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This is not advice. Items herein are general comments only and do not constitute or convey advice per se. The information contained in these articles is for guidance only and should not be relied upon without obtaining professional advice having regard to your direct circumstances.


Bargaining under the new fair work system

From January 1, 2010, it is proposed Fair Work Australia (FWA) will be the super body replacing the Australian Industrial Relations Commission, Workplace Authority and Workplace Ombudsman among several others with the aim of performing all these functions as an industrial ‘quick-e-mart’.

Employers called before FWA will generally not be allowed the representation of a lawyer or paid agent when fronting FWA. FWA will have a range of jurisdictions including unfair dismissal, industrial action and regulating “Good Faith Bargaining”.

Union rights of entry

The existing rules and rights under the Workplace Relations Act for the most part remain the same. However the government’s changes expand the circumstances in which trade union officials can enter workplaces. Trade union officials will be able to enter premises to hold discussions with one or more employees who wish to participate (who perform work on the premises, whose industrial interests the union is entitled to represent).

What this means in real terms is that trade unions can enter workplaces on a significantly greater set of circumstances as there is no need to refer to an industrial instrument that governs the employees work. Furthermore, when a trade union official enters premises to investigate suspected breaches, the Bill allows for access to relevant documents regardless of whether they relate to a union member and in doing so dispenses with the current safeguard in the current laws that only allows for the inspection of union member records unless the commission orders otherwise.

Good Faith Bargaining

What you need to know:

1. Trade unions may become parties to enterprise agreements if they represent only one employee. This provides unions with substantial rights at any given business.

2. Where a majority of employees at a workplace wish to bargain collectively, their employer will be obliged to bargain collectively with them and in good faith. This majority may be made simply by a show of hands.

3. If you are a business owner, director or CEO and you are representing your business as a participant to the enterprise bargaining process, you will be required to:

• Attend and participate in meetings at reasonable times

• Disclose relevant information in a timely matter (although commercial in confidence material will be protected)

• Respond in a timely matter to proposals made by the other party

• Give genuine consideration to other parties’ needs and provide reasons for responses, and

• Refrain from capricious or unfair conduct which undermines freedom of association or collective bargaining.

4. These requirements do not compel you, as an employer, to finalise an agreement. However, should you fail to comply with these directions, the other participants (i.e. trade unions) may obtain an order from FWA to instruct you to bargain in good faith. Should you not comply, for any reason with ignorance being an excuse, FWA may arbitrate the matter and make a workplace determination.

5. In relation to agreement making, a better off overall test (BOOT) will be applied for a collective agreement to be approved by FWA. This means an agreement will need to meet the 10 legislated minimum standards where there is no relevant award. Where there is an award, the test will be applied against both the legislated and award standards.

Risk for businesses

The inability to bring paid agents before FWA poses some risk to business owners who are not able to succinctly and eloquently put their case forward. The need for a comprehensive and independent business case to take into FWA appears the best solution to best represent the facts on behalf of small businesses. FWA is a radical change from everything employers to employees have ever known and may take some time to get used to.

Furthermore, the government’s new IR bill put a sharp emphasis on collective bargaining, so businesses need to be ready for the possibility of having to negotiate with trade unions. New union rights, such as the right to inspect your business records pertaining to all employees, indicate a strong position for trade unions in your workplace. Union observers note that ‘good faith bargaining’ will give unions new and vastly improved opportunities for workplace organising and activism.   

Some employers seem incensed that unions – which represent a mere 14 per cent of the private sector workforce – will get a seat at the bargaining table. The Australian Mines and Metals Association is on record as suggesting that the proposed changes would “give unions the key to the door of all workplaces” including 90 per cent of businesses that currently had no dealings with unions. The Australian Retailers Association is on record as saying small business is ill equipped to cope with the new industrial system which heavily discriminates against small business.

The changes are described by some as being tough, unfair and very inappropriately timed, particularly for small and medium businesses. Owners and managers of these businesses can manage the changes in only two ways.

Either business owners, as well as focusing on their core business in these tough economic times, become fully aware of the changing laws for unfair dismissal and for collective bargaining in making sure they do not fall foul of the law and, more seriously, for agreement making, good faith bargaining orders. Or, business owners avail themselves to specialist advice. Whilst neither option is ideal for struggling small and medium businesses, those that bury their head in the sand are liable to have it lopped off.

David Chapman
My Business, March 2009


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