by Nick Wailes & Russell D. Lansbury

IV. The process of collective bargaining over flexibility

C. Coordinated flexibility

The adoption of coordinated flexibility was in part a reaction to the perceived limitations of managed decentralism in achieving the extent of change needed in patterns of industrial regulation across all sectors of the economy. It also reflected acceptance by the ALP and the ACTU of the arguments put forward by employer associations that improved competitiveness and greater labour market flexibility could only be achieved by allowing determination of outcomes at the level of the enterprise.

Figure 5 indicates the streams of bargaining that were associated with coordinated flexibility in Australia. The intention of these reforms was to make enterprise-based bargaining between unions and employers the primary source of alterations in wages and conditions. This was meant to allow the specification of terms and conditions appropriate to the particular enterprise.

While allowing fragmentation of bargaining outcomes, the coordinated flexibility approach maintained the protective role of the award system. It did so, firstly, by ensuring that enterprise bargains represented no net disadvantage to workers covered by the agreement in comparison with the relevant award. Secondly, it continued to provide a mechanism for the maintenance of wages and conditions through the award system. Safety net adjustments were designed to accommodate workers who could not participate in enterprise bargaining (for whatever reason). Finally, while the coordinated flexibility made provision for nonunion enterprise bargaining, the criteria for ratification of these agreements was more stringent than for union-based enterprise bargains. This was designed to minimize the incentives for union evasion while at the same time provide a mechanism for bargaining for the increasing number of workers who were not members of unions.

Under the coordinated flexibility system, there was been a shift in the focus of flexibility bargaining from the industry-wide level to the enterprise level. Under the managed decentralism system, much of the focus of productivity bargaining related to alterations of industry-wide accords and involved employer bodies and union secretariats. Under the coordinated flexibility system, while these centralized bodies have retained a role in coordinating bargaining approaches, the ability to bargain at the enterprise level has become far more important. This was a challenge to both employers and unions. Employers in Australia have traditionally relied on employer associations to deliver bargaining resources and many have not had experience in negotiating patterns of industrial regulation. In reaction to the changed demands of the coordinated bargaining system, employers have had to develop bargaining skills and employer associations have had to provide a range of new services to meet the changed demands of their members.

Unions in Australia have not traditionally been well organized at the workplace level, with the exception of some sectors. The increased focus on bargaining at the enterprise level has required unions to address workplace organization and to develop the resources needed for bargaining to take place at the enterprise level. Some unions have invested resources in expanded delegate training and increased the number of officials involved in servicing workplaces. However, this has been uneven and many unions are concerned about the increased strain on resources that enterprise bargaining demands. These resource problems have made coordination of bargaining increasingly difficult for unions.

While in theory, enterprise agreements could replace awards under the coordinated flexibility system, in practice, the vast majority of agreements were negotiated as adjustments to and add-ons to awards. In fact, in the adam database only 5 per cent of agreements replaced awards (see Buchanan et al., 1997: 8). This can be interpreted as evidence that the coordinated flexibility system, which provided mechanisms for enterprise-based flexibility bargaining within the framework of an award system, provided sufficient scope for alteration in patterns of industrial regulation to meet the demands of employers. The overview of the scope and scale of changes made during the coordinated flexibility period provides some substantiation of this view.