The mere thought of enterprise bargaining has been known to instill dread in even the most seasoned HR professional. At KPMG, working with our clients, we know it doesn’t have to be this way.
Our Workplace Relations Advisory team has deep experience of enterprise bargaining and developed a model to ensure the enterprise bargaining process is a smooth one – and one that benefits everyone.
In the third article of our defence workforce series, we explore five key issues for Australia’s land and maritime defence industry to have top of mind when prepping for enterprise bargaining.
Understand your operating environment, your business requirements, and what your people prefer particularly in the manufacturing and defence industry sectors, where trade unions have had historically high levels of influence, the priorities, tactics and influence of unions are important, but so too is your own view. The first thing an employer ought to do is take a good look at what is going on in their own house. Ask yourself whether the business understands its operating environment, its business requirements, and what employees want.
The operating environment:
Financial modelling is a mark of a mature enterprise bargaining strategy. In our experience, a financial impact model is an extremely useful tool for the executive and negotiation teams to use to understand the value of any adjustment to an existing or proposed enterprise agreement. A financial model with a clean and intuitive dashboard allows the average user to alter the input variables and clearly see how this impacts the bottom line. This is powerful in three key ways:
The most effective negotiation tactics at the bargaining table are likely to come to naught if they are not backed up by a persuasive employee communications campaign. After all, if employees are not motivated to vote “yes” at the ballot box, there is no agreement.
There are many factors that contribute to effective internal communication. In our experience some design principles are particularly relevant to enterprise bargaining. These are:
It is tempting to seek to negotiate all reform priorities in one enterprise agreement. However, in our experience, where a business wants to transform operations, iterative reform over the long-term is much more sustainable. Experience tells us that developing an enterprise agreement strategy that maps a path over several horizons brings the best results. Focus on identifying reforms that need to be achieved in the current round of negotiations. These may include reforms that deliver the best productivity improvements and focus your energy on these. Other reforms, although important too, may be better bundled into the next round of negotiations.
Some new entrants to the defence industry in Australia may well have the benefit of pursuing a Greenfields Agreement. A Greenfields Agreement is an enterprise agreement that is made in relation to a new enterprise of the employer before any employees are employed. Where a Greenfields Agreement is an option, we recommend giving this genuine consideration as soon as possible because the negotiation process tends to be more streamlined.
There have been many unfortunate instances where an organisation has implemented a comprehensive and diligent bargaining process, but makes a seemingly innocuous compliance error that proves critical and unravels the entire process. For example:
Non-compliance may void an otherwise sound enterprise agreement, and the negotiation process may need to be repeated. The time, cost and reputational damage caused by having to go back to the bargaining table can be significant. It is therefore vitally important to check and double check your work so that you can tick the compliance box with absolute confidence.
With the right strategy, you can be well-prepared and be assured that the strategic and operational requirements will be met or facilitated through the enterprise agreement. The key is to be proactive, mindful of your workforce and put in the hard yards early on.
©2020 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance.