Onward and upward - despite the enterprise bargaining regime

Introduction

I want to explore with you today, some of the achievements that have been made through co-operative action between Unions and Management under the enterprise bargaining system. This Paper argues that these achievements have been made not because of the enterprise bargaining system but despite it. It will also examine the impact of the changing nature of work, the challenges presented by the processes of enterprise bargaining as well as identifying some of the specific achievements made and reflected in Certified Agreements, both at a State and Federal level.

History

In 1979, after I completed an Industrial Relations Degree at the University of New South Wales, I was successful in gaining employment in a major Trade Union in that State. During this time, I undertook a full range of industrial activities, including research, preparation and advocacy in relation to new Awards and variations to existing Awards before the Conciliation Commission and the New South Wales Industrial Commission, dealing with dispute matters before the Commission, and extensive advocacy and representation matters directly with employers. This work was undertaken at a time of centralised wage fixation and at a time when The Accord was in operation between the Trade Union movement and the government. This centralised framework provided by the Accord, was followed by other major initiatives including Award restructuring, a two-tier wage fixation system and work value guidelines.

After 10½ years in the Trade Union movement, I relocated to Brisbane and headed up the Human Rights and Equal Opportunity Commission, as its State Manager with responsibility for administration of human rights law throughout Queensland as well as responsibility for the introduction of the Queensland Anti-Discrimination Act. In this role I had substantial dealing regarding the full range of employment discrimination matters. After 3½ years in that position, I moved to a Senior Executive position for the Queensland government that involved responsibility for juvenile justice and child protection throughout the State. In both of these positions, I had management responsibility and, at times, was directly involved in industrial relations matters. One that particularly comes to mind is when youth detention staff staged a wildcat stoppage and abandoned one of the youth detention centres which had in excess of 50 young people detained in the unit. This was a particularly challenging event as no notice had been given by the Union. As well as trying to implement a crisis staffing response that was adequate and safe, I was required to represent the Department in an urgent hearing in the Queensland Industrial Commission that evening. Fortunately, in that case, the staff returned to work the next morning, following some overnight encouragement from the Commission; however, it was a pretty tricky situation at the time.

In 1996, I decided that I would prefer a more independent arrangement and established my own consultancy company that I’ve operated over the last 5 years. In this capacity, I’ve worked with a broad range of clients, including all levels of government, the non-government sector and universities. In terms of industrial relations work, I have been directly involved in the development and negotiation of Certified Agreements, both under the State and Federal jurisdictions. I have adjudicated on disciplinary and dispute matters. I have often assisted organisations to deal with conflict in the workplace and have facilitated a range of sessions for organisations, including training for people in understanding and interpreting Awards. I was also one of a number of consultants who provided support to the community sector in Queensland following the introduction of the Social and Community Services Award in 1996.

A number of the points I want to make about enterprise bargaining relate to my work, particularly in the non-government sector, and in relation to Certified Agreements which are based upon the provisions of the Social and Community Services Award.

From an industrial relations point-of-view, I work with a diverse range of clients. They include a number of unions. I also provide industrial and human resource-related support to a large variety of community organisations which have voluntary committees of management. In addition, I have facilitated a Certified Agreement for senior staff at the Queensland University of Technology and provided industrial advice to private schools.

So what’s this all got to do with enterprise bargaining? Well, really, what I want to say is that I am relying on these experiences I have had in drawing out my views that about enterprise bargaining.

Often my work is undertaken in areas where there has not been a history of industrial regulation or activity. This can be explained as often they are new or evolving areas of work. So before I go to my specific comments concerning Enterprise bargaining I think that we should have a bit of a look at the changing nature of work.

The changing nature of work

It is my experience is that enterprise bargaining has allowed a whole range of particularly small organisations that are trying to work flexibly to meet the needs of their organisation and advantage their employees.

It is likely such approaches will continue when one considers the changing nature of work.

If we look at what’s driving the changes to the nature of work, there appear to be some financial imperatives, such as downsizing and requirements for improved productivity; globalisation; technology; more women and older workers involved in the workforce; more work-related stress and burnout; and a move from production-based to service-based economy.

In terms of the jobs of the future and where they’ll be, understand that, in terms of industry growth, the strongest growth will be in the human services areas such as health, education, retail trade, welfare, property and the business services.

Consumers are demanding higher quality and faster service now. Competition is greater with the global economy and there are more choices for consumers so companies need to provide services or products fast, and technology needs to provide solutions.

Quick decisions are also required, shorter chains of command, flatter hierarchies, decisions made by frontline employees. There needs to be fewer demarcations of labour and jobs requiring multi-skilling. Also, there is a need for work teams so that no one employee is indispensable.

Companies are also limiting activities to core business with the rest to be outsourced and employees will provide support services to a range of organisations rather than one employer, consultants or temporary staff with specialist skills to handle new projects or to deal with specific problems.

Also, in terms of the changing nature of work, there is more recognition of the need for a work/life balance with more flexible working hours and job-sharing and perhaps even tele-commuting.

So it really means the end of 9 to 5. Technology and the global economy could eliminate the typical 9 to 5 working day, with the Internet allowing the conduct of business at any time, day or night, with companies anywhere in the world.

Therefore, in terms of the changing nature of work, we are seeing the demise of the office. Laptop computers and mobile phones allow work from anywhere. There are savings for organisations in terms of office space and other overheads.

Work tends to be focussed now upon outcomes. Jobs are focussed on results and outcomes rather than on performance of tasks or time worked. Employees are organised in teams and work towards particular outcomes. Employees will function more autonomously and performance will be measured on the basis of results.

In terms of conducting a bit of a reality check of this changing nature of work, some of the negatives that could come out of it would be:

• Employee isolation
  
• Whether working from home is more productive
  
• There could be longer hours as against shorter hours worked

These features of the changing nature of work will provide challenges for industrial relations practitioners in relation to ensuring that employees receive appropriate remuneration and entitlements for the work they perform. They will provide challenges regarding defining the boundaries of an enterprise. Additionally, the situation will be more complex for employers in meeting the challenges that arise from the changing nature of work.

Centralised wage fixation and enterprise bargaining

From my early involvement in industrial relations, wage fixation systems were based upon a centralised approach. The opposite is now in vogue, with enterprise bargaining forming the basis of the current system. So we have gone from the centralisation to much more decentralisation but it is still regulated. The legislation is quite prescriptive about the requirements that need to be met in terms of enterprise bargaining.

Process challenges

I was interested to hear Tony Abbott state yesterday that he would like to see changes to make Certified Agreements easier to enter into. I took this as acknowledgement that there are some process challenges in achieving certified agreements.

The processes in relation to seeking approval and the time lines involved can prove challenging for organisations. Because of the changing nature of work, employees may not be located in one location or even be required to attend the employers base. Consultation with employees in such cases requires a range of strategies. In addition a post ballot is often the only mechanism to determine employees approval of the agreement or otherwise. In terms of the specific approval process it cannot commence until 14 days after notifying employees of the intention to make an Agreement. My experience of what usually happens is that, once agreement is reached between the parties about the content of the Certified Agreement, information sessions are held with employees and material forwarded to them, including a draft Agreement and an explanation of each clause. Once that material has been in place for 2-3 weeks, then the balloting process usually commences.

It is my experience that the balloting process usually utilised is one of a postal ballot, particularly in view of the changing nature of work where all employees are not necessarily on-site at the employer’s location at any one time. This has a cost which has to be borne by the employer.

In one case, however, an electronic balloting process was utilised. This was ‘a first’ and approval was sought and the validity of the proposed process was confirmed. There were some teething troubles with the process; however, it is likely that they will be overcome in any subsequent electronic ballot.

Another challenge that people have considered in terms of the enterprise bargaining approval process is when the parties agree to change a provision of the draft Agreement after the 14-day period has commenced. In such cases, the process has to be recommenced so a significant time and cost factor is involved.

Achieving agreement through negotiation can be very resource intensive in organisations. In one agreement I facilitated where no union was involved the process of reaching agreement involved three rounds of focus groups, each group repeated twice at each of three different sites. In another case the quantum for the wage increase had been agreed, however the remaining issues involved meetings between the parties being scheduled for two hours each week for 10 weeks.

I am aware that some unions hold significant concerns about the resource intensive nature of enterprise bargaining negotiations and the diversion of their resources away from other priorities. You will recall that Ron Callus referred to this in his presentation as ‘Bargaining Burnout’.

Achievements of enterprise bargaining

So what has enterprise bargaining achieved? Well, the basic tenet of enterprise bargaining means that parties cannot proceed or progress matters unless they’ve agreed to the items that are to be contained in the Certified Agreement so, fundamentally, if you’re at war with each other, you’re not going to get very far.

The work that I’ve been undertaking over the last 5 years, particularly with the non-government sector, has really been about developing Certified Agreements that meet the particular needs of the employer and the employee within the context of the changing nature of work. In the disability area, for example, with significant moves to de-institutionalisation, a number of non-government sector agencies have provided accommodation and support options for people moving from institutional care into the community. This requires a very flexible approach to ensure that the needs of the people are adequately met. Some organisations struggled with the approach that they would take in dealing with such matters. My involvement came after some organisations had put some arrangements in place but were not satisfied with them.

In relation to one large church-based disability service which employed over 600 staff in the Brisbane metropolitan area, two Certified Agreements were struck for staff covered under the Social and Community Services Award and staff covered by the Disability Support Workers Award which addressed two significant matters. The employer was concerned to retain a stable and skilled workforce, a workforce that could provide services on a flexible basis and at a variety of hours which met the needs of the person with a disability. The Agreements reached fundamentally changed the casualised nature of employment that had been rife within the area prior to the striking of the Agreement.

Both Agreements were pitched at significantly reducing the number of casual workers in the area, thereby providing people with more stability about their employment arrangement. While there was not the opportunity to create large numbers of full-time positions, substantial numbers of part-time positions were created. These were supplemented by a small number of casual staff who were properly engaged to cover work instances of a casual nature. In addition to providing more stability about people’s employment arrangement, a career structure was struck that was based upon both Awards which allowed for more generous progression for staff working in this area. Many staff had complained about the difficulty they experienced in being able to borrow money to buy a car or achieve a home loan. The reduction of the casualisation of the workforce assisted staff to access such arrangements. For the employer it achieved a stable skilled workforce and resulted in significant savings in recruitment, including advertising and training.

In another case where the employer was small and the service needs were unclear, the employer favoured continuing with the employment of casual staff. In this particular case, a range of penalties were rolled up into an additional percentage paid on top of the casual rate. The Agreement’s length was 12 months with the parties committing to review the situation at the end of that period. This was to take account of whether the organisation had been successful in attracting any additional funding and whether its ability to offer permanent or part-time work had changed.

A range of organisations have also included in their Certified Agreements rates of pay which roll up a number of penalties and after-hours loadings. Many of these organisations are small and do not have the infrastructure nor the funding to meet the administrative burdens of implementing such arrangements for a small number of staff. Consequently, some of the Agreements contain loadings of 15% which are paid any time work is performed, regardless of whether it is at 10 o’clock on a Monday morning or 7 o’clock on a Thursday evening.

Overall, what enterprise bargaining has provided for such agencies has been the ability to have employment arrangements reflected in a Certified Agreement which meet the specific needs of the organisation. This has been a particular advantage in areas such as the disability area where changed work practices and the nature of work does not, and has not previously been reflected in traditional industrial processes.

Another example of an innovative approach in a Certified Agreement concerned a regional carer respite service which provides crisis short- and medium-term respite for carers. This service commenced as a pilot project. As the service was unable to predict its clients and the usage, it had identified a range of people who were prepared to undertake urgent respite in cases of emergency. This might be a situation where a woman living with her elderly mother required a small level of support and assistance in order to be able to live independently. There may have been an emergency in the family in Sydney requiring the daughter to travel urgently to that city and there was no-one in place to be with the mother that evening. This service would fill that sort of a void, meeting the crisis needs in this situation. So, as you can see, it was complex industrially in terms of traditional industrial approaches. What did the Agreement achieve? Well, it achieved an increase in the hourly rate from $13.82 to $16, that rate including a casual loading and a flat loading in lieu of penalty rates and shift loadings. But also it provided higher compensation for sleepovers than was the case generally in the industry where people were paid hour-for-hour for a sleepover rather than a small allowance. As well, there were higher rates of pay for responses to client crisis calls between the hours of 8pm and 5am with a minimum payment of 6 hours regardless of the actual hours worked. In this case, because it was unclear as to whether the organisation would be able to attract additional funding and what might develop in terms of the pilot period, the Agreement was struck on the basis of 12 months which has only just recently expired. This organisation has been successful in attracting additional funding and is looking to substantially renegotiate the Agreement. Being able to meet the specific needs of this service is a really positive outcome from enterprise bargaining.

Apart from creating career structures in advance of the arrangements under the relevant award, often through broad banding and establishing simple criteria for progression subject to the completion of particular requirements these agreements generally do not include significant increases in rates of pay. Many organisations in the non government sector are restricted in terms of the funding provided by their relevant funding body. Also the changes to salary sacrificing and FBT under the new tax system have reduced the capacity of the sector to provide generous salary packaging arrangements. Many are dependent upon wage movements arising from the ACTU’s Living Wage cases.

Awards' stripping process

The Commission has been required to review Awards in terms of the Award Simplification process and strip them back to a number of allowable matters. A large number of organisations in the non-government sector found the requirement to strip back Awards to the allowable matters as particularly distressing given that they had only had an Award in operation in the sector since 1996. While many of them found it challenging to meet the requirements of the Award provisions at that time, there were transitional provisions which meant the financial impact was not as large as could have been the case if it was fully implemented from the initial date in July 1996. Having come to terms with the Award and its provisions, many employers were concerned that many of those provisions would be lost through the Awards’ stripping back process. In view of this and in terms of organisations’ commitment to uphold the provisions of the 1996 Award, many have struck Certified Agreements that refer specifically to the provisions of the 1996 version of the Award. What, in fact, this achieves is the operation of those provisions despite the Award having been stripped back. This has been seen as particularly important to staff and many voluntary management committees operating in the non-government sector.

Over-award conditions

As the non-government sector in Queensland was fairly unregulated until the introduction of the Social and Community Services Award in 1996, many organisations had struggled with what action they could take to ensure they could retain their staff. While wages paid were low, some additional benefits in relation to conditions had been provided. Many organisations, despite the implementation of the Social and Community Services Award, considered that those conditions of employment should continue. In order to ensure the maintenance of these types of conditions, some organisations have incorporated them into Certified Agreements that have subsequently been approved by the Commission. The sorts of provisions have included:

• Provision of paid Maternity Leave
  
• Additional Leave for the Christmas/New Year period - in many agencies this is usually a close down period and adds 3 days to the employee entitlements
  
• More generous Long Service Leave provisions
  
• An additional week’s Recreation Leave

These provisions are clearly above-Award and the enterprise bargaining regime has allowed organisations, through the Certified Agreement process, to incorporate these in their Agreements.

Are we moving to centralised wage fixation again?

It appears that, in a number of areas, the wage outcomes that have been achieved through enterprise bargaining are similar or identical. I have been working with a couple of private schools in terms of Certified Agreements incorporating teaching and non-teaching staff rates of pay and other matters. Both schools have had Agreements in operation over the last few years. In one case, towards the end of the year 2000, one organisation struck a Certified Agreement with the union which provided a 9% increase over 3 years (3+3+3). Following the handing down of the decision for State teachers by the Queensland Industrial Commission on 21 December 2000,which awarded a 14% increase over a similar period, the Union argued that, despite their Agreement having been certified by the Commission, the rates should be increased by a further 5%. The questions this raises are whether the particular increases available under enterprise bargaining should simply reflect the local negotiations between the employer and its employees within a particular enterprise, or whether general movements in particular industries should be reflected throughout that industry. It would appear, when arguing such a matter for the same movements or movements in line with the industry standard - however that might be defined - that one is actually arguing for a centralised wage outcome for particular industries. If we move to this sort of arrangement, then the whole issue about having work-based enterprise bargaining negotiations and particular Certified Agreements is called into question.

Or is it that we want a mix, that we want to have industrial arrangements in place that meet the needs of the specific workplace and reflect that, or is it that we prefer to get an outcome based on centralised arrangements? In the particular school in question, this has been a very vexed issue because the approval process had been completed to certify the 9% over the 3 years and in terms of the applicability of the State teachers’ decision, the basis of that decision did not apply to the conditions under which the teachers in the private school worked. Additionally, it was argued by Management that the argument did not involve like with like or ‘apples with apples’, that the career and promotional structure and additional allowances available were significantly in advance of those available within the State structure. What has happened, in fact, is that there has been an adjustment determined by the Board of Trustees of that school. Management has also notified that there will be a review of all salary arrangements, allowances and promotional positions at the expiry of the current Agreement in the middle of the year 2003.

Concluding comments

Nevertheless, it will no doubt be ‘onward and upward’ despite whatever wage fixation system is in operation. I firmly believe that organisations, workers and Unions will work together to achieve outcomes which meet their needs despite any of the difficulties of particular wage fixing system. Despite difficulties experienced positive achievements have been made through negotiations between Unions and organisations in the current enterprise bargaining system. I hope that I have been able to sketch out a few of the examples in this Paper, particularly around the reduction in casualisation of specific areas of employment where, prior to the Agreement, flexibility was seen as only requiring casual workers, the development of career paths, the maintenance of progressive conditions of employment and the overcoming of the impact of the Award stripping back process.

Industrial relations practitioners will need to ensure that they are able to adapt to flexible and innovative approaches in order to ensure that the best outcomes are achieved for all parties to the process. I hope that this paper has been able to give you some insight in relation to my personal experience regarding enterprise bargaining and some of the positive achievements made despite the process challenges of enterprise bargaining.

I wish you well in the challenges that you face.