The big step back

The Fair Work Act was unashamedly drafted to play the unions back into the industrial game. And it did this with a vengeance.

In the last two months I have acted for several businesses that are struggling with reinvigorated union officials’ robust attempts to regain control of the management prerogative.

The agenda in manufacturing sadly replicates the bad old days of:

• Union Control over the use of contractors and casuals;
• Fixed manning levels on machines at the cost of productivity gains undertaken safely;
• Transfer of business entitlements paid into trusts, rather than being retained as working capital of the business.

The list goes on!

In one business that I act for, an indefinite strike was held (recently resolved) where both employers and employees suffered huge and continuing losses. Had it not resolved, other sites of the business would have suffered stand downs, clients would have been forced to stand down employees and the business would have invariably lost contracts and reputation.

The union tactics described above have not saved jobs in the past. Instead they have caused businesses to fail and become uncompetitive.

What can the Act do to help Australia’s vulnerable employers? Very little!

The Good Faith bargaining provisions are being fairly and sympathetically construed by Fair Work Australia and in a way which does not impose excessive obligations on employers.

However, the capacity of Fair Work Australia to assist the parties, even where damaging and protracted disputes are underway, is limited. First, the Good Faith bargaining provisions enable unions to prevent direct agreement making between employers and employees, something that is supported by the Act. Second, the role of Fair Work Australia is facilitative only – the parties can be ordered to the table but not to be reasonable in their behaviour.

Further, the tools for terminating or suspending industrial action can only be utilised after the damage has been done. The Act is designed to permit damaging industrial action to continue until the last man is standing. That will almost invariably be the union because the only person who gets paid during strikes is the union official.

Few would seriously cavil with the proposition that WorkChoices at its worst went too far. However, the excesses of WorkChoices will pale into historical insignificance compared to this Act. As case law develops we will see:

• The introduction of restrictions on the business prerogative, rendering it inflexible.
• The driving of a wedge between employers and employees (watch this space for Good Faith bargaining cases).
• An increase in the use of courts as Adverse Action claims – with a reverse onus of proof – become popular union industrial tools.
• An increase in the use of litigation and the complexity, cost and disputation around agreement making.

Most of all everyone will lose money, jobs will be lost, export earnings and reputation will be lost and a lengthy, destructive battle over union ideological agendas will blossom. This Act is a huge step back into the mayhem of the 80s. And yes – at our most vulnerable economic time.

Andrew Douglas is the founder, principal lawyer and managing director of Douglas Workplace & Litigation Lawyers. Andrew is an experienced commercial litigation and workplace lawyer, who acts both as a solicitor and advocate.