Interest in the use of enterprise awards has been stimulated in Australia by growing
pressures to develop a devolved industrial relations system. In particular it is widely
thought that enterprise awards permit greater labour market flexibility than do multi-
employer awards, and therefore should be adopted more extensively. This paper
presents evidence to show that enterprise awards are a good deal more common
than is generally supposed Nevertheless, they cover only a small minority of private
sector employees and enterprises, and rarely displace multi-employer awards since
they usually determine only one or two issues on a single-enterprise basis. While
enterprise awards do yield labour market flexibility (in particular upon pay,
classifications and working hours/shift arrangements) and are positively connected
with several aspects of good industrial relations (higher labour flexibility, lower
restrictive work behaviour, shorter strikes, and better use of award restructuring),
it should not be assumed that they are necessarily preferable to multi-employer awards.
First, many firms and unions will be unable to devote sufficient resources to develop
enterprise awards. Second, industry awards are becoming more flexible through
fragmentation, the development of enterprise appendices, the use of enterprise flexibility
agreements, the establishment of more flexible classification and training provisions,
and the adoption of less prescriptive employment conditions. Third, firms can be
constrained by union bargaining power in their use of enterprise awards. Product
market competition was found to be weakly connected with the distribution of
enterprise awards which appear to have arisen in large firms primarily in response
to special bureaucratic, technological and labour market factors. In conclusion it
was thought likely that enterprise awards will continue to grow in importance, but
they are unlikely to displace multi-employer awards, especially among smaller
employers.
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