ENTERPRISE BARGAINING AND PRODUCTIVITY

Abstract

When the Australian Industrial Relations Commission, in April 1991, refused to introduce a principle for enterprise bargaining, it was sceptical of claims that enterprise bargaining would raise both the level and rate of growth of productivity. An examination of productivity data for the years between 1964–65 and 2010–2010 shows little evidence of any boost to productivity that could be attributed to enterprise bargaining. The trend growth rate after 1991 was less than in the preceding 27 years. There is some evidence of a rise-sometimes characterised as a ‘surge’—in productivity in the later 1990s. Since then, the productivity record has been poor. The suggestion that the ‘surge’ was due to enterprise bargaining has little or no empirical basis. Analysis of productivity at the industry level indicates that different industries had widely different productivity experiences, with little sign that enterprise bargaining was a significant cause of superior performance. The Commission's scepticism has been vindicated.