Essay Sample on the Role of Enterprise Bargaining in the Australian Employment System

Published: 2017-08-23
Essay Sample on the Role of Enterprise Bargaining in the Australian Employment System
Type of paper:  Essay
Categories:  Policy Employment
Pages: 9
Wordcount: 2428 words
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From the time of their foundation in the nineteenth century, unions have played an integral role in the improvement of workers. From the working condition to payment to employee relations, the trade unions have played an important role in the improving the worker's welfare. The trade unions have been instrumental in ensuring that the employees respect the worker's rights, freedom, and privileges. Some of the strategies that have been used by the trade unions include strikes, collective bargaining, legal challenges as well as a public address and campaigns.

The enterprise bargaining power in Australian context

Australia's unique Union can be attributed to the active engagement between the parliament and the politics through the country's labor party (Australian Labor Party) (McPhail, Jerrard, & Southcombe, 2015). The Australian Labor Party was formed mainly by the Australian unions to help advance the complaints and rights of the workers in the early 1890s (ABS, 2016; Hayter, 2016). The development was slow between 1890 and 1984. However, between 1984 and 1996, there was a sharp increase in activism as the unions and the labor in government. The activism saw the country's first changes in its labor system as the wage determination shifted from the previously centralized wage shifting system to a more decentralized wage setting system under the enterprise bargaining (Peetz, Pocock & Houghton, 2007). Never the less, after the 1990s, there has been a sharp increase in hostility and legislations aimed at eliminating the unions as can be seen in the number of laws favoring individual employees over the union's members. The increasing interest in individualized employment relationship can be attributed to the country's attack on union's membership and union bargaining (McPhail, Jerrard, & Southcombe, 2015).

During Howard Government's WorkChoices' legislation in 2006m, the union was out rightly attacked leading to the sharp decline in the union membership. The work choices legislation was founded on the argument that each worker has his specific situation that cannot be generalized (, 2016).

With the decline in union density in Australia, it is also important to note that while the institutional arrangements conferred power to the employees because of the low union density, the union density at the national level. With the decline in the union membership density, the union's power declined which mean that the institutional; protection power also declined. The government of surely was effective in its stance to help the employers to become hostile to the unions was driven by the country's anti-union policies. The policies also saw significant changes in the public sectors role in enforcing the employee's rights which further deepened the union membership decline. For the centralized arbitration and award system of a country is weakened then the institutional protection also declines and this is the case in countries such as Australia. When the government gave the employers more power over the employees means that the unions could not help the workers. The government further weakened the unions by dictating the occupational, industry and state standards for both wage and work conditions.

According to Peetz, & Pocock, (2009, P. 47), the government argued that most of the unions in Australia were mainly inclined to conciliation and arbitration. Some were just oriented towards employer assisted closed shop unionism and activism instead of arbitration which made unions lacking in character and rules (Peetz, Pocock & Houghton, 2007). .

The union's significance rose again when the Rudd Labor government pointed at the weaknesses of the WorkChoices' policy with his Your Rights at Work' campaign such that even with the assertive employers and the changing labor market, it has been difficult for the workers to operate without unions. Most of the remaining unionized workers benefit from the collective bargaining despite the effect of the Howard legacy. The implication of the Your Rights at Work' and WorkChoices'campaign is that not all employers and employees will return the previous compulsory conciliation and arbitration (McPhail, Jerrard, & Southcombe, 2015).

Industrial Relations, Trade Unions and the ACTU

Minimum wage and worker's rights

Despite the growth of industrial relation in the world, the industrial relation system in Australia is unique from its historical context till now. For example, the country's industrial relations have constantly been involved in based federal system of conciliation and arbitration. This has seen the country successfully establish realistic minimum wage as well as varying conditions for different occupations. The country's minimum wage and other industrial relations requirements that are equivalent to the country's state-based systems.

Dispute Resolutions

The country's trade union, ACTU, and industrial resolution have been at the forefront for providing a fair system for dispuit6e resolve;utiions. For example, these systems have established the Australian Industrial Relations Commission (AIRC) and the industrial tribunals to prevent or solve industrial disputes (Sebbens, 2000, pp. 43-55)..


The tribunals have also been developed to conciliate and arbitrate whenever there are disputes such as minimum pay rates and working conditions. This means that in such cases, their involvement in ensuring fair hearing and award has been considered a success as it is like a safety net for all the workers with poor bargaining power (Sebbens, 2000, pp. 43-55).

Latest Act

Over the last two years, there has been debates and legislation aimed at clarifying the role of the country's award system and promoting greater bargaining power fo the workers. The act was also developed to help maintain an enforcement system. These legislations are all aimed at realizing he primary goals of the trade unions (McPhail, Jerrard, & Southcombe, 2015).

ILO Regulations

The Australian trade union has also enacted a number fo external powers and provisions with the aim of meeting the relevant ILO requirements. Based on its legislation, the country's international obligations to the ILO conventions have been discouraged successfully considering the minimum entitlement that all workers receive irrespective of their location in Australia. Some of the key achievement include the minimum wage for all job groups, gender parity in payment based on work value, minimum employment termination rights which must be preceded by the minimum period of notice, as well as employees protection against unfair dismissal (Johnson, and Keddy, 2010).

Enterprise Bargaining In Australia

At minim, the country's industrial relations is enshrined in the protection fo the employee rights. This has seen the country enact a bill that dictates the role and duty of the Industrial Relations Commission as far as awards are concerned. For example, the bill explicitly states that the Industrial Relations Commission must be informed by collective bargaining or enterprise bargaining. This mean that the workers have a right to bargain in good faith as long as he workers are negotiating to attain the minimum entitlements (Omari, and Paull, 2015; Paludi, and Poitier, 2015).

The Industrial Relations Commission have therefore developed an award system that dictates the industrial relationship between the employees and their respective employers. However, in case the employers and the employees want to bargain above the minimum award safety nets, they can exploit the advantages of the Enterprise Flexibility Agreements (Caponecchia, and Wyatt, 2011). Never the less, it is important to note that only union which are party to the certified agreement can apply the terms. On the other hand, companies especially the constitutional corporation can use the Enterprise Flexibility Agreements or (EFAs)

The role of enterprise bargaining in the Australian system of employment relations

Enterprise bargaining or collective bargaining has increasingly been used in Australia to define the country's industrial relations terms. The country's public policy related to enterprise bargaining was modified in 1990's to regulate the industrial relations system, at the workplace or enterprise level. Currently, the country's trade unions are kin to the North American bargaining regime in which are enforced by a well-established legal system.

Collective bargaining in Australia is main at the enterprise level .mean that al issues such as term and condition of employment are first settled at the enterprise level and is not significantly influenced by the labor-management policy formulation despite explicitly reflecting the labor management relations policy. In Australia, enterprise bargaining covers issues such as minimum wages, and wage guidelines, procedures of employment termination as well as wage adjustment ion consideration other increasing the cost of living (McPhail, Jerrard, & Southcombe, 2015)..

Collective bargaining is supposed to help the workers improve their life Vis a Vis their productivity as most companies realized the importance of pegging the payment on individual productivity. Currently, gain production sharing is used in Australian companies as despite resolution is not aimed at fairness but to have a peaceful dispute resolution. The companies have turned to individualized bargaining to nature that each employee's situation is given individual consideration.

Collective bargaining in Australia is considered as an important element in the pluralism agenda because it is the only way that the workers and employers can collectively fix employment rules. While enterprise bargaining may be bad as it does not provide maximum benefits, it usually involved bargaining and acceptable compromise on the part of both parties (Caponecchia, and Wyatt, 2011).

Collective bargaining has been beneficial to the Australian employees and workers as it offers them a fair strategy for solving employment conflicts as required in a truly democratic society. Collective bargaining helps preserve the rights and autonomy of all the forces involved in the employment scene while at the same time forcing a moral commitment of both the workers and the employers. Collective bargaining at the enterprise level is, therefore, a representation of a sound industrial relations system (McPhail, Jerrard, & Southcombe, 2015). According to ILO Convention No. 98 (1949), workers have a right to organizes themselves and bargain as a group. The unions should be voluntary, and the agreement should also be a voluntary such that any agreement between eh employers and the employees should be enforced under the agreements

Other Advantages of Collective Bargaining

Collective bargaining improves the overall relationship between the employer, the employee and the unions through. The continuous dialogue which leads to a better understanding amongst the three parties. Institutionalized collective bargaining prevents trade union action as there are better alternatives to dispute settlement and conflict resolution (McPhail, Jerrard, & Southcombe, 2015). Collective bargaining leads to improve cooperation between employer and the employees in other areas that are not adequately covered by the country's enterprise bargaining arrangements.

It is also am means by which the respective parties can exert the influences for the benefit of either the employers or the employees (McPhail, Jerrard, & Southcombe, 2015). Cases of the dispute between employer and employees call for conciliation and mediation which is useful in either nurturing the relationship or lead to a divorce between different parties for the larger good of everyone.

Current Collective Bargaining Trend in Australia

In Australia, unemployment rates have been increasing making enterprise bargaining a little challenging. This coupled with the difficult business condition, the employers have been very assertive in their stance and reluctant to comit to all requirement of the enterprise bargaining policies such as wage policies (McPhail, Jerrard, & Southcombe, 2015). Additionally, most governments have shown definite preferences for private enterprises giving primacy to the market forces which dictate the employment terms, wages and contract termination. With the enterprise bargaining, employers have more power and leverage over the employees meaning that the employees are at the mercy of employers. Never the less, even thigh the enterprise bargaining ahs its drawbacks, it has helped his country to devolve employee relation to the enterprise level allowing the employees and the employer to come to their term of engagement without the influence of the unions (Burke, and Cooper, 2000).

The Australian Industrial Relations Commission, therefore, may have power but cannot assert their power over the employers apart from overseeing the implementation collective bargaining agreement at the enterprise level. Finally, weakening collective bargaining and negotiation at the national level significantly affects the employees as the employers have to deal with weaker unions at the enterprises level because of the skewed distribution of income unlike if the collective bargaining was at the national level. Never the less, enterprise bargaining favors the employers than it favors the employees giving them the power to use enterprise level strategies in managing employee conflicts include production pegged wage system, strategic compensation systems, new working hours arrangements contract engagements (Peetz, & Pocock, 2009)..


In as much as unionization may still be difficult, unionization is still an important strategy for the employees and the employers as it set the rules of engagement and given the employee's voice and the employer's power and reason to manage their employees. Never the less, the current unions are set in a legislative environment that makes it very difficult to recruitment new members. Even though the enterprise bargaining is promising, they cannot operate effectively without members as the unions derive their power from their memberships.


1. A country such as Australia should consider a mix of enterprise level bargaining and shopfloor system because the rate of change in business condition and demand for productivity cal for a pragmatic approach to employee relations.

2. Unions should device strategies and policies aimed at increasing the union power and memberships.


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Caponecchia, C. and Wyatt, A. (2011). Preventing workplace bullying. Crows Nest, N.S.W.: Allen & Unwin.

Johnson, C., and Keddy, J. (2010). Managing conflict at work. London: Kogan Page.

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McPhail, R, Jerrard, M & Southcombe, A (2015). Employment relations: an integrated approach (1st). South Melbourne, Victoria, Australia: Cengage Learning Australia.

Sebbens, T. (2000) The Other Side of the Coin? Union Security and Freedom of Association Under the Workplace Relations Act 1996 (Cth)' in Burgess, J., and Strachan, G. (eds) Proceedings of the 14th AIRAANZ Conference, University of Newcastle, Newcastle, pp. 43-55.

Peetz, D & Pocock, B, (2009). An Analysis of Workplace Representatives, Union Power and Democracy in Australia,' British Journal of Industrial Relations, 47(4),

Peetz, D., B. Pocock & C. Houghton (2007). "Organizers' Roles Transformed? Australian Union Organisers and the Shift to an Organising Approach." Journal of Industrial Relations 49(2)., (2016). Australia's National Workplace Relations System. [online] Department of Employment. Available at: [Accessed 19 Mar. 2016].

ABS, (2016). Labour Statistics: Concepts, Sources and Methods, 2013. [online] Available at: [Accessed 19 Mar. 2016].

Hayter, S. (2016). The Role of Collective Bargaining in the Global Economy: Negotiating for Social Justice. CANBERRA: 1996-2016 International Labour Organization (ILO).

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