Resolution of Intractable Bargaining Disputes … with a Catch!!
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) has enhanced the power of the Fair Work Commission (‘FWC’) to resolve intractable bargaining disputes.
These changes will take effect on 6 June 2023.
This article will focus on single employer enterprise bargaining.
Intractable Bargaining Declaration
If bargaining for an enterprise agreement becomes prolonged and reaches a point where a resolution seems unlikely, a bargaining representative has the option to submit an application to the FWC to request an intractable bargaining declaration.
If such a declaration is made, the FWC may make a determination resolving the bargaining dispute. However, before making a declaration the FWC must be satisfied that:
- it has dealt with the dispute under section 240 of the FW Act (eg. conciliation of the bargaining dispute) and the applicant participated in the dispute resolution process;
- the parties have bargained for a minimum period of 9 months or at least 9 months have elapsed since the nominal expiry date of the previous enterprise agreement;
- there is no reasonable prospect of agreement being reached if the FWC does not make a declaration;
- taking into consideration the views of all the bargaining representatives for the enterprise agreement it is reasonable in all the circumstances to make the declaration.
If a declaration is made, the FWC will consider whether to provide the bargaining representatives with a further period to negotiate, to be known as a ‘post-declaration negotiation period’. During this period the FWC may provide assistance (such as conciliation) to the parties to reach agreement. If agreement still cannot be reached, the FWC may make an intractable bargaining workplace determination to resolve any outstanding matters. Such a determination is made by a Full Bench of the FWC and will likely involve a formal hearing where the parties are required to lead evidence and make submissions.
The potential for the FWC to resolve intractable bargaining disputes is both an opportunity and a risk for employers.
The opportunity is the potential for employers who cannot reach agreement with employees to use the FWC to make a determination in relation to non-agreed items. Unions and employees will often refuse to negotiate on the removal of long established high employee value items. This might include no forced redundancy or requirements that rosters can only change with employee agreement. Employers may have better prospects of advocating before the FWC for the removal of these clauses.
The risk is that an employer may have an outcome imposed on them against their will. This may operate a just say “no” approach by an employer to bargaining.
Take home points
Employers should review their bargaining strategies in light of the FWC’s ability to determine an intractable bargaining dispute. Although the FWC’s power is discretionary, the fact that an application can be made by an employer may be a useful tool to encourage union parties to reach an agreed outcome.