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Strateg-Eyes

IR and the Upcoming Election

16 August 2010


IR and the Upcoming Election

Ed Austin-Woods

In the eyes of the electorate, industrial relations policy remains a key point of difference between the ALP and the Coalition’s recent promise that it would preserve the ALP’s current legislative framework or at least a first term if elected. The Coalition has recognized that its workplace relations policy is a politically sensitive subject and is seeking to neutralize it as an election issue by taking this position. However, employers need to be aware of the possibilities for change that may occur to ensure that their industrial strategy is thorough and properly considered. This is especially pertinent when planning whether an industrial instrument should be entered into or re-negotiated, or whether it should be delayed so as to await a more favourable legislative framework.

Historically, and previous to this latest announcement, the ALP and Coalition had significantly different policies which demonstrated the contrasting ideologies between the parties. The ALP believes in collective bargaining with strong union power and involvement, and that this affords employees the best representation and strongest position in workplace negotiations. On the other hand, the main objective of the Coalition’s industrial relations policy is to foster a more direct relationship between employers and employees at the workplace level without union interference. The Coalition’s core values include individual freedom and free enterprise, and it positions itself as the champion of small business.

When the ALP was elected to Government in 2007, one of its central platforms was that it would abolish the WorkChoices legislation implemented under the Howard Government. It promised to bring in a new system that would guarantee both employers and employees a “fair go all round”, a concept which was mirrored in the names of the Fair Work Act 2009 (Cth) (“FW Act”) and Fair Work Australia (“FWA”).

The FW Act heralded a number of significant workplace reforms. Access to unfair dismissal laws has been extended to allow workers relief where they are employed by a company with less than 100 employees. The National Employment Standards have been introduced which comprise 10 minimum employment standards (replacing the Australian Fair Pay and Conditions Standard). The prohibition on discrimination has been broadened though the introduction of the general protections provisions.

Importantly, the FW Act has also provided unions with stronger right of entry powers and an increased ability to negotiate enterprise agreements on behalf of employees they industrially cover. Under the Good Faith Bargaining (“GFB”) Principles, employers are now legally obliged to negotiate with unions in good faith. This includes the requirements to recognize and bargain with the other party’s bargaining representatives, attend and participate in meetings, disclose relevant information, respond and give genuine consideration to proposals in a timely manner, and refrain from capricious and unfair conduct that undermines freedom of association and collective bargaining. However, the FW Act also specifies that the obligations do not require concessions to be made or agreement reached on proposed terms.

Where an employer refuses to bargain, a union or employees can ask FWA to determine if there is ‘majority employee support’ for negotiating an enterprise agreement. If FWA determines there is majority employee support, the employer will be required to bargain collectively.

The GFB Principles have forced employers to re-think their negotiating strategy. Considerable though must be given to how replies are drafted, and future bargaining positions to be adopted. All possible outcomes, and their necessary response, must be properly prepared and planned.

The Coalition has stated that if elected it will not amend the current legislative framework for at least three years. It maintains that, in doing so, it is respecting the opinion of the Australian public who voted against WorkChoices at the last election, and listening to small business who do not want any more changes. On June 26 2010, the Coalition released a policy document called “Our Action Contract” which provides that they will nor revisit WorkChoices or reintroduce Australian Workplace Agreements (“AWAs”).

Although the Coalition has made these promises, we can expect it to return gradually to a position where it will wind back unfair dismissal laws for small business, address penalty rates, diminish union right of entry, and re-introduce non-union contracts. Furthermore, it is expected that a Coalition Government will eventually remove the GFB Principles. Consequently, employers would no longer be legally obliged to negotiate with their employees and/or representatives, and the involvement if unions would be considerably weakened. This would then also necessarily strengthen the position of employers in negotiating the terms of any proposed agreement.

Employers will need to remain informed on workplace policy development so they are able to make proper and educated industrial decisions. Industrial relations is certain to play a central role in the upcoming election. In 2007 it was reported that the ACTU spent $30 million in advertising against the Howard Government and WorkChoices. The Coalition’s election pitch is that it will not amend the FW Act for at least three years if elected. However, the Government will argue that the Coalition cannot be trusted and that wholesale changes will occur. The ALP will continue with the rhetoric that a Coalition Government will reintroduce WorkChoices and bring back AWAs.

Pre-election HR Actions

Be familiar with the current industrial legislative framework and the changes brought about by the FW Act.

Consider and understand how this framework affects your workplace obligations in relation to current contracts, agreements, policies and future industrial negotiations.

Understand the importance and relevance of the GFB requirements, and the correct procedures that must be followed when bargaining is deemed to have commenced.

Keep up-to-date and informed on changing policy developments, and consider their consequences and implications.

Have a sound IR strategy in place that reduces risk exposure through consideration of both and possible future movements.

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