Is there a better way than enterprise bargaining

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Is there a better way than enterprise bargaining?
IRS National Convention September 2001

Ron Callus ACIRRT, University of Sydney
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Gains from enterprise bargaining for employers

• changes to working time
• wage increases via productivity offsets
• regained the agenda
• mechanism for introducing other rule change
• increase use of performance linked pay schemes
• greater focus on enterprise needs

3
Micro problems with enterprise bargaining for
employers

• time and resource costs
• benefits more limited and less than expected
• no benchmark or reference point for standards
• resistance or inertia in implementation
• bargaining burnout
• negative impact on employee morale

4
Problems with enterprise bargaining for employees

• hours of work
• growth in non-standard employment
• growing earnings inequality
• increase stress and insecurity from changes
• increase in mistrust of management
• implementation of benefits often slow
• not prepared or skilled

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Impact of EAs on Business Performance
Source NILS Workplace Management Survey, 1998
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Problems with enterprise bargaining - Macro

• breaks down accepted community standards/norms.
  Who sets it under EB?
• inefficient for ensuring and maintaining a
  skilled workforce
• growing inequality - social consequences
• agreements between employers and employees dont
  encompass non- employees

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Whats the problem

• While awards might have once been the correct
  model for a standardised Harvester workforce,
  agreements are not the appropriate regulatory
  model for a flexible non standard labour market
  and enterprise

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Features of contemporary work life

• 1/4 workforce casuals
• 1/4 work part-time
• working for same employer over long term
  increasingly unlikely
• growth of non-employee workers
• redundancy real possibility at some time
• work and non work balance more difficult
• problems of long hours

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Hours of work by employment status, April June
2000, Australia
All employed persons 8.7 mil
Employees (a) 78.4 6.8 mil
Owner managers 21.6 1.9 mil
Part-time (lt35 hours) 29.3 2.0 mil
Full-time (35 hours) 70.7 4.8 mil
Part-time 25.2 0.5 mil
Full-time 74.8 1.4 mil
35-40 hours 53.7 2.6mil
41 hours 46.3 2.2 mil
35-40 hours 22.1 0.3 mil
41 hours 77.8 1.1 mil
41-50 hours 38.0 0.4 mil
51 hours 62.0 0.7 mil
41-50 hours 67.3 1.5 mil
51 hours 32.7 0.7mil
23.0 29.8 17.3 8.4 5.4 3.6
4.8 7.8
Source ABS Catalogue 6361.0 (a) Excludes owner
managers of incorporated enterprises
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The new challenges

• the restructured labour market
• changing structure of organisations
• changed in peoples working lives
• ensuring entitlements and standards for a new
  workforce
• new institutions for the new labour market

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Working life key transitions
PRIVATE HOUSEHOLDS
LABOUR MARKET
RETIREMENT
EDUCATION SYSTEM
UNEMPLOYMENT
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New Institutions required

• (i) Setting standards
• New Administrative Body to set minimum hourly
  rates of pay. Modelled on RBA
• (ii) Enforcing standards
• Inspectorate Service to enforce minimum rates
  and award and agreement entitlements
• (iii) Settling disputes
• On any matter including non wage standards,
  unfair dismissals, test cases

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Beyond the enterprise

• sharing risks - group apprenticeship model
• portability of workers entitlements (eg
  construction long service)
• funding beyond the enterprise eg maternity leave
• training beyond the enterprise
• entitlements - national insurance scheme