Making decisions that affect employees is more risky
than ever and the penalty of poor planning is conflict with unions
and litigation in court.
Anyone who has been involved in running a business in Australia
will know there has been a major re-regulation of the labour
market. This occurred in 2009 through the introduction of the Fair
Work Act. I am going to talk about four aspects of that
re-regulation and four aspects that are key to the Fair Work
Firstly, collective bargaining. Collective bargaining has become
virtually mandatory for employers in Australia and that collective
bargaining invariably now involves union representations.
Essentially the provisions have brought in unions, which in many
industries have not been involved for many years. There is still to
this day a union density rate of about 13 percent in the private
sector. But the system now almost mandates that they be involved in
collective bargaining and negotiating collective agreements in
workplaces. In many cases the system also drags business into
complex and costly litigation before the Industrial Tribunal or
Fair Work Commission and the courts.
The second aspect that has affected the way we manage our
workplace is the right of entry rules governing the basis on which
union officials can come into your workplace and that is very
closely attached to the bargaining arrangements.
Previously, a union official had to have a connection to your
workplace by the organisation being a party to an agreement and the
organisation having members in your workplace.
Now all that needs to be shown, subject to very light touch
procedural requirements being met, is that the union is legally
entitled to enrol members in your business. This has been further
strengthened recently where if your business has an operation in a
remote location you may also be required to pay for the
transportation of the union official to the location where your
workplace is and provide them with overnight accommodation. That
came in the most recent changes to the Fair Work Act.
Thirdly, the Fair Work Act contains general protections
provisions. The effects of the general protection provisions are to
make almost any decision that you make that affects your employees
reviewable by the Federal Court.
That drags employers into potential litigation every time they
make a decision that could be said to adversely affect their
employees. And, they face a reverse onus: essentially they have to
show that the reasons they made the decision were not unlawful
reasons and that drags business invariably into costly and time
consuming litigation before the courts. This is far more time
consuming than even the sort of litigation being conducted before
the Industrial Tribunals and in an environment where unlike other
commercial litigation, you almost never are in a position to
recover your costs.
And finally, acquisitions and transferring of assets etc have
become far more of a risk with respect to the transfer of employees
via the transfer of business provisions that have been brought in.
The position now is that whenever you transfer work whether by
in-sourcing or outsourcing, let alone an acquisition or an actual
transfer of assets, the industrial agreement transfers with the
So what can business do? Business needs to plan, plan, plan and
in that planning identify the risks associated with the strategy
they want to embark upon or the decision that they want to
implement and work out the best way to mitigate those risks. And
that is only done by getting the best advice you possibly can.
Because the alternative is the risk of highly adversarial
disputation with unions or equally adversarial litigation in the
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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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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