In December 2022, the Fair Work Legislation Amendments (Secure Jobs, Better Pay) Act 2022 (Cth) came into force, impacting the system of EAs.

Employers should avoid engaging in reactive bargaining and view EA negotiations as a two-way collaborative process to create terms and conditions that benefit employees and the business. Undertaking due diligence and preparation before negotiating is vital for a mutually beneficial outcome.

If your business is engaging in EA negotiations, this article provides tips to help your business prepare and implement a robust and productive strategy.

1: How does your EA compare to the modern award?

Since their inception, modern awards have been continuously re-drafted and updated by the Fair Work Commission (FWC). Before determining which EA terms and conditions you intend to change, it is important to understand how your EA compares to the underlying modern award.

We’re all busy, and you may have missed some changes. The Victorian Chamber’s experienced workplace relations consultants can help review and ensure your EA is still superior to the terms of the modern award and/or will pass the better off overall test (BOOT) before considering which changes you would like to pursue.

2: What are your competitors doing?

Even though an EA is an agreement between a business and its employees, it is important to know how your terms and conditions stack up against other businesses in the industry.

While your competitors’ EAs will have no impact on your ability to obtain EA approval, benchmarking against your competition can aid your recruitment and retention strategy and put you in a better position to respond to claims from an employee bargaining representative or the union that your wages are uncompetitive. There may also be other factors to consider as wages are just one part of the equation.

3: Know your financial position

It is crucial that businesses have a thorough understanding of their financial position and limitations before starting negotiations. Make sure you set some clear bargaining parameters before considering which terms and conditions can or cannot be accommodated. This will help provide informed responses and set expectations for negotiations.

4: What are your bargaining objectives?

Some businesses view EA negotiations as a one-way street to determine which employee claims can be accepted or rejected. However, they should be viewed as a collaborative process. Employers should take the opportunity to consider in advance which terms work well, which are problematic, which are ambiguous or potentially incorrectly applied, and which can/should be amended to enhance flexibility, productivity, cost reductions or a combination of these.

Often the best feedback will come from your people. Speak to heads of finance, operations, people and culture and payroll staff to find out what changes they would like to see (and why).

How the Victorian Chamber can help

The Victorian Chamber has a team of Workplace Relations and Health, Safety and Wellbeing advisors and consultants. The team has a wealth of experience to support your business and inform you about the terms and conditions for your EA. For more information or to access our consulting services call us today on (03) 8662 5222.