Submission 167 Australian Council of Trade Unions Workplace Relations Framework Public inquiry

Too high a bar?

There is a mismatch between the key international obligations that have informed these provisions of the FW Act which might at face value indicate that the bar for arbitration is too low. However, the practical reality is that the capacity to obtain access to interest arbitration of industrial disputes (in all bar the most exceptional cases) is largely unattainable for employees due to the very high threshold established under ss423 and 424 of the FW Act – unless of course, the employees concerned are health workers engaged in effective protected industrial action.

The current provisions relating to access to arbitration do not contain the right balance and are complex and unwieldy. They inherently favour the interests of very large corporations and disadvantage employees with lesser bargaining power. They also operate within a framework that prohibits effective multi employer bargaining and unduly restricts the permissible subject matter of agreements, meaning some cases that could conceivably meet the threshold never arise.

The ability of employees such as those employed by Cochlear, ResMed or Endeavour Coal to apply for and obtain an arbitrated settlement of their intractable industrial disputes is next to zero. The net effect of the arbitration provisions in the FW Act is that arbitration is used to shield and protect the position of employers in a difficult bargaining context, but not employees. There is a need to review the provisions relating to access to arbitration in order to provide an appropriate level of protection for employees seeking to negotiate a collective agreement with their employer – particularly, in a first agreement context.

The position we advocate is not one of ready recourse to the compulsory arbitration of collective bargaining disputes, but a recalibration of the tests contained in the FW Act to provide more flexibility for the FW Commission to interpose itself in the bargaining environment in appropriate situations. In other words, the legislative framework needs to shift the emphasis from damage to the economy per se, to other important criteria such as:

1. 
   The maturity of the bargaining relationship and in particular, whether the bargaining involves an actual or virtual first agreement context. Consistent with international norms, where a first agreement context is in play, there should be easier access to tribunal intervention, including formally arbitrating interest claims, provided of course that any arbitrated settlement respects any matters already agreed and that there remains throughout a discretion in the Tribunal to allow the parties to continue or resume negotiations for a period where it satisfied that the parties are committed to reaching an agreement and there is some prospect of them doing so.
   

2. 
   The extent to which the parties have conducted themselves in accordance with their good faith obligations, and in particular, whether the claims or issues advanced are consistent with reasonable responses, given the relevant industrial context. This consideration would be concerned to prevent ‘surface bargaining’ – the practice of deliberately pursuing an unacceptable bargaining stance or agenda with the aim of avoiding the making of an enterprise agreement per se. It may be the case that it is not amendment the of the conciliation and arbitration powers per se that provide the desired reform, but rather a more direct requirement within the good faith bargaining framework to make reasonable efforts towards making an agreement along with a less convoluted route to achieving the “serious breach declaration” which is the necessary perquisite to a bargaining related workplace determination⁴⁶⁹.
   

3. 
   The damage that a continuing industrial dispute is causing, or likely to cause, to the long-term relationships between employers and employees. This is a critical productivity issue given that industrial disputes that lead to clear “winners” and “losers” are likely to engender a negative and retributive workplace culture, where “getting square” becomes an underlying dynamic of work relationships. The moderating influence of the FW Commission as a conciliator with the flexibility to recommend or dissuade parties from adopting particular stances or tactics would be a critical tool in reducing the likelihood of the “baggage” from a particular bargaining round going on to define the dynamics of the relationship in future.
   

4. 
   Whether there is any reasonable expectation that the dispute will be solved by further negotiation. Clearly, a proper consideration in determining whether arbitral intervention should occur in practice is whether there is a real prospect of the parties reaching agreement themselves. In circumstances where this is highly unlikely, the intervention of the industrial tribunal is a necessary circuit breaker – provided that both parties want an enterprise agreement and, as above, provided that any arbitrated settlement respects any matters already agreed and that there remains throughout a discretion in the FW Commission to allow the parties to continue or resume negotiations for a period where it satisfied that the parties are committed to reaching an agreement and there is some prospect of them doing so.
   

Within the framework discussed above, compulsory arbitration of the matters dividing the industrial parties will remain a last resort, but would not be so unattainable as to not exert a moderating influence on the negotiating parties.⁴⁷⁰

Importantly, there is also a need for the FW Commission to more actively use and explore its conciliation powers.⁴⁷¹ Those powers include the power to make a recommendation or to express an opinion⁴⁷², neither of which are exercised frequently in a bargaining context. Conciliation and arbitration under the FW Act should not be construed as radically different forms of intervention, but as part of one continuum. That is, active conciliation and mediation of collective bargaining disputes should always precede any recourse to arbitration and in turn, a realistic prospect of arbitration imposing a result on the bargaining parties should always be an influence on the parties to conciliation.