In the three months since the Fair Work Act 2009 started, we are seeing the extent to which the bargaining environment has changed. Only a few decisions by Fair Work Australia have been necessary to illustrate how prescriptive the process of bargaining is becoming at the workplace level and how much choice and flexibility are being lost in the new system.
Much was said in support of the new bargaining regime in 2008 to allay fears that the good faith bargaining model proposed would not amount to de facto arbitration. The government, itself concerned not to be countenancing compulsory third-party intervention in actual bargaining between the parties, ensured that the act stipulated that no party in bargaining would be required to accept or make offers in the course of negotiations.
That said, many seasoned in the practice of industrial relations could see that the good faith bargaining requirements now contained in the act would enable parties to use grievances over the other party's conduct for tactical advantage.
Regrettably, these scenarios are coming to pass if early decisions are any guide, and some clear lessons, notably for employers, are apparent.
Evidence is mounting that the availability of bargaining orders from Fair Work Australia could itself spawn a culture of litigation rather than encourage workplace consensus.
The combination of majority support determinations, bargaining orders and scope orders means that a party needs little encouragement to draw the sword of Damocles over the other if it cannot secure the concessions it seeks.
Take the recent case of Total Marine Services v MUA, where in the space of four days three applications for bargaining orders were made: two by the MUA and one by the employer. In LHMU v Coca-Cola Amatil (Aust) Pty Ltd, involving a series of recent cases, the LHMU has applied for three orders: a majority support determination, good faith bargaining orders, and a scope order.
The new bargaining regime could potentially impede the capacity of businesses to make organisational decisions free from review or challenge. In LHMU v Coca-Cola, the LHMU used the suite of remedies available to try, among other things, to stop Coca-Cola from restructuring one of its syrup rooms. The LHMU argued that Coca-Cola's "proposed restructuring of the syrup room and its actions in support of this restructuring, represent capricious or unfair conduct that undermines freedom of association or collective bargaining".
Although Fair Work Australia rejected the LHMU's argument, holding that the restructure was not unfair conduct, it does highlight the extent to which bargaining rules will influence structural workforce decisions by employers.
Large employers structure their staff to suit operational matters, facts a union may now dispute in bargaining. Depending on the disposition of the member hearing the dispute, operational decisions could be stopped, reversed and delayed.
While employers are bound to negotiate with a trade union representing employees in discussions, good faith bargaining requirements mean employers will probably have to go beyond this. Even if, for example, a trade union entitled to represent employees does not take any steps to initiate or continue negotiations, an employer, in order to avoid the accusation that it has not permitted a trade union to attend and participate in meetings, needs to pro actively involve it.
In ASU v QT AC, it was noted that "neither party appears to have taken any subsequent action to initiate any meetings, though the ASU claimed it understood that QTAC would invite it to meetings". A bargaining order was issued.
It is clear that the adequacy of an employer's reasons for either rejecting a union's log of claims or conveying an offer will be fertile ground for good faith bargaining order applications. In practice, this means a party in negotiations will have to provide enough information for the other party's purposes, at least if it wants to avoid an application to Fair Work Australia.
It would be a mistake to view good faith bargaining requirements as simply part of a regime regulating process. These decisions will go much further, shaping the parties' substantive negotiating positions and intruding on areas not previously up for grabs such as workforce structure.
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