Good faith and opportunities


Good faith and opportunities

Good faith bargaining is shaping up as a major point of controversy in the Fair Work system as the six months interim period leading up to the commencement of modern awards progresses.


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Good faith bargaining is shaping up as a major point of controversy in the Fair Work system as the six months interim period leading up to the commencement of modern awards progresses.
A few days before the Fair Work Act commenced, representatives of the employer and union movements offered their last-minute comments about the Act’s impact at a conference conducted by the Workplace Research Centre in Sydney on 26 June 2009.
Employer view: good faith bargaining the biggest issue
Good faith bargaining is the change of biggest concern to employers, according to Ron Baragry, legal counsel, National Workplace Relations, for the Australian Industry Group. The concern is that no-one knows how it will operate in practice, in terms of both the strategies adopted by unions and how Fair Work Australia will decide to exercise its wide-ranging powers. Another comment was that terms in the Act such as 'capricious conduct' and 'undermines collective bargaining' were 'dangerous' terms that need to be more clearly specified.
Probably the next biggest issue is the transfer of business provisions, which are now based on transfer of the employment instrument (award or agreement) rather than the type of business itself. It now means that outsourcing a business function comes within the scope of a transfer of business, although the original aim of the provisions was to prevent using outsourcing as a 'rort' to avoid coverage by workplace agreements. However, Baragry claimed that 'outsourcing' has not been precisely defined. He sees dissatisfaction occurring when two businesses are merged (or one is taken over) and the result is two different groups of employees with different entitlements. He predicted that many employers will try to avoid offering jobs to employees who would otherwise be transferred.
Other concerns
Baragry added the following comments:
  • The low-paid bargaining provisions are not as clearly defined as they need to be.
  • The protected industrial action provisions are not constructive — such provisions in general are 'bad for industrial relations'.
  • The 'matters pertaining to relationship' provisions could throw up some issues that would be unenforceable but nevertheless still go into an agreement. Employers don’t know what sorts of claims they may get. 
  • Small businesses may have problems accommodating requests for part-time work. For example, what if all five employees in a business want it?
  • The transitional arrangements are going to cause 'lots of logistical problems'.
Some positives, too
Baragry was more optimistic about the award modernisation provisions, praising the process used and believing the system will work better than the old one once established.
He suggested that the appropriate strategy for parties in the new system should be:
  • work together to find solutions
  • understand and allow for problems affecting the other parties involved
  • avoid confrontational approaches.
GFC a bigger issue
Finally, Baragry commented that the fallout from the Global Financial Crisis was a bigger issue for businesses at present than the Fair Work changes.
An opportunity for unions?
There are opportunities for unions in the new system but also an obligation on them to pursue them constructively, according to Troy Burton, assistant national secretary of the Liquor, Hospitality and Miscellaneous Union (LMHU). The LHMU operates in 23 industries, and because it covers occupations such as cleaners, it has many members who are on or close to minimum wages.
Burton said that the cleaning industry was an example of the 'race to the bottom' some people predicted under WorkChoices. The industry did not benefit from the recent economic boom. Cleaning contracts usually have a very low cost structure, so extra potential savings from reducing entitlements are small, but a workplace that is not clean can cause high risk exposure, so he believes the union and employees are in a better bargaining position today. He described a recently-negotiated 'Clean Start' agreement that commenced on 1 July 2009.
Membership and influence
Burton sees the Fair Work Act as providing opportunities for the LHMU to increase its membership level, provided it communicates better with its members and potential members. The 'Clean Start' campaign and agreement had increased membership. He described increases in union membership as being spurts in response to recent events, whereas membership declines tend to be very gradual. Also, the combination of new legislation and an economic 'shock' has historically resulted in union membership increases.
There are also some opportunities to increase union influence, if not actual union power, and the removal of various restrictions will also assist unions. The opportunities include the low wage bargaining stream and majority support determinations, although Burton added that in practice the LHMU did not bother contacting employers unless it already new it had majority support on-site.
He said that if employers had 'panic' reactions or employers and employer associations issued threats, employees were more likely to discuss their pay and conditions with each other and follow developments. This then provided the union with more opportunities to contact them. With the Fair Work Act then pending, the LHMU had visited 25 large hotels and given out cards to employees that promoted the Act’s focus on collective bargaining and advertised the union’s bargaining services and resources. This proved very successful in signing up new members.
Need to avoid the threats
Burton said that unions will need to be careful that they don’t fuel the line of their opponents that 'union rights equals job losses'. Unions should not try to drive the workplace agenda themselves, but should respond to the lead of employees. He believes the opponents’ claims about increased union power to be misleading. The power to be at the bargaining table was already widespread, and it is different from the power to actually make agreements. Good faith bargaining sets out ground rules for the bargaining process, but does not compel the parties to reach an agreement. Therefore there is a risk of 'death by process'.
A unique moment in time
The combination of the Fair Work Act commencing and the Global Financial Crisis will provide opportunities to redefine and reshape significant workplace relations issues. Both the uniqueness and the scope of this situation are illustrated by the recent lobbying by 'free marketers' to nationalise General Motors in the United States to recover from bankruptcy.
Further information
Further information about the conference is available from the Workplace Research Centre.
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