by Nick Wailes & Russell D. Lansbury

I. The types of flexibility introduced
. . V. Outcomes of collective bargaining on flexibility

B. Comparisons with the parties' initial positions and outcomes of collective bargaining

It is difficult to capture the "process" of bargaining in order to compare the final outcomes with the initial positions adopted by the parties unless a study is conducted over the course of a collective bargaining activity. Nevertheless, there are a number of case studies (such as ICI Botany) which demonstrate how employers and unions have negotiated new working arrangements involving a tradeoff between increased pay in return for greater flexibility (see Mealor, 1996). There are also examples of innovative provisions which can be gleaned from registered enterprise agreements in which the parties have agreed to more flexible arrangements as part of the bargaining outcome. Examples of some innovative provisions, drawn from the Agreements Data Base and Monitor compiled by ACIRRT (#12 1997) are shown in table 10. Some of the more interesting clauses which provide for increased flexibility (both numerical and functional) include references to continuous improvement, teamwork and skill formation.

One industry in which there have been significant tradeoffs between wage increases and greater flexibility is building and construction. This industry plays an influential role in determining broader wage trends across the Australian economy, so that innovative practices in the industry can have wider ramifications. A comparison of recent collective agreements in the construction industry with agreements in all other industries (table 11) shows that they contain a number of innovative provisions.

Compared with other industries, construction agreements are more likely to have:

-- unions as party to the agreement

-- training provisions

-- occupational health and safety provisions

-- teamwork provisions

-- use of contractor clauses

-- consultation provisions

-- grievance clauses.

While many of these provisions are likely to enhance flexibility, the influence of strong unions in the construction industry is reflected in the higher incidence of "employee oriented" provisions such as training, occupational health and safety and consultation.

As the construction industry has been at the forefront of the trend towards collective bargaining in Australia, it is useful to compare agreements registered in 1996 with an earlier generation of agreements from 1991-93. It may be somewhat surprising to observe that the earlier agreements were more comprehensive and reflected a more diverse agenda, with a higher proportion dealing with employee focussed issues such as training, teamwork, consultation and grievances procedures. As shown in table 12, the earlier agreements also included more references to traditional management concerns such as changes to hours of work, use of contractors, performance indicators and performance-based pay arrangements. By contrast, recent agreements reflect the tradeoffs which have been negotiated in the construction industry for above-average level wage increases.

Recent agreements are more likely than earlier agreements to include references to the following:

-- no extra claims provisions

-- averaging of working hours

-- absorption of penalty payments for overtime work, etc.

-- 12-hour shift arrangements.

Less prevalent in recent agreements have been training provisions, performance-based pay arrangements and performance indicators. The diminished importance given to the latter provisions may reflect difficulties that a number of employers have found with the implementation of such arrangements in earlier agreements. It would also appear that considerable experimentation is occurring with different forms of flexibility and tradeoffs as both employers and unions become more experienced with collective bargaining, especially at the enterprise level.

New tradeoffs have also become evident in a number of recent major agreements in construction. A two year agreement by a major building company linked the entire 15 per cent wage increase to productivity targets. By contrast, another agreement in the industry contained a 10 per cent wage increase over two years. All previous allowances were absorbed into the new wage. Some of the items typically included as allowances are for tools, additional responsibilities and certain disabilities (see adam Report, No. 12, 1997).

An oft-cited example of innovative bargaining at the enterprise level in order to achieve more productive and flexible outcomes has been the ICI chemical plant at Botany in New South Wales (see Mealor, 1996). The plant had a reputation for frequent disputes, low levels of productivity and faced an uncertain future at the end of the 1980s. In February 1989, the complex was completely shut down by a two-week strike and legal action was mounted by the company against the unions on site to recoup losses estimated at AUS$24 million. The litigation was not pursued and the strike was settled, but it marked a turning point in industrial relations at ICI. Changes were made in both management and union personnel and negotiations for a new enterprise agreement were conducted over a six month period. The new ICI Botany agreement, which was concluded in August 1989, became something of a landmark in Australian industrial relations.

Some of the main provisions were as follows:

-- annualized salaries which included all other payments such as shift allowances, average overtime and meal allowances; no other payments were made

-- improved quality of work and social life through work rosters designed by the workers themselves

-- training, access to career paths and payment for skills acquired and used

-- simple status employment which has given workers entry to a much better superannuation scheme

-- unlimited sick leave in genuine circumstances

-- formalized worker participation and self-management.

Since the first agreement was signed, there have been exceptional gains in productivity at ICI Botany as well as significant improvements in other indicators such as absenteeism, workforce attrition and industrial disputes. Although the external environment has been turbulent and the chemical industry has experienced considerable uncertainty, the Botany site has survived. While many workers and managers were sceptical about the long-term viability of the collective agreement signed in 1989, it has been renewed several times over the past decade and is regarded as a major success in Australian industrial relations reform at the enterprise level. In the words of one of the shop stewards who was involved in the initial negotiations: "The site has survived and is prospering for the common good ... There seems little doubt that the labour process has been democratized and the tenure of the program and depth of cultural change suggests that it is not ephemeral" (Mealor, 1996, 142).