Interest-based bargaining is a collaborative approach to enterprise bargaining.
Traditionally, enterprise bargaining is adversarial. Parties approach the process with pre-determined positions or a log of claims.
Interest-based bargaining is different: it is consensus-seeking and cooperative. It focuses on the interests that underlie positions or claims.
It aims to ensure that each party is satisfied that their interests have been addressed. Interest-based bargaining is also sometimes called mutual gains bargaining or principled negotiation.
Interest-based bargaining can:
- lead to better agreements – parties share more information so their decisions are better informed
- create stronger ongoing relationships – the parties have worked together with some common purpose and shared understanding during bargaining
- increase trust and respect between the negotiating parties – the parties have openly declared their common and conflicting interests. There should be no hidden agendas.
- improve acceptance of the final agreement – people are more likely to accept decisions that they have been involved in creating and when they understand the rationale behind the decision.
During interest-based bargaining, parties aim to:
- communicate their interests clearly
- genuinely try to understand the interests of others
- collaborate when problem-solving
- share as much relevant information as possible
- be objective and rational when evaluating options against criteria they have decided on together
- be respectful and avoid coercive methods.
Example: ABC Manufacturing Co. transport allowance
Stating a position
The union representing employees at ABC Manufacturing make a claim for a $60 transport allowance. (They don’t tell the company they would accept $45.)
Management offer a $20 allowance (even though they would be able to pay $30).
Neither party will move from their positions. Negotiations come to a standstill.
The company and the union decide to take an interest-based approach to the issue.
The parties share information. The union explains their underlying reason for wanting the transport allowance: the local bus company is about to cancel their late services, which means workers will have to use their own transport to get home at the end of the afternoon shift.
The union has estimated that this will cost each worker an extra $45 a week.
ABC Manufacturing explains why they can’t afford the allowance: the company is in a severe cash crisis and simply cannot afford any additional expense.
However, the company and the union agree that the extra transport expense faced by workers is a concern.
Together they look for possible solutions to help the employees with end-of-shift transport while ensuring the business can continue to stay competitive and profitable. This becomes a more creative conversation than a traditional bargaining dispute.
- the $45 transport allowance
- no transport allowance
- a reduced transport allowance
- cancelling the afternoon shift
- changing the start and finish time for afternoon shift so that the afternoon shifts ends at 7.15 pm
- organising private transport to the train station
- asking the bus company to continue running their current service until 8 pm
- paying the bus company a subsidy to keep running a service at 8 pm.
Is interest-based bargaining right for your workplace?
Interest-based bargaining suits employers and employees with good working relationships and those who want to improve difficult relationships.
All parties must consent to the process and be genuinely willing to work together. It won’t work when only one party is willing to commit.
Interest-based bargaining involves a high level of information-sharing and genuine communication, so trust and respect between the parties is important.
Importantly, it is not an ‘all or nothing’ process. Parties can use interest-based bargaining just for negotiating particular issues or only at particular stages of the bargaining process. Parties can come back to traditional methods whenever they want.
How to get started
Learn about the interest-based approach by completing our online learning modules on interest-based bargaining, available through our Online Learning Portal.
Our guide to interest-based bargaining has information on how to start interest-based bargaining, as well as a suggested bargaining model, some useful tips and basic ground rules. You can also read more about how interest-based approaches make for better workplaces.
Consider our Cooperative Workplaces program, designed to provide support to workplaces that want to try interest-based approaches. A Commission Member will work with you to deliver training and help you facilitate the process. They will also offer guidance and advice as you make the change to using an interest-based approach. The program is free.
We also have some videos to help you learn more about how interest-based bargaining works: