Brand trashing: The new IR revolution

It is close to Christmas and time to reflect upon the year in industrial relations. In this year we have seen:

• The expansion of social media disparagement.
• The use of adverse action claims to protect union delegates who disparage businesses.
• The advent of protected industrial action that includes wearing campaign gear, advising clients of a business and the media of the faults of the business with who they are engaged and generally disparaging the business.
• Discrimination and harassment claims that are almost unsupported by medical evidence of pain and suffering, but rely upon brand damage to seek millions of dollars.
• The fateful JJ Richards case where a union sought to negotiate with an employer and as the employer was unable to ascertain what he could negotiate (waiting upon final contract negotiations), the union was permitted by Fair Work Australia to avoid the usual steps required of the union prior to the commencement of protected industrial action.

The Qantas and the Victorian Nurses strikes tell us that it is now permissible for unions to gain protection for industrial action during the negotiation of an agreement where the industrial action involves trashing the business brand.

When you examine the above case law behind these principles there is a disturbing trend. In our new industrial environment it is acceptable, when advancing a claim, to utilise the court of public opinion for a financial benefit. Although the case of JJ Richards does not appear to be similar to the other matters – in practice it is. As the more entrepreneurial unions move to gain membership they have approached industrially vulnerable organisations (such as car dealers) with aggressive letters to the employer seeking to negotiate, expand communications to the employer’s workers and all the time knowing, if the employer pushes back, it is an opportunity to short-circuit the industrial process. This necessarily involves trashing of the brand internally in an organisation, dislocating the business and damaging the businesses’ profitability.

JJ Richards really is the thin end of the wedge for more aggressive union bargaining into the future. However, the wedge gets thicker when we examine cases like the Qantas dispute and the Victorian Nurses dispute where a ballot for protected industrial action permitted, as “industrial action”, the wearing of campaign clothing and the deliberate communication of that campaign to clients of the business. There could not be a more disturbing industrial process than this.

There is no line in the legislation, once this concept of industrial bad-mouthing is permitted, to stop more offensive campaigning forming part of legitimate protected industrial action. Imagine your clients, ringing your site seeking to purchase goods, only to be told by one of your employees:

“We are taking industrial action against this business because they don’t look after us properly, they are terrible employers and you really shouldn’t deal with them!”

Do we really want such behaviour to be protected? The purpose of the Fair Work Act is not to destroy business. A quick reading of the Act makes it clear that it has an object of “providing a balanced framework for productive and co operative workplace relations that promotes economic prosperity and social inclusion for all Australians.” The Fair Work Act then lists seven elements of that general proposition – all of which promote fairness. What part of fairness is brand trashing?

You could not read the tabloid press and not be aware of the recent spate of discrimination and harassment claims seeking millions of dollars. An examination of many of these cases reveals that there is hardly any reliable medical evidence demonstrating serious medical injury leading to pain and suffering. In the past, many of these claims, if successful, would have been disposed of between $10,000 to $20,000. Instead, claims are settling for hundreds of thousands of dollars, even where the sexual harassment complained of is at the lower end of the scale of sexual harassment (not involving assault). The payout of these claims is significantly greater than common law claims where very serious injuries occur as a result of assault.

The new species of brand trashing litigation is a matter of concern for all Australians. Although businesses can mitigate the risk, the best laid plans can be overcome by a strong media campaign.

Perhaps the only inroads that we are seeing into brand trashing, is in relation to employees who trash brands on their personal social media. A number of cases have recently come through that demonstrate that employees who use their personal social media, in their own time and publish to friends, comments which identify and trash the business they are in, may be in breach of a fundamental duty to their employer and face disciplinary consequences. However, the cases are not clear as to what is and what is not permissible comment by an employee in respect of their employer. That is something we will understand, hopefully before the end of next year.

How do you defend yourself from brand trashing?

1. If unions approach you to commence bargaining and you have not had an industrial agreement in place before – do not reject the approach out of hand. Seek some advice and be strategic.

2. Policies and procedures are critical in all businesses. Employees must be trained in the policies and procedures around discrimination and harassment, they must be competent in them and the policies and procedures must be applied fairly.

Each business must have a policy that identifies the brand, the values behind the brand and which emphasises the need to protect that brand. For example, in cases like Boags, the employer identified its brand with “responsible drinking” and was successful in terminating an employee who drove while they were intoxicated. Brand does matter, should be defined and the business should enforce any behaviour that breaches the values of the brand.

3. You must have a social media policy. A social media policy must proscribe any actions that identify the business, employees, clients or other stakeholders in the business adversely, and must have a supporting IT/IP internet policy to prevent use of the businesses’ system (taking into consideration the differing rules around surveillance both at State and Federal levels throughout Australia).

4. When negotiating with a union who seeks a protected action ballot – challenge the ballot to ensure that where campaign gear or adverse communication is to be utilised as part of the industrial action, the protected action ballot order sought accurately identifies what is to be done and said to prevent brand trashing.

All of the above steps will help protect your business from the 2011 disease of brand trashing. Hopefully, the Australian Government and other stakeholders in industrial relations will take notice of the damage brand trashing is doing to Australian business and how it undermines the very objects of the Fair Work Act which governs our industrial system.