{"id":637,"date":"2016-09-11T23:00:00","date_gmt":"2016-09-11T23:00:00","guid":{"rendered":"https:\/\/www.olexo.com.au\/august-2016-enterprise-agreements-what-are-they-and-what-are-the-benefits\/"},"modified":"2016-09-11T23:00:00","modified_gmt":"2016-09-11T23:00:00","slug":"august-2016-enterprise-agreements-what-are-they-and-what-are-the-benefits","status":"publish","type":"post","link":"https:\/\/workn.net.au\/?p=637","title":{"rendered":"Enterprise Agreements – What are they and what are the benefits?"},"content":{"rendered":"

Published 11 September 2016<\/em><\/p>\n

Where modern awards provide base employment standards for whole industries or occupations, enterprise agreements are tailored agreements that meet the needs of a particular enterprise. These collective agreements are made between employers and employees and usually address the terms and conditions of employment for all. \u00a0Enterprise agreements can be made between one or more employers and two or more employees with their chosen representatives. They will usually address a broad range of matters, including employment conditions, rates of pay and dispute resolution procedures. These agreements cannot include unlawful content, like discriminatory or objectionable terms.<\/p>\n

Background \u2013 Why Bargaining can be Controversial<\/strong><\/p>\n

Collective Bargaining has been a feature of the employment relationship since the industrial revolution.\u00a0 It has also been a political battleground throughout the western world:\u00a0 the political right, led by industry, have argued for deregulation, providing greater freedoms for employers to bargain directly with their workforce; the political left, led by unions, have fought to maintain and improve a safety net of standards for their workers.\u00a0\u00a0\u00a0 Like all \u2018bargaining\u2019 contexts, the incentive to participate in bargaining for all parties has always been provided by the prospect of improving their position.<\/p>\n

In Australia, the debate reached fever pitch in 2005 with the Coalition\u2019s\u00a0Work Choices\u00a0reforms, leading to one of the biggest and most important High Court decisions in modern times.\u00a0 The Federal Government successfully wrestled control of the bulk of industrial relations law away from the states, in order to provide employers with a virtually unfettered freedom to bargain directly with individual employees.\u00a0\u00a0 For the Howard government, this was a legal triumph but a political disaster, contributing to their landslide loss at the 2007 election.<\/p>\n

The ALP\u2019s subsequent enactment, the\u00a0Fair Work Act 2009\u00a0(Cth), restored significant regulation to agreement making.\u00a0 The Act included the\u00a0National Employment Standards, reintroducing a meaningful statutory \u2018safety net\u2019 for national system employment.\u00a0 These standards cannot be contracted out of, or bargained away, by employers.\u00a0 Enterprise Bargaining Agreements (EBAs), as well as Individual Flexibility Agreements (IFAs) are now also subject to the \u2018Better Off Overall Test\u2019 (\u2018BOOT\u2019).\u00a0 An EBA will not be approved by the Fair Work Commission unless they are satisfied that the employees are better off overall under the agreement, than they would be under the relevant modern award.<\/p>\n

However, this has led to many employers questioning whether there are any remaining benefits to the Enterprise Bargaining Process.\u00a0 If employers are stuck with the\u00a0National Employment Standards, and if every agreement results in employees being better off, does this mean that an agreement is required to make the employer worse off?\u00a0 Where is the \u2018bargain\u2019 in this?\u00a0 What is the incentive for employers to participate?<\/p>\n

Under the\u00a0Fair Work Act, a more creative approach to bargaining is now required, but with a proactive and careful approach it is still possible for enterprise agreements to be hugely beneficial.<\/p>\n

What are the benefits?<\/strong><\/p>\n

If an employer takes control of the bargaining process, an Enterprise Agreement can offer additional benefits to employees, while at the same time promoting flexibility, simplicity, and innovation.\u00a0 Potentially, an enterprise agreement can also ensure compliance, while increasing productivity and reducing administrative costs.<\/p>\n

Enterprise agreements can and should be tailored to the particular business. A successful enterprise agreement will ultimately increase productivity and meet the needs of both employees and employers. Cooperative enterprise bargaining should result in long term benefits and rewards for all parties.<\/p>\n

Possible outcomes of successful bargaining can include things like:<\/p>\n