Bargaining orders

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Bargaining orders

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Introduction

See Fair Work Act 2009 ss.229–232; Fair Work Regulations reg 2.11

A bargaining representative for a proposed enterprise agreement may apply to the Fair Work Commission for a bargaining order in relation to the proposed agreement.

Bargaining orders are designed to promote fair and efficient bargaining.

Stage in bargaining process

Employer initiates or agrees to bargain for a proposed enterprise agreement
Employer issues employees with a notice of employee representational rights
Employees may appoint bargaining representatives

Agreement making process
Good faith bargaining

Representatives bargain for a proposed enterprise agreement

Bargaining
1. Application for a bargaining order
2. Bargaining order made by the Commission
3. Non-compliance with bargaining order
4. Serious breach declaration made by the Commission
Employer asks employees to approve proposed enterprise agreement (by voting)
Bargaining representative lodges enterprise agreement with the Commission for approval
The Commission approves enterprise agreement

Approval process

Prerequisites for a bargaining order

An application for a bargaining order cannot be made unless the bargaining representative:

has concerns that:
- one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements, or
- the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
has given a written notice setting out those concerns to the relevant bargaining representatives and has given them a reasonable time to respond, and
considers that the relevant bargaining representatives have not responded appropriately to those concerns.

However, the Commission can consider an application for a bargaining order even if the notice or opportunity to respond requirements above have not been met, if the Commission is satisfied that it is appropriate in all the circumstances to do so.^[1]

Process

An application for a bargaining order must be made by a bargaining representative.

Exclusion – Multi-enterprise agreements

An application for a bargaining order must not be made in relation to a proposed multi-enterprise agreement unless a low-paid authorisation is in operation in relation to the agreement.

Timing – Not more than 90 days before nominal expiry date of an existing agreement

An application may only be made at whichever of the following times applies:

if one or more enterprise agreements apply to employees who will be covered by the proposed enterprise agreement:
- not more than 90 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be), or
- after an employer that will be covered by the proposed enterprise agreement has requested that employees approve the agreement, but before the agreement is approved

otherwise – at any time.

Powers of the Commission

The Commission may make a bargaining order in relation to a proposed enterprise agreement if:

an application for a bargaining order has been made
the requirements of section 230 of the Fair Work Act have been met (see below), and
the Commission is satisfied that it is reasonable in all the circumstances to make the order.

Requirements

Before making a bargaining order, the Commission must (in all cases) be satisfied that one of the following applies:

the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement
a majority support determination in relation to the agreement is in operation
a scope order in relation to the agreement is in operation, or
all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.

In addition to the above, before making a bargaining order the Commission must be satisfied:

that:
- one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements, or
- the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and
the bargaining representative who applied for the bargaining order has given the relevant bargaining representatives a written notice setting the representative's concerns and provided a reasonable time for a response.

The Commission should be:

"slow to interfere in the legitimate tactics undertaken by parties during the bargaining process unless an applicant for a bargaining order has demonstrated that there are sound reasons for so doing. There needs to be satisfaction that the good faith bargaining requirements are not being met."

An order under s.230 is discretionary and may only be made if the Commission is satisfied that it is reasonable in all the circumstances to make the order.^[2]

What a bargaining order must specify

A bargaining order in relation to a proposed enterprise agreement must specify all or any of the following:

the actions to be taken by, and requirements imposed upon, the bargaining representatives for the agreement, for the purpose of ensuring that they meet the good faith bargaining requirements
requirements imposed upon those bargaining representatives not to take action that would constitute capricious or unfair conduct that undermines freedom of association or collective bargaining
the actions to be taken by those bargaining representatives to deal with the effects of such capricious or unfair conduct,
such matters, actions or requirements as the Commission considers appropriate (taking into account whether the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement), for the purpose of promoting the efficient or fair conduct of bargaining for the agreement.

Types of bargaining order

The types of bargaining orders that the Commission may make in relation to a proposed enterprise agreement include the following:

an order excluding a bargaining representative for the agreement from bargaining
an order requiring some or all of the bargaining representatives of the employees who will be covered by the agreement to meet and appoint a single bargaining representative to represent them in bargaining
an order that an employer not terminate the employment of an employee, if the termination would constitute, or relate to, a failure by a bargaining representative to meet the good faith bargaining requirements,
an order to reinstate an employee whose employment has been terminated if the termination constitutes, or relates to, a failure by a bargaining representative to meet the good faith bargaining requirements.

Bargaining order for reinstatement of employee

If the Commission is making a bargaining order to reinstate an employee, the Commission may make any of the following orders:

an order to reappoint the employee to the position in which he or she was employed immediately before the termination of his or her employment
an order to appoint the employee to another position for which the terms and conditions of employment are no less favourable than those under which he or she was employed immediately before the termination of his or her employment
any order that the Commission thinks appropriate to maintain continuity of the employee's employment, or
an order that the employer who terminated the employment of the employee pay the employee an amount for remuneration lost, or likely to have been lost, because of the termination of employment.^[3]

Operation of a bargaining order

A bargaining order in relation to a proposed enterprise agreement comes into operation on the day on which it is made and ceases to be in operation at the earliest of the following:

if the order is revoked – the time specified in the instrument of revocation
when the agreement is approved by the Commission
when a workplace determination that covers the employees that would have been covered by the agreement comes into operation, or
when the bargaining representatives for the agreement agree that bargaining has ceased.

Contravening a bargaining order

See Fair Work Act s.233

A person to whom a bargaining order applies must not contravene a term of the order. This is a civil remedy provision.

A bargaining order is legally binding. However, the Commission does not itself have the power to enforce its orders.

A civil remedy provision is a provision of the Fair Work Act that is enforced by civil rather than criminal orders.

If a civil remedy provision is breached, an application can be made to a court for orders imposing a pecuniary penalty on the person who has breached the provision and for other orders such as an injunction or an order to pay compensation.

Related information

Case examples

Bargaining order made

Health Services Union v Victorian Hospitals' Industrial Association

Health Services Union v Victorian Hospitals' Industrial Association [2012] FWAFB 2901 (Watson SDP, Smith DP, Bissett C, 4 April 2012), [(2012) 221 IR 1].

The HSU and VHIA were engaged in bargaining for a multi-employer agreement. The HSU made an application for an interim order restraining the VHIA from requesting a vote of employees until related bargaining proceedings had been heard and determined. At first instance, the Commission was not satisfied that VHIA had not met the good faith bargaining requirements, and was not persuaded that there was a serious question to be tried about the scope of the agreement in respect of mental health employees. In addition, the Commission was not satisfied that the balance of convenience favoured making interim orders. The HSU appealed the decision.

The Full Bench found that there was a serious issue to be tried as to the operation of the Heads of Agreement and the scope of the agreement. The failure of VHIA to respond to requests for information about the scope of the proposed agreement in respect of mental health employees raised a serious question as to whether VHIA was engaging in good faith bargaining.

The Full Bench found that the Commission had erred in exercising its discretion not to make interim orders. Permission to appeal was granted and the appeal upheld.

Endeavour Coal Pty Ltd v APESMA

Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia (Collieries' Staff Division [2012] FWAFB 1891 (Boulton J, Harrison SDP, Deegan C, 22 March 2012) [(2012) 217 IR 131].

Endeavour Coal Pty Ltd v Association of Professional Engineers, Scientists and Managers, Australia and Another [2012] FCA 764 (19 July 2012), [(2012) 206 FCR 576].

Endeavour Coal commenced bargaining with employees and APESMA following the Commission's decision to issue a majority support determination.

At least 12 bargaining meetings were held between Endeavour Coal and APESMA over a 12 month period. APESMA produced various draft agreements for discussion. An impasse was reached in the negotiations. APESMA submitted that the impasse arose because the real position of Endeavour Coal was that it was never going to agree to an enterprise agreement covering the staff employees and that it therefore did not matter what concessions or changes to proposals APESMA made in the negotiations.

At first instance, the Commission was satisfied that Endeavour Coal was not meeting the good faith bargaining requirements. The unwillingness of Endeavour Coal to enter into enterprise agreement negotiations with APESMA had continued in modified form after the making of the majority support determination.

The Commission concluded that Endeavour Coal was bargaining with APESMA with no real intention to negotiate an enterprise agreement and contrary to the good faith bargaining requirements, and made five bargaining orders.

Endeavour Coal appealed the decision, and the Full Bench concluded that it was open to the Commission to find that, in the circumstances, Endeavour Coal had failed to meet the good faith bargaining requirements by:

not giving genuine consideration to the proposals of APESMA for the agreement, and
not recognising and bargaining with APESMA.

However, the Full Bench considered that the Commission had erred by not giving appropriate consideration to whether it was satisfied that it was reasonable in all the circumstances to make the order. Ultimately, the Full Bench adopted all but one of the Commission's orders, and provided guidance on how the remaining orders were to be construed.

Endeavour Coal sought judicial review of the Full Bench's decision on the basis that the Full Bench misconstrued s.228(1) of the Fair Work Act and that this misconstruction affected the orders made by the Full Bench.

The Federal Court concluded that the Full Bench had correctly construed s.228 of the Fair Work Act. However, the Court did conclude that three of the orders made by the Full Bench should be set aside on the basis that they required Endeavour Coal to make concessions during bargaining. These orders related to requiring Endeavour Coal to take various actions (including providing APESMA with a list of the subject matter it would be prepared to include in an enterprise agreement), as well as representation in future bargaining meetings and the holding of meetings.

Attending, and participating in, meetings at reasonable times

Esso Australia Pty Ltd v "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU); The Australian Workers' Union (AWU); Australian Municipal, Administrative, Clerical and Services Union (ASU) [2014] FWC 6132 (Hamilton DP, 5 September 2014).

Esso made an application for a bargaining order against the AMWU, CEPU, AWU and ASU. There were 4 agreements in place which the parties sought to replace, however only one of the 4 agreements had all 4 unions as bargaining representatives. Previously, agreements and other issues had been raised and discussed in meetings of the Esso All Sites Committee (EASC) comprising Esso management and representatives of each of the 4 unions.

The proposed order sought that the relevant bargaining representatives for each of the agreements attend bargaining meetings with Esso at 4 separate site meetings and that no person other than the bargaining representatives for that replacement agreement attend except with the prior approval of Esso. The unions objected to the application and advised Esso that they would negotiate with Esso 'only the EASC level'.

Esso did not want to renegotiate these agreements through the EASC because it viewed this to be 'cumbersome' and 'inefficient' for the purposes of negotiation. Also, it had not been able to include specific productivity items in the previous agreements due to rejection by the unions, including those not eligible to act as bargaining representatives for those agreements.

The Commission found that the refusal by the unions to attend separate site meetings for negotiations on each of the replacement agreements was a failure to meet the good faith bargaining requirement to attend and participate in meetings at reasonable times (s.228(1)(a)). The Commission issued a bargaining order requiring attendance at separate site meetings.

Bargaining order NOT made

Eligibility rule specifies coverage for pilots on airline services operated in whole or part and under any name by Qantas

Australian and International Pilots Association v Network Aviation Pty Limited [2013] FWCFB 5216 (Hatcher VP, Boulton J, Cargill C, 14 August 2013).

AIPA applied for a bargaining order against Network, a wholly-owned subsidiary of Qantas Airways Ltd, in relation to bargaining for an enterprise agreement to cover Network pilots.

At first instance, the Commission determined that it could not make bargaining orders on the basis that pilots employed by Network were not eligible to be members of AIPA.

AIPA appealed the decision and, given the importance of the interpretation of the eligibility rules of unions, permission to appeal was granted. However, the Full Bench found that the Commission's decision was correct and that AIPA could not represent the industrial interests of Network pilots. Accordingly, AIPA could not seek bargaining orders with respect to the enterprise agreement.

Further meetings planned

Total Marine Services Pty Ltd v Maritime Union of Australia [2009] FWA 290 (Thatcher C, 16 September 2009), [(2009) 188 IR 4].

During negotiations with the MUA for a proposed enterprise agreement, Total Marine Services applied to the Commission for bargaining orders requiring the MUA to provide Total Marine Services with a tracked changes version of the amendments the MUA proposed to the existing enterprise agreement. In the alternative, Total Marine Services sought an order requiring the MUA to provide an annotated version of the MUA’s log of claims, as well as a written response to the claims proposed by Total Marine Services.

The hearing of the application was held 1 day before the parties were scheduled to meet, and 3 further meetings had already been arranged.

The Commission declined to make the orders sought on the basis that the orders would require the MUA to provide significant written material that may not be required after the parties had met and each had clarified its various claims, options and preferences.

References

^[1] Fair Work Act s.229(4)–(5).

^[2] Liquor, Hospitality and Miscellaneous Union v Foster's Australia Ltd [2009] FWA 750 (Kaufman SDP, 28 October 2009) at para. 20.

^[3] Fair Work Regulations reg 2.11.

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Last updated

24 May 2019

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