Enterprise Bargaining Agreement Advantages and Disadvantages


Enterprise Bargaining Agreement (EBA) is a written agreement made between an employer and employee or a group of employees that outlines their terms and conditions of employment. EBAs are negotiated and agreed upon by both parties and are legally binding. EBAs have become increasingly popular in recent years, and many companies have adopted them as a way of managing their workforce effectively. In this article, we will discuss the advantages and disadvantages of enterprise bargaining agreements.

Advantages of Enterprise Bargaining Agreement

1. Improved working conditions

One of the primary advantages of an EBA is that it can result in improved working conditions for employees. Through negotiation, employers and employees can agree on measures such as flexible working arrangements, leave entitlements, and work-life balance policies. These improvements in working conditions can lead to a happier, more productive workforce.

2. Better job security

EBAs can also provide job security for employees by outlining the terms of their employment, including length of contract and redundancy provisions. This can give employees peace of mind and help build loyalty to the company.

3. Increased productivity

Employers can benefit from EBAs by increasing productivity. By agreeing to work arrangements that suit both parties, the company can ensure that its employees are working in a way that maximizes their productivity. This can result in improved product quality and increased efficiency.

4. Improved employer-employee relations

EBAs can also help improve employer-employee relations. By negotiating the terms of their employment, both parties can build a better understanding of each other`s needs and concerns. This can lead to a more harmonious workplace and fewer disputes.

Disadvantages of Enterprise Bargaining Agreement

1. Increased costs

One of the drawbacks of EBAs is that they can increase costs for employers. Negotiating with employees can result in higher wages, benefits, and other costs that can impact the company`s bottom line.

2. Limited flexibility

EBAs can also be inflexible, as they are legally binding agreements that can be difficult to change once they have been signed. This can be a disadvantage in industries that are constantly evolving and require flexibility to remain competitive.

3. Time-consuming

Negotiating an EBA can be a time-consuming process that requires the involvement of multiple parties. This can be a significant disadvantage for small businesses with limited resources.

4. Unions` intervention

Lastly, unions can play a significant role in the negotiation process, which can be problematic for employers who prefer to handle employee relations in-house. Unions can also demand certain conditions that may not be in the best interest of the company.


EBAs can be a valuable tool for managing employees and improving working conditions. However, they also come with their own set of advantages and disadvantages. Companies should weigh up these factors carefully before deciding whether to adopt an EBA. Ultimately, the success of an EBA depends on both parties being willing to negotiate in good faith and work towards a mutually beneficial outcome.