Good faith bargaining orders kick in

For those employers engaged in negotiations for a collective agreement or enterprise bargain, there has been some quiet anticipation of what the good faith bargaining provisions of the Fair Work Act will mean in practice.

Well, the first decisions of Fair Work Australia have been trickling through, and they suggest things will be tougher for employers. Big corporates, such as the banks and Telstra, have already implicitly acknowledged this by implementing major strategy shifts in dealing with unions.

Among the first couple of decisions were orders by FWA that an employer was to be prevented from putting a proposed enterprise agreement to a ballot of employees. In these cases the unions claimed they had not been sufficiently consulted during the negotiation process.

Another case in which an employer ballot proposal was halted also included order that the employer and the union meet four times over a two week period to discuss the enterprise bargain.

A capital “R” Recommendation, which traditionally has been seen as a strong indication of the preparedness of a member of the tribunal to make an order, was made to timetable exchange of proposals and for meetings between the union and the employer.

Although unclear from the decision of FWA itself, it appears that this Recommendation may also have been made in response to an employer proposal to ballot its employees directly about a proposed agreement.

Significantly the Recommendation said that the employer should not attempt to “bypass” the union by communicating directly with employees who were members of the union. The union was appointed a joint returning officer with the company for the conduct of any further ballot on the employer’s proposal.

In a case involving Coca-Cola, the union had alleged that the company was acting “capriciously” by proposing a restructure within part of its plant. While FWA did not make any orders in that case, the employer gave undertakings that it would not continue with its restructure process and that it would provide further information to the union and conduct further negotiations.

It also appears that a number of other applications for bargaining orders may have led to “off the record” arrangements being reached to accommodate the union.

Meanwhile, at the World Labour Law Congress this week, academics and practitioners alike are calling on the tribunal not to be too narrow in its application of good faith bargaining principals.

Lessons for employers:

• Fair Work Australia has indicted that it is prepared to step between employers and their employees in favour of union interests;
• Employers will need to implement even greater care in the bargaining process, and in what they communicate, whether the union is involved in negotiations or not;
• The likelihood of getting an enterprise agreement directly with employees is greatly diminished and large employers in particular will have to accept the reality that they will have no choice but to bargain with the unions in their workplace.

Peter Vitale is the principal of CCI Lawyers.