What is enterprise bargaining?

Question

How enterprise bargaining concept related to work places since last 20 years? how it effect?

Answer 1

In Australia, 20 years ago workplace conditions were all set by the government, unions and the courts. This centralised system meant that everybody doing a particular job got paid the same amount, regardless of how hard they worked. It also meant they had the same conditions (eg leave entitlements etc). This meant that if wages rose in one sector due to excess demand for labour, wages for every other job increased too. This meant that inflation increased and pushed unemployment up, especially for low skilled workers, since employers had to pay them more than they contributed. This meant that many unemployed people could never get work experience and gain skills, resulting in inequality etc.

Enterprise bargaining allowed wages and other conditions to be negotiated on an enterprsie by enterprise (or workplace by workplace) basis. If all of the employees wanted to trade off leave for more pay, or more pay for more leave and this also suited the employer, then under enterprise bargaining, this could be achieved. Importantly, it also meant that workers and employers could make changes to working arrangements to improve productivity since improved productivity means that a firm can pay higher wages and increase it profitability and thus both employees and employers would be better off.

Recently, there has been an increased trend towards doing this at the individual employee, although there is considerable public debate about whether it is reasonable to expect individual employees to negotiate with their employer, especially for low skilled jobs where the employee is not very well educated. Personally, I think that these concerns are over-rated, but I know that others would disagree with this.

If you want to know more, you might want to do a search for terms such as "industrial relations", "AIRC" and "Fairpay Commission". Just be aware that most of you will find will have been written to reflect the particular bias of the author, weigh up what you read and reach your own conclusions.