More than 18 months after the Fair Work Amendment Bill 2014 was first introduced into Parliament, and more than three years after the Fair Work Act Review Panel finalised its report, the Federal Government has finally secured support from Senate crossbenchers to make some key, albeit limited, amendments to the Fair Work Act 2009 (FW Act).

In the face of significant calls for reform from employer and industry associations, and despite sustained opposition from the ALP, both Houses of Parliament passed the Fair Work Amendment Bill 2015 (Amendment Bill) on 11 November 2015.

While the Amendment Bill constitutes a significantly ‘watered down’ version of its original proposal, it includes a small number of minor, but strategically important changes to the FW Act.  The passing of the legislation also signals a key shift in the political landscape, which to date has seen the Federal Government’s package of workplace relations amendments stalled without progress in the Senate.

The balance of the Federal Government’s reforms are likely to be re-tabled in 2016, following the release of the Productivity Commission review into the Workplace Relations Framework. These further changes, together with the issue of industrial relations more broadly, will almost certainly constitute a key issue in the 2016 Federal election.

The major amendments introduced by the Amendment Bill are as follows:

GREENFIELDS AGREEMENTS – INTRODUCTION OF ‘DEADLOCK ARBITRATION’ AND GOOD FAITH BARGAINING OBLIGATIONS

The Amendment Bill introduces a new regime in the FW Act to resolve bargaining impasses involving Greenfields Agreements. Currently, a Greenfields Agreement can only be submitted to the Fair Work Commission (FWC) for approval if it has been agreed to by the relevant union bargaining representative. This, coupled with the lack of leverage in terms of good faith bargaining obligations, has resulted in the stalling and deadlock of agreements between parties, particularly in the resource sector, with no capacity to bring the matter before the FWC.

Under the Amendment Bill, an employer seeking to make a Greenfields Agreement may give written notification to the relevant union bargaining representative(s) stating that a six month ‘notified negotiation period’ has commenced.  If no agreement is reached by the end of that period, an employer will be able to submit the proposed Greenfields Agreement to the FWC for approval.

Employers will now have greater capacity to ‘call’ unions on their conduct in negotiations, as the parties will be subject to good faith bargaining requirements, including the requirement to attend and participate in meetings at reasonable times, give genuine consideration to proposals and refrain from engaging in capricious or unfair conduct.

In considering whether to approve a proposed Greenfields Agreement, and in addition to other statutory requirements in the FW Act, the FWC will be required to evaluate whether the agreement ‘provides for pay and conditions that are consistent with the prevailing pay and conditions within the relevant industry for equivalent work.’

While it is unclear at this stage how the ‘industry consistency requirement’ will operate in practice, the capacity for third party intervention in the FWC will constitute a critical ‘circuit breaker’ for stalled negotiations, and provide employers with a lever against delay, particularly in the context of construction or infrastructure projects.

PROTECTED ACTION BALLOTS – THE END OF ‘STRIKE FIRST, TALK LATER’

Another important amendment passed is the pre-requisite that an employer agree, or be required, to bargain with employees before unions can apply for a protected action ballot order (PABO). This will significantly curtail a union’s capacity to exert leverage at an early stage in the negotiations.

Prior to the Amendment Bill, unions were able to apply for a PABO, even if the employer had not agreed to bargain for a new enterprise agreement.  This was confirmed by the Federal Court in J.J. Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 (JJ Richards).

In an attempt to address the shortcomings resulting from JJ Richards, the Bill inserts a new sub-section into s 437 of the FW Act that requires a ‘notification time’ to occur before a party can obtain a PABO.  Under s 173 of the FW Act, a ‘notification time’ for bargaining includes (among other events) where the employer agrees to bargain for the agreement or where a Majority Support Determination (MSD) regarding the agreement comes into operation.

The effect of this change will be that, in most circumstances, a union will need to obtain an MSD from the FWC before seeking a PABO, if the employer has refused to bargain.  While this may be a straightforward step in heavily unionised workplaces, this is likely to prove more difficult in workplaces where there is not a significant union membership, as the support of a majority of employees is required in order to obtain an MSD.

In this regard, the Bill neutralises a strategic lever for unions, and creates an additional hurdle to overcome before seeking support for protected industrial action.

REQUEST TO EXTEND UNPAID PARENTAL LEAVE – DISCUSSING WITH EMPLOYEES

The Amendment Bill amends the FW Act to clarify that an employer must not refuse an employee’s request to extend their unpaid parental leave unless the employer has given the employee a reasonable opportunity to discuss the request (in addition to providing reasons based on the employer’s reasonable business grounds).

That said, the position remains that the FW Act does not provide a remedy to employees whose request for extended unpaid parental leave is refused by their employer without reasonable business grounds (although the FWC can deal with disputes about this issue in some limited circumstances).

REVIEW OF AMENDMENTS

Within two years of the commencement of the Amendment Bill, the Minister for Employment is required to implement an independent review of the amendments introduced, the findings of which must be tabled in Parliament.

The Fair Work Amendment Bill 2015 is waiting for Royal Assent.

REFORMS DON’T GO FAR ENOUGH

Whilst the reforms go some way towards addressing some of the perceived shortfalls in the FW Act, they do not contain the more substantive amendments sought by employers, including changes to bargaining rules, right of entry,  individual flexibility agreements, unfair dismissals, registered organisations  and the re-establishment of the Australian Building and Construction Commission.

These further reforms, and the broader challenge of achieving productivity in the workplace, are certain to be hotly debated issues in the upcoming 2016 Federal election.