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Tag Archives: negotiating

27 April 2009 8:53am

Employers that underestimate the proficiency of trade unions and neglect to do their homework in the lead up to enterprise-agreement negotiations are unlikely to “exert control” at the bargaining table, says Deacons partner Martin Osborne.

“Despite popular perception unions are generally very well organised,” Osborne told HR Daily.

“They often come across as dishevelled or disorganised,” he says, “but are more switched on than a lot of employers.”

Osborne says that unions tend to approach the bargaining table equipped with a number of well-developed and comprehensive bargaining strategies and contingency plans, while many employers enter the first round of meetings unprepared – and start planning from there.

They should start planning up to a year in advance, he says.

A failure to do so, according to a recent Deacons report, may result in a “commercially undesirable bargain”, and can lead to:

disruptive and costly industrial action;

substantial and unfeasible wage increases;

operational inflexibility and restrictions on implementing change;

an ongoing and destructive “us and them” workplace culture; and

the erosion of the employer’s status in future bargaining rounds.
Examining previous agreements
Osborne says that employers should start by examining the process and results of previous negotiations.

Bargaining is a bit like “groundhog day”, he says. The majority of issues are the same every time.

Employers must determine what worked – and what didn’t – in the previous agreement, and cost alternative scenarios. They should establish a set of goals and ensure that their bargaining objectives can enable improvements in business outcomes.

“Employers don’t want cost-neutral developments,” he says. “They don’t want to go backwards from the last deal.”

Employers should also review “met commitments”, Osborne says. “Sticking points” in the bargaining process often go unresolved, he says, and stakeholders can end up making commitments they can’t live up to.

A failure to meet a commitment from the previous agreement might need to be explained and defended, he says. If the failure is on the part of another stakeholder, it can be used as a bargaining chip.

Research key
According to Osborne, employers must also prepare for the bargaining process by researching:
internal demographics to determine future costs relating to maternity leave, the ageing workforce and other factors;

other industries, to see what competitors are doing; and

the political environment, especially where organisations are dependent on government work, or vulnerable to the effects of legislation.
Employers would also be prudent to examine union and employee “drivers”, Osborne says.

“Different unions have different drivers and approaches to enterprise bargaining,” he says.

Unions are “not always driving worker imperatives”, he says, and have different “commercial drivers” to business.

“Bargaining can be difficult if you don’t know where [unions are] coming from.”

Industrial-action contingency plan
An industrial-action contingency plan can help “keep the wheels turning” should negotiations stall, Osborne says.

In the months leading up to a new bargaining round employers could consider increasing production – where possible – or explore alternative labour options to prepare for a possible strike.

They should seek advice to determine their legal options – such as the right to seek orders to halt industrial action – and use surveillance to document illegal activity should things get out of control.

BHP Billinerals Adam Morton
April 22, 2009

AUSTRALIA’S big miners are pushing for a merger of 11 industry bodies in a bid to cut costs and centralise lobbying power under the Minerals Council of Australia.

Organisations targeted under the plan include the Australian Coal Association, the Australian Aluminium Council, the Australian Uranium Association and state and territory minerals councils.

A letter signed by chief executives at 11 companies, including BHP Billiton, Rio Tinto and Xstrata, says it would “improve national consistency” and reduce a combined operating cost topping $45 million a year.

“Quite simply, we will not continue funding organisations as separate entities to the Minerals Council of Australia as we have previously,” it says.

Sent on the eve of Easter, the letter has angered some industry bodies and their junior member companies.

Most declined to speak, but industry insiders said they feared concentrating power in Canberra would strip some commodities of representation and deny others a strong voice at state level, where much of their business lies.

Tony Fawdon, executive chairman of minerals explorer Diatreme, said the Queensland Resources Council had been crucial in the industry winning $50 million from its State Government in 2006.

He said the national minerals council sat in an ivory tower with little idea of what happened at state level.

“Frankly, I don’t think the (minerals council) is going to have any practicality at all — the bigger the company, the bigger the chamber, the less hands-on the practitioners are at the top of it,” he said. “How are you going to cut up a very, very thin cake of funding across the states?”

Minerals Council chief executive Mitch Hooke said the plan was a commonsense approach that would “enhance regional capacity, not diminish it”.

He said the states would continue to be represented by branches within the national council, as Victoria had been since a merger in 2004. The Northern Territory Resources Council had already volunteered to take part.

“The goal is alignment of advocacy, the goal is improved efficiency and effectiveness,” Mr Hooke said. “If Victoria is anything to go by, the regions are richer for working within the national secretariat while maintaining autonomy to deal with the state issues.”

Mr Fawdon said this meant little: the Victorian minerals council was “pretty toothless”, unlike its counterparts in Queensland, South Australia and Western Australia.

Mr Hooke will convene an implementation committee to be chaired by former Newmont executive Paul Dowd.

Other companies backing the plan are Anglo Coal, Downer EDI, Barrick Gold, Minara Resources, Newcrest Mining, Ausminerals, Thiess and Newmont Asia Pacific.

Several industry bodies declined to comment.