Are we in the beginnings of a cyclical upswing in industrial
action in Australia? And if so, what does it mean for those
involved in competitive tender processes?
Data from the ABS indicates that the last spike in industrial
disputes occurred in September 2012, with around 110,000 working
days lost. The sense that there may be another spike coming
correlates with the enterprise agreement life cycle, as enterprise
agreements typically expire after 3 or 4 years. Many businesses are
currently engaged in, or planning for, negotiations for the next
round of agreements.
In this climate, the potential impact of industrial action is
particularly troubling for those employers who engage in
competitive tender processes in order to win work. Organisations
who put work out to tender are increasingly adopting sophisticated
assessment criteria, which include many aspects of the
tenderer's business strategy – rather than just looking
at price. One of the criteria that often has a high priority is how
industrial relations risk (especially the risk of industrial
action) will be managed and reduced. There is an expectation, if
not a requirement, that tenderers will have a comprehensive plan to
minimise the impacts of industrial action, and that innovative
solutions will be designed by tenderers for that purpose.
Principals often award tenders for many years which means that
the management of industrial relations risk requires tenderers to
'play the long game' in managing and pre-empting industrial
action risks that might arise during the course of the
In this context, tenderers need to think deeply about how they
best position themselves in a competitive tender process. This
requires careful consideration of the options that are available to
get the work done. Traditional models of engaging employees might
no longer be enough to convince the principal that the tenderer is
trying to minimise employment risk. Demonstrating capability and
innovation in managing industrial relations risk means looking
afresh at workforce models, including:
creating solutions to the problem of
enterprise agreements expiring during the course of a project;
rethinking reliance on one
'supplier' of labour and considering how multiple sources
of supply might be engaged – to help minimise disruption to,
or delay in, labour supply that might arise from industrial action;
outsourcing some of the IR risk to
other entities or stepping outside the traditional workforce
While you might wonder if the current industrial landscape is
really that tumultuous, or you may feel a touch of
schadenfreude at the industrial action going on elsewhere
(confident that your ship is secure), now is the time to think
proactively about your system for managing industrial relations
risk to differentiate your offer from competitors.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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