Recent decisions of FWA suggest employers are still coming to grips with some of the key changes introduced by the Fair Work Act 2009 (Cth) (FW Act). The recent campaign of the Australian Manufacturing Workers Union (AMWU) regarding flexibility clauses, notwithstanding that they are a mandatory requirement of enterprise agreements, suggests the unions are also finding the new regime challenging. Flexibility clauses essentially permit some flexibility around hours and penalty rates to accommodate family friendly arrangements. For example, arrangements could be made to allow an employee to start early and leave early in order to coach a junior sporting team without receiving penalty rates for the earlier start.
Other changes we have noticed include the reappearance on the bargaining table of demands for matters that were previously prohibited content, for example, specific representational rights of unions and a more significant role in consultation about any change proposals. It is important to remember that the FW Act now allows an application to be made to the Federal Court for an injunction in respect to an alleged breach of an enterprise agreement or alleged breach of the general protections.
We encourage employers to pause during bargaining and understand that changes such as the ability of Fair Work Australia (FWA) to hear a broader range of disputes under its settlement of disputes powers and the ability to seek injunctions in respect to enterprise agreements are very different to the pre-reform regime. For example, a broadly worded dispute resolution clause may mean that FWA is able to arbitrate on the substance of a dispute. This is particularly important for employers renewing pre-reform agreements where the Commission was limited in the disputes it could entertain. The disputes that can be dealt with by FWA, depending on the scope of the clause in the enterprise agreement, may include arbitrating proposals to introduce a change in the workplace. Further, such proposals may also be stopped by a court if an argument arises that the change is in breach of consultation clauses. How these clauses are now drafted has become a critical issue.
In a number of recent decisions FWA has considered the good faith bargaining requirements and the requirements for a protected action ballot order. In the following we look at some of the recent developments concerning the application of the new laws.
FWA considers bargaining
FWA has now had occasion to consider a number of aspects of the new bargaining regime. We have discussed with clients the substance of the changes, especially the new rules around bargaining in good faith and how these provisions may also affect whether a party has been genuinely seeking to reach agreement when assessing an application for a protected action ballot. Other key changes relate to the ability for a bargaining representative or employer to seek to set the scope for an agreement.
In NUW v Defries Industries Pty Ltd Commissioner Whelan made the following observations about the good faith bargaining requirements in the FW Act:
- The requirement to participate in meetings suggests a sharing of information and views and a willingness to discuss the matters about which the other bargaining representative wishes to bargain.
- The requirement to disclose relevant information in a timely manner is to allow the other bargaining representative to give consideration to the other's position. This obligation includes disclosing a document that included the company's position on what was and what was not negotiable. The obligation is not limited to responding to requests for information.
- Circulating an agreement directly to employees for the purpose of a vote without notice to a union bargaining representative will amount to unfair conduct undermining freedom of association and collective bargaining and a breach of the good faith bargaining requirements.
Commissioner Whelan again emphasised the importance of disclosure of information in Alphington Aged Care and Mary McKillop Aged Care when dealing with an application to approve enterprise agreements. In this case the employer had been negotiating with the ANF (union) regarding a new agreement. Following the enactment of FW Act the employer did not provide the appropriate notice of representational rights nor did it inform the union it intended to conduct a vote of its employees over its proposed offer. Commissioner Whelan found that a decision to put an agreement directly to employees whilst ostensibly still bargaining with a bargaining representative is relevant information that must be disclosed under the good faith bargaining requirements.
However, an important distinction between US labour law and Australian good faith bargaining requirements in respect to communicating directly with employees was noted by Commissioner Whelan in AMWU v H J Heinz Co. Commissioner Whelan stated that there is nothing in the FW Act that prevents an employer canvassing the views of employees about issues in dispute. This is different than putting an agreement to a vote for approval.
Protected action ballots
There have been a large number of applications for protected action ballots. Many applications have been made by the AMWU particularly in the manufacturing sector in Victoria. It was therefore timely that Vice President Watson in NUW v FreshExchange Pty Ltd provided guidance on the requirement for clarity in the questions to be put to employees when voting pursuant to a protected action ballot order. Watson VP found that the FW Act requires an application for a protected action ballot order to propose a question and contain other details about the industrial action and other relevant matters that will permit employees to make an informed choice on whether to authorise the particular action specified in the question.
A question which is ambiguous, or does not permit such a result, will not comply with this requirement. An example of this may be a question with various types of industrial action rolled up and set out in the one question. FWA has also recognised that whether a party has complied with the good faith bargaining requirements may be relevant to whether it is genuinely seeking to reach agreement. The cases highlight the importance of understanding the application of these requirements.
It is also plain that an employer's plans can be seriously disrupted and effort wasted if parties do not comply with the new bargaining provisions.
We have prepared guides to critical areas of the new laws - The Workplace Guide to Bargaining under the FW Act, The Workplace Guide to the General Protections, The Workplace Guide to Right of Entry and The Workplace Guide to Responding to Industrial Action.
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This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.