In yesterday’s blog, we commented on the state of play in enterprise bargaining in Australia.

So what’s the outlook for enterprise bargaining in Australia? Here’s the top 7:

  1. Collective bargaining remains unlikely to be the answer for productivity gains – as has been the case for some time. Nor will it deliver the across-the-board wages

On 12 December 2013 Seyfarth Shaw announced our Australian offices were officially open for business. Today marks five years since those doors opened.

What better way to reflect than to ask ourselves, what have been the biggest changes in our specialist areas of law over those five years?

“It has become increasingly difficult to make

On Wednesday 18 October, the Shadow Minister for Industrial Relations Brendan O’Connor foreshadowed amending the bargaining regime in the Fair Work Act to outlaw so-called “sham agreements”.

The target of the changes seems to be enterprise agreements that are voted on by one group of employees, but have the potential also to cover a much broader group, or to cover a similar group who will be employed in a different geographic location. The Shadow Minister referred to these situations as employers “gaming the system”. 

However,  we note that the Fair Work Act already contains a number of safeguards to prevent “gaming the system”, including that agreements are genuinely made, that employees who vote to make the agreement are “fairly chosen”, and employees are not coerced to vote or not vote for an agreement.

While we do not have the benefit of any detail (such as a draft Bill) – there are some things to be said about the potential effects of the foreshadowed changes.

The concept put forward by Shadow Minister O’Connor in his speech would allow an agreement that has been made, to be challenged and potentially reversed on the basis that the employees who made the agreement are not “representative” of those who will be covered by it.

This raises a number of important questions including:

  • What factors are to be taken into account in determining representativeness?
  • Which characteristics of the employment will be given priority over others in determining representativeness?
  • Who could challenge an agreement that has been made? For example:
    • Could a competitor union to that which represents the employees use the provisions to unwind an agreement that has been made?
    • Could another company challenge the approval, with the goal of ensuring the employer is hindered in achieving competitive terms and conditions for its business?

These questions may not be answered unless and until the provisions are enacted and tested by the many varied situations real life throws up.

Our initial impression is that any amendments that allow agreements that have been made to be effectively “undone” could cause enormous problems that go well beyond the immediate issue being addressed. This exemplifies the danger of focussing on first order consequences, at the expense of equally (sometimes more) important second and third order consequences.  By trying to plug a perceived gap in the legislation, these amendments have the potential to open up a new form of “litigation sport” – where agreements that have been made are subject to lengthy legal challenges and then undone much later down the track. There are many industrial reasons – which have nothing to do with the supposed problem being addressed – which might provide motivation for such challenges.
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Trade union conduct is constantly changing, and our team have observed trends that are reshaping the boundaries, and that have already begun to impact our clients.

Policy Measures: increased scrutiny on trade union conduct

On the policy front, the conservative government has implemented three measures addressing unlawful behaviour by unions and their members based on the findings of former High Court Justice John Dyson Heydon AC QC in the Royal Commission into Trade Union Governance and Corruption in 2015.

Two key measures passed in late 2016.


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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.
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In his book Bargaining with the Devil, Harvard Professor Richard Mnookin probes the challenges and options available when negotiating with “a devil” – anyone you perceive as a harmful adversary. The Devil Brad

“The devil” is usually a traditional “power-based” negotiator who is win/lose orientated, adopts extreme positions, makes small concessions, and uses threats as a key tactic to enhance negotiating leverage. Sound familiar?

Power or “positional-based” negotiations have dominated Australian workplace relations and remain a feature of enterprise bargaining – in a system which, to be fair, legitimises the threat and reality of industrial action.
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FinanceScott Morrison’s first Federal Budget announced the creation of the ‘Youth Jobs PaTH’ (Prepare-Trial-Hire) program – a program designed to encourage up to 120,000 unemployed youth into the workforce through skills training programs, paid internships and incentive payments for prospective employers. While further details will come to light over the course of the Federal Election campaign, employers who want to participate will need to look before they leap, to make sure their participation in the program doesn’t lead them, later on, to fall foul of the minimum wage provisions in awards and legislation. 
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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.
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Aurizon, previously a government owned entity, operates in the rail industry. The company had been bargaining in relation to numerous enterprise agreements. Part of the company’s bargaining platform was to be relieved of onerous restrictions on management, many of which were legacies of its public sector origins. The changes were resisted and the bargaining became intractable.

In an effort to overcome the legacy arrangements, Aurizon applied to the Fair Work Commission to terminate the agreements.
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