Enterprise bargaining is down. That’s the big call out from the Department of Employment Report on Enterprise Bargaining February 2017. Comparing private sector agreement numbers from 2014 there is a reduction by a third overall, with close to 50% less in retail and construction and around 20% in most sectors.

As a result, the number of employees covered by current agreements (ones that haven’t expired) has declined. The decline is felt in respect of both union and non-union agreements.

If fewer agreements are being made or perhaps, more accurately, are taking longer to be replaced, why? The economic environment has a big part to play particularly in some key sectors. Unions are finding it harder to secure deals – obviously. Is this a function of the economic environment or is it a function of a longer more systemic trend borne out of declining union density, and therefore union organising power? Probably both.

The agreement making numbers are down, particularly in smaller enterprises. Unions are best placed to focus their resources on larger employers where the potential membership pool is larger. On the employer side, the cost of making a new agreement (2% per annum plus wage increases) outweighs the pain (union pressure/employee discontent) of not doing so. An employer’s “BATNA” (best alternative to a negotiated agreement) is the status quo. There is more leverage for employers in an environment where the termination of expired agreements is more readily available than once thought.

When this occurs employers start thinking about a concept that gets revisited every decade since the dawn of enterprise bargaining: “beyond bargaining”. How can we, the employer, operate in a sustainable, risk-free way without enterprise bargaining? The solutions here are well known, but long term and resource intensive. It relies on two key premises:

  • First, there is nothing to be gained operationally by enterprise bargaining. The “productivity lemon” has been well and truly squeezed. Employers consistently tell us this.
  • Secondly, bargaining can be avoided with manageable risk. Put another way, any risk associated with the bargaining process (read “industrial action”) does not outweigh risks associated with making an agreement which, in the longer term, risks the viability of the enterprise.

On Friday 24 March, Western Bulldogs kicked off their 2016 premiership defence with a tenacious win against Collingwood. Round 1 of the 2017 AFL season also coincided with the introduction of the WorkSafe Legislation Amendment Bill 2017 (VIC).

This Bill includes changes to the rules by which WorkSafe Victoria can prosecute alleged indictable offences against the OHS Act outside the current two year limitation period.

WorkSafe is already a contender for the premiership team for enforcement action if you look at its record of successful safety prosecutions. For example, in 2013/2014 it commenced 107 prosecutions for alleged offences against workplace health and safety laws with an 88% success rate. This has gradually increased to 119 prosecutions in the 2015/2016 period with a prosecution success rate of 94% (see page 19 of the WorkSafe Annual Report 2016).

Yet WorkSafe has kicked off its 2017 enforcement year backed by impending legislation that is designed to give it even more scope to prosecute alleged indictable offences against workplace health and safety laws outside the current two year period.

We are all for cheering on teams whose purpose is to improve health and safety outcomes at Victorian workplaces. Though we query whether the proposed changes in the Bill are designed to improve the already high performing enforcement regime in Victoria, or whether they are designed to give WorkSafe a free kick if they drop the ball with an investigation?

We acknowledge there will always be limited exceptions where WorkSafe needs the ability to prosecute for alleged offences outside of the two year period. For good public policy reasons that exception already exists in the current law that enables WorkSafe to commence prosecutions out of time with the written authorisation of the Director of Public Prosecutions.

Aside from questions about the utility of yet more law to deal with situations which appear to be adequately addressed by the current law, there are broader considerations about whether the provisions in the Bill will have the desired impact. The longer a matter takes to investigate and prosecute, the less likely it is to have a successful outcome. We also see the adverse impacts of protracted safety investigations and prosecutions on the victim, their families and work colleagues.

If the ‘end-game’ is improving health and safety outcomes for Victorian workers, are better options available? Are the tax-payer resources required to implement these proposed legal changes better directed to funding collaborative programs where WorkSafe Inspectors engage early and effectively with employers and employees on critical WHS risks in their business with an explicit objective to promptly improve health and safety outcomes?

Much has been made of recent scandals arising from sexual relationships in the workplace and in most cases the relationships are said to have been ‘personal and consensual’. While not a new issue, we have seen changes to the way organisations have responded to the relationships, perhaps as a reflection that our culture is less accepting of the conduct.

Is it ever appropriate for a senior executive to conduct a sexual relationship with a workplace colleague, whether they are an employee, a representative of a client or customer, contractor or consultant to the business? Continue Reading Is a workplace relationship ever consistent with good governance

It is an indisputable fact that women are not equally represented in leadership roles or management positions in Australian companies and governments, not even close. Even in 2016, this is the case in almost all arenas of business and politics and is most certainly a global issue, although Australia even appears to lag in this indicator among developed nations. This flows through to an under-representation of women on boards of directors of Australian public companies. Earlier this year consultant Conrad Liveris found that there were fewer women in CEO and chair roles in ASX 200 companies than there were men named either John, Peter or David in such roles. What an alarming statistic! In this note we consider whether this under-representation is caused by a failure to recognise that women as much as men are able to achieve and sustain appropriate business outcomes and conclude that this is a matter that good corporate governance can resolve. Continue Reading A perspective on the unequal representation of women in leadership

As we celebrate International Women’s Day, the 2017 campaign message asks us to #beboldforchange and to “take action to drive change for women to forge a better working world”.

The campaign’s aims are admirable and worthy of support. But I find myself querying whether such a campaign really helps our workplaces become more holistically diverse and inclusive.

Much of the focus on “diversity” remains on women’s participation and inclusion in the workforce (undoubtedly a very important issue). Sadly, many organisations still have not moved beyond the numbers game – reporting annual statistics on the number of women in the workforce as a whole, on the senior management team and on the board of directors. This approach provides an easily measurable benchmark and is encouraged by compliance initiatives such as the ASX Corporate Governance Principles and the WGEA reporting obligations.

I accept that getting women in the front door is often the first challenge, and several of our clients are working on fabulous initiatives to address this challenge to achieve more gender diversity in their blue collar workforces. Ensuring sufficient numbers of women progress to senior leadership positions is also an ongoing battle.

However, does this narrow focus mean that many organisations are missing the bigger picture and the business imperatives for broader diversity and inclusion? What about ethnicity, age, national origin, disability, sexual orientation, educational background, religion, parental status and socio-economic status? How do employers bring together their diverse people resources for mutual benefit?

It is trite and well-trodden ground that without buy-in from the top, progress towards true diversity and inclusion will not be made. However, general statements of commitment at the Board or corporate policy level will also never lead to change without integration and implementation at each business function and unit level.

Our clients who are advancing the most in this space know that it is critical to create an environment at all levels of the company where diverse ideas, perspectives and backgrounds are harnessed to create value to the business. The long journey to achieving an inclusive workplace requires inquiry at every level about the specific and measurable actions to be taken to create and foster such an environment.

All easier said than done I know! We’d love to hear your thoughts on what it is for an organisation to #beboldforchange.

The Victorian Supreme Court recently issued a stunning decision awarding an employee over $600,000 comprising $210,000 for pain and suffering and the balance for lost past and future income, despite the employee having a significant pre-existing psychiatric illness and a finding that no bullying had occurred.   Continue Reading Damages in bullying claims – the stakes are rising even higher

boxing-gloves-375473Ronda “Rowdy” Rousey was at the top of her field, training hard and winning harder.  Her success had built her brand.  So much so that she diversified into acting with parts in two big budget, big publicity movies. Then it happened. Her reputation did not match her performance. Immediately the questions started – would she come back?

As the saying goes ‘the bigger you are the harder you fall’.

The shock and self-doubt experienced by Rousey and the public commentary about her performance and her future are also experienced by organisations and industries following a significant or catastrophic workplace incident. 

There is the shock. That a colleague, friend or someone on their watch has suffered serious injury, or lost their life. There are questions about why the systems and the commitment to safety were not enough to prevent the occurrence. Your performance has not met your own expectations and the expectations of others.

Then comes the uncertainty about what comes next. Uncertainty about what an investigation will reveal about the failure, the associated consequences and the future cost of prevention. You will question if you are going in the right direction, including whether your systems and processes are adequate. The safety solution is not the only area of uncertainty for business – it extends to how to re-build trust, how to re-build brand and how to re-build performance.  In short, how will you get back in the ring?

Like Rousey the business has to persevere. It has to assess what happened, what needs to be reinforced, what needs to be improved and what needs to change. Was there over training? Or undertraining? The wrong preparation? The wrong support team? Is there new technology or new techniques that can assist? Are there improvements that can be made to the system of work? Do you need a new coach? Or a new approach? In reality it is probably a combination of all these things (and more) for the business to get “back in the ring”.

Then the hard work needs to start again. Not from the beginning, but building on what was implemented before the incident and incorporating the lessons learnt. We often find that organisations that have experienced a significant or catastrophic incident take a different approach to risk control than those that haven’t. They keep a healthy level of vigilance on the performance of their critical controls and they drive the commitment to safety through all levels of their business. They use a variety of levers to engage and embed an incident prevention mindset – they are not afraid to bring in outside expertise to give them the edge to get back on top.

And like Rousey, it is important to take your time, consider your options and develop the right strategy to get you back in the ring.

A photo by Thomas Kelley. unsplash.com/photos/hHL08lF7IkcThe Aurizon decision handed down on 22 April 2015 and endorsed by a Full Federal Court on 3 September 2015 has created a viable option for employers needing to move away from legacy industrial arrangements that are bad for business.

The Aurizon decision was a watershed ruling because it swept away a longstanding presumption that agreements should not be terminated whilst bargaining negotiations for a new agreement are occurring (see our earlier blogs about this decision here). The mere fact the option exists has given employers more leverage in bargaining, as well as providing an opportunity to change arrangements other than through a union-resisted employee ballot for a new agreement.

Figures released by the Department of Education last week show that applications to terminate agreements have almost doubled. The Fair Work Commission terminated 416 agreements in Q1 – Q3 2016, which represents an increase from 275 in 2015 and 156 in 2014.

Of course, not every agreement is a good candidate for termination – a lot depends on the context, the reasons for the application, what has occurred during the bargaining process, and a list of other factors. An employer making an application to the FWC without the consent of employees covered will need to show that termination of the agreement is not contrary to the public interest, and is appropriate in all of the circumstances.

The union response to these recent developments has been multi-layered, with the following key strategies observed:

  1. Deal with it “on the ground” using traditional IR tactics and weapons (including ramping up protected action and/or taking covert unprotected industrial action)
  2. Go after the “brand” with media campaigns and the like
  3. Lobby for changes to the legislation – unlikely at present
  4. Look for suitable test cases to run to try to overturn Aurizon, and / or
  5. Try to agree restrictions in the agreements currently being negotiated to the effect that if the employer applies to terminate the agreement in the future, specified terms and conditions considered particularly important will be maintained by way of undertaking.

This fifth strategy is itself a result of a recent development. Late last month, VP Hatcher stayed a decision of DP Clancy to terminate the Loy Yang Power Enterprise Agreement 2012. The stay was issued on the grounds that termination was ordered despite a specific clause in the EA requiring the Company to maintain a suite of conditions until a replacement agreement was negotiated. While AGL gave an undertaking it would maintain certain conditions, the undertaking was narrower than the list of conditions specified in the clause.

The appeal will be heard on 21 February 2017. The appeal will look closely at the effect of this clause and particularly whether AGL moving away from it impacts on the “appropriateness” of terminating the agreement. This part of the test requires the FWC to consider a range of discretionary factors.

The impact of the AGL stay has been immediate. Across our partnership, we have seen unions ask for a similar protective clause in over half a dozen separate bargaining negotiations in the past week. Major employers will increasingly need to deal with this kind of claim and the public campaigning that results if there is a rejection of the claim. Of interest over the next month will be how far the AGL appeal goes – and whether it has ramifications beyond the specific facts of that case.

The stakes are risingIn the world of anti-discrimination law awards of money against employers for psychiatric injury or illness caused by sexual harassment by one of their employees have been rare and low, typically in the range of $12,000 to $20,000. Similarly, the anti-bullying jurisdiction of the Fair Work Commission has seen limited orders made to prevent further bullying where claims have been made, and compensation is not available as a remedy for bullying behavior.

But things are changing, especially in the area of sexual harassment where awards of damages for psychiatric illness are increasing. This reflects change in societal attitude towards this type of conduct that has (finally) started to be reflected in judicial pronouncements.

The spectrum of mental harm that can be experienced by victims of sexual harassment or bullying covers depression, anxiety and post-traumatic stress disorder (PTSD) any of which can be debilitating for a significant period.

Continue Reading Damages in sexual harassment and bullying claims – the stakes are rising

SurveillanceTechnological advances in monitoring and surveillance call to mind the lyrics of The Police’s widely misinterpreted hit, Every Breath You Take. But how will this emerging new frontier play out in workplaces and work practices? As technology continues to accelerate, many employers are starting to think about how to harness these developments in order to achieve greater workplace productivity and consistent health and safety outcomes.

When we think of workplace surveillance, it’s easy to get stuck thinking about the traditional measures that have been widely used for the last 10 years or so – email monitoring, CCTV and the occasional dash-board camera. These methods have historically been used for safety, security and compliance. But as workplaces become more remote and isolated and there are lower numbers of employees on any one site, organisations are looking beyond traditional methods and embracing the latest monitoring technology – both to deal with safety and security, but also as a direct way of measuring employee productivity.

The new frontier of workplace monitoring includes the use of:

  • drones to monitor inaccessible work sites;
  • caps worn by employees operating heavy duty machinery or vehicles which use infra-red technology to identify fatigue indicators such as yawning and prolonged blinking, and where such fatigue indicators occur, send an alert to either the employee or a manager;
  • satellite monitoring of speed limits for employee driven vehicles in remote locations which instantly alert drivers and managers to speed limit infringements; and
  • without getting too Matrix-y about it, there even exists headwear which can measure the electrical activity of the brain in order to determine when your mind, quite literally, isn’t on the job.

Some innovations haven’t even been applied to the workplace yet. For example, in the tech industry, it is common for companies developing apps and websites to road test new developments with consumers by using eye tracking technology to monitor where a tester’s eyes are drawn on a computer or tablet screen (and how long the user spends looking at particular parts). It is not a great leap to think that employers could use similar technology to measure employee productivity – for example, in call centres where time efficiency outcomes and work outputs are intrinsically linked. This technology could measure the workplace productivity (and therefore focus) of each employee by tracking their vision on a computer screen. There may also be compliance benefits for companies that require their employees to provide disclosures regarding transactions – this technology could measure whether an employee looked at those requirements on a screen prior to carrying them out. Or, simply, monitoring whether or not an employee looks at their mobile phone whilst driving a vehicle in the performance of their role.

Closer to home, technological advances continue to make us reassess and update our personal practices to allow devices to monitor our location and behaviour (hello exercise trackers, Find My Friend and the new Parked Car feature in the iPhone’s iOS 10 – trust us, it’ll weird you out when you get an unsolicited notification as to where you left your car). So is it only a matter of time before these technological advances, and the general comfort and acceptance of them, translate into the introduction of new monitoring and surveillance practices in our workplaces?

We think the answer is yes, particularly where there is little doubt that new technology could provide information that will deliver increased productivity and health and safety outcomes. However, putting to one side the legal implementation questions, these developments raise some serious operational questions for employers:

  • what is the best method to measure productivity in your workplace and is there a technological advance that will make this easier? Simply introducing a new technology for the sake of appearing ‘cutting edge’ may be counter-productive and expensive.
  • how will you balance the introduction of new technology with the cultural impact this might have on your employees? Employees may be reluctant to allow this sort of Big Brother monitoring and have legitimate concerns about how the information from new monitoring systems might be used. How you start the conversation with your employees regarding monitoring (especially in regard to the reasons why you are doing it) will be an important step.

Balancing increased workplace productivity and consistent health and safety outcomes with a positive workplace culture is not a new concept for employers, but we think that advances in technology (and our attitude towards technology) mean that a new frontier in workplace monitoring and surveillance will be a critical feature of the future of work and how employers measure productivity. The big question is, are we ready for it?