Bargaining with Fair Work Australia

Fair Work Australia has become increasingly involved in enterprise bargaining since the commencement of the Rudd Government’s good faith bargaining requirements. While the decisions of the Tribunal have gone both for and against employers, looking a little deeper at what unions are chasing gives you a better idea of the significant influence the legislation is having.

Recently the Commonwealth Bank awarded some of its employees a pay increase. Nothing unusual? Maybe not, except that at the time the Bank were in negotiations with the Financial Services Union and had refused to put a pay offer on the table in those negotiations. Is that a problem? Under the new good faith bargaining rules, it seems it absolutely is a problem. FWA recently ruled that the Bank’s decision to award the pay increase unilaterally was in breach of the good faith rules under the Fair Work Act.

Ultimately the consequences for the bank were not excessively onerous, being required to give notice of any proposed wage increases. The union had sought an order requiring the Bank to table a pay offer in the negotiations for a collective agreement. The Tribunal left the door open for such an order, in finding that the Bank’s conduct “undermined collective bargaining”.

Another decision of FWA illustrates the point. Following about 50 bargaining meetings and extensive industrial action over the course of about 15 months, Xstrata attempted to meet with its employees directly to finalise an enterprise bargain at the Tahmoor mine. The Full Bench of FWA recently ruled on an application by the Construction Forestry Mining and Energy Union (CFMEU) for the orders to the following effect:

• The employer not continue to require attendance by Tahmoor production and engineering employees at small group (eg. crew) meetings on the employers claims in the absence of their bargaining representative.
• The employer will not post or otherwise send further material on its claims to the Tahmoor production and engineering employees’ homes, unless such material is agreed between the parties (including the union).
• The employer will not, directly or by its staff employees or agents make threats or exert pressure on the Tahmoor production and engineering employees as individuals or small groups to extract their support for the employer’s claims.
• Should the Employer wish to present its claims directly to its workforce it will only do so by convening meetings of shifts or the production and engineering workforce as a whole and will do so only in the presence of their bargaining representative. Equal time will be permitted to the employees’ bargaining representative (ie. the CFMEU) for presentations and/or answering questions at any such meetings.
• The Employer will not put a proposed enterprise agreement to the workforce for a vote unless one of the following applies:

1. the proposed enterprise agreement is agreed in principle between the bargaining representatives.
2. the Tribunal has determined that negotiations have reached an impasse.
3. 60 days have passed from the date of this order.

In other words the union alleged that the employer, in trying to discuss its enterprise agreement directly with employees was acting contrary to the good faith bargaining rules by behaving in a manner that was “capricious or unfair conduct that undermines freedom of association or collective bargaining”.

The Full Bench decided against the CFMEU’s application. On the surface that would seem a sensible result. What is really disturbing is that the case ever got that far in the first place – and one can’t blame the union. Even after all of the negotiations and discussions and industrial action, the union felt that the Fair Work legislation offered them a further opportunity to hold up the bargaining process, even after, and perhaps because, it had become clear that the employer was not going to give them what they wanted. And so, the Tribunal was called on to examine in some detail the process followed by the parties in the course of negotiations to decide whether the employer had acted in good faith.

Between the Commissioner at first instance (note, he made his decision in February) and the Full Bench, there were nearly 30 pages of reasoning. There is barely a mention in any of that of the substance of the negotiations. That is the real crux of the good faith bargaining laws; they deal with process, process, process. No doubt the Tribunal was at the same time providing all the assistance it could behind the scenes to help the parties reach agreement. That is a role which they have performed with great efficiency for a long time.

It speaks poorly, however, of the legislation, when so much of the public record is taken up with arguments about the bargaining process.

Peter Vitale is the principal of CCI Lawyers.