Workplace Relations Minister, the Hon. Bill Shorten MP, has announced further details of the Government’s proposed amendments to the Fair Work Act 2009 (Cth) (FW Act) dealing with greenfields agreements and union right of entry.

The proposed changes mostly implement recommendations of the 2012 Fair Work Act Review Panel – although the Minister also indicated that the Government will move to provide for arbitration of intractable bargaining disputes (a proposal which had been rejected by the independent Review Panel).

Bargaining for greenfields agreements

The Government will implement several recommendations of the Review Panel aimed at assisting employers and unions to resolve deadlocks in the negotiation of greenfields agreements.

These agreements are used to determine the terms and conditions of employment to apply in a genuine new business, project or undertaking, before any employees are engaged, and can only be negotiated with a union or unions with coverage of prospective employees.

Greenfields agreements are commonly used by employers in the construction, manufacturing and mining industries. However, the Review Panel identified ‘a significant risk that some bargaining practices and outcomes associated with greenfields agreements potentially threaten future investment in major projects in Australia’ – particularly due to the ability of a union with coverage rights over the relevant work to frustrate or delay the making of an agreement.[1]

The solution proposed by the Review Panel was to extend the application of the good faith bargaining (GFB) requirements in section 228 of the FW Act to the process of negotiating a greenfields agreement.[2] The Panel also proposed that the availability of dispute resolution under section 240 should also be extended to greenfields agreement-making;[3] and that the industrial tribunal be given the power to resolve a bargaining impasse by arbitration, where attempts to resolve the dispute within a specified time-frame have failed.[4]

The Minister’s 8 March 2013 statement indicated that the Government will implement these recommendations:

  • the GFB requirements will apply to greenfields negotiations, providing a balance between business needs and workers’ rights ‘to receive fair, but not excessive, pay and conditions’;
  • the Fair Work Commission (FWC) will be given powers ‘to assist in the resolution of greenfields bargaining when it has reached an impasse and will allow for workplace determinations to be made in limited circumstances to ensure certainty for investments’.

Another recommendation of the Review Panel – to ensure that employers notify all unions with eligibility to represent the relevant employees of an intention to negotiate a greenfields agreement[5] – was not mentioned in the Minister’s statement. However, it is likely that this proposal will also be implemented, as it is flows logically from the extension of the GFB obligations to greenfields bargaining.

Arbitration of bargaining disputes

After outlining the Government’s proposals to empower the FWC to resolve impasses in greenfields negotiations, the Minister’s statement added that:

‘The Government will also apply this limited access to workplace determinations in other limited circumstances where bargaining has become intractable.’

This suggests that the Government is planning to provide greater access to arbitration of bargaining disputes, particularly in situations where the parties are simply unable to reach agreement – such as the Cochlear dispute.[6]

Many unions and some commentators called for these kinds of changes in their submissions to the Fair Work Act Review, based on concerns that employers could avoid entering into an enterprise agreement by ‘surface bargaining’. However, the Review Panel considered that more time was needed to see if the GFB requirements could develop to address these perceived problems; and therefore, no additional avenues for arbitration should be provided.[7]

It is interesting, then, that the Government has decided to proceed with reform in this area. At this stage, it is unclear precisely when the FWC will be able to arbitrate ‘intractable’ bargaining disputes, or what tests will need to be satisfied by parties seeking to access arbitration.  Care will need to be exercised in the drafting of any provisions so as to avoid providing ready access to arbitration by unions or other bargaining representatives adopting ‘surface bargaining’ strategies and thereby undermining the enterprise bargaining focus said to be provided by the FW Act.

Union right of entry

In relation to the union right of entry provisions in Part 3-4 of the FW Act, the Review Panel recommended that:[8]

  • the FWC be given greater power to resolve disputes about the frequency of visits to a workplace by a right of entry permit-holder (based on concerns that union officials were making excessive use of these rights in some instances);[9]
  • the tribunal also be given greater discretion to determine a reasonable location at the workplace for permit-holders to conduct meetings and interviews with employees (following a significant number of cases in which the reasonableness or otherwise of locations determined by employers had been contested);[10]
  • the ability of a permit-holder to enter premises to investigate suspected breaches of the FW Act (or awards, agreements, etc) apply not only in relation to existing employees, but also former employees who are members of the permit-holder’s union.

The Minister’s statement indicates that the Government will adopt the first two of these recommendations:

  • the Government will ‘address employer concerns about excessive visits’ by union officials, through extra powers for the FWC to resolve such disputes;
  • where an employer and union cannot agree on the location of a workplace meeting with employees, ‘the meeting should be held in a location used by the employees during meal times or other breaks’.

Further, the Government will ‘clarify arrangements for [right of entry] permit holders reliant on employer-provided travel and/or accommodation to access remote worksites’ (although no recommendation on this issue was made by the Review Panel).

Where to next?

The Minister indicated in his statement that the Government will continue to consult with stakeholders prior to the introduction of legislation implementing the changes discussed above. It seems likely that the legislation will also include the Government’s previously-announced changes to promote family-friendly workplace practices and to address workplace bullying (see: http://www.corrs.com.au/publications/corrs-in-brief/government-announces-workplace-changes-for-a-modern-workforce/).

Employers will need to examine the proposed legislation in order to assess the implications of all these changes, as it is difficult to do so based on the minimal details announced to date. There is also a significant ‘question mark’ over whether any of these proposals will in fact be enacted before the September 14 federal election.