Recent changes to the industrial law landscape
As we have discussed previously, industrial law in Australia is ever changing at the moment, as new amendments to the Fair Work Act 2009 (Cth) (FW Act) commence and amendments from previous tranches are being considered by the Fair Work Commission (FWC) for the first time.
In this article we discuss two recent developments which are of particular importance to employers, particularly those with highly unionised workforces.
Delegates’ rights terms
A delegates’ rights term has been inserted into all 155 modern awards effective 1 July 2024. This term expands upon the existing rights for workplace delegates (being employees who are a member of a union and are appointed or elected by the union to represent members in the workplace) set out in section 350C of the FW Act. The rights set out in the new delegates’ rights term are summarised as follows:
employees have a right to be represented by the workplace delegate in a variety of matters including consultation, dispute resolution, disciplinary processes and enterprise bargaining;
workplace delegates are entitled to communicate with employees to represent their industrial interests;
workplace delegates are entitled to ‘reasonable access’ to various facilities to facilitate communication; and
workplace delegates are entitled to paid days for training related to representation of the industrial interests of employees, subject to conditions.
Section 350A of the FW Act also provides that employers may not unreasonably fail or refuse to deal with a workplace delegate, knowingly or recklessly make a false or misleading representation to a workplace delegate, or unreasonably hinder, obstruct or prevent the exercise of the rights of a workplace delegate. Breaches of this section can attract civil penalties.
A delegates’ rights term must also be included in any enterprise agreements voted on after 1 July 2024. If a delegates' rights term in an enterprise agreement is less favourable than that of a relevant modern award, the modern award term will be taken to be a term of the enterprise agreement.
Accordingly, all employers, but particularly those whose staff are covered by an award or enterprise agreement, must:
be prepared for increased union involvement in a variety of workplace processes, and for the union to have increased access to premises and facilities;
ensure that managers are aware of these new rights and how they may impact upon your workplace to reduce the risk of breaches; and
consider how delegates’ rights terms will be incorporated into future enterprise agreements.
Intractable bargaining determination
The Full Bench of the FWC has also recently issued its first intractable bargaining determination (IBD) in the decision of Transport Workers’ Union of Victoria v Cleanaway Operations Pty Ltd [2024] FWCFB 287.
IBDs were introduced to the FW Act from 6 June 2023 and replaced the former serious breach declaration provisions which were very rarely used. They effectively allow the FWC to arbitrate bargaining disputes, to resolve matters that are not able to be agreed by the parties in particular circumstances where bargaining has reached an impasse.
In this decision, the parties had been bargaining for 12 months, during which time the parties held 17 bargaining meetings and two versions of an agreement had been unsuccessfully put to a vote. The parties had also participated in several conferences conducted by the FWC as is required before an IBD can be issued.
By the time the Full Bench was required to make its IBD, there were still many significant matters at issue between the parties, including the ordinary hours of work, weekend penalty rates, wage increases, consultation and the nominal expiry date for the new agreement.
The Full Bench considered the submissions of both the employer and the union in respect of each of these matters in light of its obligations under section 275 of the FW Act.
In making the IBD, the FWC accepted both parties’ submissions at various stages – for example, it accepted the employer’s proposed ordinary hours of work clause but preferred the union’s proposed pay increases. This highlights that an IBD comes with uncertainty and risk for both employers and employees, although the risk is certainly heightened for employers following the introduction of section 270A(2) of the FW Act. This section provides that a term of an IBD dealing with a matter in issue ‘must not be less favourable to each of those employees, and any employee organisation that was a bargaining representative of any of those employees, than a term of the enterprise agreement that deals with the matter.’ This presents a clear risk for any employer involved in the IBD process, as any terms and conditions for employees in an IBD will be at least equal to, if not more favourable than, their existing conditions, unlike in traditional enterprise bargaining which consists of ‘give and take’ between the parties.
It is important to note that it is much easier for applicants to seek an intractable bargaining declaration than it was to seek a serious breach declaration, so it may be necessary for employers to evaluate their approach to bargaining. In our view, having a proposed agreement be the subject of arbitration and an IBD is unlikely to be in the employer’s interests.
Should you have any questions in relation to any of the matters discussed in this article, please contact Lincoln Smith at lsmith@normans.com.au or +61 8 8210 1203 or Annabelle Narayan at anarayan@normans.com.au or +61 8 8210 1292.
