Consultation about workplace change is a significant issue across the higher education sector. The obligation to consult can arise in different ways, and at different times. Sometimes what constitutes 'consultation' can differ from university to university.
This article provides some guidance on what you need to consider when meeting your consultation obligations.
What is the source of the obligation to consult?
There is an obligation to consult with employees in the Fair Work Act 2009 (Act). Section 531 of the Act requires employers to consult after making a decision to dismiss 15 or more employees on the ground of redundancy. Similar consultation obligations are also contained in modern awards.
In most universities, however, the obligation to consult and the circumstances which enliven the obligation to consult extend significantly beyond the obligation to consult about termination of employment or redundancy situations. Most universities' obligations to consult are set out in the relevant enterprise agreement.
For example, one university enterprise agreement effectively requires consultation to occur where major changes in the university's production, program, organisation, structure or technology are likely to have significant effects on employees. 'Significant effects' is defined very broadly and includes a range of situations such as termination of employment, major changes in the composition, operation or size of the workforce or in the skills required, any new outsourcing proposals involving work that is currently undertaken by staff, elimination or diminution of job opportunities or job tenure, alteration of hours of work, the need for retraining or transfer of employees to other work or locations or restructuring of jobs.
This is a significant list and requires the relevant university to consult about a range of matters that may usually be considered to be within the domain of management.
What does consultation involve?
At a general level, consultation involves giving those consulted a sufficient opportunity to express their views, so those views can be taken into account when making a decision to do something. In various decisions, the Commission has indicated that consultation is not a 'mere formality' or 'perfunctory advice about what is about to happen'. Consultation requires in general terms, an opportunity to be given to employees or unions to influence a decision. Consultation generally does not require, however, employers to make changes to any proposal based on the feedback received – it does not mean joint decision making.
Many university enterprise agreements seek to give further voice to these concepts. One university agreement defines consultation in the following way: 'consultation means the exchange of information about a matter or issue, explanation of the respective points of view, and taking into account the views of the other. Consultation does not necessarily mean that an agreement can be reached'.
Must information be provided in writing to other parties?
Some consultation clauses require not just discussion, but the provision of specific information to assist employees and unions to engage in the consultation.
One university enterprise agreement requires the university to issue documentation setting out the change to directly affected staff and the NTEU. The documentation must include the extent and nature of any change, the reasons for making the change, the aim of the change, the timeframe for the change, the likely number, if any, of redundancies and any relevant financial information.
The requirement to provide relevant financial information set out above is particularly onerous. It is not limited and does not exclude commercially sensitive information. There is not any apparent requirement on the receivers of the information to keep it confidential.
Once the decision is made, is consultation still required?
Many university enterprise agreements do not limit consultation to the period before a decision is made. Rather, universities have agreed to extend the requirement to consult to the implementation phase of any decision. One university agreement we have seen requires the university to consult and confer with affected staff and the NTEU "to determine those measures to be adopted in order to implement that change". Accordingly, universities should not assume that consultation ends once a decision has been made.
Why should you consult?
A failure to comply with consultation obligations under an enterprise agreement will result in the university breaching the enterprise agreement. In that circumstance, a union or affected employee could commence proceedings against the university for breach of the enterprise agreement. Compensation and other remedial orders could be sought and imposed. Furthermore, a court may issue fines of up to $54,000 per breach.
A number of universities have, in recent times, fallen foul of their industrial obligations. One judge of the Federal Court has recently seen fit to issue a warning about the importance of universities abiding by their obligations. The court noted that "Other higher education institutions also need to be on notice that industrial and employment protections and commitments, even when they are perceived to “cost” an employer more, or to make for a less 'flexible' workforce, are to be adhered to and respected, or appropriately re-negotiated".
Lessons for universities
- Recognise that in the university sector, the obligation to consult extends well beyond only requiring consultation for redundancies or terminations of employment. Many day to day operational decisions may fall within the requirements of a consultation clause.
- Read your enterprise agreement closely. Pay careful attention to the words used and their meaning. Do not assume that your obligations are similar to the obligations imposed on others, or the obligations under the Act.
- In addition to the workplace change provisions, be wary of special or unique consultation provisions that may be contained elsewhere in the enterprise agreement. For example, it is common for unique and separate consultation provisions to exist when altering academic workload models, or in redundancy situations.