Most of the relevant provisions in the new Fair Work Act
2009 ("Act") relating to collective bargaining and
enterprise agreements commenced operation from 1 July 2009. This is
a reminder of some of the more significant provisions that
employers need to be aware of:
The old prohibited content rules no longer exist. Agreements may
include content about "permitted matters". Most
significantly, this includes matters pertaining to the relationship
between the employer and union (as well as between employer and
employees). This has already seen the reintroduction of many old
prohibited content items onto union shopping lists for agreement
Flexibility and consultation re workplace changes clauses
Each agreement must include a flexibility term that enables the
employer and an individual employee to agree to an individual
flexibility arrangement to meet the genuine needs of both parties.
A consultation clause is also mandatory, requiring the employer to
consult about major workplace changes likely to have a significant
effect on employees.
Employee notification re right to be represented
Employers must take all reasonable steps to notify employees of
their right to be represented by a bargaining representative. Here,
even if the employee does not formally nominate the union as
his/her bargaining representative, the union will become the
bargaining representative by default if the employee is a member of
a relevant union and does not appoint anyone else as their
bargaining representative. This is an extremely significant change.
It will bring unions into the bargaining process in many workplaces
that have traditionally had non-union collective agreements in
place. It also has the potential to bring multiple unions into the
bargaining process, in workplaces that have only dealt with 1 union
in the past.
Good faith bargaining
An employer must not refuse to bargain with a union that is a
bargaining representative. Prior to 1 July 2009, an employer could
refuse to bargain with a union, on the basis that it wished to
reach agreement directly with its employees for a non union
agreement or it preferred to bargain with a different union. Good
faith bargaining also contains a number of specific requirements in
relation to the conduct of parties during the bargaining process.
For example, they must attend and participate in meetings; disclose
relevant information and respond to proposals in a timely manner;
genuinely consider proposals; and refrain from capricious or unfair
Fair Work Australia ("FWA") has the power to make a
wide variety of prescriptive orders, where one party is not meeting
the requirements for good faith bargaining.
Whilst an agreement is made when it is voted up by a valid
majority of employees who vote, application must be made to FWA to
approve agreements. From 1 January 2010, agreements must pass a new
"better off overall" test, that replaces the existing no
disadvantage test. The test requires employees to be better off
overall, when compared with the relevant modern award. It does not
however require FWA to enquire into individual employees
circumstances, as the test can be applied to classes of
FWA retains the power to arbitrate the terms and conditions of
employment in an enterprise, via a workplace determination. The
power to make a workplace determination can be triggered by the
issue of a Serious Breach Declaration, relating to good faith
bargaining issues, or by an order to terminate protected industrial
action for the proposed agreement. Significantly, a new ground
exists under which application can be made for an order to
terminate protected industrial action – namely, if the
action is causing/threatens to cause significant economic harm to
the employer or to any employees who will be covered by the
agreement. This has the potential to fast track the bargaining
process through to a workplace determination.
Injunctions can now be granted by the Federal Court/Federal
Magistrates Court to enforce the terms of an enterprise agreement.
This may mean, for example, that a union will seek an injunction
against an employer to restrain it from proceeding with major
workplace change until it has complied with the consultation and
redundancy provisions in the enterprise agreement.
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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