Executive Monograph

The Transformation of Australian Industrial Relations

*** This series is now complete ***

Changing Bargaining Structures - Executive Monograph Series No 4 (June 1999)

Executive Summary

- Compared with just a decade ago, bargaining structures in Australia are far more decentralised. The survey data reported on in this paper suggest that at the average Australian workplace with more than 20 employees, over half the non-managerial workforce no longer depend on awards for the determination of wages and employment conditions. Instead, their wages and conditions are largely dependent on agreements negotiated at the workplace and/or enterprise level. Indeed, a classification system developed in this paper suggests that two-thirds of all workplaces are pursuing industrial relations strategies which place emphasis on either enterprise/workplace-level or individual-level bargaining, and are no longer content to rely on awards. Moreover, this trend towards reliance on agreements is expected to continue.

- Most workplaces can be classified as adopting one of three clear alternative bargaining strategies - collective bargaining, individual bargaining, or reliance on industry- and occupation-based awards.

- Identifying the factors driving change is difficult. What is clear, however, is that managers typically see agreements, irrespective of whether they are collective or not, as more conducive to achieving better outcomes for their firms and promoting improved relationships between management and employees.

- The choice between collective and individual agreements is constrained by the presence of trade unions - workplaces with a well organised union presence will almost certainly pursue a collective bargaining strategy.

- The large majority of workplaces with collective agreements reported `formalising' at least one of those agreements, with the main considera-tion being the greater ease with which the conditions and terms specified in formalised agreements can be enforced. Not surprisingly, informal collective agreements were found to be concentrated in small, non-union, private sector workplaces, especially in the retail trade and accommodation, cafes and restaurants industries. In addition, they were also found to be quite common at workplaces employing relatively large numbers of highly skilled workers.

- Formalised individual agreements are still comparatively uncommon - less than one-in-five workplaces with individual agreements reported that such agreements had been approved by a relevant statutory authority. Moreover, it was quite difficult to identify workplace characteristics that were associated with the likelihood of formalising individual agreements.

- A small but still sizeable proportion of workplaces with collective agree-ments have negotiated those agreements without union involvement. The majority of these non-union agreements, however, lie outside the purview of industrial tribunals and commissions. Compared with union agree-ments, these non-union agreements tend to have lower rates of employee coverage and are less likely to be modelled on other agreements within the industry. Like individual agreements, these non-union agreements were most common in small private sector workplaces and firms.

- The survey data suggest a rising involvement of management in work-place industrial relations matters in recent years. It is argued here that this finding is consistent with the hypothesis that it has been the greater scope for bargaining at the workplace that has been instrumental in facili-tating this change.

- There is evidence to support the strategic choice framework of industrial relations, with management strategy found to be of large importance at workplaces adopting bargaining strategies (especially collective bargain-ing) and relatively unimportant at the award dependent workplaces.

- Subjective measures of management style were found to vary with bargaining structure, with the individual bargainers exhibiting the greatest commitment to team work, consensus and human resource management as an important feature of overall business strategy.

- It is difficult to attribute much, if any, of the decline in trade union mem-bership in recent years to changes in bargaining structures. Greater scope for formalised individual employment arrangements has the potential to undermine trade union activity, but the incidence of such arrangements is still quite low. Collective agreement-making, on the other hand, appears to have facilitated increased dialogue and cooperation between unions and workplace management, but this has not translated into additional paid-up members.

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