Good faith bargaining: spinning the moral compass?


Good faith bargaining: spinning the moral compass?

The principles of good faith bargaining are basically to act morally and ethically correctly — but, is this what the Fair Work Act provisions have achieved?


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The principles of good faith bargaining are basically to act morally and ethically correctly — but, is this what the Fair Work Act provisions have achieved?

Not in many cases, according to Lisa Heap, executive director of the Australian Institute of Employment Rights (AIER), who spoke at the Fair Work Summit, held in Sydney by IIR Conferences on 29 May 2012.

She said that the good faith bargaining provisions have in some respects created a history of contested behaviour and litigation. It is probably a minority of instances, but the problems tend to be widely reported. The disputes have been about detailed interpretations of the Act’s provisions; for example, what types of actions are/are not ‘bargaining’, information disclosure, confidentiality and precise definitions of ‘capricious’ or ‘unfair’ conduct. Heap argued that good faith bargaining should encourage the parties to make politically and morally responsible choices, but this does not appear to be happening much of the time.

She noted that one of the objectives of the Fair Work Act was ‘to maximise workplace cooperation’ and by doing so increase prosperity, but this has been swamped by a current preoccupation with ‘productivity’.

There’s a right to bargain, so get over it
Heap discussed the recent history of workplace relations legislation and described the Fair Work Act as ‘a move back to collectivism’. It encourages bargaining and provides a right to bargain, gives a legitimate role to industrial action and employees have rights to be represented. She suggested that people, instead of complaining about these changes, should just adapt to them and move on. In her opinion, Fair Work Australia ‘has got it right most of the time’, appearing to favour both sides at different times and in different circumstances.

HR needs to promote ‘good faith behaviour’
Good faith bargaining can only work if ‘good faith relationships’ have been established as a prerequisite. As noted above, its principles basically amount to acting morally and ethically correctly. ‘Justice’ is what is consistent with what is morally right and fair.

The challenge for HR, therefore, is to encourage managers involved in bargaining to adopt these behaviours. This requires them to think very carefully about what they do, why and how they do it, which in turn may require the following training techniques:
  • internal dialogue and self-questioning (eg about motives)
  • self-awareness
  • self-reflection
  • making the right choices
HR not needs only to be a role model in terms of displaying ‘good faith behaviour’, but it needs to challenge others to do likewise.

Short-term gain can do long-term damage
Heap warned those who become involved in bargaining that their actions will have consequences later on, so tactics that are dubious but achieve a short-term benefit may eventually backfire (eg because trust or reputation have been undermined). She suggested that the widely-publicised lockout of employees by Qantas earlier this year was motivated by a desire to preserve shareholder value at the time, but it may well have done significant long-term damage to the relationship between the bargaining parties, and perhaps also the brand and reputation of Qantas.

The concluding message: Think very carefully about what you do, and the longer-term impact your tactics may have.

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