Today heralds the start of the Federal Government's new Fair Work industrial relations system, at the heart of which are significant changes to agreement making. Under the Fair Work system, collective agreements called 'enterprise agreements' will be the sole basis upon which an employer and its employees can agree to completely exclude the operation of awards.
In most cases the employer will start the agreement making process. However, the new laws allow employees to force an employer to commence the bargaining for an enterprise agreement where they have a 'majority support determination' from Fair Work Australia (the new body that replaces the Australian Industrial Relations Commission).
Employers need to be aware that they must, within 14 days of the commencement of the agreement making process, give to employees, who will be covered by the proposed agreement, a notice informing them of their right to appoint a bargaining representative. Further, the notice must specify that where an employee is a member of a union and they fail to appoint a bargaining representative, that union will be appointed as their 'default' bargaining representative.
New 'good faith bargaining' rules have been introduced to regulate the conduct of the negotiating parties. The specific requirements imposed on bargaining representatives under the Fair Work Act, include:
- attending and participating in meetings at reasonable times;
- disclosing relevant information in a timely manner, subject to appropriate protection for confidential or commercially sensitive information;
- responding to proposals made by a party in a timely fashion;
- giving genuine consideration to the proposals of the other parties, and providing reasons for their responses to those proposals;
- refraining from capricious or unfair conduct or conduct that undermines freedom of association or collective bargaining; and
- recognising and bargaining with other bargaining representatives for the agreement.
These rules could result in, amongst other things, the employees' bargaining representatives being able to obtain financial information concerning the employer's business. Also, they require employers to invest considerable time and resources into the preparation for, and participation in, the bargaining process.
As the requirements are new, they are yet to be tested by Fair Work Australia.Our
Employment team will monitor the way in which Fair Work Australia applies the requirements and will keep you updated.
For further information, please contact: