Labor's very clear pre-election commitment was not to introduce compulsory arbitration, except “where industrial action or threatened industrial action is causing or may cause significant harm to the wider economy or to the safety or welfare of the community”. However, the FW Act has a hidden threat for employers around FWA arbitration of disputes.
Under the provisions of the new Fair Work Act now in operation, in dealing with a dispute, FWA must not exercise any powers limited by the term of the disputes procedure in the agreement, contract of employment or award. It also says, "If, in accordance with the term, the parties have agreed that FWA may arbitrate (however described) the dispute, FWA may do so. "
What this does is turns around the previous rules about the AIRC / FWA arbitrating disputes in the sense that previously there had to be a clear intent to provide the tribunal with the power to arbitrate a dispute. The new provisions require the term of an agreement to limit FWA powers, which could change the interpretation of FWA powers under some disputes procedures.
"When You Have a Hammer, Everything Looks Like a Nail"
Experience has shown us that in many situations, if a member of an industrial tribunal is given the opportunity, they will want to be able to exert their influence to help resolve a dispute according to their view of what should happen. This is a hang over from the historical role of the industrial tribunals being there to ultimately settle disputes.
The problem with this approach was that it created a national industrial relations psyche of having someone else solve your disputes. It also led to many tribunal decisions restricting an employers ability to implement changes needed to remain efficient and flexible. Unions became skillful in tying up employers in tribunals to stop them implementing necesary business changes.
What To Do About It?
To be on the safe side, our advice is that any agreement needs to make clear FWA can only arbitrate a dispute where the parties specifically agree to do this. Failing to do this may open the door to an outside party imposing - or threatening to - an outcome in a dispute.
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