From the Chancellery
The University’s Enterprise Bargaining Agreement (EBA)
was certified by the Industrial Relations Commission on July 26. The contents of
the agreement were explained in campus meetings, and can be accessed
here
Accordingly, I won’t discuss the EBA itself here, but rather will reflect on the process of enterprise bargaining in the University and what I think will be the major issue for its future.
Enterprise bargaining involves the coming together of management and staff representatives to consider the operations and financial situation of the organisation, looking for mutually acceptable ways to increase income and cut costs in order to be able to provide salary increases for staff.
The focus should be on what is best for the organisation – the enterprise – and how it can best secure its future and the futures of its staff.
In most organisations, there are a range of variables that can be played with to make the income, salaries and other costs balance. A business may be able to increase its prices or the volume of its sales, introduce efficiencies to reduce costs, shift activity from areas of lower profitability to areas of higher profitability, borrow money or sell more shares to spread capital costs over many years, and rebalance the split between returns to shareholders, operating costs (including salaries) and investments.
Universities have very few of these options available to them. We cannot increase prices for most of our activities as these are fixed by HECS and the government’s operating grant, research grants and research support.
The only income streams where we can set prices are international student fees, postgraduate fees, contract research, consulting and the like – in total about 25 per cent of our income. Also, our capacity to borrow is restricted as universities generally do not own their own land and thus cannot mortgage their campuses to raise funds for investments.
Our equation for funding salary increases is limited to relatively restricted opportunities to increase income, finding ways to reduce current costs and determining how much of whatever surplus we can make we should save for future investment. This makes enterprise bargaining difficult for universities.
There is one thing that makes it easier: in a fundamental sense, all of the enterprise bargainers in a university are on the same side. We don’t have to balance income spent on maintaining and developing the enterprise against returns to shareholders. All of our income is ours to spend. The only question is – how much we spend on current activities and how much we invest in our future?
But that is a fundamental question, and it will be the major challenge for future rounds of enterprise bargaining. If this process is to serve the University well and provide for the long-term interests of its staff, students and the community, those engaged in enterprise bargaining must be representative of the future of the University, not its history.
I believe this is the most important thing for all parties to get right in future bargaining rounds.