Bargaining Disputes

*Note the information in this Alert takes account of the passage of the Bill on 2 December 2022 and subsequent Royal Assent.

The amendments to the Fair Work Act 2009 (Cth) (FW Act) by the Fair Work Amendment (Secure Jobs Better Pay) Act 2022 will overhaul the dispute resolution process for bargaining disputes which are referred to the Fair Work Commission (FWC). The rationale for the changes is to support the FWC to assist parties involved in bargaining to resolve their bargaining disputes.

Notably, the amendments replace ‘serious breach declarations’ in s 235 of the FW Act with the power to issue an ‘intractable bargaining declaration’ if, among other things, there is no reasonable prospect of the parties reaching agreement.

Changes to the FW Act impacting bargaining disputes will come into effect on 6 June 2023,  unless an earlier date is proclaimed.

Background

The following provisions of the FW Act (which continue unamended) are provided for context:

• Where it is believed a bargaining representative is not bargaining in good faith, a bargaining representative may apply to the FWC under s 230 for a ‘bargaining order’;
• A bargaining representative may make an application under s 240 for the FWC to assist in resolving a bargaining dispute using powers that include conciliation, mediation, the making of recommendations, in whichever way the FWC considers appropriate, or with the agreement of the parties – arbitration.

Summary of Amendments

Under the amendments, parties to a bargaining dispute can approach the FWC for an ‘intractable bargaining declaration’ in relation to the agreement (provided it is not a greenfields agreement). The consequences of such an application is that the FWC may make an intractable bargaining workplace determination.

A party cannot apply for an intractable bargaining declaration as soon as a dispute arises. A ‘minimum bargaining period’ applies of at least 9 months after the nominal expiry date of the existing agreement or bargaining starts (as the case may be). Certain other requirements must then be met before the FWC may exercise its discretion as to whether to make the declaration.

The FWC cannot make a declaration unless the parties have first participated in the FWC’s section 240 processes. Second, there must be no reasonable prospect of the agreement being reached if the declaration is not made. Third, the FWC must be persuaded that it is reasonable in all the circumstances to make the declaration, considering the views of all the bargaining representatives for the agreement. This may include the context of the relationship of the parties, the bargaining history, prevailing economic circumstances, and the bargaining environment.

When an intractable bargaining declaration is in operation, the parties would be unable to take protected industrial action.

When making an intractable bargaining declaration, the FWC may impose a post-declaration negotiating period under the new s 235A.  This would specify a period (a post-declaration negotiation period) during which the parties would continue to negotiate before an intractable bargaining workplace determination is made by the FWC. If an agreement is made in that period, the declaration would cease to operate.

An amended s 269 provides that the FWC must make an intractable bargaining workplace determination as soon as practicable following the end of the post-declaration negotiation period, or if no such period is ordered, as soon as practicable after the declaration is issued. The content and effect of the determination is much the same as the effect of current bargaining-related workplace determinations. The terms as decided by the FWC operate as the terms of the enterprise agreement between the parties.

Note for Employers

The amendments will allow greater opportunity for the FWC to become involved in bargaining disputes that are protracted and unlikely to resolve without intervention. The FWC will no longer be limited to intervention where there has been a contravention of a bargaining order.

Key elements of the Bill include:

• The Abolition of the Australian Building and Construction Commission
• Equal Remuneration
• Prohibiting Pay Secrecy
• Prohibiting Sexual Harassment in connection with work
• Fixed Term Contracts
• Flexible Work
• Termination of Enterprise Agreements after Nominal Expiry Date

• Sunsetting of “Zombie Agreements”
• Initiating Bargaining (Multi-Employer Bargaining)
• Better off Overall Test
• Bargaining Disputes
• Industrial Action
• Single Interest Employer Authorisation
• Cooperative Workplaces
• Enhancing the Small Claims Processes