Article by Sonia Millen, Michael Serong and Rohan Doyle
The effects of a bad bargain can resonate for longer than the
life of the agreement. Saying and doing nothing is not a
It is not an easy task, but planning and preparing for your next
bargaining round well in advance will help you achieve a successful
Deciding when and how to bargain is an important and often
difficult business decision. A number of factors need to be taken
into account including changes to industrial relations legislation
proposed by the Fair Work Bill 2008 (Cth) as well as
employee perception to reduce the "us" and
As a general rule, planning should commence at least six months
before you expect to begin bargaining and in some cases this may
need to be at least twelve months before the expiry dates of
Failing to plan may result in accepting a commercially
undesirable bargain, the cost of which will generally far outweigh
any additional cost associated with planning. Failing to plan may
disruptive and costly industrial action;
substantial wage increases;
significant restrictions on an employer's ability to manage
its business and implement operational changes (e.g. through
intrusive facilitative, consultative and/or change clauses);
the creation or continuation of an "us" and
"them" mentality; and
erosion of your position in future bargaining rounds.
What to consider when planning?
Bargaining is not a 'one size fits all' process. The
appropriate bargaining strategy will vary between employers and
industries. However, addressing the following matters in the
planning phase should assist in the development of a suitable
Review the terms and impact of current agreements or other
industrial instruments (e.g. award) to determine:
what is negotiable, including any relevant restrictions (e.g.
financial constraints) to such negotiation; and
what is not negotiable – what must be included and
what must be removed;
assess the financial impact of potential wage increases,
including the timing of increases;
communicate with your employees: – how and when (see
facilitate efficient bargaining by:
establishing a suitable timetable for bargaining;
determining who is going to bargain on the employer's
behalf and why;
being aware of your obligations under the current and proposed
industrial relations legislation;
being able to explain why each action is being taken, why each
position is adopted and why certain proposals may be unacceptable;
establish a plan for responding to industrial action if and
when it occurs.
Communicating with your employees
An effective communication strategy is an essential part of any
successful bargaining strategy. Communicating effectively with
employees both before and during bargaining is fundamental in
promoting a focused approach to bargaining.
Communication with employees should:
be clear, concise, informative and accurate;
usually begin before bargaining commences;
inform employees of the status of bargaining, including:
whether bargaining will occur;
when bargaining will occur (e.g. proposed timetable); and
the reasons for the employer's approach (e.g. to explain
why bargaining may be delayed); and
where possible, demonstrate the pursuit of common goals between
the employer and employee.
An effective communication strategy should also identify how the
employer will respond to communications issued by other
participants such as unions. The strategy should also include ways
in which employees can be proactively involved in the bargaining
process (for example, a suggestion box or dedicated point/line of
1 Note that all documents (e.g. strategy papers, emails,
etc) created during the planning and bargaining process may
ultimately be subject to discovery/production orders. Employers
should also develop appropriate protocols for the creation and
retention of documents.
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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Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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