Enterprise Bargaining

The term enterprise bargaining refers to the negotiation process that takes place at the "Enterprise Level" between representatives of the business owner and representatives of the workers to fix wages and conditions of work for all employees at the enterprise.

Enterprise bargaining is very different to centralised wage fixation, where wages are not determined separately, enterprise to enterprise, but on a national level. Under a centralised wage fixation regime, a job would be paid the same irrespective of the region, size of business or economic circumstances. However, with enterprise bargaining, the same job may be paid differently in different enterprises.

The rationale for enterprise bargaining is that it is thought to be more beneficial to the nation's economy than centralised wages fixation. If a company is struggling financially, it can negotiate with employees to have smaller wage increases or if the company needs to lift productivity, it can negotiate with employees to provide increases in pay in return for productivity improvement. Productivity, is greatly important to the nation's economy.

In the negotiation process, employees may call upon the expertise of a 3rd party to assist with negotiation and to represent the interests of the workers. Usually this party will be a Union. The employer is also free to hire a consultant to bring expertise to the bargaining table.

A successful negotiation process will result in the parties establishing an "Enterprise Agreement" which becomes legally binding.

In reality, the outcome of Enterprise Bargaining is that there is often greater benefit for employers than for employees. Although, employees are often paid more, they are usually caused to work longer hours, undertake more complex work, and spread the work among fewer people.


Event operations manual
Software for Treasurers
how to create a financial model