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Ashurst report pinpoints shift in enterprise bargaining

A new report commissioned by Ashurst has found that an “uncertain climate” is forcing a change in perception on enterprise bargaining.

user iconEmma Musgrave 25 March 2019 Big Law
Ashurst
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The international law firm has just released the findings of its 2019 Bargaining Survey Report, which asked a number of respondents, including some of Australia's Top 200 ASX-listed companies and major government agencies, 19 questions related to enterprise bargaining.

The respondents include those from industries such as construction and infrastructure, finance and insurance, government, healthcare and higher education, as well as transport, technology and not-for-profit.

"We've seen a number of unexpected shifts in this year's report, which highlights the potential degree of change the market expects in the coming months," said Stephen Woodbury, partner and Ashurst global practice head, employment.

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"Industrial relations has been a key focus in the lead up to the federal election, and the employers we surveyed are very much aware of the potential for significant change that lies on the horizon.

"Perhaps the greatest surprise in our findings was that whilst the majority of private sector respondents opposed the ALP's IR platform elements – prohibiting employer lockouts during bargaining, limiting the ability to terminate expired agreements and requiring compulsory arbitration to settle enterprise agreement disputes – those numbers were not as high as we would have expected."

One of the big changes the report uncovered was a rise in the number of enterprise agreements operating beyond their expiration, added Mr Woodbury.

"Some 31 per cent of respondents said they were operating with agreements past their nominal expiry, in some cases four years past expiration, representing a 10 per cent increase on our 2017 survey results. This suggests a high level of dissatisfaction with and movement away from the system," he said.

"Responses also suggest a more stable economic and market outlook. In 2019, just 4 per cent of respondents indicated they sought a temporary wage freeze compared to nearly 12 per cent in 2017, and only 1 per cent sought a reduction in wages compared to 10 per cent of respondents in the 2017 survey."

Time spent negotiating is also on the rise, with the report finding that there has been a nearly 10 per cent increase in the number of respondents saying it is taking more than 12 months to negotiate an individual enterprise agreement.

"This is most significant in the case of government respondents, with 78 per cent saying their agreement took more than 12 months to negotiate," Mr Woodbury noted.

"When coupled with the time taken in getting an agreement approved and the number of expired agreements still operating, the increased time frames provide evidence to support calls for change, on the basis that the current system does not appear to be working in the interests of either party.

"Interestingly, in 2017 just 36 per cent of respondents indicated that industrial action occurred or that a protected action ballot order was sought when conducting their most recent bargaining. In 2019, this rose to 55 per cent of respondents who said the same – showing a nearly 20 per cent jump.

"It is clear industrial action remains a key feature of the bargaining framework.

"As to why employers negotiate, a number of respondents commented that bargaining is a historical position and a 'force of habit' rather than something that adds to, or improves, their business performance."

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