"Industrial Action is Legitimate"
Employers who might hopefully look towards the 'independent umpire' Fair Work Australia (FWA) for protection against unions taking industrial action during bargaining disputes are likely to be very badly disappointed.
The umpire sees its role as enforcing the rules of the fistfight, rather than stepping in to stop the fight (unless of course one participant in the fight is in mortal and immediate danger of suffering a severe 'brain' injury - significant economic harm - more on that in a future article perhaps).
Commissioner Smith of Fair Work Australia commented on the principles governing the taking of industrial action under the Fair Work Act in a recent case -
"The processes contained in the Act are designed to permit employers and employees to engage in industrial action in support of their bargaining positions without the fear of external legal action. In other words, the resort to industrial action by either the employer or the employees is a legitimate and proper exercise of economic power provided that a particular process is followed."
This philosophy was actually introduced by the Howard Liberal Government into the predecessor to the Fair Work Act, under the Work Choices legislation. So there is no philosophical disagreement between our major political parties on that score. The philosophy is that parties to enterprise agreements should generally be free to negotiate their own arrangements, generally free from outside intervention in all but the most serious cases.
Our Comment - we tend to agree with this approach, because the easy intervention of industrial tribunals in the past led to significant inefficiencies in our local labour market, inefficiencies which thankfully have largely disappeared.
Good Faith Bargaining
Where there is some divergence between Labor and Liberals is in the concept of Good Faith Bargaining, introduced by Labor into the Fair Work Act from 1 July 2009. We have written other articles where we proffered the view that this new concept would be a 'sleeper'. Whilst fortunately not all the concerns we expressed in that particular article have yet come to fruition, we are still concerned about the longer term direction GFB will take us in.
An example of a sensible approach from FWA is a finding that it is still appropriate for an employer to continue to discuss issues directly with its workforce even during negotiations for an enterprise agreement. That's nice to know.
However, there are some areas where the Act gives unions what might be considered an unfair advantage in being able to take industrial action against employers, or wage 'war' in other ways, whilst still obliging the employer to continue to engage in good faith bargaining.
We were recently directly involved in a case where Fair Work Australia held that the employer was bound to continue to negotiate in good faith even whilst employees were involved in taking industrial action against the employer. So does that mean parties to negotiations need to continue to be polite and helpful whilst the other side is pummelling them? Just sometimes it seems...
Whither the Truth?
It seems to us that truth can be the first victim of war, and in negotiations for an enterprise agreement, our experience is that often unions (and no doubt some employers on occasions) will make false or misleading accusations about issues involved in the negotiations in order to gain a tactical advantage, for example to garner employee support for industrial action or to encourage the employees to join the union.
However, employers need to be very careful in disciplining staff as a result of their involvement in propogating these falsehoods. The Act is slanted towards the approach that employees are entitled to protection against suffering any disadvantage (adverse action) where it can be linked to their union membership.
In the recent case of Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14, it was held by a majority of a Court of Appeal of the Federal Court that the employer had taken adverse action against an employee (who was also an officer of the union involved in the negotiations, the AEU) when it sought to discipline the employee for claiming he had been told by colleagues they had been asked to produce "false and fraudulent documents" for a re-accreditation audit.
The employer argued the employee's assertions were damaging to its reputation.
The Court majority held (in rather interesting reasoning, we think!) with regard to the employer's conduct that, "The real reason for a person's conduct is not necessarily the reason that the person asserts, even where the person genuinely believes he or she was motivated by that reason," they held. The court majority said that, "If adverse action is taken by an employer in response to conduct of a union, it is impossible for that employer to dissociate or divorce from that conduct its reason for the taking of the adverse action simply by characterising the activity of the union as the activity of its employee."
So an employer might be guilty of conduct even when it doesn't even know it is engaged in that conduct!
We Ask - What About a "Truthfulness in Dealings" Principle During Negotiations?
It seems the truthfulness of what is said in negotiations is far less important than a unionist's right to say what they want, where it is just seen to be part of the "rough and tumble" of enterprise bargaining negotiations. In the case cited, the tribunal heard that both parties had taken a "robust" approach to bargaining, with the union accused of portraying the employer as "the caricatured black suited, cigar smoking 'fat capitalist' dragging a trolley load of money" and the employer of describing the LHMU's actions as "un-Australian".
We think there is definitely room for a stricter monitoring role of what is said during negotiations to keep both sides honest, so employees do understand the real truth of the situation when deciding what attitude they will take against their employer in an often highly politicised situation. We think that is a natural accompaniment to what most people would expect of a concept of good faith bargaining.
Our Comment - We are highly experienced in advising clients or actually conducting enterprise bargaining negotiations and in developing associated employee communication strategies.
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