Employers and unions representatives are now required to meet new good faith bargaining requirements when negotiating enterprise agreements. Whilst these requirements appear logical and reasonable, they do require a deal of thought by parties participating in enterprise bargaining to avoid intervention by Fair Work Australia. It might mean greater reliance by employers on outside bargaining experts to assist them to conduct negotiations.
ER Strategies Director Steve Champion cites obligations such as the need to disclose relevant information (subect to an exemption for confidential or commercially sensitive information) and giving reasons for responses to proposals from the other side in a negotiation as significant. "This cuts both ways".
"Good Faith Bargaining Orders requiring bargaining reps to bargain in good faith are probably not going to be that hard to get if you don't play ball, although the other party normally first has to tell you in writing of their concerns and give you time to rectify them. Serious breach declarations - where FWA can impose a workplace determination - would be much harder to get, with lots of requirements imposed on FWA before handing them out".
Another requirement which he feels is the 'sleeper' is refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining.
"I think that is the one employers really need to be aware of. For example, approaching employees directly could be 'unfair conduct that undermines FOA or collective bargaining. I think the employer would need to tell the union beforehand, for example, if they intended asking for an employee vote on an agreement in the middle of a negotiation. You couldn't just go straight to them, or that might result in embarrassing orders against you, based on the use of similar provisions under New Zealand employment legislation."
"Also, paying a unilateral wage increase ahead of a final negotiated outcome might also be seen to offend this requirement, particularly if it was done without the Union's prior knowledge. Telling employees and the union well ahead of time might not be, because the union would have time to do something about it, reducing the unfairness of the conduct."
He feels that unions will see the new obligations as a great tool to drive union membership. "I have participated in negotiations where the particular union had a policy of asking for compulsory arbitration of disputes on application by one of the parties to the agreement. The union kept the negotiations going for more than a year, starting each negotiation with a deman we meet this claim. They kept telling employees that the employer was denying them a fundamental human right. This is despite the fact that very few countries anywhere in the world have compulsory arbitration of disputes.
"The particular employer had never ever had a formal dispute about any issue. The employees however were concerned about what the union was telling them. It will be this ability to keep negotiations running for extended periods that will provide the union with the opportunity to sign-up as many employees as possible as their 'natural' bargaining representatives.
"In this sort of emotional environment, it will be the trust that the employer was able to establish with its employees before the negotiations began, that will be important in influencing the ultimate attitudes of employees during the negotiation, often in the face of less than frank communications by a union."
Good Faith Bargaining Requirements
The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet under the Fair Work Act:
- attending, and participating in, meetings at reasonable times;
- disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
- responding to proposals made by other bargaining representatives for the agreement in a timely manner;
- giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
- refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
- recognising and bargaining with the other bargaining representatives for the agreement.
The good faith bargaining requirements do not require:
- a bargaining representative to make concessions during bargaining for the agreement; or
- to reach agreement on the terms that are to be included in the agreement.
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