Enterprise bargaining agreement
Encyclopedia
Enterprise bargaining is wage and working conditions being negotiated at the level of the individual organisations. Once established, they are legally binding on employers and employees.
An Enterprise Bargaining Agreement (EBA) consists of a collective industrial agreement
between either an employer and a trade union
acting on behalf of employees or an employer and employees acting for themselves.
On the one hand collective agreements, at least in principle, benefit employers, as they allow for improved "flexibility" in such areas as ordinary hours, flat rates of hourly pay
, and performance
-related conditions. On the other hand collective agreements benefit workers, as they usually provide higher pay, bonuses, additional leave and enhanced entitlement
s (such as redundancy
pay) than an award
does.
s, which provide similar standards for all workers in the entire industry
covered by a specific award, collective agreements usually apply only to workers for one employer - although on occasion a short-term collaborative agreement (for example, on a building-site) yields a multi-employer/employee agreement.
Parties endorse proposed enterprise bargaining agreements between themselves (in the case of employers the matter goes to a vote). Fair Work Australia
then assess them for approval. (Under the Fair Work Act 2009, agreements renamed "enterprise agreements" and are lodged with Fair Work Australia
to assess entitlements against the modern award and be checked for breaches of the Act.)
In practice they served to complement award
s, and in combination they became the basic mechanisms for setting wage
s and conditions in Australia.
A standard enterprise bargaining agreement would last for three years.
EBAs had one unique feature in Australia: whilst negotiating a federal enterprise bargaining agreement, a group of employees or a trade union could, without legal penalties, undertake industrial action
(including strikes
) in pursuit of their claims .
's decision in the case of Electrolux v The Australian Workers' Union
. The question revolved around what these industrial instruments could cover. The Australian Industrial Relations Commission
determined the matter in 2005 in the Three certified agreements case
.
, the industrial reform of 2005 - 2006, known as "WorkChoices
" (with its corresponding amendments to the Workplace Relations Act (1996)
) changed the name of such agreement documents to "Collective Agreement". State industrial legislation can also prescribe collective agreements, but the enactment of the WorkChoices reform will make such agreements less likely to occur.
Since the Fair Work Act was enacted, parties to Australian federal collective agreements lodge their agreements with Fair Work Australia
for approval. Before an enterprise agreement will be approved a member of the tribunal must be satisfied that employees employed under the agreement will be 'Better Off Overall' than if they were employed under the relevant modern award.
An Enterprise Bargaining Agreement (EBA) consists of a collective industrial agreement
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
between either an employer and a trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
acting on behalf of employees or an employer and employees acting for themselves.
On the one hand collective agreements, at least in principle, benefit employers, as they allow for improved "flexibility" in such areas as ordinary hours, flat rates of hourly pay
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
, and performance
Performance
A performance, in performing arts, generally comprises an event in which a performer or group of performers behave in a particular way for another group of people, the audience. Choral music and ballet are examples. Usually the performers participate in rehearsals beforehand. Afterwards audience...
-related conditions. On the other hand collective agreements benefit workers, as they usually provide higher pay, bonuses, additional leave and enhanced entitlement
Entitlement
An entitlement is a guarantee of access to benefits based on established rights or by legislation. A "right" is itself an entitlement associated with a moral or social principle, such that an "entitlement" is a provision made in accordance with legal framework of a society...
s (such as redundancy
Layoff
Layoff , also called redundancy in the UK, is the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons, such as when certain positions are no longer necessary or when a business slow-down occurs...
pay) than an award
Award (Australian industrial relations)
An award is a ruling handed down by either Fair Work Australia or by a state industrial relations commission which grants all wage earners in one industry the same conditions of employment and wages....
does.
EBAs in Australia
Unlike awardAward (Australian industrial relations)
An award is a ruling handed down by either Fair Work Australia or by a state industrial relations commission which grants all wage earners in one industry the same conditions of employment and wages....
s, which provide similar standards for all workers in the entire industry
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...
covered by a specific award, collective agreements usually apply only to workers for one employer - although on occasion a short-term collaborative agreement (for example, on a building-site) yields a multi-employer/employee agreement.
Parties endorse proposed enterprise bargaining agreements between themselves (in the case of employers the matter goes to a vote). Fair Work Australia
Fair Work Australia
Fair Work Australia is the Australian industrial relations institution created by the Federal ALP Government's Fair Work Act 2009.. It commenced operation on 1 July 2009.-Functions:...
then assess them for approval. (Under the Fair Work Act 2009, agreements renamed "enterprise agreements" and are lodged with Fair Work Australia
Fair Work Australia
Fair Work Australia is the Australian industrial relations institution created by the Federal ALP Government's Fair Work Act 2009.. It commenced operation on 1 July 2009.-Functions:...
to assess entitlements against the modern award and be checked for breaches of the Act.)
History of enterprise bargaining agreements
Enterprise Bargaining Agreements were first introduced in Australia under the Prices and Incomes Accord in 1991 (Mark VII). They later became the centrepiece of the Australian industrial relations system when the Accord was next revised in 1993 (Mark VIII). This ended nearly a century of centralised wage-fixing based industrial relations.Use of enterprise bargaining agreements
Enterprise agreements have proved quite popular; on 30th of June 2006, 14383 Collective Agreements were active. June Trends in Enterprise BargainingIn practice they served to complement award
Award (Australian industrial relations)
An award is a ruling handed down by either Fair Work Australia or by a state industrial relations commission which grants all wage earners in one industry the same conditions of employment and wages....
s, and in combination they became the basic mechanisms for setting wage
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
s and conditions in Australia.
A standard enterprise bargaining agreement would last for three years.
EBAs had one unique feature in Australia: whilst negotiating a federal enterprise bargaining agreement, a group of employees or a trade union could, without legal penalties, undertake industrial action
Industrial action
Industrial action or job action refers collectively to any measure taken by trade unions or other organised labour meant to reduce productivity in a workplace. Quite often it is used and interpreted as a euphemism for strike, but the scope is much wider...
(including strikes
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
) in pursuit of their claims .
Issues regarding enterprise bargaining agreements
A major legal question associated with enterprise agreements stemmed from the High Court of AustraliaHigh Court of Australia
The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, has the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the States, and...
's decision in the case of Electrolux v The Australian Workers' Union
Electrolux v AWU
The case of Electrolux v The Australian Workers' Union was a High Court of Australia decision of 2004.-The Background to the Case:The case dealt with whether bargaining agent's fees were able to be placed within an enterprise bargaining agreement as created by the Workplace Relations Act ...
. The question revolved around what these industrial instruments could cover. The Australian Industrial Relations Commission
Australian Industrial Relations Commission
The Australian Industrial Relations Commission, or AIRC , was a tribunal with powers under the Workplace Relations Act 1996. It was the central institution of Australian labour law...
determined the matter in 2005 in the Three certified agreements case
Three certified agreements case
The "three certified agreements case" was a decision of the Australian Industrial Relations Commission. The case resolved the confusion created by the High Court's decision of Electrolux v AWU.-Name of the case:...
.
The future of EBAs in Australian industrial law
In the context of Australian labour lawAustralian labour law
Australian labour law has had a unique development that distinguishes it from other English speaking jurisdictions.In 1904 the Conciliation and Arbitration Act was passed mandating "Conciliation and Arbitration for the Prevention and Settlement of Industrial Disputes extending beyond the Limits of...
, the industrial reform of 2005 - 2006, known as "WorkChoices
WorkChoices
The Workplace Relations Act 1996, as amended by the Workplace Relations Amendment Act 2005, popularly known as Work Choices, was a Legislative Act of the Australian Parliament that came into effect in March 2006 which involved many controversial amendments to the Workplace Relations Act 1996, the...
" (with its corresponding amendments to the Workplace Relations Act (1996)
Workplace Relations Act 1996
The Workplace Relations Act 1996 is an Australian law passed by the Howard Government after coming into power in 1996. It replaced the previous Labor Government's Industrial Relations Act 1988. It started operation on 1 January 1997 and provided for the continuation of the federal award system...
) changed the name of such agreement documents to "Collective Agreement". State industrial legislation can also prescribe collective agreements, but the enactment of the WorkChoices reform will make such agreements less likely to occur.
Since the Fair Work Act was enacted, parties to Australian federal collective agreements lodge their agreements with Fair Work Australia
Fair Work Australia
Fair Work Australia is the Australian industrial relations institution created by the Federal ALP Government's Fair Work Act 2009.. It commenced operation on 1 July 2009.-Functions:...
for approval. Before an enterprise agreement will be approved a member of the tribunal must be satisfied that employees employed under the agreement will be 'Better Off Overall' than if they were employed under the relevant modern award.