FWA decision paving way for industrial action will cause “carnage”
In a decision that has dumbfounded employer groups, on 1 June 2011, a Full Bench of Fair Work Australia found on appeal that unions and employees can take industrial action even before bargaining of an Enterprise Agreement has started.
Usually, industrial action like strikes and bans of overtime are a tool of last resort, used by employees when negotiations for an EA have broken down.
Under the Fair Work Act 2009, before employees can take action, their union has to apply to FWA to hold a secret ballot to see if employees want to take action. FWA will only approve an application for such a ballot if the union “has been, and is, genuinely trying to reach an agreement with the employer.”
What happened in this latest case is that the employer, JJ Richards & Sons (who provides waste management services), had a contract with the Canterbury City Council in NSW and employed 25 workers to fill that contract. The Transport Workers Union (TWU) wrote to the company on 24 December 2010 and said it wanted to start negotiating for an EA. On 7 January 2011, the company responded that it did not want to negotiate because the Council would not accept the company passing on the wage increases.
The union requested an EA again on 17 January 2011, and the company again declined to bargain on 24 January 2011. The TWU then applied to FWA for a protected action ballot.
The company opposed the TWU’s application, and argued that the TWU was trying to commence bargaining, not trying to reach an agreement, when it asked for ballot orders. Essentially, it was premature to allow a secret ballot.
The company said that when an employer was unwilling to bargain, a protected action ballot should not be granted unless the union had exhausted the steps available under the Act to force it to do so. The Act can force an employer to bargain with a union if the union is given a majority support determination or good faith bargaining orders.
However, the Full Bench read the Act’s protected action ballots provisions very literally, and said there were no such limitations in the Act. FWA was satisfied that by writing to the company to propose negotiations, the TWU was trying to reach an agreement.
Australian Industry Group chief executive Heather Ridout said the decision to reject the appeal was disappointing, and that it would create more risks for employers, particularly those who do not wish to enter into Enterprise Agreements.
“We have tested this law and the law has been found wanting,” Mrs Ridout said. “The decision is further evidence that the Fair Work bargaining laws are not working effectively in some areas and need to be amended.”
The Australian Mines and Metals Association’s Chief Executive Steve Knott said last week, “The full bench today paved the way for a minority of a workforce to perpetrate industrial carnage by taking protected industrial action against the wishes of the majority of a workforce.”
“Such a situation is manifestly unfair to employers and flies in the face of the assurances given to employers when the Government first introduced its changes to the nation’s industrial legislation.”
If your business is negotiating an enterprise agreement or has any concerns about the way that the Fair Work Actand modern awards apply to your workforce, contact MST’s Workplace Relations team.
Author: Richard Scougall