Ahead of upcoming changes to the Enterprise Bargaining Framework, now is the time for HR to think about maximising opportunities and minimising risks that could arise from the new legislation. 

As part of the next tranche of industrial relations reform initiated by the recent Secure Jobs, Better Pay Bill, new policies to encourage and facilitate enterprise bargaining will be rolled out on 6 June this year. 

Expansions and adjustments to the Fair Work Act‘s multi-enterprise bargaining system will make enterprise bargaining agreements (EBAs) more accessible to employers who have not traditionally engaged in collective bargaining. A particular focus will be placed on multi-business enterprise bargaining. 

What’s more, the Fair Work Commission has been granted new powers to arbitrate bargaining disputes, which will allow them to influence the content of EBAs.

According to Charles Power, Partner and National Practice Chair of the Workplace Relations and Safety Group at Holding Redlich, the impacts of these changes are already being felt by employers. And once the changes are implemented in June, it won’t be long before we start to see cases where the FWC is called upon to arbitrate.

“If an agreement expired late last year, the Commission could theoretically start arbitrating unresolved issues in July this year – because they can take into account the period prior to the commencement of the legislation in assessing whether or not there were prospects of an agreement being reached,” he says.

“[The FWC] could form a view as early as July this year that there are intractable disputes about bargaining issues and staff, and then they could start a compulsory arbitration process in the middle of the year. Although the laws haven’t commenced, they should be and are factoring into the bargaining strategy development that major employers are engaging in right now.”

New ways to create EBAs

As part of the reforms, there will be a significant expansion of the different streams of collective bargaining. As of June, there will be three updated streams covering multi-employer agreements. These include:

1. A supported bargaining stream. Under this stream, the FWC is required to make a Supported Bargaining Authorisation if it is satisfied that it is appropriate for the relevant employers and employees to bargain together. This stream will replace the existing low-paid bargaining scheme.

“This is designed to assist organisations with predominantly low-paid employees who don’t necessarily have the resources or the HR capacity to bargain,” says Power. “It’s a multi-enterprise bargaining stream that’s really catering for organisations like kindergartens, childcare and aged care.”

2. A cooperative workplaces bargaining stream. Under this stream, an employer can seek to join with other employers to make a cooperative workplaces agreement. This will replace the current ‘multi-enterprise agreements’ made with the agreement of multiple employers.

“This is only really designed for small businesses. Employers can’t be subjected to industrial action in the making of these agreements. It’s a very new area, and it remains to be seen what – if any – traction it gets,” says Power.

3. A single-interest bargaining stream. This stream was previously available, but the reforms will remove unnecessary barriers to using it. It will allow employee bargaining representatives to initiate the making of multi-employer agreements with groups of employers who share “clearly identifiable common interests”. This stream will only be available to employers with a headcount of 20 employees or more.

“[These agreements] are only going to be relevant for employers that have a history of enterprise bargaining, and have a union relationship,” says Power. “So, for instance, a franchise system might access this stream.”

Together, these new streams will eliminate obstacles many businesses have faced in implementing EBAs.

“They will hopefully provide an incentive for employers in these areas to engage in collective bargaining, whereas currently the process is a bit daunting for them,” says Power.

“By looking at some of the bargaining streams that might be suited to your particular needs, it provides you with a better argument for actually making a collective agreement [in the first place].”

When are employers obliged to engage in multi-enterprise bargaining?

For employers currently trying to negotiate a single-enterprise agreement, the clock is ticking for them to make a deal that satisfies all parties, after which they might lose their say in how the agreement plays out.

“If employers fail to reach a deal on a single-enterprise agreement within nine months, employers risk being roped into a multi-enterprise bargaining process that’s applicable to their industry,” says Power.

“If you want to avoid having that occur, then you need to improve your offer and make a better effort to conclude the enterprise bargaining process and reach an agreement.”

“[The FWC] could form a view as early as July this year that there are intractable disputes about bargaining issues and staff, and then they could start a compulsory arbitration process in the middle of the year.” – Charles Power, Partner at Holding Redlich

The capacity for a union bargaining representative to bring an employer into this process, either voluntarily or against their will, will be dependent on the nature of the negotiations and the business itself. This can occur only in cases where employers with particular common interests can participate in a multi-enterprise bargaining process and reach an agreement that covers a number of employers and their employees, says Power. 

However, there are avenues that employers can take if they do not wish to enter into an agreement like this.

“There are a number of tests that need to be satisfied. If they’re in the process of negotiating effectively for a single enterprise agreement, that will give them some protection. If they can show that they don’t have sufficient commonality with the employers that are in the multi-enterprise bargaining process, then they can avoid being roped in.”

How should HR prepare?

Before the legislation is rolled out, HR plays a critical role in ensuring that employers are one step ahead when it comes to negotiating their next agreement, says Power.

“[HR] needs to engage in a significant amount of preparation in the lead up to the expiry date of their agreement. Once the agreement expires, then it’s all on – you’ve really got nine months to get the bargain done.”

Organisations should particularly consider scenarios where negotiations are less fruitful than expected, he says.

“Prior to that nominal expiry date, you want to be thinking about what your expectations are for the next agreement. What are the things that you think can be agreed on with the unions? What are the things you think it’s unlikely that you’ll reach agreement about with the unions?

“If you can see issues that you think you’re never going to reach agreement with the union about, then you might want to start preparing now for the process that the Fair Work Commission will undertake to resolve those disputes through arbitration.”