, (2014) opined that, Enterprise Bargaining Agreement (EBA) is an
agreement between the employer and the employees. However, it has also been monitored
that trade unions also sign agreements with the employers on behalf of the employees. These
agreements are termed as the collective agreements. The collective agreements, as assumed
primarily benefit the employers, at least by their principles. The agreements help employer to
opt for flexibility regarding certain employee issues and working conditions. However,
having a thorough study of the nature of these agreements, it can be said that adaptation of
these flexibilities help the employees also. The awards and compensations that have been
finalized based upon the agreements in turn succeed in motivating the workforce to a great

2ENTERPRISE BARGAINING
extent. In a given organizational environment, the employees and the trade unions involve in
the procedures of bargaining in order to achieve highest employee satisfaction (Addison,
Portugal & Vilares, 2015). In this essay the key factors that are affecting the presence of trade
unions in the organizational culture, have been discussed.
However, Bray & Stewart, (2013) argues that the structure of the enterprise
bargaining started to fall off, almost twenty-five years after the implementation of the
framework. In its initial stages the agreements seemed to be potential, enough to keep the
promises that have been made. In the recent scenario, the popularity of the agreement is
decreasing. According to the recent surveys, the number of agreements that have been signed
within a span of six years have drastically decreased. The agreements have lessen around one
third within 2016 (Townsend, Wilkinson & Burgess, 2013). The primary reason behind the
fall of the enterprise bargaining and signed agreements is that the process of bargaining is
becoming highly complicated. This deviation is also causing in the increasing dependence on
the relevant compensation and the awards that are available in the organizations. In addition
to this, the trade unions are increasingly becoming ineffective. Hence, the employees do not
prefer to depend on the unions anymore. The employees as well as the employers have
monitored that the increasing numbers of strikes are affecting the organizational environment
(Bishop & Cassidy, 2017). However, it can easily be understood that the inefficiency on parts
of the trade unions are affecting the issues related to employee wages and compensations.
The employers on the other hand, are being benefitted by the decrease of the strike activities.
In addition to this, the Western Australian organizations are attempting to opt out from the
framework of enterprise bargaining and agreement. They are willing to take up the
organizational award condition as a path of their increasing flexibility.
Another view that has been put forward by Jacobs & Rush, (2015) is that along with
the passing time, the employees have also realized the fact that the agreements tend to restrict

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the employees in gaining more awards and compensations. It has been monitored that the
organizations have already come up with the award and wage policies that are paying the
employees more than that of the stringent award provisions. The sociologists have monitored
that any enterprise bargaining and agreement tend to take three to four years in order to show
its effect on the organizational culture and wage policies. In the present scenario of
globalization, the employees are not willing to wait for the long span. Moreover, the
globalization encourages a constant change and upgrade in the environmental and work
culture of the organizations. As the increasing demand of the global market, the organizations
are working towards improvement and innovations. Hence, in this present scenario both the
nature and demand of the work force are changing. They are favoring the organizational
award policies. In addition to this, the Fair Work Commission has come up with a strict
interpretation the “Better off Overall Test”. According to this framework, each employee as
well as employer should be in an advantageous for both the employees and the employers
(Young & Kim, 2015). Primarily the Fair Work Commission was willing to accept the terms
and conditions put forward by the union leaders. However, the commission eventually
terminated the idea of incorporating any words from the end of the bargaining
representatives.
Another major change that has occurred in the enterprise bargaining framework is the
emergence of part time employees. Crabtree & Chamberlain, (2014, February) has pointed
out that previously the agreements were done keeping in mind the wellbeing of the full time
employees. As the change in the organizational culture and the nature of working, the
employment of part time workers have increased largely. In this respect, it is monitored that
the part time work forces are not as capable of being united as the full time work forces are
(Wright & Lansbury, 2014). Hence, the trade unions cannot come up with an easy solution
that might be helpful for the part time workforces. Moreover, the varied nature of work of

4ENTERPRISE BARGAINING
these part time employees, creating an additional barrier in the path of any constructed
agreement. Hence, the necessity of individual and line-by-line assessment has aroused in
order to protect the rights of every employees. The part time workers are found to have a very
less capability to unionize and stand for their demands. In addition to this, the existing trade
unions are also faltering in the matter of working towards retaining the wellbeing of the part
time workers (Chan & Hui, 2014). As a result of the globalization, the workforces have
become varied in their nature. Hence, it is practically not possible for the unions to identify
and address all the needs of the employees.
Addison, Portugal & Vilares, (2015) pointed out that low wage is an issue that has
been concerning the commission largely. Over the course of time, it has been seen that the
public sectors are mostly employing the enterprise bargain and agreement. As a result of this,
the employee wages of these sectors have not raised significantly. Aggravating the matter is
the fact that the number of goods and services production have increased significantly
(Pekarek et al., 2017). This means the productivity of the employees have increased however,
they are not having proper compensations for the effort they are putting. If scrutinized the
scenarios outside Australia, it has been noticed that the compensation for the workers have
declined by ten percent. A huge gap has been monitored between the compensation of the
employees and that of the organization’s ability to pay. Moreover, the employees working in
the private sectors are gaining more wages.
The employees have challenged the agreement related to the organizational
bargaining. As Addison, Portugal & Vilares, (2015) has monitored that the trade unions are
becoming ineffective in order to protect the cause of the employees. They have also pointed
out that the trade unions are increasingly coming in between the employees and organization.
This is making the process of employee and employer direct communication. Moreover, the
organizations and the employees have also questioned the BOOT model (Abs.gov.au, 2018).

5ENTERPRISE BARGAINING
In the terms of the proposed agreements, it can be said that each employee of a particular
organization should be better off, as an effect of the agreement and the bargaining
framework. However, Bray & Stewart, (2013) opposed the idea of incorporating BOOT as
the sole method of understanding and deciding employee satisfaction. In the cases of the fast
food and the retail sectors, the BOOT framework cannot be maintained due to the
employment of huge number of workforces (Nicholson, Pekarek & Gahan, 2017). Moreover,
the idea of paying extra wages for working overtime cannot be decided by these
organizations as the employees work in different shifts and in most of the cases, the
employees select the shift timings. In addition to this, it has also been pointed out by the
organizations that any individual employee, who is not satisfied with the wages and
compensations, can disapprove of the agreement of an organization (Macdonald &
Charlesworth, 2013). Moreover, it has been noticed that it is not possible for the
organizations to provide equal incentives to all of the employees, as the retail and the fast
food industries have a huge workforce that varies in their job role.
In addition to this, the business of an organization is highly dependent on the
agreement and the employee satisfaction. The organizations hence are not willing to allow the
trade unions to take part in the process of negotiation. The majority of the employers focus on
the importance of having direct conversation with the employees (Bray & Stewart, 2013).
The majority of the employees, especially the small and medium business do not engage in
the process of enterprise bargaining that is influenced by the unions or influences that can
hamper the communication. Moreover, the freedom of the laws forbids the discriminations
amongst the members and the non-members of the trade unions. It has been argued for quite a
long time that the trade unions any work towards protecting the cause of the employees who
support them. However, according to the trade unions they generally tend to work towards
protecting the cause of every employees (Myant, 2013). However, Bishop & Cassidy, (2017)

6ENTERPRISE BARGAINING
has argued that the trade unions have counter attacked the organizations that they often
discriminate amongst the employees that support the unions to those who do not. This quarrel
amongst the trade unions and the organizations has resulted into the rise of untoward
situations in many of the organizations. This in return led the employees to deviate from the
trade unions and depend entirely upon the organizational policies of wages and compensation
(Jacobs & Rush, 2015). Moreover, by allowing the unions into the process of bargaining
eventually gives them the power to emerge as primary forces in any organizational scenario.
The increased role of these trade unions were making it more difficult for the companies to
come to a direct conversation with the employees.
In addition to this, Macdonald, & Charlesworth, (2013) has pointed out that the
sociologists have noticed that the organizations where the trade unions either are non-existing
or present in a very benign way, are more likely to provide better health and organizational
safety to the employees. To put it in another way, it can be said that the organizations that
look up to providing proper occupational health and safety, witness lower need for trade
unions (James & Ombudsman, 2015). This is the reason of increased need of trade unions in
the high-risk occupations. Along with the rising power off the unions, it was also monitored
that the members of the trade unions start to function as powerful entities and more often,
they create problems in the proper functioning of the organizations. It is also monitored that
the number of workforces that are being benefitted by the organizational set up without the
influences of unions are much higher than the organizations where the unions are playing
effective roles. Moreover, the presence of unions ensure the fact that the issues related to the
micro economy are addressed properly.
In conclusion, it can be said that in Australia the trade unions are facing their downfall
throughout the past decade. The changing nature of the organizational culture attributing to
the downfall of the trade unions. Due to the influence of globalization, the organizations are

7ENTERPRISE BARGAINING
coming up with the policies that are helping the employees. The organizations are taking up
policies that are employee friendly and help in securing their organizational health and safety.
Moreover, the trade unions are sticking with their primeval way of operating and only
working towards maintain the equality in the wages. The primary factor that is affecting the
process of enterprise bargaining is the non-flexibility of the enterprise bargaining. Moreover,
it can also be understood that the enterprise bargaining in a highly complicated procedure.
However, in the present working scenario, the organizations as well as the employees need a
different approach so that their organizational needs can be addressed. Hence, it can easily be
understood that the Enterprise Bargaining no longer holds the same importance in monitoring
and determining the primary methods of wage determination.

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Reference:
Abs.gov.au (2018). Retrieved from
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6202.0Main
%20Features2Jul%202018?
opendocument&tabname=Summary&prodno=6202.0&issue=Jul
%202018&num=&view
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