by Nick Wailes & Russell D. Lansbury

III. The sources of flexibility
. . A. The sources of flexibility

The effect of legislative change has been to place increased emphasis on workplace agreements as the primary form of regulating wages and conditions within individual enterprises. This has mainly taken the form of enterprise agreements concluded between unions representing the workers in an enterprise and individual employers (sometimes with the assistance of employer association negotiators or private sector consultants).

While provisions have existed for the ratification of nonunion collective agreements at the workplace since 1993, they have not developed into a major source of collective agreements. Some, including many employer organizations, have argued that this reflects the more onerous standards that were applied to the certification of these agreements. However, there are alternative explanations for the slow growth of nonunion collective bargaining in Australia. First, it can be argued that employers have been able to introduce the types of changes they are seeking in consultation with unions and have not found a need to eliminate the role of unions. The substantial changes in areas like working time arrangements that have been achieved through union-based bargaining (detailed in part I, D) provide some support for this argument. Secondly, where employers have not been faced with employees represented by a union, it is conceivable that they have been able to introduce changes without the need to incur the costs of consultation. Two of the very few nonunion-based enterprise bargains to have been concluded, one at Optus, the second telecommunications company, and the other at CRA's Weipa mine, have involved the introduction of sophisticated employee involvement and consultation schemes. This implies that employers must have an incentive to involve their employees on a collective basis and that only certain types of workers are able to involve their employers in collective bargaining without the aid of unions. Recent legislative changes which ease the restriction placed on nonunion enterprise agreements may, in fact, increase the incentives for union avoidance by management and increase the scope of unilateral management decisions over wages and conditions.

Many of the changes detailed in part I which have the potential to increase different aspects of labour market flexibility have been introduced through enterprise agreements concluded between unions representing workers in an enterprise and individual employers. These have generally taken the form of unions trading off award restrictions and agreeing to changes in exchange for increases in wages. Increased flexibility in the allocation of labour, the use of non-standard employees, changes in working time, changes in forms of remuneration and changes in the form of work organization have all been possible through this form of collective bargaining. The extent of the changes that have been introduced suggests that unions are not a major impediment to the introduction of changes in workplace practices and rather the major determinant of change is the extent to which management perceives a need to introduce changes. As researchers at ACIRRT have shown, there are clear industry effects in the extent to which different changes are introduced. While this may reflect some pattern bargaining on the part of unions and employers, it also reflects the importance that market factors and labour process (which differ according to industry) play in determining patterns of labour market regulation.

While enterprise bargaining between unions and individual employers has been the source of considerable change in the determination of wages and conditions, not all employers or workers have been able to, or have sought to, use this form of collective bargaining. Almost one-third of Australian workers continue to have their terms and conditions of work determined by awards concluded at an industry-wide level. As has been shown, these workers have experienced declining real wages because of the limited character of safety net wage increases introduced by the AIRC. At the same time, many awards were substantially restructured during the late 1980s. Award restructuring removed a range of "restrictive work practices", including removing restrictions on working time, reducing the number of different job classifications specified in awards and removing many of the features that had resulted in demarcation disputes in the past (Rimmer and Zappala, 1988). This combination of real wage restraint and substantial changes to factors which can potentially increase labour market flexibility in the award stream may have given some groups of employers as much change as they needed to adjust to market pressures.

Changes which further erode the coverage and comprehensiveness of this traditional collective bargaining stream may not, therefore, substantially increase the extent of labour market flexibility. Furthermore, the growth of formalized collective bargaining at the enterprise level has been able to deliver a wide range of patterns of wages and conditions. In as much as flexibility in the labour market can be measured by the range of different outcomes that are possible, then labour market flexibility may already be high in Australia.