Strengths and Weaknesses of the Enterprise Bargaining Process

Question: What Is The Strengths And Weaknesses Of The Enterprise Bargaining Process? Answer: Introduction Fair Work Commission (FWC) previously known as Fair Work Australia (FWA), is a tribunal for the Australian Industrial relations formed by the Fair Work Act 2009, being a profit of the Government of Rudd reforms in the Australian industrial relations (Baird, 2009, p. 3). This paper will answer the question on the role of Fair Work Commission in the making and approving of industrial agreements. FWC roles and functions are setting and changing the industries awards, fixation and regulation of the minimum wage, resolving industrial conflicts and disputes, approving of enterprise agreement and bargaining, handling unfair dismissal claims, employment termination among others (Cooper, R, Ellem B 2009, p 284-305). The Fair Work Act attempts to create a better national industrial system in the state, the states has the choice of forwarding complains to the Commonwealth, in case this happens all states employees are under cover of the FWC. Since its inception all of the Australian states with exception of the Western Australian refer their powers to Commonwealth(Cooper, 2009, pp. 284-305). Resignation of Vice-President Graeme Watson A report by Anna Pattyon February 27, 2017 shows that the Vice President of FWC (Graeme Watson), issued a resignation letter on January by declaring the commission as dysfunctional and divided. Mr. Watson was the last remaining appointee in the coalition serving a higher role in the commission and functioning in favor of the commission. He gave out his intention a day before his resignation effective date.He accused the commissions of being a danger zone for the businesses, claiming that the body is undermining its legislation. Writing to the employment Minister Michaela Cash he quoted that the business community which is intended to be protected by the commission cannot rust it any longer, referring to it as partisan, dysfunctional, and divided body. Graeme resignation and sidelining by the commissions president Bill Shorten reflects the poor state of leadership in the commission, and on the presidents failure to pack the commission on worthy and meritiocrityappointments. His resignation led to calls to overhaul the entire tribunal from the business community by addressing the partisan, divided and dysfunctional state of the commission. Enterprise Bargaining on the Blink According to(Westacott, 2017), when a highly ranked person in the commission like Watson resigns and out rightly declares that something is really wrong within the commission the body has to stand and say that something is really wrong. Due to the changes taking place in the businessand the digitalization of most processes, changing life habits of the Australian families has greatly led to reshaping of the workplaces, business systems should change with these changes. Enterprise bargaining has led to changes and cracks in the Australian workplaces relation system leading to disempowering of workers and employers. Enterprise bargaining was incepted in 1990 by Hawke and Keating governments and has since then served as a strong foundation of workplace relations. The main reason for the introduction of enterprise bargaining was to help in wage regulation and setting up working conditions that are favorable to both the employers and the employees and not deny employees their collective bargaining benefits. Its about the employers, employees and their representativesinterest fulfillment achieved when the bodies sit down and comeup with a collective decision regarding a current situation the organization. Regardless of the immense efforts of enterprise bargaining it is still faces risks of becoming unworkable for the employers and for the employees employed under it (40%). This is because the bodys functions has been extended far much past the wages and working conditions. Currently most of the systems has incorporated managerial decisions like hiring and organizational design among others. This means that different clauses have to be included into the system from time to time, as reported by the vice-president Graeme Watson in his resignation letter, protection action of employers as well as employees is therefore threatened. The agreements which have already been signed by employers under good faiths are as well at risk of being altered. Coles decision clearly demonstrates this in that over 90% of employees voted in favor of making the wage agreement but they were denied the wages and conditions and given into hands of the tribunal. The Better off Overall Test current changes and co nstructions are making the process of collective agreement making cumbersome, challenging and risky with large enterprises(Taylor, 2009). The trend must be addressed failure to which the businesses will have to shift to regulated awards systems , the challenge being in the complex and unclear state of the awards, most of them are also outdated. Use of awards will subject businesses and workers in a worse, workers on enterprise agreements on average earn more than those on award system. The report states that Australia needs to do something on the current situation to ensure that the enterprise agreement is in line with the global competitive pressures, sensible changes that can be implemented needs to be considered, for example the Better Off Overall Test should be made more predictable and more transparent to all employees and employers(Fact Sheet, 2013). Enterprise bargaining system should be modernized. The parliament demonstrated that it can work together and make necessary workplace relations laws that can help improve the Australias competitive ability, by passing the laws to re-establish the Australian Building and Construction Commission at the end of 2016. Members of parliament who have interest to raise the economic prosperity in 2017, through better job creation and better wages for the communities they serve should respond to the signs of threats towards enterprise bargaining and support all possible solutions. Collective Agreements unlike awards apply only to employees of a single employer but not to all employers of the entire industry. In making of an enterprise agreement the members must first endorse the proposed enterprise bargaining between themselves, if it involves the employees the matter is subjected to voting. After which the Fair Work Commission approves it as per the Fair Work Act 2009, after which the agreement qualifies to be an enterprise agreement and aligned with the Fair Work Australia assess its entitlement in comparison to the awards (Fact Sheet, 2013) How Fair Work Agreements are made To start with Fair Work Australia Act 2009 offers the employers and employees with a general overview to guide them on how the system should look like, tis framework guides the employees and the employers in ensuring that they enter into agreements in good faith. From there the parties engage in a bargaining process for the proposed enterprise agreement. The employer should alert his employees of the right they have to be represented in the bargaining agreement process by a representative within 14 days after the agreement notice has been released, such notice is passed to all the companys current workers who are intended to be covered by the agreement (Hall, 2006, pp. 291-303) Steps in Making and Approval of the Agreement According to (Cooper, 2009, pp. 261-274) negotiating and approving of an enterprise agreement involves a number of steps. These steps are as follows; Boot analysis: this involved assessing the their pay rates and working conditions in the Enterprise Bargaining Agreement for all employees and ensuring that when compared with the modern award they all satisfy the Better Off Overall Test (BOOT). Preparation of the Enterprise Bargaining Agreement to be forwarded to the workers. Within a period of 14 days a formal notice should be given to the employees to inform them of the employers intentions to enter into a bargaining process, any employeesunion involved is notified as well. After notice has been presented to the employees bargaining meetings arranged and conducted during which EBA amendments are made. Employees then take part on a voting exercise to vote for the agreement for the EAB to be approved it requires majority agreement from the employees. After a successful voting the EAB should be lodged with the Fair Work the EAB should be lodged with FWC. Responding to FWC request, to either add, remove some parts of the agreement which fails to bide with FWC requirements. The final stage is the FWCs agreement approval. Strengths and Weaknesses of the Enterprise Bargaining Process EAB is advantageous and a strong tool to use as it gives a choice of simpler system to remunerate the employees as compared to that of the modern awards, it as well acts as an employment contract because the employer is only required to give a copy of the EAB to a new employer. Negotiations between employer and employees helps is setting up an agreement that is favorable conditions for both. EAB offers all employees under it to team up and collectively bargain on their needs. However, the weak side of the Agreement is it time and resources consumingnature, to be approved lots of costs are incurred, there are also tight timeframes that should be adhered to avoid rejection by FWC (Sheldon, 2008, pp. 235-248) In conclusion even though the process of collective bargaining is expensive and time consuming to make its an important tool that benefits both the employer an employee, especially to an employer who manages his business activities efficiently without so many uncertainties of meeting or failing to meet the legal obligations that are applicable to modern awards. References Baird, M. W. S., 2009. Women, Work and Idustrial Relations in 2008. Journal of Industrial Relations, Volume 51, p. 3. Cooper, R. . E. B., 2009. Fair Work and reregulation of Collective Bargaining;. Australian Journal of Labour Law, 22(3), pp. 284-305. Cooper, R., 2009. The New Industrial Relations and International Economics Crisis: Auralia in 2009. Journal of Industrial Relaions, 52(3), pp. 261-274. Hall, R., 2006. Australian Idustrial Relatios in 2005- The WorkChoices Revolution. Journal of Idustrial Relations, June. Sheet, E. B. F., 2013. FairWork, s.l.: Australian Government. Sheldon, P., 2008. What collective bargaining future for Astralia. in J. Riley and P. Sheldon(eds) ed. s.l.:s.n. Taylor, J., 2009. Unions welcome new Fair Work Act, s.l.: s.n. Westacott, J., 2017. Enterprise bargaining on blink of faiure. 1 February.