Enterprise agreements plummet as employers abandon the system altogether

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The Fair Work Commission have released recent data revealing enterprise agreement (EA) approvals have reduced significantly.

Over the past six months to August, the data shows the median time for approving EAs has more than halved from its peak of 76 days to 35 days. Data also revealed the queue to have an agreement approved had fallen from a peak of 2,063 in January to just 660 in early August.

However, Employsure’s managing director, Ed Mallett, said the decline in enterprise bargaining timeframes were the not entirely due to ‘process efficiencies’ but, also the demonstration that, “employers are abandoning enterprise bargaining altogether, because the process is far too complex to navigate,” he said. 

Mr Mallett said employers lacked confidence in the process due to complications and uncertainties of the system: “A key reason for the recent decline in enterprise agreements has been the lack of discretion that the Fair Work Commission has had to approve enterprise agreements when very minor procedural or technical errors have been made by one or more of the parties. As a result, employers don’t have confidence in the resource-intensive system that has a history of failing to deliver real productivity as intended.”

Mr Mallett points to historical examples of Fair Work Commission decisions that have triggered the demise of enterprise bargaining such as expired agreements at Coles, Woolworths and other retail giants causing many employers to reconsider the viability of EAs.

“These are cases and issues demonstrating how the bargaining process has become a 'minefield.' As a result, many employers are deciding that the enterprise bargaining system is just too much trouble to bother with.”

Last year, only 65 per cent of agreements requiring undertakings passed the BOOT test threshold and in 2016, that figure was just 35 per cent. 

Mr Mallett welcomed industrial relations minister Christian Porter’s promise to, explore improvements in timelines to make the system simpler and less resource-intensive, as part of his review of key industrial relations issues.

"We are in full support of examining the current enterprise bargaining system in Minister Porter's upcoming reviews of poor performing elements of Australia's industrial relations system. We need employers and employees to be able to negotiate their relationship terms in a productive and constructive way,” said Mr Mallett.
 

 
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