Economy

Small business lessons from big business IR strategies

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Australia’s big corporates are acting now to lock-in close relationships with staff forged under WorkChoices in an attempt ride out the coming upheaval in industrial relations regulations.

Australia’s big corporates are acting now to lock-in close relationships with staff forged under WorkChoices in an attempt ride out the coming upheaval in industrial relations regulations.

And, according to IR experts, there is plenty that small and medium size businesses can learn from the strategies that the big end of town are trying to implement.

Telstra, BHP Billiton, Rio Tinto, Cochlear and Qantas are just a few of the companies that are taking steps to bolster links with staff and minimise the involvement of unions.

The moves have not been without controversy, particularly at Telstra, with revelations today that it has long had plans in place to lock out unions, despite only recently withdrawing from negotiations for a collective union agreement.

But for most of these businesses the reality is they are focused on securing the status quo put in place over the past five years against the big changes looming on the horizon.

It is no coincidence they are moving now, with both the Federal Government’s new industrial relations system and new modernised awards due to take effect over the next 18 months.

Good faith bargaining and majority rules provisions Labor has said it will introduce are likely to make it harder for business to exclude unions from negotiations.

But if employers can agree to non-union collective agreements now, then it could be several years before they will next need to enter new negotiations.

Other employers are providing unilateral pay rises to staff in order that they can stay on expired individual agreements without losing out on pay and conditions.

According to CCI Victoria Legal’s Peter Vitale, the key to the strategies being adopted by these firms is their ability to maintain and leverage strong direct relationships with staff.

“The driver for all of these moves is to develop and keep very strong one-on-one relationships with employees. They see a lot of value in these relationships and are prepared to put more on the table in terms of pay and conditions to maintain them,” Vitale says.

The possible subtext to these moves is the chance that a change of government – and therefore, a change to IR laws – could be possible seven or 10 years down the track.

The coming arrival of flexibility clauses in modernised awards that could allow employers to simulate many of the features of AWAs could also be attractive to employers, Vitale says.

“These flexibility provisions have been the subject of huge debate in the Australian Industrial Relations Commission already, but it appears the preferred version will provide a kind of no-disadvantage test,” he says.

The arrival of new modernised awards could also involve significant upheaval for employers, particularly those in the retail and hospitality sectors, another incentive to get long term arrangements in place now.

Australian Business Lawyers managing partner Tim Capelin says new modernised awards could contain big changes to the pay and conditions of some employees.

“There is no certainty as to what will happen if you bring together 50 awards into one in an industry – if you are a small retailer in NSW, your award could soon have provisions in it from the WA award; you just don’t know,” Capelin says.

But by entering non-union collective agreements now, business can ensure a smooth transition through the change over to new awards, he says.

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