Confusion continues for small business as AIG warns to monitor Fair Work tribunal decisions

Businesses must continue monitoring Fair Work tribunal decisions in order to avoid inadvertently breaking regulations which could see them slammed with huge fines, a new Australian Industry Group report reveals.

The study shows that while the Fair Work laws are still relatively new – only one year old – legal decisions are still being made through tribunals and the overall Fair Work legal framework is in a state of flux.

The report references a number of Fair Work cases, in which a number of different matters were put before a tribunal. Some decisions were reached quickly with clear explanations, but AIG industrial relations director Stephen Smith says others were unclear.

“Decisions are still coming through thick and fast, and there has been quite a lot of activity in full-bench appeals and so forth. The other significant issue is that there have actually very few court decisions, just tribunal decisions.”

“In most of these areas there have only been tribunal decisions, virtually no court decisions, so it’s still too early to stay whether there will be huge impacts from these. But there have been decisions we are concerned about, some we were satisfied with – it’s been a mixed bag.”

The report outlines a number of areas where decisions have been made, including rules regarding bargaining agreements, industrial action and bargaining representatives. AIG references a recent decision regarding McDonald’s Australia and procedural requirements for agreement making, saying “substantially different interpretations have been adopted by FWA members”.

While the report states the Full Bench of FWA has overturned the McKenna decision to reject a McDonald’s Restaurants enterprise agreement already approved by franchisees and employees, it noted no reasons for this decision have been handed down, which has caused confusion among members.

“It is hoped that this decision will lead to more consistency regarding the procedural requirements and the adoption of a practical and sensible approach by all FWA Members.”

AIG also praised an FWA decision, which overturned Commissioner Smith’s ruling that a Woolworths’ enterprise agreement wasn’t valid because of the wording of the dispute settling procedure, but the group has other issues.

The Fair Work Act allows FWA to approve an enterprise agreement, even if some approval requirements have not been met, if the employers give an undertaking to fulfil those requirements in the future. But AIG says undertakings are being used too extensively, and it is concerned with the “lack of detail” in these agreements.

“In AI Group’s view some of the undertakings which particular FWA Members are insisting upon do constitute substantial changes to [agreements]. AI Group has taken up its concerns about developments in this area with FWA and the Government.”

AIG also referenced a number of decisions for which detailed explanations have not been provided, such as the Woodside industrial action decision, and says these are making conditions harder for businesses.

“It’s difficult for businesses to keep up from a compliance point of view. Particularly the good faith bargaining obligations, they are still taking shape in decisions and it’s hard to figure what they all mean, if you’re a small business. There are still more important decisions to come.”

The report states that one of the good faith bargaining requirements under the act is “disclosing relevant information in a timely manner”, but it also points out that “there have been few FWA decisions on the good faith bargaining requirement to disclose information”.

Smith says businesses need to do the best they can and monitor developments in Fair Work decisions, so they can keep up-to-date with how Fair Work is making its decisions.

“Continued observation is the key here. Employers have made mistakes along with regards to procedural things. They need to know that unions have more rights now, and things they might not have been used to, like good faith bargaining terms, are now different. It’s wise to make sure companies are well aware of these laws.”