Enterprise bargaining declared not ‘intractable’ despite 117 unsuccessful meetings

Where enterprise bargaining hits an impasse, parties may apply to the Fair Work Commission (FWC) for an intractable bargaining declaration in an attempt to resolve disagreements. This is still a relatively new provision in the Fair Work Act 2009 (Cth) (the Act).

In the decision of Chief Commissioner of Victoria Police T/A Victoria Police v Police Federation of Australia & Ors (B2024/1282) the FWC provided further guidance on when bargaining will be considered ‘intractable’, after agreement could not be reached between Victoria Police and its employees despite bargaining over 15 months and 117 bargaining meetings.

What is Intractable Bargaining?

Intractable bargaining refers to a situation where negotiations have reached an impasse and the parties involved are unable to reach an agreement despite extended efforts. After the Act was amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 the framework for resolving such disputes was changed. A bargaining representative can now apply for an intractable bargaining declaration if:

• The parties have been bargaining for at least 9 months (the minimum bargaining period) or the application is made 9 months after the nominal expiry date of the previous agreement (whichever is the latter);
• Attempts have been made to resolve the dispute, including through the FWC’s dispute resolution processes); and
• Further assistance from the Commission is needed to resolve the issue, there being no reasonable prospect of agreement being reached if the declaration is not made.

The effect of an intractable bargaining declaration is that if the Commission makes an intractable bargaining declaration and the dispute remains unresolved after a further negotiating period, the Commission is required to make an intractable bargaining determination. This determination sets the terms and conditions of employment, replacing the enterprise agreement.

Facts

Victoria Police and the PFA were involved in ongoing enterprise bargaining negotiations since June 2023. By mid-2024, after extensive bargaining and some industrial action, a proposed agreement was voted down despite being supported by both Victoria Police and the Police Association of Victoria (PFA). The key reasons given for voting no were dissatisfaction with the wage increases and a roster proposed. Despite the parties engaging in the bargaining dispute resolution process and the PFA taking further industrial action, these issues would not be resolved. Accordingly, Victoria Police applied for an intractable bargaining declaration in September 2024.

The core issue in the dispute was the wage increase. Victoria Police argued that the PFA’s demand for a 6% wage increase (and back pay) was beyond what the Government Wages Policy permitted and what was possible in the financial circumstances faced by Victoria Police and the State Government, which was capped at 3%.

The PFA, however, pointed to Pillar 3 of the Wages Policy, arguing that it allowed for additional financial outcomes, even those that could be considered as wage increases beyond the 3% cap.

Victoria Police argued that the protected industrial action was ineffective, noting that it had not led and would not lead to any change in their bargaining position.

The PFA, however, contended that the industrial action was still in its early stages and likely to escalate, which could apply pressure on Victoria Police to reach a deal.

The PFA also argued that the Wages Policy provided significant flexibility and Pillar 1 set the general wage increase at 3%, Pillar 3 allowed for additional financial outcomes, depending on the operational and strategic priorities of the agency involved. The PFA pointed to this flexibility to argue that their demand for higher wages was not only possible but also justified.

Decision

The central issue in this matter was whether there was no reasonable prospect that an agreement could be reached.

In doing so, the FWC examined the extensive bargaining history, including the fact that the parties had held 117 bargaining meetings over many months, and the first agreement put to vote had been rejected by the employees, including the PFA membership. Despite these challenges, the Commission concluded that the bargaining had not reached the point of intractability. It acknowledged that negotiations had been difficult, but the Commission found no compelling reason to conclude that reaching an agreement was now ‘rationally improbable’ in circumstances where:

• Despite extensive bargaining and multiple meetings, significant differences between the parties remained, particularly regarding the PFA’s demands for an 8.5-hour shift and wage increases.
• Victoria Police’s position was constrained by the Government’s Wages Policy, which limits what can be offered in terms of wage increases. The PFA’s wage demands exceed these limits, and Victoria Police has argued that it cannot go beyond these parameters, making it difficult for an agreement to be reached within the established financial framework.
• Following the No Vote, the PFA’s revised position was seen as inflexible, particularly with their insistence on wage increases and their stance on the 8.5-hour shift. The lack of willingness from both sides to compromise or consider trade-offs has made it harder to bridge the gap between their positions.
• Key unresolved issues, such as the 9x9 roster and out-of-hours work, continued to be a major source of contention. Despite efforts to negotiate around these issues, no alternative solutions were presented that would satisfy both parties, contributing to a prolonged deadlock.
• The ongoing protected industrial action, which was strongly supported by PFA members, indicates deep frustration with the bargaining process. While industrial action is a legitimate tool, its escalation suggests that the parties were increasingly entrenched in their positions, making it more difficult to reach a resolution.

Take Home Messages

This decision underscores that intractable bargaining declarations are not made lightly. The FWC will only make such a declaration when it is evident that an agreement is unlikely to be reached despite extensive efforts from both sides. In this case, the Commission found that there was still room for further negotiations, despite the significant challenges faced.

Another key takeaway is the role of protected industrial action. Industrial action is recognised as a legitimate tool for exerting pressure in bargaining, and the use of industrial action alone is not sufficient to conclude that bargaining has become intractable.

Ultimately, the case demonstrates that the FWC seeks to facilitate resolution between the parties rather than prematurely intervening. The emphasis is on giving bargaining parties ample time and opportunity to resolve disputes.

Should you wish to discuss the matters raised in this article, please contact Sathish Dasan on +61 8 8210 1253 or sathishdasan@normans.com.au, Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au, or Shivani Gandhi on +61 8 8210 1227 or sgandhi@normans.com.au.