Written By: David Potts, Esq.
Kells The Lawyers
The Fair Work Act 2009 (Cth) (the Act) states in its objectives that it seeks to improve fairness and productivity in the workplace ‘through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations…’ (1). This signals a significant departure from previous industrial relations legislation which focused on arbitration as the primary mode of agreement making between employers and employees.
This article will focus on the good faith bargaining system, with a particular focus on the good faith bargaining obligations of employers and employee bargaining representatives.
Commencing collective bargaining
The Act also introduces a simple mechanism for commencing negotiations, known as a ‘majority support determination’. Enterprise bargaining can commence where Fair Work Australia (Fair Work) is satisfied that the majority of employees who will be covered by an agreement want to bargain (2). Fair Work has a wide discretion in determining whether majority support exists and can order surveys of employees and ballots amongst other things.
The Act also provided that the relevant union is now the default bargaining representative of employees; however, employees can appoint anybody as their representative provided it is in writing.
Good Faith Bargaining obligations
Once a majority support determination has been made and bargaining commenced, good faith bargaining obligations apply between the bargaining representative of the employees and the employer.
The obligations are (3):
Importantly, the Act specifically states that the good faith bargaining obligations does not require either side to make concessions during negotiations or to reach an agreement.
These obligations seem clear enough, but the case law would suggest otherwise. It can be difficult to determine exactly what the parties to negotiations must do in order to meet their good faith bargaining obligations.
Enforcing the Good Faith Bargaining obligations
Fair Work is empowered to issue ‘bargaining orders’ where one of the parties to the negotiations has not been observing its good faith bargaining obligations. By making a bargaining order Fair Work can make orders specifying the requirements the infringing party must meet in order to fulfill their good faith obligations.
Additionally, Fair Work is able to make a ‘serious breach declaration order’ where a party has engaged in a serious breach of its good faith bargaining obligations. Where this happens Fair Work is empowered to make a ‘bargaining related workplace determination’ and commence compulsory arbitration of the agreement. Although a serious breach declaration has not yet been ordered under the Act, it is fair to say that any arbitration arising from the order is unlikely to be favorable to the party subject to the declaration.
There are several cases on each of the good faith bargaining obligations listed above, however the law is not clear and is constantly evolving. In order to avoid the cost and inconvenience of bargaining orders and ensure the best possible agreement is reached it is essential that employers have sound advice regarding their good faith bargaining obligations during each stage of collective bargaining.
Kells’ expert employment law team is able to provide advice and guidance for employers and employee representatives during collective bargaining, tailored to the specific needs of the client.
Call David Potts, accredited specialist in employment law, on (02) 4221 9311.
For more information about Kells The Lawyers, please visit www.kells.com.au or the International Society of Primerus Law Firms.
1. Fair Work Act 2009 (Cth) s3(f)
2. Ibid, s236.
3. Ibid, s228.