Chris Gardner, a Partner based in our Melbourne office, recently returned from a tour of the United States where he conducted research on good faith bargaining. The good faith bargaining requirement is a key plank of the Rudd Government's new collective bargaining laws.

Chris shares with us insights from the research for collective bargaining in Australia.

Bargaining is more sophisticated

The higher level of regulation dictates a higher level of sophistication from negotiators. As a general observation, employers in the United States tend to spend more time planning the negotiation strategy and tend to have more resources on hand than is often the case in Australia.

Australian employers will invariably increase the time and investment made in collective bargaining. Greater controls over the negotiation process (through the good faith bargaining requirements), together with the spectre of regulatory scrutiny (through Fair Work Australia) underscores this inevitability.

Positioning claims and defending claims is vital

Good faith bargaining demands that consideration be given to claims and responses provided.

Employers will need to explain and potentially justify why claims cannot be met. If the reason(s) provided are without proper foundation then concessions are probably inevitable.

In the United States, finance experts are often called upon to analyse claims by the respective parties to support or challenge them. If an employer 'cannot afford' to meet a wage claim – this will need to be supported.

Data is important here, as will be the production of appropriate documents.

Preparation is paramount

What happens in the negotiation room is open to scrutiny—and hence a challenge.

Negotiators need to work hard in advance on what will be said when, and how. Of course, any negotiation demands this. But the need is elevated in a good faith bargaining environment.

You must intend to agree

Under the Australian law there is no obligation to make concessions. That said, good faith bargaining is likely to dictate that you approach bargaining with an open mind with the aim of reaching agreement. In the United States, hard and fast positions can amount to bad faith bargaining.