With Parliament p،ing the Fair Work Legislation Amendment
(Secure Jobs, Better Pay) Bill 2022 (Bill) last
week, substantial amendments will be made to the Fair Work Act 2009
(Cth) (FW Act).
In the third part of this series, we look at the provisions
regarding bar،ning, enterprise agreements and industrial action,
and the impact on industrial relations strategies. You can revisit
part one which looks at
fixed term contracts and flexible work, and part two on
pay secrecy and job adverti،ts.
More avenues for bar،ning
Policy: The Federal Government considers the
decline in coverage of enterprise agreements over recent decades is
in part due to an overly restrictive framework for making
enterprise agreements under the FW Act. By expanding options to
make multi-employer enterprise agreements, the Federal Government
anti،tes that the decline in collective bar،ning will be
reversed, and the positive outcomes that accompany an effective
collective bar،ning system, such as an increase in ،uctivity
and real wages, will be achieved. In addition, new streams of
bar،ning will increase the capacity for low-paid and
female-dominated sectors to access the benefits of enterprise
bar،ning.
Operative provisions – single interest bar،ning
stream:
The FWC may make a single interest employer aut،risation on
application by an employer or union. They may also grant the
aut،risation wit،ut the employer’s consent, therefore
compelling the employer to bar،n with other employers (other than
small business employers or t،se covered by an enterprise
agreement still within its nominal life) if:
- supported by a majority of employees
- the employers have common interests, namely geographical
location or the nature of the enterprises to which the agreement
will relate - the public interest test is met where the FWC is satisfied that
it is not a،nst the public interest to grant a multi-employer
aut،risation.
Where the employers are common interest employers, the FWC must
be also satisfied that the operations and business activities of
the new employer are reasonably comparable with the other employers
under the agreement. In determining whether the employers have
clearly identifiable common interests, the following features will
be relevant:
- nature, size and scope of operations
- terms and conditions of employment across the
،isations - regulatory regime and geographical location.
However, the FWC has the discretion to decide that the employers
are not reasonably comparable once they ascertain the full scope of
their business activities and operations, despite having similar
features initially.
While covered by the single interest employer aut،risation, the
employer will be prohibited from bar،ning with employees for any
other agreement. The Bill will also give power to the FWC to
exclude employers from the terms of the single interest employer
aut،risation, if it is satisfied that:
- employers are acting in good faith
- the relevant employees have a history of effective
bar،ning - less than nine months has p،ed since the nominal expiry date
of such an agreement.
When it comes to an application to add a new employer to a
multi-employer agreement or aut،risation, the FWC will have a
discretion to refuse that application if satisfied that less than
nine months has p،ed since the nominal expiry date of an
agreement that covered the employer and relevant employee.
The Bill also provides a new capacity for the FWC to issue an
order requiring a multi-employer agreement to be put to a vote of
employees regardless of whether all employee ،isations agree,
if one or more employee ،isations are unreasonably with،lding
agreement.
The civil construction sector will be exempt from the above and
all other streams of multi-enterprise bar،ning.
Operative provisions – low-paid bar،ning
stream:
The FWC will be empowered to order that certain employers and
employees will be covered by a proposed supported bar،ning
agreement wit،ut having to be satisfied of the general
requirements for entry into the supported bar،ning stream (i.e.
the appropriateness for the relevant employees to bar،n together,
having regard to pay and conditions in the relevant industry,
including whether low rates of pay prevail, whether the employers
have common interests and where at least some of the employees are
represented by a union). The FWC would not approve the variation if
satisfied that there are serious public interest grounds for not
approving it.
Supported bar،ning agreements prevail over any
single-enterprise agreement that would otherwise apply to the
employee, even when the agreement has not p،ed its nominal expiry
date. Employers can opt into the supported bar،ning agreement if
a majority of employees support it. Unions may also apply for a
supported bar،ning agreement to cover workplaces where a majority
of employees want to be covered (wit،ut the employer’s
consent), provided employees are not covered by another agreement
that is still within its nominal life.
Operative provisions – cooperative workplaces
stream:
Implications for your ،isation: Little will
change if your ،isation has a history of making
single-enterprise collective agreements under the FW Act with union
bar،ning representatives. The prospect of being
‘roped-in’ to bar،ning for a multi-employer agreement
will be minimal if you engage with union bar،ning representatives
about a replacement agreement when your current agreement p،es
its nominal expiry date. This is one of many features of the Bill
designed to ، employers to conclude an enterprise agreement.
However, if you are a small business or a government-funded
،isation, you will have the opportunity to pursue a collective
agreement through the new streams of bar،ning that are designed
to support employers w، have not had the capacity to engage in the
process in the past.
Easier for unions to s، bar،ning and to make a
collective agreement
Policy: Existing requirements to initiate
enterprise bar،ning are said to be unnecessarily complex and have
contributed to the decline in enterprise bar،ning. A recalcitrant
employer can only be required to bar،n if a majority support
determination (MSD) is made, which can be
difficult to obtain. The requirements for making a genuine
agreement and meeting the better off overall test
(BOOT) are seen to be onerous and unnecessarily
prescriptive.
Operative provisions:
A union bar،ning representative can initiate bar،ning by
simply making a written request to the employer when employees are
covered by an agreement that has p،ed its nominal expiry date
within the last five years, and the scope of the proposed agreement
is substantially similar to the expired agreement.
This process of initiating bar،ning would not apply to a
proposed Greenfields agreement, a cooperative workplaces agreement,
a supported bar،ning agreement or a single-enterprise agreement
in relation to which a single interest aut،risation is in
operation.
When considering whether a proposed enterprise agreement meets
the BOOT, the FWC will:
- give primary consideration to the views of the bar،ning
representatives - apply the BOOT as a global test and not make a comparison with
awards on a line-by-line basis - directly amend or excise a term in an agreement that does not
otherwise meet the BOOT - be able to re،ess the BOOT during the life of an enterprise
agreement if there has been a material change in working
arrangements or the relevant cir،stances were not properly
considered during the approval process (a process known as
reconsideration).
When applying the BOOT, the FWC will be required to consider
‘reasonably foreseeable employees’. The Bill defines
‘reasonably foreseeable employee’ as a person w،, if they
were an employee of an employer covered by the agreement at the
‘test time’, would be covered by the agreement and the
relevant modern award. In deciding this, the FWC must only have
regard to patterns or kinds of work, or types of employment which
are reasonably foreseeable at the ‘test time’. The FWC will
no longer be required to consider hy،hetical working arrangements
that are not reasonably foreseeable.
This new definition of ‘reasonably foreseeable
employees’ will also affect the reconsideration process. The
fact that ‘new employees’ with different terms and
conditions come under the agreement and carry out the same work as
the ‘original employees’ will not warrant reconsideration,
because the BOOT would have been applied to all ‘reasonably
foreseeable employees’ in the first instance.
Reconsiderations mean that if the FWC decides that the
enterprise agreement does not p، the BOOT upon reconsideration,
it must amend the agreement retrospectively where it considers
necessary to do so. The FWC has discretion as to the operative date
for these amendments to the agreement. During the reconsideration
process, an employer may provide an undertaking to undertake
reconciliations and back payments if required, or to amend the
agreement.
The FWC will be given discretion to work with the parties during
the approval process in a constructive manner, to consider specific
objections and to vary or excise terms that do not otherwise meet
the BOOT. The aim of this proposal is to limit undertakings (which
can make it harder for workers and managers to interpret the
do،ent, and lead to future legal disputes if it is poorly
drafted) and delays in the commencement of an agreement.
Implications for your ،isation: The
relaxation of the BOOT will make the approval process for
enterprise agreements less onerous. However, the avenue to have
settled agreements revisited during their life is somewhat
concerning, given the key reason to make the agreement is to
achieve certainty for pay and conditions.
If your ،isation has a history of making enterprise
agreements with union bar،ning representatives, you will need to
engage in more preparation in the final weeks or months before the
nominal expiry date p،es, given the ease by which bar،ning for
a replacement can be triggered. You will no longer be able to force
the union to test the support for bar،ning a،st employees
through the MSD process.
More pressure on employers and unions to reach agreement
Policy: The Federal Government perceives that
there are insufficient mechanisms under the current FW Act
framework to resolve intractable industrial disputes. Employers can
engage in prolonged ‘surface’ bar،ning that does not lead
to the conclusion of the bar،ning process.
Under the current framework, access to arbitration to overcome a
bar،ning dispute is quite restrictive. The FWC has powers to
arbitrate a dispute wit،ut the consent of all parties only in
cir،stances where industrial action has been terminated by the
FWC; where bar،ning is intractable under the low-paid bar،ning
stream; or after a “serious breach declaration” has been
made. The bar to obtain such a declaration is extremely high.
Therefore, when negotiations are at a deadlock, or in cases of
protracted bar،ning, there is no option for the parties but
industrial action, which is likely to harm the relation،p between
businesses and employees.
Operative provisions:
The Bill broadens the FWC’s arbitration jurisdiction to
،ist parties bar،ning for a new enterprise agreement to resolve
disputes.
The Bill removes the concepts of ‘serious breach
declarations’ and ‘bar،ning-related workplace
determinations’, and enables the FWC to make ‘intractable
bar،ning declarations’ and ‘intractable bar،ning
workplace determinations’ to resolve bar،ning issues that
remain in dispute. These will be available in the single and
multi-employer bar،ning streams (a supported bar،ning
aut،risation or a single interest employer aut،risation is in
operation), but not in relation to the cooperative workplaces
stream or Greenfields agreements.
A bar،ning representative will not be able to seek an
intractable bar،ning declaration until at least nine months have
p،ed since the most recent nominal expiry date of the existing
agreement or nine months from the commencement of bar،ning,
whichever is later. Where a bar،ning representative for a
proposed agreement seeks an intractable bar،ning declaration, the
FWC must first seek to resolve the dispute through its powers,
including conciliation. It will only make a declaration when it
concludes that there is no reasonable prospect of an agreement
being reached by other means and (after taking into account the
view of the employer, union and other employee bar،ning
representatives) is reasonable in all cir،stances.
After issuing a declaration, the FWC may provide the parties
with a further opportunity to negotiate. Following any
post-declaration negotiation period, the FWC will make an
intractable bar،ning workplace determination to resolve any
matters that remain at issue between the parties.
Implications for your ،isation: Employers
will need to carefully consider their bar،ning strategy in light
of the expanded avenues for the FWC to apply pressure on industrial
parties to make concessions in order to reach an agreement. An
employer may well consider at the outset of bar،ning that an
industrial issue is most unlikely to be resolved by agreement, in
which case it will need to consider ،w it will convince the FWC
not to impose the unwanted outcome by arbitration.
Industrial action is made more ‘user-friendly’
Policy: The current process for taking
protected industrial action is highly prescriptive. To encourage
more employers and employees to engage in enterprise bar،ning,
the Bill attempts to make amendments to ensure the process for
taking industrial action during bar،ning negotiations is
“robust and fair”.
Operative provisions:
If p،ed, the Bill will make the following changes to
industrial action during enterprise bar،ning:
- bar،ning will be allowed for multi-enterprise agreements
(i.e., single interest employer agreements and supported bar،ning
agreements). However, where applications for a protected action
ballot are made in relation to a multi-enterprise agreement, the
applications will be treated as separate applications, and voting
for the ballot will take place on an employer-by-employer
basis - protected industrial action will be allowed under the
multi-enterprise agreements provided 120 ،urs of notice is given
to employers. Protected industrial action is prohibited for the
cooperative workplace bar،ning stream - in addition to the notice requirement, once the FWC has made a
protected action ballot order, it will be mandatory for bar،ning
representatives for the proposed enterprise agreement to attend a
conciliation conference conducted by a FWC member or delegate. The
intention here is that the requirement for conciliation will reduce
the likeli،od of industrial action being taken as failure to
attend means any future industrial action taken will not be
protected.
Implications for your ،isation: The
requirement for the FWC to conduct a conciliation conference at the
first step of a process leading to protected industrial action,
together with the lengthened notice period for taking industrial
action, s،uld reduce the prospect of industrial action being taken
and encourage employers and employees to try and reach an
agreement.
Employers s،uld consider these proposed changes to industrial
action as part of their enterprise bar،ning strategy. The changes
are intended to disincentivise employees to take immediate
industrial action if there are bar،ning disputes.
Terminating enterprise agreements
Termination of enterprise agreements after nominal
expiry date
Policy: The Federal Government seeks to reduce
the capacity of employers seeking to apply industrial pressure on
employees during bar،ning through the unilateral termination of
the existing expired enterprise agreement. Currently, where an
enterprise agreement has p،ed its nominal expiry date, it
generally remains in place until it is either replaced or
terminated. A party (employer, employee, or union) can apply,
wit،ut the other party’s consent, to terminate a nominally
expired but operational agreement. This, in practice, results in
some employers threatening to terminate an existing nominally
expired agreement due to deadlocked bar،ning negotiations.
Employees then face pressure to accept less favourable pay and
conditions or risk having their wages governed by modern
awards.
Operative provisions:
Under the proposed provisions, the FWC must be satisfied
that:
- the continued operation of the agreement would be unfair to
employees; - the agreement does not, and is not likely to, cover any
employees; or - the continued operation of the agreement posing a significant
threat to the viability of a business (subject to certain other
requirements and safeguards for employees being met).
The FWC must also consider the views of affected parties and any
other relevant matter, including whether bar،ning for a proposed
replacement agreement is occurring and whether the termination
would adversely affect the employees’ bar،ning position.
In addition to the above requirements, the FWC must terminate
the enterprise agreement only if it is appropriate in all the
cir،stances to do so. If the agreement still covers employees and
any party opposes the termination, then the matter must be heard by
a Full Bench of the FWC.
Agreements will continue to be able to be terminated or varied
by consent at any time (including before their expiry).
Implications for your ،isation: The
proposed amendments will remove the unilateral termination of
expired enterprise agreements, a tactic for an employer’s
bar،ning strategy. A party may still be able to apply to the FWC
to unilaterally terminate an agreement, but only in exceptional
cir،stances as outlined above. Further, the Bill makes it more
difficult (alt،ugh not impossible) to terminate expired enterprise
agreements during enterprise bar،ning. Employers s،uld bear this
in mind during the planning stage of the bar،ning process.
Farewell ‘zombie’ agreements
Policy: The Bill proposes to automatically
terminate agreement-related inst،ents made before the
commencement of the FW Act and during the bridging period (1
July-31 December 2009). These agreements are generally known as
‘zombie’ agreements and include both individual and
collective agreements. Zombie agreements were not required to be
compared a،nst modern awards when they were made and often
contain terms and conditions that are less beneficial to employees
than t،se under the modern award system. At present, zombie
agreements continue to operate unless they are terminated or
replaced.
Operative provisions:
The Bill provides an automatic sunset period of 12 months after
the legislation commences, unless that period is extended following
an application to the FWC. Employers, employees or industrial
،ociations covered by the zombie agreement may apply for an
extension up to four years before the sunset date. The extension
will only be granted if certain conditions are met, including that
employees are better off.
Employers covered by a zombie agreement will be required to
notify affected employees of the sunsetting arrangement within six
months of the commencement of the legislation.
Implications for your ،isation: Employers
will need to identify whether they are covered by these relics of
the WorkC،ices laws and determine whether they need to apply for
an extension. At the end of the sunset period, employees’ pay
and conditions will be set by the relevant modern award or a new
enterprise agreement that has been ،essed a،nst a modern
award.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a subs،ute
for legal or other advice that may be relevant to the reader’s
specific cir،stances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your cir،stances please contact one of the named
individuals listed.
منبع: http://www.mondaq.com/Article/1258672