Good Faith Bargaining

For some businesses, the introduction of ‘Good Faith Bargaining' may not affect you right now, may affect you in the future, or may be a significant change that causes a further burden. It is worth reiterating at this early stage that these changes to Australia's IR laws found in the Australian Federal Government's Fair Work Act can be managed with education and a solid business strategy. This education starts with some review:

Fair Work Australia (FWA)

From January 1, 2010, the FWA will be the super body replacing the Australian Industrial Relations Commission, Australian Fair Pay Commission, Workplace Authority and Workplace Ombudsman, amongst several others, with the aim of performing all these functions as an industrial ‘quik-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 in a significantly greater set of circumstances, as there is no need to refer to an industrial instrument that governs the employee's 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. The above requirements do not compel you, as an employer, to finalise an agreement. However, should you fail to comply with the above directions, the other participant(s) (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 no 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 (To be known as the National Employment Standards) where there is no relevant award. Where there is an award, the test will be applied against both the legislated and award standards.
   
   

Conclusion

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 represent the facts on behalf of small businesses. FWA is a radical change from everything employers and employees have known and may take some time getting used to.

Furthermore, the government's new Fair Work Act 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 - including non-union employees - indicate a strong position for trade unions in your workplace. 'Good Faith Bargaining', it is anticipated, will give unions new and vastly improved opportunities for workplace organising and activism.

Unions - which represent a mere 14% of the private sector workforce - will get a seat at the bargaining table. Even if just one worker in a large company belongs to a union - and most employees are happy to collectively bargain - this will become the new workplace life for business owners. The proposed changes give unions greater access to workplaces - including the 90 percent of businesses that currently have no dealings with unions. Many small businesses may be ill-equipped to cope with the new industrial system, which discriminates heavily against them.

Business owners, as well as focusing on their core business in these tough economic times, need to become fully aware of the changing laws for unfair dismissal, collective bargaining, and, more seriously, for agreement making, and good faith bargaining orders, to ensure they do not fall foul of the law. They would be well advised to avail themselves of specialist advice.

Whilst neither option is ideal for struggling small and medium businesses, burying their head in the sand will achieve naught - and might actually do more damage.

Author Credits