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This is the seventh in a series of articles about the Federal Government's proposed new workplace legislation known as the Fair Work Bill 2008.
The Government intends for the new laws to be fully introduced by 1 January 2010, with some aspects to commence 1 July 2009. At the date of this article, there have been no changes in the law and it is possible that there will be changes to the Fair Work Bill as it moves through the Senate. We will report on any substantial changes as they occur.
The Fair Work Bill gives expression to the notion of good faith bargaining. The good faith bargaining requirements do not correspond with the existing legislation and so represent new law in this area. In many ways, good faith bargaining sets the parameters for the conduct of enterprise bargaining within the new system of workplace law.
Those responsible for negotiating an enterprise agreement are expected to do so in a manner consistent with various good faith bargaining principles. To satisfy these, a negotiating party will be required to:
These requirements do not compel a party to make concessions during bargaining, nor is a party required to reach agreement on the terms that are to be included in the agreement.
The new regulatory body, Fair Work Australia, will replace various existing bodies such as the Australian Industrial Relation Commission. Fair Work Australia be able to involve itself in disputes about enterprise agreements and will have the power to order compliance with good faith bargaining requirements.
The Fair Work Bill allows a bargaining party to seek orders from Fair Work Australia if that party is aggrieved about the conduct of another party to the negotiations. Amongst the orders available, a party may be ordered to take actions to meet good faith requirements. Fair Work Australia may also exclude a bargaining representative from negotiations. To deal with situations where there are multiple employee representatives, Fair Work Australia will be able to require the employee representatives to appoint one person to act on behalf of all those representing employees in the negotiations with the employer.
Parties will be expected to comply with orders. If there is serious and sustained contravention, Fair Work Australia may issue a breach declaration. If there is ongoing dispute about issues after the declaration has been made, Fair Work Australia may impose an arbitrated order regarding the disputed issues including rates of pay. These orders are known as workplace determinations.
Bargaining orders will be enforceable in the Federal Court. A person who contravenes a bargaining order will be faced with a potential fine of up to $6,600 for each contravention.
The good faith bargaining requirements apply equally to unions and employers. As such, employers will be able to rely on those obligations to hold unions to account during the bargaining process. For employers, the good faith bargaining rules open up the prospect that unions will exploit the opportunity to bring proceedings against employers where unions allege that the bargaining process is not proceeding efficiently or fairly, or where a union considers that the employer has not responded appropriately to its concerns. Despite its intentions, good faith bargaining could become a means to reduce employer resistance to unacceptable claims.
If you have any questions about the new laws and how they may affect your business, please do not hesitate to call your usual contact at Australian Business Lawyers or our Managing Partner, Tim Capelin on (02) 9458 7497.
Note: This is for information purposes only.
It does not purport to be comprehensive or to render legal advice.
