Enterprise Agreements in a CDC Environment? Damien Ryan Executive Manager, Workforce & Safety

©Leading Age Services Australia - Victoria Australian IR Framework National Employment Standards (NES) Modern Awards Enterprise Agreements –Mandatory content –Unlawful content –Better off overall test (the BOOT) Approx 59% of community aged care employees are covered by an enterprise agreement (based on a 33% survey response rate in 2012) Source: Fair Work Australia 19 October 2012

©Leading Age Services Australia - Victoria Benefits of enterprise agreements Standard and stable conditions –No extra claims –Formal process to resolve disagreements and build trust –Avoids bargaining multiple individual arrangements Adapt award conditions to suit the workplace –Increased flexibility (e.g. hours of work) –Increased wages & conditions –Increased productivity & competitiveness

©Leading Age Services Australia - Victoria Are these benefits under CDC? Is there a risk in stable conditions? –Ability to adapt to changing environment –Collective negotiations can create an adversarial environment and impact morale There are limits to how much award conditions can be changed by an EA –NES –Modern Award –BOOT Can award conditions be changed outside an EA? –Which is the greater burden on resources?

©Leading Age Services Australia - Victoria Majority Support Determinations If more than 50% of employees want to bargain for an EA and the employer refuses, they can apply to the FWC for a majority support determination This requires the employer to bargain in good faith, but does not require the employer to reach agreement

©Leading Age Services Australia - Victoria Current bargaining claims Unions –Wage increases of 4-5% pa –Increased penalty rates –Increased minimum engagement –3-4 year agreement –Additional leave –Extend travel allowance application –Extend client cancellation notice period –Roster change restrictions

©Leading Age Services Australia - Victoria Current bargaining claims Employers –2 year agreement –Minimum shift lengths –Notice of shift changes –Classification structures –Span of working hours –Flexible ordinary hours –Personal leave requirements

©Leading Age Services Australia - Victoria The enterprise bargaining process Fair Work Commission Draft Enterprise Agreements Benchbook us/consultation/draft-enterprise-agreements- benchbook

©Leading Age Services Australia - Victoria The enterprise bargaining process Notice of Employee Representation Rights Bargaining representatives Good faith bargaining requirements How long can bargaining take? Role of the FWC Voting on proposed EA Approval process (incl BOOT)

©Leading Age Services Australia - Victoria Summary of EA bargaining preparation

©Leading Age Services Australia - Victoria Summary of EA bargaining preparation Business Strategy & Employer Proposals –Align EA objectives to overall business strategy –Stakeholder analysis & internal consultation –Industry research, trends & constraints –Brainstorm, cost and confirm employer proposals

©Leading Age Services Australia - Victoria Summary of EA bargaining preparation Negotiation Strategy & Employee Communications –Identify challenges, risks and mitigation strategies –Ensure thorough costings& test assumptions –Determine bargaining approach & best alternative to a negotiated agreement (BATNA) –Develop Communications Plan & draft communications in advance

©Leading Age Services Australia - Victoria Summary of EA bargaining preparation Negotiation Team & Resources –Determine ‘Project’ governance structure –Determine resource requirements of Negotiation Team & Working Group (preparation through to implementation) –Are external consultants & legal required? (don’t underestimate the importance of EA clause drafting and the FWC approval process) –Don’t under-resource EA implementation

©Leading Age Services Australia - Victoria Conclusion Under CDC there is no ‘best way’ to manage your employee conditions The ‘most appropriate way’ will depend upon –Client needs –Organisation size and funding –Strategic plan/objectives –Labour market and bargaining power