Individual Contracts What Do They Mean for Australia?

Collective bargaining can be of benefit to both employees and employers. Nevertheless, there is growing interest in individual contracts, as part of a broader agenda for labour market flexibility. In particular, individual contracts are being pursued by some companies as part of a human resource management strategy to increase productivity by reducing the role of third parties and promoting ‘common purpose’ between the firm and its employees. There is some evidence that individual contracts can indeed contribute to higher productivity. The challenge for policy makers is to provide sufficient flexibility in the area of individual contracts while preventing employers from using them to reduce wages and conditions.