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Can Social Enterprises Remain Sustainable And Mission-Focused?

Enterprise Bargaining Framework in Australia

Enterprise bargaining is a framework that has been built in order to protect the rights and the working conditions of the employees in a certain organization. The framework of enterprise bargaining was introduced in Australia in 1991 (Pursued, 2014). Afterwards, it became one of the major systems in industrial relations in Australia. This enterprise bargaining policies consist of agreements, that has to be signed between an employer and an employee. Moreover, the framework has been implemented in order to make the workplaces more favorable and flexible for the employees. However, it has been noticed that the framework has failed to deliver the promises that it has made. The idea of enterprise bargaining hence seems to be irrelevant in the present context. The factor that is aggravating the condition more is the lack of flexibility of the framework. In this essay, the factors that are playing influential role in the decline of enterprise bargaining have been discussed. Lack of flexibility and improvement, emergence of part time workers and low wages are some of the factors that are affecting the enterprise bargaining largely.


As seen from recent studies, the number of organizations using enterprise bargaining is decreasing significantly. According to the reports published by the Department of Employment, the number had declined around one third over the span of six years. Although Crabtree & Chamberlain, (2014) opined that, Enterprise Bargaining Agreement (EBA) is an agreement between the employer and the employees. However, it has also been monitored that trade unions also sign agreements with the employers on behalf of the employees. These agreements are termed as the collective agreements. The collective agreements, as assumed primarily benefit the employers, at least by their principles. The agreements help employer to opt for flexibility regarding certain employee issues and working conditions. However, having a thorough study of the nature of these agreements, it can be said that adaptation of these flexibilities help the employees also. The awards and compensations that have been finalized based upon the agreements in turn succeed in motivating the workforce to a great extent. In a given organizational environment, the employees and the trade unions involve in the procedures of bargaining in order to achieve highest employee satisfaction (Addison, Portugal & Vilares, 2015). In this essay the key factors that are affecting the presence of trade unions in the organizational culture, have been discussed.  

However, Bray & Stewart, (2013) argues that the structure of the enterprise bargaining started to fall off, almost twenty-five years after the implementation of the framework. In its initial stages the agreements seemed to be potential, enough to keep the promises that have been made. In the recent scenario, the popularity of the agreement is decreasing. According to the recent surveys, the number of agreements that have been signed within a span of six years have drastically decreased. The agreements have lessen around one third within 2016 (Townsend, Wilkinson & Burgess, 2013). The primary reason behind the fall of the enterprise bargaining and signed agreements is that the process of bargaining is becoming highly complicated. This deviation is also causing in the increasing dependence on the relevant compensation and the awards that are available in the organizations. In addition to this, the trade unions are increasingly becoming ineffective. Hence, the employees do not prefer to depend on the unions anymore. The employees as well as the employers have monitored that the increasing numbers of strikes are affecting the organizational environment (Bishop & Cassidy, 2017). However, it can easily be understood that the inefficiency on parts of the trade unions are affecting the issues related to employee wages and compensations. The employers on the other hand, are being benefitted by the decrease of the strike activities. In addition to this, the Western Australian organizations are attempting to opt out from the framework of enterprise bargaining and agreement. They are willing to take up the organizational award condition as a path of their increasing flexibility.

Factors Affecting the Decline of Enterprise Bargaining

Another view that has been put forward by Jacobs & Rush, (2015) is that along with the passing time, the employees have also realized the fact that the agreements tend to restrict the employees in gaining more awards and compensations. It has been monitored that the organizations have already come up with the award and wage policies that are paying the employees more than that of the stringent award provisions. The sociologists have monitored that any enterprise bargaining and agreement tend to take three to four years in order to show its effect on the organizational culture and wage policies. In the present scenario of globalization, the employees are not willing to wait for the long span. Moreover, the globalization encourages a constant change and upgrade in the environmental and work culture of the organizations. As the increasing demand of the global market, the organizations are working towards improvement and innovations. Hence, in this present scenario both the nature and demand of the work force are changing. They are favoring the organizational award policies. In addition to this, the Fair Work Commission has come up with a strict interpretation the “Better off Overall Test”. According to this framework, each employee as well as employer should be in an advantageous for both the employees and the employers (Young & Kim, 2015). Primarily the Fair Work Commission was willing to accept the terms and conditions put forward by the union leaders. However, the commission eventually terminated the idea of incorporating any words from the end of the bargaining representatives.


Another major change that has occurred in the enterprise bargaining framework is the emergence of part time employees. Crabtree & Chamberlain, (2014, February) has pointed out that previously the agreements were done keeping in mind the wellbeing of the full time employees. As the change in the organizational culture and the nature of working, the employment of part time workers have increased largely. In this respect, it is monitored that the part time work forces are not as capable of being united as the full time work forces are (Wright & Lansbury, 2014). Hence, the trade unions cannot come up with an easy solution that might be helpful for the part time workforces. Moreover, the varied nature of work of these part time employees, creating an additional barrier in the path of any constructed agreement. Hence, the necessity of individual and line-by-line assessment has aroused in order to protect the rights of every employees. The part time workers are found to have a very less capability to unionize and stand for their demands. In addition to this, the existing trade unions are also faltering in the matter of working towards retaining the wellbeing of the part time workers (Chan & Hui, 2014). As a result of the globalization, the workforces have become varied in their nature. Hence, it is practically not possible for the unions to identify and address all the needs of the employees.

Lack of Flexibility and Improvement

Addison, Portugal & Vilares, (2015) pointed out that low wage is an issue that has been concerning the commission largely. Over the course of time, it has been seen that the public sectors are mostly employing the enterprise bargain and agreement. As a result of this, the employee wages of these sectors have not raised significantly. Aggravating the matter is the fact that the number of goods and services production have increased significantly (Pekarek et al., 2017). This means the productivity of the employees have increased however, they are not having proper compensations for the effort they are putting. If scrutinized the scenarios outside Australia, it has been noticed that the compensation for the workers have declined by ten percent. A huge gap has been monitored between the compensation of the employees and that of the organization’s ability to pay. Moreover, the employees working in the private sectors are gaining more wages.

The employees have challenged the agreement related to the organizational bargaining. As Addison, Portugal & Vilares, (2015) has monitored that the trade unions are becoming ineffective in order to protect the cause of the employees. They have also pointed out that the trade unions are increasingly coming in between the employees and organization. This is making the process of employee and employer direct communication. Moreover, the organizations and the employees have also questioned the BOOT model (Abs.gov.au, 2018). In the terms of the proposed agreements, it can be said that each employee of a particular organization should be better off, as an effect of the agreement and the bargaining framework. However, Bray & Stewart, (2013) opposed the idea of incorporating BOOT as the sole method of understanding and deciding employee satisfaction. In the cases of the fast food and the retail sectors, the BOOT framework cannot be maintained due to the employment of huge number of workforces (Nicholson, Pekarek & Gahan, 2017). Moreover, the idea of paying extra wages for working overtime cannot be decided by these organizations as the employees work in different shifts and in most of the cases, the employees select the shift timings. In addition to this, it has also been pointed out by the organizations that any individual employee, who is not satisfied with the wages and compensations, can disapprove of the agreement of an organization (Macdonald & Charlesworth, 2013). Moreover, it has been noticed that it is not possible for the organizations to provide equal incentives to all of the employees, as the retail and the fast food industries have a huge workforce that varies in their job role.

Emergence of Part-Time Workers


In addition to this, the business of an organization is highly dependent on the agreement and the employee satisfaction. The organizations hence are not willing to allow the trade unions to take part in the process of negotiation. The majority of the employers focus on the importance of having direct conversation with the employees (Bray & Stewart, 2013). The majority of the employees, especially the small and medium business do not engage in the process of enterprise bargaining that is influenced by the unions or influences that can hamper the communication. Moreover, the freedom of the laws forbids the discriminations amongst the members and the non-members of the trade unions. It has been argued for quite a long time that the trade unions any work towards protecting the cause of the employees who support them. However, according to the trade unions they generally tend to work towards protecting the cause of every employees (Myant, 2013). However, Bishop & Cassidy, (2017) has argued that the trade unions have counter attacked the organizations that they often discriminate amongst the employees that support the unions to those who do not. This quarrel amongst the trade unions and the organizations has resulted into the rise of untoward situations in many of the organizations. This in return led the employees to deviate from the trade unions and depend entirely upon the organizational policies of wages and compensation (Jacobs & Rush, 2015). Moreover, by allowing the unions into the process of bargaining eventually gives them the power to emerge as primary forces in any organizational scenario. The increased role of these trade unions were making it more difficult for the companies to come to a direct conversation with the employees.


In addition to this, Macdonald, & Charlesworth, (2013) has pointed out that the sociologists have noticed that the organizations where the trade unions either are non-existing or present in a very benign way, are more likely to provide better health and organizational safety to the employees. To put it in another way, it can be said that the organizations that look up to providing proper occupational health and safety, witness lower need for trade unions (James & Ombudsman, 2015). This is the reason of increased need of trade unions in the high-risk occupations. Along with the rising power off the unions, it was also monitored that the members of the trade unions start to function as powerful entities and more often, they create problems in the proper functioning of the organizations. It is also monitored that the number of workforces that are being benefitted by the organizational set up without the influences of unions are much higher than the organizations where the unions are playing effective roles. Moreover, the presence of unions ensure the fact that the issues related to the micro economy are addressed properly.  

Low Wages

In conclusion, it can be said that in Australia the trade unions are facing their downfall throughout the past decade. The changing nature of the organizational culture attributing to the downfall of the trade unions. Due to the influence of globalization, the organizations are coming up with the policies that are helping the employees. The organizations are taking up policies that are employee friendly and help in securing their organizational health and safety. Moreover, the trade unions are sticking with their primeval way of operating and only working towards maintain the equality in the wages. The primary factor that is affecting the process of enterprise bargaining is the non-flexibility of the enterprise bargaining. Moreover, it can also be understood that the enterprise bargaining in a highly complicated procedure.  However, in the present working scenario, the organizations as well as the employees need a different approach so that their organizational needs can be addressed. Hence, it can easily be understood that the Enterprise Bargaining no longer holds the same importance in monitoring and determining the primary methods of wage determination.

Reference:

Abs.gov.au(2018).Retrievedfromhttps://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6202.0Main%20Features2Jul%202018?opendocument&tabname=Summary&prodno=6202.0&issue=Jul%202018&num=&view

Addison, J., Portugal, P., & Vilares, H. (2015). Unions and collective bargaining in the wake of the great recession.

Bishop, J., & Cassidy, N. (2017). Insights into low wage growth in Australia. RBA Bulletin, March, 13-20.

Bray, M., & Stewart, A. (2013). From the arbitration system to the Fair Work Act: the changing approach in Australia to voice and representation at work. Adel. L. Rev., 34, 21.

Chan, C. K. C., & Hui, E. S. I. (2014). The development of collective bargaining in China: From “collective bargaining by riot” to “party state-led wage bargaining”. The China Quarterly, 217, 221-242.

Crabtree, A., & Chamberlain, A. (2014, February). Making it pay a bit better: design challenges for micro rural enterprise. In Proceedings of the 17th ACM conference on Computer supported cooperative work & social computing (pp. 687-696). ACM.

Jacobs, D., & Rush, A. (2015). Why is wage growth so low?. RBA Bulletin, June, 9-18.

James, N., & Ombudsman, F. W. (2015). Commonwealth of Australia.

Macdonald, F., & Charlesworth, S. (2013). Equal pay under the Fair Work Act 2009 (Cth): mainstreamed or marginalised. UNSWLJ, 36, 563.

Myant, M. (2013). The impact of the economic crisis on collective bargaining in the Czech Republic. Transfer: European Review of Labour and Research, 19(2), 185-194.

Nicholson, D., Pekarek, A., & Gahan, P. (2017). Unions and collective bargaining in Australia in 2016. Journal of Industrial Relations, 59(3), 305-322.

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 Relations, 59(1), 44-64.

Pursued, M. R. (2014). Changes in labour market conditions and policies, and their impact on wage inequality during the last decade. Falling inequality in Latin America: Policy changes and lessons, 251.

Townsend, K., Wilkinson, A., & Burgess, J. (2013). Is enterprise bargaining still a better way of working?. Journal of Industrial Relations, 55(1), 100-117.

Wright, C. F., & Lansbury, R. D. (2014). Trade unions and economic reform in Australia, 1983–2013. The Singapore Economic Review, 59(04), 1450033.

Young, D. R., & Kim, C. (2015). Can social enterprises remain sustainable and mission-focused? Applying resiliency theory. Social enterprise journal, 11(3), 233-259.

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