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Industrial Relations

Industrial Relations

 

Executive Summary

The executive summary is intended to offer an outline of the report made to advise the Fair Grocery Shop in regard to the subject of Enterprise Agreement (EA) between the corporation and its employees. To deal with the subject-matter, various legal requirements that are pre-requisites of the EA are discussed. In addition to this, various approaches or strategies that can be used in negotiating the EA, such as position based approach and interest based approach, are also discussed in the report. Finally, the most effective strategy in negotiating the EA have also been discussed. 

 

 

Contents

Introduction. 4

Enterprise Agreement 4

Essentials of an Enterprise Agreement 5

Necessary legal requirements. 5

Negotiation. 6

Negotiating Styles: 6

Possible ways to implement he strategy. 7

Conclusion. 7

References. 8

 

 

 

Introduction

Enterprise Agreement refers to an agreement made between any corporation and its employees to establish reasonable wages and workplace conditions. It provides the employer as well as the workers with the right to negotiate higher pay, wider tractability and conditions of employment to meet their interests. Once signed, an Enterprise Agreement establishes standard working conditions among one or more employers or corporation and their workers that has to be honoured by both the parties. This report includes the meaning and essentials of an EA. Furthermore, it provides the legal necessities of an EA that are required for approval by Fair Work Commission. In addition to this, it also provides certain approaches and strategies that should be adopted by the Fair Grocery Shop (FGS) for negotiation.

Enterprise Agreement

Enterprise agreement, also known as Collective Agreements, are made between employers at national level organization and their workers, to cover standards of employment, including flexible shift timings, wage rate and process of dispute resolution (McCrystal, Creighton & Forsyth, 2018). For large enterprises, or workers who take part a multidimensional employee base, an enterprise agreement (EA) can be a reasonable and realistic method to optimize the employment terms and conditions for its employees. It is not unusual for employers to have a variety of Modern Awards extending to their staff and thereby adding confusion and logistical difficulties. In fact, since new awards are not fixated on particular companies but extend across sector, all of the criteria are also complicated and expensive to enforce which on the whole may be a burden for a company to maintain conformity (Oliver, 2016).

An enterprise agreement is made between national system employers and their workers, as stated in the agreement. Enterprise agreements are reached by the participants through collective bargaining in good conscience, usually at the corporate scale (Nicholson, Pekarek & Gahan, 2017). As per the Fair Work Act 2009, an enterprise can include any kind of business, operation, venture or undertaking. An Enterprise Agreement, by comparison to a Modern Award or the National Employment Standards offers employers and workers the right to bargain for higher pay, more tractability and standards of employment to fits their purposes. The tool of Enterprise Agreement was intended to simplify the connection of management stratagem or approach in employment or industrial relation to the general commercial approach (Mortimer & Ingersoll, 2015).

An enterprise agreement is an agreement regarding approved subjects which are:

  1. Conditions about the arrangement across each employer and the workers protected by the contract
  2. Conditions for the relationship among each employer and any association of workers such as trade union, work union, among others, covered by the agreement
  3. Wage deduction for any reason permitted by a worker subject to this Agreement
  4. Operation of the Agreement

Essentials of an Enterprise Agreement

An enterprise agreement will include the bellow mentioned terms (Pekarek, Landau, Gahan, Forsyth & Howe, 2017):

  1. A minimum expiry date for the Agreement not exceeding four years since the date of approval by the Fair Work Commission;
  2. A dispute resolution process which should allow either the Fair Work Commission or anyone other than those specified by the Agreement to resolve disputes on any issue regulated by the Agreement relating to a modern award or to the National Employment Standards;
  3. A flexible concept allowing for individual flexibility agreements (IFAs) to meet the specific needs of employers and employees. There are agreements among an employer and an employee in the organization varying the execution of the business agreement with respect to the individual; and
  4. A consultation term that necessitates the employer to discuss with its workers on any substantial organizational change that are able to make a significant impact on them and that enables staff members to be represented in that consultation. When the term of consultation does not exist, the definition of the model consultation must apply.

As per an enterprise agreement, the level of income or pay-rate for a worker cannot be less than the appropriate level of income defined under the modern award which would be applicable to the worker or under a national minimum wage (McGrath-Champ, 2003).

Necessary legal requirements

The request for a planned Enterprise Agreement must be submitted to the Fair Work Commission in under 14 days of the agreement being concluded or within thinks fit time frame as the Fair Work Commission permits.

The Fair Work Act largely describes an EA as an instrument, as provided in this agreement, among one or more national system employers and their employees and, in certain scenarios, a trade union or worker alliance. These agreements are reached in good faith by means of collective bargaining (Stewart, 2018).

The application to the Fair Work Commission for approval of Enterprise Agreements must be accompanied by following documents:

  1. Signed copy of the Agreement
  2. Any other documents required by the Fair Work Commission.

For the approval of an Enterprise Agreement, the Fair Work Commission should be satisfied that:

  1. The workers affected by the presented agreement have consented to it
  2. The agreement satisfies the Better Off Overall Test (BOOT) (Bulut, 2018).
  3. The agreement does not contain any unlawful standings, terms that are in contravention with the National Employee Standards, or terms about textile clothing or footwear (TCF) outworkers

The aforesaid conditions must be complied by the parties in order to get approval for the EA by the Fair Work Commission. In case of failure to meet the given requirements, the agreement is subject to be rejection by the Commission (Stewart, 2018). Additionally, the agreement must be mutually consented by both the parties.

Negotiation

Negotiations enables the participants to consent to a jointly acceptable outcome. The stakeholders must reach the conclusion the overall terms of the agreement which may be as wide or as precise as the parties intended. A negotiated settlement may be documented as an agreement. When signed, it holds the effect of a contract between the parties. When the settlement is reached in the sense of a litigious conflict, the settlement may be filed with the Court by the participants in compliance with the pertinent standards of practice.

Negotiation Styles

There are two common negotiation styles that are usually adopted by parties in creating their approach for an effective negotiation (Price, Bailey & Pyman, 2014). These are:

  1. Competitive / Positional Negotiation

In the competitive model, the members attempt to maximize their returns at the other's expense, choose a combination of techniques to do so, and display the interests of the opponent or parties as irrelevant, only to the extent that they expand their own objective of enhancing returns.

  1. Cooperation / Interest Negotiation

Also known as interest-based negotiations or problem-solving negotiations, the co-operative method begin with the assumption that the negotiations should not be treated as a "zero-sum" scenario, i.e. one member 's benefits in the agreement are not inherently at the other member 's cost. Shared interests and beliefs are emphasized, as is the use of an impartial viewpoint and a reasonable and mutually beneficial outcome is the primary aim of the negotiations.

In the present scenario, co-operation negotiation strategy or style should be the best approach to be adopted by Fair Grocery Shop (FGS) in negotiating the enterprise agreement. In order to make the employees accept the terms of the agreement, Lacy must first understand their viewpoint as well and in order to do so, there must be effective communication between the parties, which is one of key essentials of an active negotiation. Basic interests of the other party, including their concerns, proposals and needs must be acknowledged and considered. While measuring the interest of the other party, the ‘BATNA’ approach should be adopted. The ‘Best Alternative To a Negotiated Agreement’ or ‘BATNA’ refers to the norm or level against which any planned agreement should be assessed. In a nutshell, it is the best alternative solution or choice in case the negotiations fall short (Thornthwaite, 2016). Compliance of this strategy will enable the FGS or the Corporation to cautiously analyze all the alternatives available to the other party which can empower the corporation in making such a negotiation that fulfils all the desired needs and cuts out any such loopholes that may give a chance to the other party to consider any other alternatives.

Furthermore, a well-structured framework is necessary, outlining all the terms being proposed by the Fair Grocery Shop or the Corporation and highlighting the points that will benefit the other party of the negotiation. In addition to this, the FGS or the corporation must be prepared to present the solutions to any concerns being raised by the other party. The best effective way to conduct a brainstorming sessions between the stakeholders wherein both the parties are given the opportunity to present or discuss any issue. This will make the workers feel included and acknowledged which will encourage them to express their concerns as well as ideas without any hesitation (Jackson, Doellgast & Baccaro, 2018). The FGS or the corporation can then work on such issues and present a detailed framework covering all the concerns in the next negotiation session. A ‘win-win’ approach must be adopted by the Corporation or the FWS in negotiating the Enterprise Agreement.

Possible ways to implement he strategy

To achieve this task in a short span of time without any industrial conflict, Lacy must make a group of parties that are willing to assist her in the Negotiation. Furthermore, she must divide the aforementioned tasks to each person to achieve maximum result in minimum time. The task of assessing the underlying interests as well as the concerns of the other party to the negotiation can be delegated to one person, whereas the task of creating a strategy to cover all the identified issues must be handled to another. In addition to this, to save more time and to avoid any haphazard, theses task must be done in systematic order so that no step is missed or mixed with other. In negotiating the EA, Lacy must explain the details of her proposal to the employees as even though she is keen on making the employees work overtime, she is also ready to increase their pay, higher than the minimum wage rate set by the Award. This will inspire the staff to accept her terms of the Agreement as it will benefit both the parties. Additionally, Lacy, the CEO of Fair Grocery Shop, or the Corporation must comply with the necessities required by the law for a fair and non-biased negotiation and final agreement.

Conclusion

Enterprise Agreement is made between one or more employers or corporation and its employees, to reach a mutual ground for working conditions and standard payment. The Fair Grocery Shop, while making an agreement, must comply with the legal requirements set by the Act as well as Commission. Additionally, as discussed above, the Fair Grocery Shop must adopt the co-operation negotiation strategy or approach while negotiating with its employees as this strategy will benefit them in enhancing the employee morale by giving them an equal say in the terms of the Agreement.

 

 

References

Bulut, V. (2018). Give them the BOOT: Negotiating enterprise agreements with existing employees for a'new enterprise'. Bar News: The Journal of the NSW Bar Association, (Autumn 2018), 14.

Jackson, G., Doellgast, V., & Baccaro, L. (2018). Corporate social responsibility and labour standards: Bridging business management and employment relations perspectives. British Journal of Industrial Relations56(1), 3-13.

Koukiadaki, A., & Grimshaw, D. (2016). Evaluating the effects of the structural labour market reforms on collective bargaining in Greece. Conditions of Work and Employment Series, (85) ILO.

McCrystal, S., Creighton, B., & Forsyth, A. (2018). Collective Bargaining under the Fair Work Act.

McGrath-Champ, S. (2003). Employment benefits in enterprise agreements: An overview. Australian Bulletin of Labour29(1), 46.

Mortimer, D. E., & Ingersoll, L. (2015). The impact of deregulation on employment relations in the Australian retail industry. Employment Relations Record, 15(2), 43-60

Nicholson, D., Pekarek, A., & Gahan, P. (2017). Unions and collective bargaining in Australia in 2016. Journal of Industrial Relations59(3), 305-322.

Oliver, D. (2016). Wage determination in Australia: The impact of qualifications, awards and enterprise agreements. Journal of Industrial Relations58(1), 69-92.

Pekarek, A., Landau, I., Gahan, P., Forsyth, A., & Howe, J. (2017). Old game, new rules? The dynamics of enterprise bargaining under the Fair Work Act. Journal of Industrial Relations59(1), 44-64.

Price, R., Bailey, J & Pyman, A. (2014). Varieties of collaboration: the case of an Australian retail union. International Journal of Human Resource Management, 25(6): 748–761.

Stewart, A. (2018). Bargaining, Cooperation and 'New Approaches' under the Fair Work Act IN 2018 Collective Bargaining under the Fair Work Act. Bargaining, cooperation and 'New Approaches' under the Fair Work Act IN, 85-116.

Stewart, A. (2018). Stewart’s Guide to Employment Law. Sydney, Federation Press, 6th Ed. *

Thornthwaite, L. (2016). Chilling times: social media policies, labour law and employment relations. Asia Pacific Journal of Human Resources54(3), 332-351.

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