Last week, I gave you 3 good reasons for making an enterprise agreement.

But there is always another side to the story…

Before making an enterprise agreement, you should also consider the negatives…

1. You could lose the ability to make decisions in the interests of your business.

Collective bargaining and the new agreement making process mean that many employees may now make the choice to involve their union in the agreement making process. And when you are making an agreement, you are now required by law to sit down with your employees (and/or their unions) and properly consider any claims or requests that they make.

And that’s not all – theoretically, employees can engage a lawful strike to force you to accept their demands.

In other words, the agreement making process may lead to the imposition of terms and conditions on your business that are less than ideal – and you will be stuck with them for many years to come.

Remember: It will be much harder for you to reach an agreement to change the conditions of an enterprise agreement than the conditions of an employment contract.

2. Awards and other safety net conditions could be more “employer friendly”.

Modern awards will be easier to apply and could also allow you greater flexibility.

Under modern awards, you will be able to make award flexibility agreements with individual employees that allow you to “load up” award base rates of pay in lieu of award entitlements to loadings, penalties, overtime and allowances. You can even contract out of awards altogether for employees earning $108,300 or more. (More info on this another time!).

So it’s up to you really – if you think that making an enterprise agreement would be beneficial for your business, go for it!

If not, you do have other options…

Next week, I’ll show you the alternatives to making an enterprise agreement.

Charles Power

Tags: collective bargaining, employees, enterprise agreement, fair work act, flexibility agreements