Employment Relations May, 2011

What is Employment Relations? Legislation is not the critical factor… …Employee Engagement is Strengthening the direct relationship between employees and management A strengthened relationship brings about the creation of greater employee ‘ownership’ in the Company’s performance Whilst providing greater rewards for employees, customers, the business and its owners (shareholders)

Who Are The Stakeholders in the ER Process? Employees - Earn money, have job satisfaction Employers - Want to increase profit and return to shareholders Employer Associations - Advise employers on their rights and obligations Unions - Represent their employees Government Organisations - Implement policies eg. Workchoices and Fair Work Australia (FWA)

How is ER Success Defined? Company/ Employer’s Perspective Third Party/ Employee Representatives’/ Union’s Perspective Federal/ State Government’s Perspective Employment Relations Success = Employee Engagement => Company Results Employment Relations Success = Employee Dis- Engagement => Org/Union Results Company Results = Votes! & Govt Funding +

Employment Relations Framework GENERAL BENEFITS (eg) Safety support Leave Superannuation Company Discounts Employee Assistance The Company’s Goals/ Visions – ultimately creating shareholder value We all share a commitment to live by the principles of OUR VALUES Achievement Entrepreneurship Ownership Teamwork REWARDS AND RECOGNITION (eg) Attractive Pay Bonuses/Incentives Employee Share Plans Skills and Career Development Career Opportunities Under a COLLECTIVE AGREEMENT Everyone shares the same arrangements Generally negotiated by a third party on your behalf Protected by Statutory Law Each individual’s employment conditions are protected by either a Collective Agreement/ Individual Contract Under an INDIVIDUAL CONTRACT with RB There is scope for variation/flexibility in your arrangements Discussed directly between you and your manager Protected by Common Law Underpinned by minimum employment entitlements protected by law for ALL employees The Employee Benefits and Terms & Conditions the Company provides OR

Historical Employment Relations Snapshot Pre-Workchoices Seen as very bureaucratic/ complex Industrially disruptive Excessively litigious Cynically “too Union friendly” Workchoices Simplified legislation Formal industrial disruption minimised Still rather litigious Cynically “too Employer friendly” Post Workchoices (FWA) Complexity creeping back in Took Company’s & Unions a good months to get their head around it Opportunities for industrial disputes opened Yet to see this come to fruition Lawyers are always going to make a lot of money out of this Cynically: “still in the Employer’s favour but foundation is there if Labor is re-elected”

FWA Overview Federal Government’s new Fair Work Act took effect on 1 July 2009 Caught many Companies and Unions off guard – IR hiatus As part of Fair Work Australia, a new modern award structure and 10 National Employment Standards commenced from 1 January 2010 These awards and standards underpin all individual and collective employment contracts Key changes: Impact of changes has been minimal… at this stage The state of the economy has enhanced stability State Legislative impact minimised Provisions regarding flexible employment Push to provide employees with more flexibility in terms of work/ life balance Enterprise Bargaining Process Encouraging the use of third parties Workchoices effectively removed them from the equation Union Right of Entry Promoting Good Faith Bargaining Dispute Settlement Procedures Re-introduced 3 rd parties Unfair dismissal Push to settle through Conciliation NOT through Arbitration

What has this meant to RB? Impact of changes have been minimal… at this stage Managing effective Employee Engagement (and hence ER) requires dealing in a world far beyond FWA legislative requirements The consequence of not doing so puts you at the mercy of competitors, not the FWA State Legislative impact minimised Most Global and large employers only deal with Federal Legislation Provisions regarding flexible employment Increasingly a major draw card for employees (more importantly talented employees) Trend in Australia regarding work expectations has become rather alarming Company’s have yet to warm to this notion Provides a real challenge for HR to manage Enterprise Bargaining Process Encouraging the use of third parties Hasn’t presented any major issues yet Promoting Good Faith Bargaining Appears to have worked although has proven difficult to challenge Informal industrial action (sick leave; workers comp; go slow) Dispute Settlement Procedures Essentially business as usual Not in the business of denying employees representational rights Unfair dismissal Expectation to settle ($) during conciliation no matter how strong your case is

Employment Relations Questions?