A recent decision of the Fair Work Commission has confirmed an employer’s right to put a proposed enterprise agreement to employees for their approval, despite the union’s request to continue to bargain.

Background

In CFMEU Queensland District Branch v Workpac Pty Ltd [2017] FWC 1995 WorkPac had been negotiating with the CFMEU for a replacement enterprise agreement for almost a year. It had attended many negotiation meetings with union bargaining representatives and produced 13 draft agreements.

It became apparent that there were areas, notably wage rates, where no agreement would be reached. On a meeting on 7 March 2017, WorkPac indicated that the next draft agreement would be its “best and final offer”.

The CFMEU contended that the final draft included “substantial and important” changes and requested a meeting with WorkPac to discuss them. WorkPac refused and began the formal process to put the agreement to its employees to vote on.

The CFMEU then applied for a bargaining order arguing that WorkPac had breached its good faith bargaining obligations by failing to give genuine consideration to a CFMEU proposal and engaging in unfair conduct by refusing to provide an adequate opportunity for discussion of the important changes.

Good faith bargaining

Under the Fair Work Act 2009 (Cth), employers who are proposing an enterprise agreement must bargain with good faith. This includes:[1]

  • attending and participating in meetings;
  • responding to proposals made by other bargaining representatives;
  • giving genuine consideration, and responding, to the proposals of other bargaining representatives; and
  • refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining.

Importantly, good faith bargaining does not require employers to make concessions or actually reach agreement.[2]

Decision

The Commission, pointing to the evidence of WorkPac’s significant efforts to negotiate with the CFMEU, found that it had not breached its good faith bargaining obligations.  Deputy President Asbury distinguished the Endeavour Coal decision where the employer was found to have failed to bargain in good faith because its conduct was “a mere sham or pretence, such as going through the motions of bargaining without any real intention to reach an agreement”.[3]

Asbury DP found instead that WorkPac had engaged and negotiated with the other bargaining representatives, made concessions, and given genuine consideration and responses to proposals put to it. Asbury DP stated:

“There is a point where an employer, having bargained extensively and in good faith, is entitled to draw a line in the sand and declare that no further concessions will be made.”[4]

“In all of the circumstances, a refusal by WorkPac to engage in a further meeting after it had circulated its best and final offer was not a failure to give genuine consideration to the proposals of other bargaining representatives.”[5]

Interestingly, although it was found that the final agreement was materially similar to previous draft agreements, Asbury DP also noted that her decision would not have changed, even if there had been substantial amendments to the final draft put to employees.[6]

Key takeaway for employers

An employer is entitled to conclude enterprise bargaining and ask employees to vote on its proposed agreement despite objections from a union provided that it has:

  • bargained with a genuine objective of reaching an agreement – this may be evidenced by attending meetings, presenting draft agreements which have been varied as negotiations progressed; and
  • indicated that it is presenting its best and final offer ahead of circulating the final draft agreement to employees.

Of course, this will not prevent the union/s from encouraging employees to vote against the proposed agreement. For this reason, this is a tactic which an employer should only use if it is reasonably confident that a majority of employees are likely to support the agreement, notwithstanding active union opposition.

 

Thank you to Rachel Hao (Graduate) for her contribution to this article.

 

[1] Fair Work Act 2009 (Cth) s 228(1).

[2] Ibid s 228(2).

[3] Endeavour Coal Pty Ltd v Association of Engineers, Scientists and Managers Australia [2012] FWAFC 1891 at [30].

[4] CFMEU Queensland District Branch v Workpac Pty Ltd [2017] FWC 1995 at [50].

[5] Ibid at [46].

[6] Ibid at [46].