By CCH Writer Michelle Leighton

Fair Work Australia has denied the approval of an enterprise agreement after finding that the employer could unilaterally reduce the employees’ entitlements by changing the content of its HR handbook.  

The employer brought an application before the FWA seeking approval of the proposed enterprise agreement negotiated with its employees.  

The agreement provided for employee “Progression through Classifications”. The progression through the grades in an employee’s classification was a function of the employee’s level of skill and experience, the guidelines of which were set out in the employer’s handbook. Furthermore, the progression through the grades was at the discretion of the employer.

The proposed agreement was to operate in the ACT, NSW, Queensland, Victoria and Western Australia and stipulated that it operated to the exclusion of all other industrial agreements. The agreement expressly excluded all entitlements relating to rest breaks, penalty rates, allowances, public holiday rates, incentive based payments and bonuses, superannuation and jury service. 

The definitions provision of the agreement stated that the handbook did not form a part of the agreement and could be amended from time to time. Alternative arrangements to the employees’ entitlements and allowances could be made without consulting them. In order for the agreement to be enforceable, there could be no capacity for the employer to opt out of the agreement by varying the terms of the Handbook.

The FWA raised its concerns about the Handbook with the employer and required that it meet the requirements of a “no-disadvantage” test. The employer was to provide a comparison of the rates of pay and conditions of employment of employees who were engaged under a proposed agreement with the equivalent rates for similar employees who were properly classified under an award. The employee did not provide the required information and therefore failed to comply with the “no-disadvantage” test.

The FWA sought an undertaking that the employer would not change the HR handbook and ensure that the employees were not in any way disadvantaged. In the absence of such undertaking the FWA declined the approval of the agreement.

Should employers be entitled to use company manuals to affect employee entitlements? Are employees at risk of disingenuous bargaining by employers?  Have your say.

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By CCH writer Glenn Martin*

The global financial crisis has created a tougher operating environment for many organisations, and increased the emphasis on what it takes for them to generate sustainable high performance. But rather than putting more emphasis on “the bottom line”, many organisations are taking a deeper look at their values.

The sources of high performance

Michael Rennie, partner at McKinsey & Co, says that organisations they deal with are examining what creates high performance. They are recognising that high performance is not just the product of good analytical thinking, strategy-making and the design of efficient systems. It is people that make the biggest difference to their performance.

Once this is acknowledged, organisational change efforts need to focus on what motivates and engages people. The questions that need to be asked are:

• •What is it that engages people?
• •What meaning do people find in their work?
• •How can we increase emotional intelligence in the work environment, so that people are more aware of each other and their working environment?

The development of a work environment that generates high performance, says Michael, goes through stages. A general improvement in emotional intelligence leads to greater collaboration between people, and increased interest in ongoing learning. And what comes out of this is a greater level of caring for others.

When leaders embark on this journey, organisational performance invariably improves. McKinsey’s data bears out this correlation.

Does this mean that leaders are becoming more spiritual? Michael says the word “spiritual” has a lot of different connotations, and many executives prefer not to use it. It is generally sufficient to talk about emotional intelligence and to explore that deeply. Many large firms are doing this, including ANZ Bank, Woodside Petroleum, and a number of law firms and accounting firms.

What happens is that as this work permeates the workplace, a critical mass accumulates. The growth of individuals spills out into the behaviour of groups and has a collective impact. The important thing is to use language that people can relate to.

Michael says that beyond the talk about competitiveness and the bottom line, people yearn for their work to be meaningful and they yearn to grow and develop. Good organisations are giving their employees this chance.

A growing interest in spirituality

Interest in spirituality in the workplace could be increasing, if the publication of a new book is any indication. Spirituality and corporate social responsibility, edited by David Bubna-Litic, was released recently (Gower, 2009). At the launch of the book, David said that the financial crisis and the climate change issue are driving greater awareness of values beyond economic outcomes in business.

David said the mantra followed by many in business and espoused by Milton Friedman (“there is one and only one social responsibility of business: to increase its profits”) is falling into disfavour. It is now recognised as a particular ideological position, rather than a business truism. He said business needs to make a “passionate choice” to embrace a wider agenda than profit.

He said we might wonder whether corporate social responsibility can survive the ruthless demands of global capitalism, but the research is showing that the firms which do best over the longer term are those which look beyond short-term profits.

He reinforced the point that Michael Rennie makes, that people are driven by more than money. There is what he calls an interpenetration of the spiritual world (broadly, the world of deeper human values) and the business world. Firms which recognise this have a strong foundation for long-term growth and success.

Are there companies which are living up to this broad agenda of human values and social responsibility? David said many companies are approaching business with a different mindset now, leaving behind the ideas that business has to ignore values and pursue their competitors without regard for ethics.

For example, Tom’s of Maine is an example of a successful company that has built its business on creating honest and open relationships with everyone who uses their products, and takes it for granted that a company can and should be both successful and socially responsible. In Australia, Sonoma Baking Company displays a similar passion that goes beyond profits in how they do business.

Dramatic shift for sustainability

Dexter Dunphy, who has authored books on organisational change and sustainability, contributed a chapter to the Spirituality and corporate social responsibility book. Dexter says business can no longer ignore the environment and humanity’s relationship to it. There is a need for dramatic change in business, all the way through the supply chain.

Dexter says leaders need to shift their thinking away from an emphasis on the logic of objectivity and control and towards the realisation of connectedness. Science has already shifted in this direction. Managers need to catch up. He says leaders must face the need for personal transformation so that they can lead their organisations into a sustainable future.

Dexter, drawing on his work on organisational change, says that organisations move through stages of change. The movement towards sustainability – for organisations themselves and for the planet – starts with an interest in compliance, then turns to issues of efficiency and then to making sustainability central to strategy. Finally organisations commit to becoming sustaining as well as sustainable by actively contributing to renewing the biosphere and society. Commitment to sustainability is an investment that attracts quality people and builds a constructive, high-performing culture.

Michael Rennie, David Bubna-Litic and Dexter Dunphy are speaking at the Spirituality, Leadership and Management Conference in Sydney on 11-14 February 2010, on the theme of leadership for the emerging world. The website is www.slamconference.org.au

* Glenn Martin is a writer on management, leadership and ethics

Have your say. What is the key to employee engagement and performance? Is there a place for spirituality in the boardroom?  

(4 votes, average: 3.50 out of 5)

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