Business searches for agreement

THERE are three main industrial instruments within Western Australia’s new industrial relations system – awards, individual contracts in the form of Employee Employer Agreements, and Enterprise Bargaining Agreements.

The changes to WA’s laws have made the award the new benchmark and have removed State workplace agreements, with the Government making clear its preference for collective agreements.

This, in turn, has sparked what some are calling an exodus to the Federal system.

The Federal industrial relations system has pretty much the same offerings as the State system except the individual contracts are referred to as Australian Workplace Agreements.

Most industrial advocates are advising clients to either look to AWAs or non-union collective agreements under the Federal system because they offer the ability to set productivity targets and provide greater flexibility.

They say awards are too prescriptive, collective agreements involving unions are risky and that EEAs are too difficult to get registered.

However, to take up an AWA a business has to be incorporated – something that puts the Federal individual contract system out of the reach of many small businesses.

AWAs and EEAs are underpinned by a no-disadvantage test, meaning that an employee on agreement can be no worse off overall than if he or she was on the relevant award.

EEAs have proved to be far less successful than the instrument they replaced, the WA workplace agreement. So far fewer than 10 have been registered.

Consumer and Employment Protection Minister John Kobelke admitted that EEAs had failed to impress businesses but said the Government had no plans to remove them.

He put their poor take-up rate down to three things.

Firstly, organisations such as the Chamber of Commerce and Industry were not actively promoting EEAs as they did workplace agreements.

Mr Kobelke said the Small Business Development Corporation would provide business owners with advice about how to set them up, but that was the extent of its commitment.

He said another factor slowing their take-up was the fact that EEAs were new and employers preferred, understandably, proven arrangements. 

“The third factor is that Office of the Employment Advocate has received a new ruling that allows it to register AWAs that undercut the no-disadvantage test,” Mr Kobelke said.

“My concern with that is that I believe it is outside the law, and if it gets overthrown in the High Court then employers who had lower wages through AWAs could be up for thousands.”

Awards have proved to be the staple of WA’s industrial relations for decades, however there are concerns that they do not allow the flexibility required by modern businesses.

There are 321 awards registered in the WA Industrial Relations Commission.

One concern with awards is that they languished through the 1990s because the government of the day put its preferences towards individual workplace agreements.

With the new collective focus of the Gallop Government, moves are under way to modernise awards.

Unions WA secretary Stephanie Mayman said unions such as the Transport Workers Union and the Australian Workers Union had moved quickly to modernise their awards.

EBAs have received a bad name largely due to the excessive demands posed through pattern agreements proposed by unions such as the Construction Forestry Mining and Energy Union.

The CFMEU’s latest EBA includes things such as a demand for a 36-hour week and a requirement for employers to pay to have the union’s logo emblazoned on work clothes.

Enterprise bargaining agreements came to prominence around the late 1980s. Until that time employers had been paying their better-performing employees over-award payments, but employers started turning to EBAs because they offered some productivity returns and removed some of the inflexibility enshrined in awards.

Over-award payments are still preferred by some businesses.

Most EBAs run for about three years and, over that time, productivity targets and wage increases are set. That gives employers some certainty over their wage costs.

Under the State system a union has to be party to any EBA, while under the Federal system there are union and non-union EBAs.

One strategy being employed by industrial relations experts is to get workers to sign onto AWAs while including a provision to have that converted to a non-union collective agreement under the Federal system.

That way, if the business gets the majority of its staff onto individual contracts, it can convert that to a non-union EBA.

Clayton Utz workplace relations and employment partner Glen Bartlett said this helped prevent situations where a business had a workforce split between individual contracts and another industrial system.

“That sort of arrangement can cause problems when the employer wants to change shift rosters and the like,” he said.

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