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What are Enterprise Bargaining Agreements and do I need one?

Enterprise bargaining agreements are agreements made at an enterprise level between employers and employees about terms and conditions of employment. An Enterprise Agreement may include additional, adjusted or more favourable terms such as for example higher wage increases, consultative processes and/or dispute resolution procedures. Enterprise Agreements must not include any unlawful content. Employees partied to the Enterprise Agreement must also be better off overall when comparing the Enterprise Agreement terms and conditions with the applicable industry Modern Award.

Why use Enterprise Bargaining Agreements?

When we talk with our clients about the documentation that they use to engage their employees, we go through the pros and cons of enterprise bargaining agreements (EBA’s) and compare them to a simple employment contract. In our experience, EBA’s generally assist businesses who:

  1. Pay above Award rates;
  2. Have a complex Award which applies to their workplace or a number of Awards which apply to their workplace;
  3. Are a new business with few employees which is expecting rapid growth in the short term;
  4. Have a workforce which desires flexibility to vary Modern Award conditions;
  5. Work on government or large industry based contracts (particularly building) when sometimes a condition of tender is that an EBA is in place.

If your business meets any of the above criteria, then you can stand to gain from operating under an EBA.

In order for an Enterprise Bargaining Agreement to be effective it needs to provide a framework that is give and take, it needs to assist the organisation to be flexible and nimble in order to create a sustainable business that can operate effectively in its specific industry.

Good EBA’s provide this for both employees as well as organisations.

What is involved in the Bargaining Process

The key to successful bargaining outcomes is preparation. Consideration should be given to factors such as:

  1. What are the ‘must haves’ for the business from the bargaining?
  2. What does the company want to achieve from the EBA?
  3. Make sure that you clearly understand the breadth of the bargaining laws and the rights and obligations that go with them.
  4. The nature of the relationship between management and the workforce and the level of union involvement in the business and their level of influence on employees needs to be considered.
  5. Contingency planning. If the negotiations breakdown and employees seek to pursue protected industrial action, how will the company maintain supply to its customers and clients?
  6. Prior knowledge of likely claims by employees and their representatives allows companies to prepare appropriate responses for the negotiations.

If you need some help with implementing or understanding if an EBA would work for your business, please give us a call at HR Gurus 1300 959 560.

Written by resident HR Guru Jessy Warn.

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