The debates in the Australian Industrial Relations have been over the relative merits of collective bargaining and compulsory arbitration in their various forms. This is only to be expected when one country, as distinct from virtually all others, applies a unique approach to handling a particular set of social problems (Niland : 1982).


Collective bargaining in Australia is decentralised in that decisions are made in the organization. However, they may be able to make decision for egoist reasons and they may be the benefit wrong reasons (organisational egoism). The disadvantages of Enterprise Bargaining are for the employees and the national interest, employers level and workers level should have conscience for national profit.


Collective Bargaining is the term to describe the activity of employers through which the parties establish and administer rules and conditions of work as well as hours and wages (Chamberlain & Kuhn : 1986).

Centralised Collective Bargaining - It is the degree to which decision making occurs a central level of country. (South Korea, Sweden, Norway and Netherland)

Decentralised Collective Bargaining - It is the degree to which decision making occurs at factory level. (Australia, Canada, Japan and U.S.A)

Enterprise Bargaining presents a devolutionary stage in the dismantling of Australia's centralised wage bargaining system.

Aim of Enterprise Bargaining

to facilitate workplace level change designed to help enterprise respond to the above external pressures.

To increase competitiveness.

Reduce operating and labor costs.

Increase operational and labor flexibilities and intensify the work effort.
Function of Bargaining

Setting conflict

Regulating union / Management relations


Employee participation

Procedures of Bargaining

The Procedures employers and employees follow to discuss, explore and debate proposals range from formal to informal and from simple to complex. Whatever procedures the parties use to conduct their negotiations, they negotiate some of the nation's most important economic decisions. For example, one agreement may change the labor costs of a single company by millions of dollars (Chamberlain & Kuhn : 1986).

Dimensions of Bargaining

There are three views of collective bargaining.

The marketing concept looks upon collective bargaining as a means of contracting for the sale of labor. It is an exchange relationship.

The government concept views collective bargaining as a constitutional system in industry. It is a political relationship.

The industrial relations concept views collective bargaining as the systemisation of a functional relationship.

Advantage of Enterprise Bargaining

Facilitates organisatonal change - it can negotiate specific rules for their specific circumstances.

Sensitivity to firm's external environment - make it easier to adapt agreement to the enterprise needs especially when economic recession or competition.

Increase employees participation levels - employees need to consulted more so that the agreement can tailored for the firm.( It happens when there is collective groups, employees and employers have the same power).

Enhances union / management relationship at the shopfloor - provide for more understanding - stability between employees and employers have ownership or agreement.

Disadvantage of Enterprise Bargaining

Level of industrial conflict
- Clegg (1976) says the increase of industrial of industrial dispute union can call at employees easily.
- Agreement is the dispute - depends on the procedure available to solve dispute or sanction available.

Public national interest is neglected.
- Under decentralised system - not possible to address with enterprise bargaining.

Potential for lack of consistency with government policy
- unlikely to confirm with government employer policy in the participation
- Government can try to influence the sort to issue taken up national level - not at the firm level and can do it with tripartite level.

Neglect of egalitarian / equity objectives
- strong union in decentralised can get good wage higher than the union which are poorly.
e.g) women's wage

Pressure on orgaisational resource (money, time, expertise)


Collective Bargaining is decentralised in Australia. Decisions are made in their organization. However, the power of employers is increased so they may be able to make decisions, which threaten the national interest : organizational egoism in the national dimension.


Creighton B. & Stewart A, 1994, Labor Law

Gardner, M. & Palmer, G, 1997, Employment Relations

John Niland, 1982, Collective Bargaining and Compulsory Arbitration in Australia

Neil W. Chamberlain & James W. Kuhn, 1986, Collective Bargaining

Robyn Alexander & John Lewer, 1992, Understanding Australian Industrial Relations

Stephen Deery, David Plowman & Janet Walsh, 1997, Industrial Relations

Tom Keenoy & Di Kelly, 1996, The Employment Relationship in Australia

What are the advantages