Understanding the true boundaries of the enterprise agreement zone (“EA zone”) and the “workplace zone” is crucial to the development of any workplace relations or enterprise bargaining strategy. This is illustrated in the diagram below.
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The EA zone represents the terms and conditions which are contained in an enterprise agreement. For many employers, this zone is one which restricts the business. It provides a “handbrake” on the capacity to implement change and improve productivity. Not surprisingly, unions often take the opportunity in enterprise bargaining to introduce clauses which restrict the capacity of the employer to do certain things and thereby limit managerial prerogative.
Some employers assume that the agreement’s silence on an issue means that the right does not exist. Silence on a particular issue (such as drug and alcohol testing) should not be presumed as preventative. If it’s not in the agreement, the right may exist in the workplace zone (assuming its lawful and reasonable).
The workplace zone represents the terms and conditions of employment which sit outside of any enterprise agreement. These include the express and implied terms of employment being the zone which enables an employer to lawfully and reasonably direct employees to perform work as required. This zone is relatively unencumbered. For some employers, it’s a “twilight zone” of rights and obligations. Company policy, which dictates matters relating directly to the work and ancillary to it, resides in this zone (although not exclusively if incorporated into an enterprise agreement). The written contract of employment often expressed as a “letter of offer” can be put to good use here.
Upon a proper analysis, employers are sometimes surprised to learn that the workplace zone is larger than they otherwise perceived. Employers often assume that “custom and practice” in this zone yields more restrictions than actually exist. A solid understanding of what the law regards as “custom and practice” results in more freedom than is otherwise thought.
Conversely, many businesses do not utilise the EA zone as much as they otherwise could. In other words, there is potential within the enterprise agreement to undertake certain things, but the business is reluctant to test its boundaries, particularly in the face of ambiguity about the application of the EA to a particular circumstance. The path of least resistance sees employers attempt to negotiate the right into the EA come the next bargaining round.
Negotiating into an enterprise agreement rights which already exist is often a flawed approach. First, it is very difficult to negotiate such rights in. Secondly, it assumes that the rights do not already exist, thereby impacting the interpretation of the agreement in the future. Thirdly, once in an EA, the typical disputes procedure renders the right/obligation amenable to greater disputation.
The bottom line for employers is:
- be clear of the boundaries of the respective zones and avoid introducing into your enterprise agreement rights which already exist;
- sometimes, clarity on the boundaries requires the EA zone boundary to be tested; and
- the “twilight zone” can potentially provide more opportunity than is first thought.