The Bargaining Coach rarely comments on decisions of courts or tribunals. Plenty of others do that. This is a rare exception.
Many of you will by now be aware of the Aurizon decision where a Full Bench of the Fair Work Commission constituted by Vice President Watson, Deputy President Gostencnik and Commission Spencer terminated 12 enterprise agreements. Fundamentally, this decision recalibrates the approach taken to the termination of expired enterprise agreements.
The Full Bench found that there is no inherent “predisposition against the termination of an enterprise agreement that has passed its nominal expiry date”, effectively overturning previous views to the contrary.
The decision is thus important. Enterprise agreements are renegotiated and replaced but rarely terminated. Employers are often stuck with terms and conditions that may have been appropriate many years earlier, but are now no longer so.
Commercial circumstances change, as was the case for Aurizon. The changes required in the workplace in order to meet new competitive challenges were unable to be derived from the enterprise bargaining process. As is often the case, unions and employees remain tied to legacy arrangements, even in the face of a burning platform for change. This is all too common.
The Aurizon decision displaces the (until now) prevailing view of the Fair Work Commission that the promotion and delivery of productivity benefits is to be achieved through enterprise bargaining. The Full Bench’s acknowledgement that deals should not operate in perpetuity introduces a degree of reality which will sit more comfortably with most employers: particularly those seeking to reform obsolete legacy arrangements.
Most importantly, for all bargaining participants, it focuses their attention where it should be: on the future, not the past.
For more information on the rationale of the decision, please read – Aurizon: Operating in perpetuity not in the public interest.