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Interest-based Bargaining: What is the buzz?

Interest-based Bargaining: What is the buzz?

Published: 25 Nov 2018

Interest-based Bargaining: What is the buzz?
Written by
Kyle Scott
Kyle Scott

Interest-based Bargaining: What is the buzz?

Published: 25 Nov 2018

With the complex bargaining framework continuing to cause headaches for employers, and many businesses questioning whether the benefits of enterprise bargaining outweigh the effort involved, people are asking - what is interest-based bargaining about and is it for me?

Many HR and IR practitioners have a general understanding of the concept of interest-based bargaining, or the Fair Work Commission’s (FWC) spin-off version which has been re-branded under the banner of “New Directions”.

Ironically, the concept is far from new and was largely developed out of what is known as the “Hunter model” of industrial relations, pioneered by former Honourable Deputy President (Dr) Rod Harrison during the 1990s in Newcastle.

Under the Hunter model, DP Harrison used the broad powers under the NSW Industrial Relations Act (which gave the Commission power to deal with “industrial matters”, rather than merely deal with “industrial disputes”) to build proactive relationships between workplaces and the Tribunal, encouraging parties to seek the Tribunal’s assistance before a dispute arose, rather than waiting for one to happen and then asking the Tribunal to resolve it.

During major infrastructure projects, employers and unions sought the Tribunal’s assistance prior to the commencement of a project and had the Tribunal convene weekly conferences to deal with operational issues as they arose, preventing them from developing into more serious disputes.

The process reflected the long term approach of the NSW industrial system where Tribunal members became intimately involved in key industries and businesses. As an example, DP Harrison oversaw more than $15 billion in coal chain infrastructure and other works being completed ahead of schedule and under budget with no lost time due to industrial disputes with an exemplary safety record.

It was a natural progression to apply the principles of the Hunter model to enterprise bargaining.

In many workplaces “bargaining” is a transactional process whereby a union issues a “logs of claims” and by doing this entrenches a mode of adversarial, transactional bargaining (start high, counter low, settle somewhere in the middle).

While this transactional process might be fine in certain scenarios, it is generally not a good mode of operating when dealing with a workforce, where the real value for the business is derived from the quality of the ongoing relationship and having an engaged and productive workforce. In most cases, the old-school transactional bargaining method creates collateral damage in the form of deterioration in personal relationships which can then take years to overcome.

The most significant difference with interest-based bargaining is the starting point. Rather than commencing with a log of claims from a union, the parties aim to work together to build an enterprise agreement (EA) around the business plan. This involves looking at the business and asking ‘Where does the business need to be in X years’ time? ’and ‘What do we need to do to get there?’

While this requires an element of information-sharing on the part of the business, by starting from this viewpoint, parties are generally able to identify a few key shared interests, for example, having a sustainable business, having secure jobs and fair wages to name a few. With these interests in mind, the parties can then work on building an EA that meets these aims. 

The conversation is often a broader conversation about the business rather than simply about certain clauses of the EA, and this has the added advantage of identifying issues that may not be “EA issues” but that the business may not have been aware of and can address separately.

There are a few other innovative features which can be taken from Dr Harrison’s approach, for example:
  • The use of a staff survey at the commencement of bargaining to give all employees a voice about what issues are important to them.
  • The development of a communications plan detailing how the bargaining group will disseminate information to the broader workforce, which could include the use of short videos from members of the bargaining team uploaded to an intranet at the end of each meeting.
  • Where technical issues arise, use the engagement of ‘subject matter experts’ to provide reports to the bargaining group on particular issues (rather than people operating on assumptions and beliefs).
It is true that the success of the process is ultimately dependent on the parties’ willingness to commit to the principles of interest-based bargaining and in many cases employees or unions are not prepared to move away from their traditional mode of bargaining. However, we are certainly seeing successful outcomes in a number of industries (both blue collar and white collar) where this approach is being used.

If this resonates with you and you think it might be something that you are interested in exploring further, feel free to contact us on 1800 565 846 or

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