Good faith bargaining: the story so far — Nov 2009


Good faith bargaining: the story so far — Nov 2009

It’s now almost five months since the good faith bargaining provisions of the Fair Work Act 2009 came into operation. What’s been happening so far and how are the provisions being interpreted?


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It’s now almost five months since the good faith bargaining provisions of the Fair Work Act 2009 came into operation. What’s been happening so far and how are the provisions being interpreted?
Some insights were provided at a seminar conducted by the Australian Human Resources Institute (AHRI) in Sydney on 26 November 2009.
Alice De Boos, partner at HWL Ebsworth Lawyers, provided an overview of the legal provisions. She also made the following comments regarding developments so far:
  • 80–90% of bargaining agents are predictable appointments, such as union delegates. She was unaware of any disputes relating to ‘unpredictable’ appointments so far.
  • The use of petitions of employees to apply for a majority support determination depends in the circumstances, according to decisions so far. Fair Work Australia (FWA) needs to be satisfied that the petition is valid, that the signatures on it are authentic, etc. Some petitions have been rejected due to concerns of this nature.
  • There have also been some apparently contradictory decisions regarding attendance at meetings and the number of meetings required. In some cases, FWA has ruled that insufficient meetings were held. 
  • There have been no significant decisions so far regarding the timely disclosure of information between the parties.
  • When bargaining, you need to be very careful if you attempt to argue that the employer’s financial position is difficult. You may be required to actually prove that it is in financial difficulties. Another presenter at the seminar added that some unions compile dossiers on financial information (eg annual reports, media releases, press coverage) about businesses. If the company’s Marketing or PR Divisions have produced glowing reports intended to influence share prices and impress shareholders, it becomes difficult to argue financial hardship in bargaining negotiations. If a union claims that other comparative employees are being paid more, this places the onus on it to produce evidence to prove the claim.
  • It is a contentious issue whether company management meeting directly with employees can amount to ‘undermining’ the bargaining process by by-passing bargaining representatives. De Boos argued that it is normal good management process to communicate directly with employees on a regular basis.
  • FWA is yet to issue any ‘serious breach’ declarations.
Try to set the agenda as much as you can
Tony Wilks, general manager HR of Svitzer Marine Ltd, outlined his company’s experiences of the Fair Work Act to date. In bargaining situations, he recommended drafting your own new agreement and tabling it on day one of negotiations. This approach is better than waiting for a union log of claims because it means the employer has a better chance of setting, or at least strongly influencing, the bargaining agenda.
Adding to the comments above about claims relating to financial position, he advised never to say ‘we can’t afford that‘, otherwise you will be asked for evidence to prove it. A better approach is answers such as ‘out of touch with community standards’, ‘much higher than CPI increases’.
He recommended preserving your right to manage, for example by saying ‘we will respond to that within 28 days’. He said ‘give money before time, give time before control, avoid losing control’.
Wilks predicted that the legal profession will have a greater role to play in the system, eg as advisers, than it did under WorkChoices. Employers that embraced AWAs and had difficult workplace relations under WorkChoices are likely to require a long time to rebuild trust, but those that enjoyed good relations will be little affected by the new Act.
F17 form onerous
Relevant ‘Fair Work forms’ are available from the FWA website
Ian Hedges, general manager People of Hanson, issued a warning regarding the contents of Form F17, which is required when lodging a new collective agreement. The form has 57 questions and seeks detailed statistical information on items such as the demographic statistical profile of the workforce. Numerous questions require the employer to review compliance with both the Act and the BOOT (Better Off Overall Test).
The implication here is that businesses need to have access to the data required by such forms, for example in their HR information systems, and it must be easy to extract it when required. Employers should also provide managers with easy intranet access to documents frequently required under the Act, such as the ‘notification of representation rights’ form and, when available, the Fair Work Information Statement.
Issues with ‘flexibility’ provisions
Hedges said that some unions have attempted to limit the use and scope of the ‘flexibility clause’ in collective agreements. They apparently feel that its use may reduce their power and influence, because it deals with matters that are private between the employer and employee. Some of them prefer that flexibility arrangements only apply to the taking of leave, not to work arrangements or payment issues.
One approach is to simply say that you will not have a flexibility clause in the agreement. The result will be that the Act’s model clause is inserted into the agreement by default. Another approach, if you want to make an agreement with an employee over a simple and single specific matter, is just to deal with that in a separate letter issued to the employee. The lesson here is: know exactly what you want a flexibility clause to achieve in each case, don’t rely on general flexibility provisions.
Hedges quoted from a report by the Australian Industry Group, Fair Work Act: First 100 Days (click on Fair Work Act: Bargaining Provisions — The First 100 Days), which noted that while some unions became very active in pursuing claims, industrial action remained at low levels. The report commented that the interpretive approach taken by FWA will have the biggest impact on how the new system works in practice. The attitudes of individual FWA Members will be influential, for example, in their approaches to handling what is claimed to be ‘commercially sensitive information’.
Further information
Further information about this seminar is available from AHRI.
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