In brief

When an employer refuses to bargain there are specific mechanisms under the Fair Work Act 2009 (Cth) (Act) which can be utilised by a union to effectively compel an employer to bargain.

However, a Full Bench of Fair Work Australia (FWA) has today confirmed that protected industrial action is also available as a means to compel an employer to bargain. This decision means that unions can effectively bypass specific mechanisms established by the Act and resort to the more blunt form of leverage – the taking of industrial action.  

Protected industrial action available before bargaining ‘commences’

A Full Bench of FWA has today confirmed that protected industrial action is available as a means to compel an employer to bargain in circumstances where:

  • bargaining has not yet ‘commenced’
  • the employer has refused to bargain
  • FWA has not otherwise ordered the employer to bargain, and
  • there may not be majority support for an enterprise agreement from employees to be covered by the agreement.

Background to the application

The appeal decision in JJ Richards & Sons Pty Ltd v Transport Workers’ Union of Australia [2011] FWAFB 3377 was handed down by a FWA Full Bench today.

The decision concerned an employer (JJ Richards) who refused the Transport Workers’ Union’s (TWU) request to bargain for an enterprise agreement to cover its employees. JJ Richards’ reasons for refusing to bargain were based on operational considerations.

Bargaining had not commenced, and the TWU had not made use of specific provisions of the Act that enable FWA to compel an employer to bargain (being the provisions that allow a bargaining representative to make application for a Majority Support Determination and seek Bargaining Orders).

Following JJ Richards’ refusal to bargain, the TWU made an application for a protected action ballot order to enable protected industrial action to be engaged in by relevant employees. The order was made (and upheld) despite the fact that negotiations had not commenced.

The reasons for JJ Richards refusing to bargain were not relevant to the making of the order, nor were the views of the employees who would ultimately be covered by the enterprise agreement sought by the TWU.

Implications of the decision

This decision means that where an employer refuses to bargain unions can effectively bypass specific mechanisms established by the Act and resort to the more blunt form of leverage – the taking of industrial action.

Accordingly, an employer may find itself subject to protected industrial action in circumstances where:

  • it has not agreed to bargain
  • it has legitimate and compelling operational reasons for not agreeing to bargain, and
  • there is little support amongst the relevant employees for an enterprise agreement to cover them.

The decision also confirms that the pre-requisite to obtaining a protected action ballot order that the applicant be ‘genuinely trying to reach an agreement’ is not a high bar to meet.

It is not clear whether the decision of the Full Bench will be appealed.

What should employers do?

The case demonstrates the complex legal environment in which the bargaining framework now sits.

Employers need to understand the framework or risk compromising their respective bargaining positions. This a key ingredient in the development of any bargaining strategy, including the identification of possible industrial action mitigation strategies.

In the new financial year, Freehills will be publishing a summary of these issues in an update of the past 12 months of bargaining and industrial action under Act. This paper will serve as a second volume to Freehills’ 2010 publication entitled Bargaining under the Fair Work Act – 12 months on: A Freehills retrospective.

The forthcoming publication will be available to Freehills’ clients free of charge on request. Further details will follow in the coming months.

The full decision is available from Fair Work Australia.1