Australia: Late arrivals can spoil the party: FWC reinforces consultation required with all bargaining representatives

Last Updated: 3 February 2018
Article by Matthew Cameron and Hedy Cray

Employers bargaining for a new enterprise agreement who want their voting process to stay on track should give all bargaining representatives a genuine opportunity to consider and comment on the agreement before it is presented to employees.

The Fair Work Commission has ordered an employer to delay a vote on its enterprise agreement and meet with a bargaining representative who was not given a proper opportunity to consider and comment on the terms of a proposed agreement.

The decision reinforces the importance of compliance with the good faith bargaining requirements under the Fair Work Act, and that all lawfully appointed bargaining representatives are entitled to the same treatment regardless of the number of employees involved or the size and influence of their representative.

A late arrival to the negotiating table

The bargaining order was made against Domino's Pizza Enterprises, which had been negotiating a new enterprise agreement to cover all delivery and in-store employees with the Shop Distributive and Allied Employees Association (SDA) since 2016.

In September 2017, the rival to the SDA, the newly formed Retail and Fast Food Workers Union (RAFFWU) notified Domino's that it had become a bargaining representative for the proposed agreement.

Domino's accepted the RAFFWU's status as a bargaining representative and met with the RAFFWU to discuss its claims. Domino's subsequently provided the RAFFWU with a copy of a proposed agreement, which it said incorporated all of the changes it was willing to accommodate, and met with the RAFFWU to discuss the union's response to the proposed agreement.

As the RAFFWU did not provide further feedback on the agreement following the meeting, Domino's subsequently sent a revised version of the agreement to the RAFFWU and indicated that this was the final version of the agreement that would be put to a vote. Domino's then immediately provided a full copy of the agreement to its employees and announced that a vote would occur.

The final version of the agreement included a number changes that had not been discussed with the RAFFWU, including reducing wages for some groups of employees in comparison to the wages payable under the previous draft provided to the RAFFWU.

Spoiling the party

The RAFFWU applied to the Fair Work Commission for bargaining orders to stop the vote from going ahead, arguing that Domino's had been breached the Fair Work Act's good faith bargaining requirements by failing to give genuine consideration to the RAFFWU's proposal, by engaging in capricious or unfair conduct that undermines collective bargaining and by failing to recognise and bargain with the RAFFWU.

During the hearing Domino's said that it wanted to push ahead with the vote, because the agreement had been settled with the other major bargaining agent, the SDA. Domino's expressed concerns that the RAFFWU, which Domino's described as a "minor" bargaining representative, was "spoiling" the agreement, after coming in at the end of a bargaining process with the SDA that had been ongoing for 18 months.

The Commission rejected these arguments, and held that Domino's had breached the good faith bargaining requirements as suggested by the RAFFWU. Senior Deputy President Hamberger found that the RAFFWU had been "effectively denied a genuine opportunity to consider and comment on the terms of the proposed agreement, and have any such comments considered by Domino's".

While it was noted that Domino's was not required to accept any of the comments put forward by the RAFFWU, it did have to give the union an opportunity to provide those comments and consider them before finalising the agreement and presenting it to employees for a vote.

As a result, the Commission made an order postponing the vote and requiring Domino's to:

  • meet with the RAFFWU to discuss the proposed agreement; and
  • give genuine consideration to the RAFFWU's proposals; and
  • provide reasons for its responses to those proposals.

How to avoid this happening to you

The decision serves a reminder to employers that any bargaining representative - even a minor bargaining representative that joins the negotiations when they are close to being finalised - can use the good faith bargaining requirements in the Fair Work Act to delay a vote on the agreement and send the employer back to the negotiating table.

Employers should ensure that they document their compliance with the good faith bargaining requirements at all times by:

  • communicating in writing and confirming verbal discussions in writing where possible, and documenting responses to claims made by employees bargaining representatives;
  • ensuring that all terms of the proposed agreement are provided to all of the bargaining representatives before an announcement is made to employees that a vote will be occurring; and
  • requiring bargaining representatives to respond to an employer's proposals within specific timeframes, so that the employer is in a position to move to a vote in compliance with the good faith bargaining requirements if no response is received.

If your business needs assistance with bargaining and navigating compliance with the good faith bargaining requirements, our Workplace Relations team at Clayton Utz can help.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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