See Fair Work Act 2009 s.228
One of the objects of Part 2-4 of the Fair Work Act is to provide a framework that enables collective bargaining in good faith, particularly at the enterprise level.
The Fair Work Act sets out the good faith bargaining requirements in section 228.
Note: See also section 255A (limitations relating to greenfields agreements)
The good faith bargaining requirements are generally self-explanatory.[1] They are designed to facilitate agreement making and assist bargaining representatives to bargain effectively.
The good faith bargaining system recognises that most employers and employees voluntarily and successfully bargain collectively in good faith and that most employers respect their employees' right to bargain collectively.[2]
In general, the legislative scheme might be described as one which seeks to promote agreement making but which does not compel parties to make concessions or to reach agreement. There is nothing inconsistent about encouraging parties to make agreements – and imposing an obligation upon them to try to do so – but at the same time not compelling parties to make concessions in bargaining. An agreement remains what the name implies.[3]
Good faith bargaining requirements aim to ensure that all bargaining representatives act in an appropriate and productive manner. The requirements also seek to facilitate improved communication between bargaining representatives, which is expected to reduce the likelihood of industrial action.[4]
The Fair Work Act emphasises that there is an obligation to bargain in good faith. Bargain means to discuss the terms of any transaction. Discuss means to engage in conversation, examine by argument – to debate. At its most fundamental, enterprise bargaining is about communication both before and during formal negotiations. Each requirement for good faith bargaining has as its aim, purposeful or meaningful communication.[5]
Determining whether a bargaining representative is meeting the good faith bargaining requirements requires an objective assessment of the actions of the bargaining representatives.[6]
The good faith bargaining requirements do not require a bargaining representative to make concessions. A bargaining representative can meet the good faith bargaining requirements, whilst also adopting a 'hard line'.
Equally, the good faith bargaining requirements do not imply moderation of demands. The good faith bargaining requirements imply a preparedness to genuinely consider offers and proposals made by other bargaining representatives and to take account of the bargaining representatives' reasons for their proposals. If, having done these things, a bargaining party is unmoved, it may still be bargaining in good faith. The inability of parties to reach an agreement is not evidence that either party is not meeting the good faith bargaining requirements.[7]
The requirement in section 228(1)(e) ('refraining from capricious or unfair conduct ...') is intended to cover a broad range of conduct. For example, conduct may be capricious or unfair if an employer:
Whether conduct is capricious or unfair can only be ascertained by an examination of all of the circumstances in a particular case.[9]
Capricious is defined as 'guided by caprice; readily swayed by whim or fancy; inconstant' and caprice as 'an unaccountable change of mind or conduct…' in The New Shorter Oxford English Dictionary as cited in Liquor, Hospitality and Miscellaneous Union v Foster's Australia Ltd.[10]
It is anticipated that most bargaining representatives will bargain voluntarily and cooperatively without the need for assistance or intervention from the Fair Work Commission. In the occasional cases where this is not occurring, the Fair Work Act provides mechanisms for the Commission to facilitate bargaining and, where necessary, make orders to ensure the integrity of the bargaining process.[11]
If bargaining representatives are not effectively bargaining together, an application can be made to the Commission for a bargaining order to be issued requiring bargaining representatives to bargain in good faith.[12]
[1] Explanatory Memorandum to Fair Work Bill 2008 at para. 951.
[2] Explanatory Memorandum to Fair Work Bill 2008; Financial Impact Statement at para. 155.
[3] 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) at para. 27, [(2012) 217 IR 131].
[4] Explanatory Memorandum to Fair Work Bill 2008; Financial Impact Statement at para. 161.
[5] Fair Work Australia v Union of Christmas Island Workers; Phosphate Resources Limited [2012] FWA 1081 (Cloghan C,16 February 2012) at para. 72, [(2012) 218 IR 182].
[6] ibid., at para. 74.
[7] Re Public Transport Industry Print L5622 (AIRC, Hancock SDP, 30 September 1994), 3, see also Australasian Meat Industry Employees' Union v G & K O'Connor Pty Ltd [1999] FCA 310 (22 March 1999) at para. 45.
[8] Explanatory Memorandum to Fair Work Bill 2008 at para. 951.
[9] Construction, Forestry, Mining and Energy Union (Mining and Energy Division) v Tahmoor Coal Pty Ltd [2010] FWAFB 3510 (Giudice J, McCarthy DP, Larkin C, 5 May 2010) at para. 7, [(2010) 195 IR 58].
[10] Liquor, Hospitality and Miscellaneous Union v Foster’s Australia Ltd [2009] FWA 750 (Kaufman SDP, 28 October 2009) at para. 13.
[11] Explanatory Memorandum to Fair Work Bill 2008 at para. 946.
[12] Explanatory Memorandum to Fair Work Bill 2008; Financial Impact Statement at para. 159.