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Enterprise bargaining is an Australian term for a form of
collective bargaining Collective 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. The ...
, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industries. Once established, they are legally binding on employers and employees that are covered by the Enterprise bargaining agreement. An Enterprise Agreement (EA) consists of a collective industrial agreement between either an employer and a
trade union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
acting on behalf of
employee Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
s or an employer and employees acting for themselves. By definition, an agreement, is the outcome of a ''negotiation'', and a ''decision'', involving multiple ''parties''. (See
Fair trade Fair trade is an arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships. The fair trade movement combines the payment of higher prices to exporters with improved social and envir ...
) On the one hand,
collective agreement A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with a ...
s, at least in principle, benefit employers, as they allow for improved "flexibility" in such areas as ordinary hours, flat rates of hourly pay, and performance-related conditions. Whilst collective agreements may, on the other hand, benefit some workers by providing higher pay, bonuses, additional leave and enhanced
entitlement An entitlement is a provision made in accordance with a legal framework of a society. Typically, entitlements are based on concepts of principle (" rights") which are themselves based in concepts of social equality or enfranchisement. In psycholo ...
s (such as redundancy pay) than an
award An award, sometimes called a distinction, is something given to a recipient as a token of recognition of excellence in a certain field. When the token is a medal, ribbon or other item designed for wearing, it is known as a decoration. An awa ...
does, they also may reduce employees' bargaining power against their employers, impacting their ability to successfully obtain such benefits. In other words, whilst those employees who are successful in negotiating an Enterprise Agreement may receive greater benefits than those who are not, the overall number of employees earning comparatively high benefits may be reduced because few employees obtain an Enterprise Agreement.


Industrial Awards and the Fair Work Act

Unlike
award An award, sometimes called a distinction, is something given to a recipient as a token of recognition of excellence in a certain field. When the token is a medal, ribbon or other item designed for wearing, it is known as a decoration. An awa ...
s, which provide similar standards for all workers in the entire industry covered by a specific award, collective agreements usually apply only to workers for one employer. However, a short-term collaborative agreement (for example, on a building-site) occasionally yields a multi-employer/employee agreement. Parties endorse proposed enterprise agreements between themselves (in the case of employees the matter goes to a vote). The
Fair Work Commission The Fair Work Commission (FWC), until 2013 known as Fair Work Australia (FWA), is the Australian industrial relations tribunal created by the ''Fair Work Act 2009'' as part of the Rudd Government's reforms to industrial relations in Australi ...
then assess them for approval. (Under the ''
Fair Work Act 2009 The ''Fair Work Act 2009'' (Cth) is an Act of the Parliament of Australia, passed by the Rudd Government to reform the industrial relations system of Australia. It replaced the Howard Government's WorkChoices legislation, it established Fa ...
'', agreements renamed " enterprise agreements" and are lodged with the Fair Work Commission to assess entitlements against the modern award and be checked for breaches of the Act.)


History

Enterprise Bargaining Agreements were first introduced in Australia under the
Prices and Incomes Accord The Prices and Incomes Accord was an agreement between the Australian Council of Trade Unions and the Australian Labor Party government of Prime Minister Bob Hawke and Treasurer (later Prime Minister) Paul Keating in 1983. Employers were not pa ...
in 1991 (Mark VII). They later became the centrepiece of the Australian industrial relations system when the Accord was next revised in 1993 (Mark VIII). This ended nearly a century of centralised wage-fixing based industrial relations.


How an enterprise agreement is made

The Fair Work Act 2009 provides a simple, flexible and fair framework that assists employers and employees to bargain in good faith to make an enterprise agreement. Employers, employees and their bargaining representatives are involved in the process of bargaining for a proposed enterprise agreement. An employer must notify their employees of the right to be represented by a bargaining representative during the bargaining of an enterprise agreement (other than a greenfields agreement) as soon as possible, and not later than 14 days after the notification time for the agreement (usually the start of bargaining). The notification should be given to each current employee who will be covered by the enterprise agreement.


Use of enterprise agreements

A standard enterprise agreement would last for three years. EAs had one unique feature in Australia: whilst negotiating a federal enterprise bargaining agreement, a group of employees or a trade union could, without legal penalties, undertake
industrial action Industrial action (British English) or job action (American English) is a temporary show of dissatisfaction by employees—especially a strike or slowdown or working to rule—to protest against bad working conditions or low pay and to increas ...
(including
strikes Strike may refer to: People * Strike (surname) Physical confrontation or removal * Strike (attack), attack with an inanimate object or a part of the human body intended to cause harm *Airstrike, military strike by air forces on either a suspecte ...
) in pursuit of their claims .


Issues regarding enterprise agreements

A major legal question associated with enterprise agreements stemmed from the
High Court of Australia The High Court of Australia is Australia's apex court. It exercises original and appellate jurisdiction on matters specified within Australia's Constitution. The High Court was established following passage of the '' Judiciary Act 1903''. I ...
's decision in the case of '' Electrolux v The Australian Workers' Union''. The question revolved around what these industrial instruments could cover. The
Australian Industrial Relations Commission The Australian Industrial Relations Commission (AIRC), known from 1956 to 1973 as the Commonwealth Conciliation and Arbitration Commission and from 1973 to 1988 as the Australian Conciliation and Arbitration Commission, was a tribunal with powers ...
determined the matter in 2005 in the three certified agreements case.


The future of EAs in Australian industrial law

In the context of
Australian labour law Australian labour law concerns Commonwealth, state, and common law on rights and duties of workers, unions and employers in Australia. Australian labour law (also known as industrial relations law) has a dual structure, where some employment issu ...
, the industrial reform of 2005–2006, known as "
WorkChoices WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard Government#Fourth term: 2004–2007, Howard Government in 2005, being amendments to the ''Workplace Relations Act 1996'' by the '' ...
" (with its corresponding amendments to the Workplace Relations Act (1996)) changed the name of such agreement documents to "Collective Agreement".
State State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of State * ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States * ''Our S ...
industrial legislation can also prescribe collective agreements, but the enactment of the WorkChoices reform will make such agreements less likely to occur. Since the Fair Work Act was enacted, parties to Australian federal collective agreements lodge their agreements with Fair Work Australia for approval. Before an enterprise agreement will be approved a member of the tribunal must be satisfied that employees employed under the agreement will be 'Better Off Overall' than if they were employed under the relevant modern award.


See also

*
Collective bargaining Collective 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. The ...
* Sectoral collective bargaining *
UK labour law United Kingdom labour law regulates the relations between workers, employers and trade unions. People at work in the UK can rely upon a minimum charter of employment rights, which are found in Acts of Parliament, Regulations, common law and equi ...
*
US labor law United States labor law sets the rights and duties for employees, labor unions, and employers in the United States. Labor law's basic aim is to remedy the " inequality of bargaining power" between employees and employers, especially employers "org ...


References

{{Organized labor, sp=uk Australian labour law Industrial agreements