A little considered feature of the new Fair Work Act 2009 (Cth) (the FW Act) are those provisions which deal with “low-paid bargaining”. The legislation invests Fair Work Australia (FWA) with general powers of arbitration in relation to classes of low-paid worker (e.g. workers in the security, cleaning, aged care, child care and community service industries). It should be noted that these are only examples of low-paid “industries” and there is no specific definition of a “low-paid worker” in the FW Act. The low-paid bargaining provisions will ostensibly encourage negotiations towards the making of a multi-enterprise agreement covering two or more employers in certain low-paid industries. However, if negotiations for such an agreement break down, it is possible for FWA to impose a workplace determination (or “last resort arbitration”) upon the bargaining parties in specified circumstances.

The starting point in the application of these provisions is that a bargaining representative or an employee organisation (that is entitled to represent the industrial interests of an employee in relation to work to be covered by the proposed agreement) may seek a low-paid authorisation (s242, FW Act). This will be an authorisation that refers to a number of employers across a particular low-paid industry. In such circumstances, FWA is obliged to make the authorisation if it considers it to be in the public interest. The legislation refers to various matters which must be taken into account in forming this view. These include:

  • whether granting the authorisation would assist low-paid employees who have not had access to collective bargaining or who face substantial difficulty bargaining at the enterprise level
  • the history of bargaining in the particular industry
  • the relative bargaining strength of the employers and employees who will be covered by the agreement
  • the current terms and conditions of employment of the employees who will be covered by the agreement, as compared to relevant industry and community standards
  • the degree of commonality in the nature of the enterprises to which the agreement relates and the terms and conditions of employment in those enterprises
  • whether granting the authorisation would assist in identifying improvements to productivity and service delivery at the enterprises to which the agreement relates
  • the views of the employers and employees who will be covered by the agreement, and
  • the extent to which the terms and conditions of employment of the employees who will be covered by the agreement is controlled, directed or influenced by a person other than the employer, or employers, that will be covered by the agreement.

If made, the low-paid bargaining authorisation applies to the various employers that are specified in the authorisation, and to the employees covered. The authorisation would operate to override some of the limits that otherwise apply under the legislation. For example, even though bargaining orders cannot be made in relation to a proposed “multi-enterprise” agreement, this limit does not apply when a low-paid authorisation is in operation (see ss 229(2) and 230(2), FW Act). Another interesting aspect of the provisions is that FWA has specific power to assist parties negotiating a multi-enterprise agreement where some person other than the “employer” exercises a significant degree of control over the terms and conditions of employment of relevant employees. This includes directing such a person to attend a conference on the grounds that their participation in bargaining is necessary for an agreement to be made.

Where a low-paid authorisation is in operation in relation to the negotiation of a multi-enterprise agreement, and bargaining representatives remain unable to reach agreement, it is possible for FWA to make a low-paid workplace determination (a form of arbitration under the FW Act) (see ss 260–261, FW Act). The legislation refers to the prospect of there being either a “consent low-paid workplace determination” where bargaining representatives for employers and employees jointly apply for the determination of matters that remain in dispute between them, or a “special low-paid workplace determination” where an application is made by a single bargaining representative.

In the case of a special low-paid workplace determination, it would be necessary for a full bench of FWA to be satisfied that the bargaining representatives for the proposed multi-enterprise agreement are “genuinely unable to reach agreement on the terms to be included in the agreement”; that there is no reasonable prospect of agreement being reached; and it is in the public interest for the determination to be made (i.e. an arbitrated outcome being imposed on the parties). Other matters that FWA must consider are whether making the determination will promote future bargaining for enterprise agreements to cover the employees and employers who will be subject to the determination, and whether it will enhance productivity and efficiency in the enterprises. It is also necessary for FWA to take account of the interests of employers and employees who will be covered by the determination, “including ensuring that the employers are able to remain competitive” (see s275, FW Act).

It appears that the low-paid bargaining provisions were included in the FW Act as a last minute concession to the trade union movement. In a speech shortly before introducing the final Bill, the Minister for Education, Employment and Workplace Relations stated that the policy intent of the low-paid bargaining stream was to assist lowpaid employers and their employees to enter bargaining for the first time. The Hon. Julia Gillard stated that FWA would have an obligation “to facilitate the making of agreements and (would) play a hands-on role to get the parties bargaining”. The real test will of course be just how these provisions apply in practice.

One recurring criticism of the lowpaid bargaining provisions is that they appear to indicate that FWA may step in and impose an arbitrated determination upon a group of employers in a specific industry even though the employers may be complying with all requirements under relevant modern awards and the National Employment Standards. Further, it is difficult to see how such provisions sit neatly alongside FWA’s more general power to fix minimum wages whereby it is already obliged to consider “relative living standards and the needs of the low-paid” (s284(1 (c), FW Act). Employer critics have also criticised the appropriateness of a workplace determination which takes the form of a “multi-enterprise” determination covering all the employees and employer organisations “specified in the application for the determination” (s264(4)), when the object of the legislation is to encourage genuine enterprise bargaining.