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Recently a large employer found to its cost that union
bargaining representatives knew the employer was signing up to a
deal it did not truly appreciate, but did nothing to alert the
employer to its error. The enterprise agreement
(EA) has been approved and the employer's
mistake has become an enforceable condition that will operate for
the life of the EA.
EA's under the Fair Work Act 2009 are complex
documents where a mistaken understanding of conditions can run into
real money. Professional union negotiators generally have a seat at
the bargaining table for these EA's, and they can bring an
unforgiving "take no prisoners" attitude to
misunderstandings by employers about what they are signing up
to.
Just like any commercial negotiation, employer representatives
need to have a full understanding of the conditions that are being
negotiated. If a mistake occurs, an employer can be fixed with the
consequences for the whole of the life of the EA, up to four
years.
In CJ Mansfield v CEPU [2012] FWAFB 3534 the employer,
CJ Mansfield, was experienced in enterprise agreement negotiations
and engaged with the CEPU (as the relevant union) in negotiations
for a new agreement to support renewal of contracting work which
required it to move to a 10-hour shift roster. The negotiations
were conducted over a period of some months, and there were many
informal exchanges of views as well as "out of session"
exchanges of proposed clauses by email.
In an early draft of the proposed enterprise agreement, a meal
breaks clause proposed by the CEPU was inserted into the EA after
being accepted by the employer's industrial representatives. It
reads innocently enough and an inattentive eye can easily skip over
it as "agreement boilerplate":
"an employee who is required to work 2 or more hours
overtime shall be allowed a crib time of 20 minutes at the
prevailing overtime rate. For each four hours of overtime worked
after an employee is entitled to a further 20 minutes crib break at
the prevailing overtime break."
The EA was finalised, including this cause, and CJ Mansfield
submitted its application for FWA to approve the EA. However, just
prior to the approval occurring, CJ Mansfield realised that the
words "two hours or more overtime" would apply
to employees working 10-hour shifts, so that that workers working
standard shifts would become entitled to three paid breaks rather
than two.
CJ Mansfield unilaterally discontinued its approval application
on discovering its mistaken understanding of the EA condition, over
the objections of the CEPU which had sought to keep CJ Mansfield to
the letter of the EA conditions. FWA allowed CJ Mansfield to
discontinue, but that was not the end of the story.
The CEPU as a bargaining representative is entitled to bring an
application to have an EA approved, and they did so here, having
been given permission in the circumstances to bring a their
application outside the usual timeframe. CJ Mansfield objected to
the CEPU's approval application, including on the basis that it
would perpetuate a mistake, but its objections were overruled. The
industrial tribunal stated:
"The employer had the benefit of time and advice to
consider the implications of the terms of the agreement it proposed
to the workforce. ... At most the conduct of the [CEPU] bargaining
representatives could be described as opportunistic or hopeful,
even if it could be said that they were themselves, fully aware of
the implications of the clause".
Key points
Employers cannot rely on other bargaining representatives to
point out implications for the employer of an enterprise agreement.
Union bargaining representatives will not cause an EA to fail tests
for approval if they do not alert an employer to its own
mistake.
Employers need to know intimately the implications of each word
in a proposed EA, and (for example) the discipline of practically
costing each condition has to be undertaken to discover the true EA
cost and implications, before the employer is fixed with its effect
for the life of the agreement.
Tim Lange is a Partner at Hunt & Hunt lawyers. He
specialises in employment, industrial relations, equal opportunity
and workplace health and safety law
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A court has determined that an employee had a workplace right under the Fair Work Act 2009 to make a complaint entitling the employee to proceed with her general protections claim.
