In 1989, the Business Council of Australia produced a blueprint for change entitled ‘Enterprise Based Bargaining Units: a Better Way of Working’. To a great extent, this document and the corresponding shifts in business, government and union approaches to wage and conditions determination meant Australia shifted from a centralised to a workplace system of bargaining. After more than two decades of enterprise bargaining though, the notion of Australia’s productivity performance seems to be in the news every week. It is one of those topics that everyone seems to feel qualified to have an opinion and often, those opinions are just that — free from theoretical perspectives or empirical evidence. We have politicians offering views, former and current Presidents of the Fair Work Commission, union and business representatives but it is more pervasive — it has become a topic of conversation in the backyard BBQ (at least within certain circles!).
In a paper drawing from their ARC Linkage Grant with Private Sector Industrial Relations division of the Queensland Government, WOW membersKeith Townsend and Adrian Wilkinson ask — is enterprise bargaining still a better way of working? Does it contribute to productivity gains in the workplace? While the BCA pointed to a multitude of advantages; Townsend and Wilkinson look at the other side of the argument. Decentralisation may be inefficient at a number of levels. First, there is the procedure of bargaining and the resources, expertise and time that is required. Second there are the outcomes of bargaining where despite a more individual focus, outcomes in many cases demonstrate very little variation across enterprises. Finally, there are the collateral consequences of bargaining — conflict, reduced trust and disruption.
At a time when policy makers are concerned about Australia’s productivity levels and are considering changes to the regulations surrounding enterprise bargaining, Townsend and Wilkinson’s paper (published in the Journal of Industrial Relations in early 2013) provides evidence about whether enterprise bargaining still meeting the needs of the actors or has the model run its course?