Key points

• Employers must genuinely participate in the enterprise agreement bargaining process. However, negotiations conducted in good faith don’t have to continue indefinitely.

• There are circumstances where an employer can put an enterprise agreement to a vote despite the fact that an employee bargaining representative does not agree and wishes to continue the bargaining process.

The Fair Work Commission dismissed a union application for a bargaining order, finding that the employer had negotiated in good faith and could decide not to make any further concessions in the negotiations.

Background

WorkPac Pty Ltd is a large labour provider servicing the coal mining sector, amongst other industries. WorkPac was bargaining with employees and the Construction, Forestry, Mining and Energy UnionMining and Energy Division Queensland District Branch (CFMEU) for an enterprise agreement (EA) to replace the existing coal mining industry EA.

Negotiations were lengthy, commencing in May 2016. By April 2017, the proposed EA had been considered and rejected by employees in a ballot, WorkPac and the CFMEU had held 13 bargaining meetings, and 14 drafts of the proposed agreement had been exchanged. 

On 20 March 2017, WorkPac wrote to the bargaining representatives, forwarding them the 14th draft of the proposed EA. WorkPac advised that that this was the company’s final offer, and that it intended to put this version of the EA to a ballot of employees.

The CFMEU asked WorkPac to cancel the ballot and requested a further bargaining meeting to discuss changes that had been made to a “casual conversion” clause and the classification structure in the proposed agreement. WorkPac declined these requests.

On 27 March 2017, the CFMEU applied to the Fair Work Commission (FWC) for a bargaining order, asserting that WorkPac was in breach of its good faith bargaining requirements under the FW Act. The CFMEU alleged that WorkPac:

1. had failed to give consideration to its meeting proposals; and

2. engaged in unfair conduct that undermined collective bargaining by refusing to meet or adequately discuss important changes that WorkPac had made to the draft of the proposed agreement.

The bargaining order sought by the CFMEU required WorkPac to cancel the ballot and resume bargaining over certain clauses in the proposed agreement, including the casual conversion clause.

Decision

The FWC dismissed the application for the bargaining order. The FWC held that WorkPac had genuinely considered the CFMEU’s proposals, made its position clear in relation to those proposals, and advanced its own proposals in response.

The FWC also found that WorkPac had explained its position in relation to the disputed casual conversion clause, and that the changes to the classification structure in the final proposal were generally consistent with discussions at earlier meetings. WorkPac had also told the CFMEU about its reasons for refusing to participate in another meeting, namely that following 12 months of negotiations, there was little possibility that the parties could reach agreement on fundamental issues such as wage rates. 

The FWC accepted WorkPac’s submission that it had made its best offer and found that any order for a further meeting was not likely to result in agreement being reached.

It further noted that the FW Act does not compel parties to keep negotiating until an agreement is made, explaining that there is a point where an employer, having bargained extensively and in good faith, is entitled to “draw a line in the sand” and declare that no further concessions will be made. At that point, the employer can call a halt to bargaining and put its best and final offer to employees.

Bottom line for employers

• Employers are required to bargain in good faith. This means genuinely participating in the bargaining process by considering the proposals of bargaining representatives and advancing proposals in response.

• However, after extensive bargaining there is no further scope for movement, employers may choose to put the proposal directly to employees without the support of bargaining representatives.