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Types of Enterprise Agreements

Discuss about the Enterprise Bargaining for Green Field Agreement.

The term bargaining denotes a kind of negotiation. Through this process, the employers and the employees are negotiating over certain terms regarding their employment agreement. An enterprise agreement begins when a negotiation has been occurred in between the employers and the employees in the form of collective bargaining (Creighton et al. 2016). Further, the agreement should be based on good faith and there should be no ulterior motive of either party. Fair Work Act 2009 has defined the term enterprise as any types of business or activities. The Fair Work Act regarding the enterprise bargaining that are as follows has specified certain processes:

When an agreement has been made in between a single employer and employees, the process is known as single enterprise agreement. There can be more than one employer but in those cases, every employer should have single interest as specified by the Act. 

When the negotiation has been made in between two or more employers and employees, the same will be regarded as multi-enterprise agreement (Pekarek et al. 2017).

Under this kind of enterprise agreement, negotiation has been done in between newly appointed employer and the employees. The Fair Work Act 2009 has specified certain obligation upon which the negotiation should be depended. Fair Work Act provides a simple process of  bargaining. It provides certain legal procedures and obligation for the process that to be maintained with highest priority.

Enterprise bargaining is one of the important agreement that describes the relationship in between employer and the employees. Therefore, the term of the relationship should be mentioned in the agreement (Williamson, O'Donnell and Shingles 2015). In certain circumstances, it can be observed that the employers are making agreement with the employee organization and in those cases; the relation in between the agreement should be mentioned in the agreement. The process of enterprise bargaining is made in good faith and if any deduction in the wage has been done, it should be mentioned in that agreement. The operational process of the agreement should be mentioned and all the thing should be done accordingly. The nominal expiry date of the agreement should follow the rules of the Fair Work Act 2009. In case of any dispute settlement, the rules of the National Employment Standard should be maintained. The terms of the agreement should be flexible and the employers are required to take any decision based on the consultation with the employees (Lee, Brown and Wen 2016). The Fair Work Act regarding the enterprise agreement that the rate of remuneration for the employee should not be less than the price fixed by the Act has mentioned an obligation.

Apart from the above named terms, there are certain terms that should not be included under the enterprise agreement. It has been mentioned by the Act that any discriminatory acts or terms should not be included under the Act. Any contravention regarding the protection provision of the Fair Work Act should not be included under the terms (Walpole 2015). The act has mentioned certain minimum period of employment and it has been mentioned under the Act that no employee should get terminate from his position before that minimum period of employment. If any terms of the unfair dismissal is proved to be detrimental for the employees, such terms should be excluded from the enterprise agreement. This agreement has attempted to secure the interest of the employees and therefore, any terms that contradict with the rights of the employees should be excluded from the agreement. The Fair Work Act has provided certain industrial provisions and no terms of the enterprise agreement be inconsistent with those provisions. The entitlements for the right of entry should be mentioned in the agreement. The term right of entry controls the rights of the organizational officials. It is a part of the commonwealth work law (Visser 2016). Through this right, the officials are getting the valid right to enter into a workplace and their entry is subjected to certain conditions imposed by the Act to this effect. In case of any inclusion of unlawful terms in the agreement, the provisions of the Fair Work Act should have to be maintained.

Obligations under the Fair Work Act 2009

It has been observed that most of the provisions of the enterprise agreement are following the terms and procedures of the Fair Work Act 2009. It is to be taken into consideration that the employers and the employees are maintaining all the necessary provisions for the same. It is further to be stated that the employers are required to serve notice to the employees before arrange the negotiation process (Hayter 2015). The notice must be served before fourteen days and the name of every employee should be included in the agreement. However, according to the Fair Work Act 2009, the notice period for the green field agreement is six month and the employers are obliged to serve the notice within the stipulated period. The serving of the notice has been mentioned in schedule 2.1 of the Fair Work Regulation 2009.

It has been mentioned under the Fair Work Act that the process of bargaining should be based on good faith. Certain obligations are mentioned by the Act regarding the same (Picciotto 2017). According to the Act, every bargaining process should follow all the requirements regarding the process:

  • Attending and participating in the meeting within the stipulated time period and all the participated members are restricted to come after the prescribed time period;
  • The participating members should have to state about all the information relevant for the case or the agreement;
  • All the proposal regarding the agreement and the negotiation should be presented in a timely manner;
  • The consideration made by the bargaining representative should be genuine in nature and it is their duty to give adequate reason for the consideration;
  • If any conduct of the collective bargaining unit insults the whole negotiation process, such conduct should be avoided;
  • According to the Fair Work Act 2009, the bargaining agreement should have to consist of certain concession and all such concession should have to follow the norms mentioned in the Fair Work Act 2009.

It has further been observed that in case majority of the employees want the employer to act based on the new agreement, then the employer is required to make new enterprise agreement to that effect. The relevant section to this effect has been mentioned under section 236 of the Act.

The Fair Work Act has mentioned certain rules for the collective bargaining representatives. This section is also important in this case and the Fair Work Act has provided certain legal obligations to this effect too. It has been mentioned by the Act that the employer is forming a part of the agreement. A member of the subjected trade union will be a part of the agreement (Cotton 2015). Further, a group of employees who are the part of the trade union could come under the purview of the agreement in case of green field agreement. If any employer or employees give written statement to the effect, they will also become a part of the bargaining process.

After the draft of the agreement has been made successfully, the approval regarding the same is required and before the voting period, following obligations are required to this effect:

  • The employees are required to get the copy of the agreement even days before the voting process;
  • The employers are required to get informed the employees about the voting place and time;
  • It is the duty of both employer and employees to ascertain the terms and conditions of the enterprise bargaining agreement. They should take reasonable steps to that effect.
  • The proposed agreement should get the approval from the Fair Work Commission.

It is a mandatory terms for the agreement that the approval from the Fair Work Commission is necessary in this case. However, the document should have to follow all the necessary rules as decided by the Act. The copy of the agreement should be signed and all the information that requires approval should be contained in the document. The consent of the employees regarding the agreement is necessary and the Better off Overall Test should verify it. The main purpose of the agreement is to secure the interest of the employees and therefore, any unlawful terms regarding the bargaining process should not be mentioned under the agreement. The employees should assure all the terms of the agreement (Johnstone, Nossar and Rawling 2015). The Fair Work Act has specified certain fair provision for the approval and according to the same, a fair process of negotiation should be mentioned in the document and the bargaining process should be based on good faith bargaining. In absence of good faith bargaining, the breaching party should have to face penalties for the same. The nature of the agreement should be flexible as mentioned in section 144 and section 145 of the Act.

Negotiation Process

There exists a strong relationship between productivity and enterprise bargaining. The system of enterprise bargaining is a system where employers and employees enter into a contract mentioning the terms of employment like entitlements of the employees, deductions from their salary, if applicable and terms on which the employer-employee relationship would rest. The system has provisions under which the Fair Work Ombudsmen can take steps if parties to the contracts contravene the contract. The enterprise bargaining contract can also include trade unions and more than one company, if the case requires. One can point out that enterprise bargaining goes a long way in trying to create a transparent relationship between the employer and the employees ( 2018). This transparency in the relationship creates a healthier environment, which in turn motivate the employees to perform highly. This promotes higher productivity within the organizations. Thus, enterprise bargaining contribute towards more transparent employer-employee relationship which ultimately transpires into high organizational performances (Cascio 2018).

Enterprise bargaining leads way to higher productivity because it forms the basis of employee motivation. The system of enterprise bargaining in Australia operates under the supervision of the Fair Work Act 2009. The act provides provision for legal assistance to employees in the event of infringements of the employment contract based on the system. This legal provision creates an ethical backing among the employees. According to Mostafa, Gould?Williams and Bottomley 2015, sense of security among employees boosts motivation. One can point that this feeling of legal security among employees can be connected to hygiene factors mentioned in the two factor theory coined by Herzberg. The theory mentions that factors like job security motivates employees to perform highly. One can comment in the light of the theory the support of the Fair Work Act acts as a great hygiene factor for the employees which boosts their productivity. This high level of employee productivity ultimately tantamount to high organizational productivity.

Enterprise bargaining leads to high level of productivity and enables high employee retention which again leads to high productivity. As pointed above, the system of enterprise bargaining provides legal and ethical support to employees. This results in them performing highly which contributes to high organizational productivity. Vasquez (2014) mentions that employees experiencing higher level of job security continue offering services to their employers for longer tenure. The business organisations in this case experience lower levels of employee turnover which reduces the expenditure they have to incur top acquire new talents. The departmental managers are as a result able to form long term decisions regarding achievement of the business targets. This advance and timely planning enable more appropriate execution and implementation of the plans, which in turn leads to productivity. Thus, enterprise bargaining leads to higher levels of productivity in organisations (Festing and Schäfer, 2014).

Enterprise bargaining leads to higher productivity by the virtue of enabling high liquidity of resources within the organisation. The enterprise bargaining system as pointed out by Vasquez (2014) leads to higher level of employee retention in the business organisations in Australia. This saves these business organisations are as a result able to channelize their resources towards acquiring more materials to boost their production (Siew et al. 2017). This availability of financial resources enable them to acquire modern plant which uses less fuel. Thus, enterprise bargaining leads to reduction in the employee turnover which in turn reduces the amounts companies spend to acquire new talents to fill the gap. They instead can channelize their resources to boost their productivity which again proves that enterprise bargaining paves way for more channelization of resources towards productivity (Phillips-Wren, Doran and Merrill, 2016).

Process of Approval of the Agreement

The system of enterprise bargaining boosts employee images of business organizations, thus enabling them to attract more talented employees which boosts their productivity. Bali and Dixit, S. (2016) mentions that in the competitive market companies have to develop strong employer image to acquire highly talented human resources. Australia is a booming market which has a large number of foreign companies which take advantage of its profitability. These foreign companies compete with the resident companies to acquire talented human resources in the Australian. This intense competition over the human resources has made it important for the business organizations to advertise their employer to gain advantage in the Australian labor market. Adherence to the system of enterprise bargaining which is in turn based on the Fair Work Act 2009 enables the business organizations to present themselves as law abiding identities. This law abiding image contributes towards strengthening of their images as employers and helps to acquire highly talented human resources. Every industry in Australia has several companies, all producing identical products having similar attributes like utility and prices. Ahammad et al. (2016) point out that business organizations today indulge in stealing employees from their competitors to boost and maintain their productivity. One can point considering the stiff competition that exists in the market of Australia that adherence to the enterprise bargaining and making a strong employer image enable companies to acquire and retain highly talented human resources. This acquisition of highly talented employees enables organizations to manufacture products, which render then differentiation in the market. This product differentiation in turn allows them to generate immense revenue. Therefore, enterprise bargaining leads to high organizational productivity and market position.

Enterprise bargaining contributes to high productivity because it renders business organizations financial sustainability. Compliance with laws has serious impact on the market image of business organizations and their revenue generation ( 2018). Aguilera-Caracuel et al. 2015 state that indulgence in illegal and non-compliance with laws have caused fall their share prices in several top companies around the world, thus leading to capital crunch and more burden on their revenue to meet their expenditures even if the revenue figures show upwards trends. Compliance to laws and enterprise bargaining enables business organizations to create more legally responsible images of them in the labor market and acquires highly talented revenue. This in turn leads to higher levels of productivity, which boosts revenue generation. This high revenue generation coupled with the legally obliged images of business organisations enables companies to attract more investments from the securities. Schmidt 2015 strengthens the opinion of Aguilera-Caracuel et al. 2015 by mentioning a strong base of investors encourage companies to acquire more business firms. This actually strengthens the capital base of the holding companies. Thus, one can infer from the discussion that adherence to enterprise bargaining actually enables business organizations to acquire financial sustainability.

The above discussions shows apparently shows that enterprise bargaining is only beneficial to present productivity but in reality it also boosts future productivity. The companies adhering to the enterprise bargaining lead to higher productivity, which in turn leads to higher revenue generation. This promotes growth of the industrial sector of Australia as a whole, thus making it more profitable (King and Baatartogtokh 2015). This stability of the Australian market attracts more foreign companies which results in more productivity and increase in revenue of the market as a whole. This presence of firms from diverse markets coupled with their revenue generation leads to disruptive innovation. This paves to Australian products replacing or challenging their foreign counterparts even in markets across the Australian shores. Thus factors ensure more productivity in the future and more revenue generation in the entire Australian economy as a whole. One can infer from this discussion that enterprise bargaining is beneficial for revenue business growth of the Australian economy as a whole.


Aguilera-Caracuel, J., Guerrero-Villegas, J., Vidal-Salazar, M. D., and Delgado-Márquez, B. L. 2015. International cultural diversification and corporate social performance in multinational enterprises: The role of slack financial resources. Management International Review, 55(3), 323-353.

Ahammad, M. F., Tarba, S. Y., Liu, Y., and Glaister, K. W. 2016. Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention. International Business Review, 25(1), 66-75.

Bali, M., and Dixit, S. 2016. Employer Brand Building for Effective Talent Management. International Journal of Applied Sciences and Management, 2(1), 183-191.

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Creighton, B., Denvir, C., Johnstone, R., and McCrystal, S. 2016. Protected Action Ballots and Protected Industrial Action Under the Fair Work Act: The Impact of Ballot Procedures on Enterprise Bargaining Processes–Methodological Approach.

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Pekarek, A., Landau, I., Gahan, P., Forsyth, A., and 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.

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Schmidt, B. 2015. Costs and benefits of friendly boards during mergers and acquisitions. Journal of Financial Economics, 117(2), 424-447.

Siew, C. L., Chuah, L. E., Koo, Y. T., Ng, J. X., and Cheng, W. L. 2017. Study on the Relationship between Talent Management and Employee Retention in Telecommunication Industry in Klang Valley (Doctoral dissertation, UTAR).

Vasquez, D. 2014. Employee retention for economic stabilization: A qualitative phenomenological study in the hospitality sector.

Visser, J. 2016. What happened to collective bargaining during the great recession?. IZA Journal of Labor Policy, 5(1), 9.

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Williamson, S., O'Donnell, M., and Shingles, J. 2015. Can collective enterprise bargaining affect the psychological contract? An analysis of the 2011 Australian Public Service negotiations. Australian Bulletin of Labour, 41(1), 1.

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