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Australian employers could be heading towards more enterprise bargaining arbitration as organisations feel the aftershocks of the Australian Government’s industrial relations reforms (IR reforms), a survey by Herbert Smith Freehills Kramer (HSF Kramer) reveals.
HSF Kramer’s At the Bargaining Table pulse report of 65 senior leaders and industrial relations practitioners in Australia found that three quarters (75%) believe the enterprise bargaining system has become overly technical and prescriptive, 70% said it gives unions and employees too much bargaining power, and 61% said the reforms have made it more difficult to reach agreement. Only 9% said the current enterprise bargaining system strikes a fair balance between employers and employees.
Employers feel the impact of IR reforms through increased demands on resourcing, less productivity improvements, and higher arbitration risk:Two in five respondents (40%) said they had achieved fewer productivity or efficiency improvements than would otherwise have been the case in the wake of the IR reforms.
Half (50%) said they had invested greater resources to reach agreement, more than a third (36%) said it had taken longer to reach agreement, and nearly half (44%) said they had spent more time in the Fair Work Commission than would otherwise have been the case.
Nine to 12 months is the most common timeframe for an enterprise bargaining round, with many organisations (17%) reporting more than one year. HSF Kramer industrial relations partner Rohan Doyle describes this as “significant”.
“These bargaining timeframes are significant, because after nine months of bargaining, and provided the current agreement has been expired for 9 months, unions and employees are able to request that the Fair Work Commission end bargaining by arbitration. It shows that arbitration is a real possibility in a large proportion of enterprise bargaining rounds. Employers generally view this as a risk, as it means they lose control over the outcome,” Rohan said.
More than half (56%) say the threat of intractable bargaining arbitration is used as a tactic by unions or employees during bargaining. Almost three quarters (74%) disagree that the intractable bargaining reforms have achieved their objective of reducing industrial action or creating stronger incentives to reach agreement quickly.
HSF Kramer industrial relations partner Rachel Dawson said: “It is clear many employers are feeling the impact of the IR reforms through increased procedural and regulatory burden. They have less flexibility to negotiate and are directing resources towards the risk of arbitration rather than achieving timely, productive and sustainable bargaining outcomes which could have long terms benefits for all parties.”
“Employers have brought forward bargaining timelines and adopted more proactive communication and engagement strategies to counteract this, which is fantastic to see, but there is clearly more work to do. More than half surveyed are only somewhat confident they could demonstrate their position is fair and reasonable if intractable bargaining proceedings eventuated.”
Employers prepare for changes to enterprise agreements; big concerns over multi-enterprise agreements: The findings show employers understand that aspects of their enterprise agreements are not supportive of productive or flexible outcomes, with 78% planning some or significant changes. Yet 14% are not intending to pursue changes they believe are needed because the bargaining process is viewed as too difficult or costly.
Only 35% said industrial action is unlikely to change their pre-planned bargaining strategy and 21% (with a further 17% unsure) said their organisation’s decisions are materially influenced by union-led or employee-led print media, social media or political campaigns. 60% are also concerned or extremely concerned that unions may seek to force their organisation into a multi-enterprise bargaining agreement with unrelated employers.
Rohan said: “The fact that pre-planned strategies are changing as a consequence of industrial action and other pressures suggests that there is a degree of misalignment across stakeholders on appetite for risk and that more needs to be done in the pre-planning phase to ensure the strategy clearly identifies that appetite and plans the organisation’s industrial action and bargaining responses accordingly.”
Psychosocial harm is a real bargaining risk: Employers are also reporting potential psychosocial risks as a consequence of bargaining, as 60% had observed stress, anxiety or burnout among employer representatives during their most recent bargaining round. Increased workplace conflict, employee mental health impacts and aggressive behaviour were also reported.
“Broader economic and geopolitical pressures, combined with misaligned expectations, leave both sides with less flexibility and make agreements harder to reach, increasing the risk of psychosocial harm. Employers should plan early and ensure they have the right measures in place to manage those risks,” Rachel said.
Growing employer discontent with the bargaining process: Rohan said this is all contributing to a significant degree of employer discontent with the bargaining system.
“Many employers are grappling with the need to renegotiate a large number of agreements, which puts their teams in a permanent bargaining state. And it is quite common for employers to run multiple unsuccessful employee votes before they can secure a majority yes vote from employees. More than half of respondents said their first enterprise agreement vote was unsuccessful, with many needing to go to vote three or more times.
“This level of resource intensity, the difficulty of reaching agreements, the spectre of third-party arbitration, concerns about being forced into agreements with unrelated employers, and the complexity of the bargaining process are driving employer dissatisfaction with the current enterprise bargaining environment.”
AI conditions emerge in enterprise agreements: AI conditions could also appear in future enterprise bargaining agreements and give rise to disputes. 44% expect that AI protections will need to be included in their next proposed enterprise agreement in order to reach agreement with employees and unions, although only 6% plan to include them. Terms might include protecting jobs, restricting workplace surveillance, or preventing offshoring as a consequence of AI implementation.
“If employers expect AI conditions or limitations to be necessary to reach agreement but do not plan to include them, they should be prepared to clearly demonstrate how existing policies or legislation provide appropriate protections,” Rachel said.
Employers want better negotiation and skills training to improve prospects of reaching agreement: Respondents identified better negotiation training for their bargaining representatives, a focus on interest-based bargaining, and reduced reliance on pattern bargaining by unions as the top opportunities to achieve better bargaining outcomes.
“What has come through surprisingly clearly is that employers feel there is an underinvestment in negotiation skills, with only 30% of their lead negotiators formally trained. Strengthening these skills, and challenging old negotiating patterns that may have worked prior to reforms, will be essential if employers are to achieve better outcomes in a challenging bargaining environment.
“We will be running a negotiation course in partnership with Melbourne Business School for the first time in November to help HR and IR leaders learn the practical skills to negotiate sustainable deals in this post-reform world of enterprise bargaining” Rohan said.
To download our pulse report, visit: https://www.hsfkramer.com/insights/2026-09/at-the-bargaining-table-pulse-survey
For more on the HSF Kramer and Melbourne Business School negotiation course, visit: https://mbs.edu/for-organisations/the-industrial-relations-negotiations-program
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