The 2022 Secure Jobs, Better Pay amendments introduced provisions empowering the Fair Work Commission (the “Commission“) to make an intractable bargaining declaration and determination in circumstances where bargaining for an enterprise agreement has reached an impasse.  While these provisions commenced on 6 June 2023, the first decision of the Commission has provided initial insight as to the circumstances in which it may be prepared to intervene. 

For an intractable bargaining declaration to be made, the Commission must be satisfied of several matters, including: 

• The application for the declaration was made after the end of what is referred to as the “minimum bargaining period”.  In practical terms, that will require the parties to have been negotiating for at least 9 months (and possibly longer). 
• The Commission must have already dealt with the dispute, and the party making the application must have participated in the Commission’s processes to deal with that dispute. 
• There’s no “reasonable prospect” of agreement being reached if the Commission doesn’t make the declaration. 
• It’s reasonable to make the declaration in all the circumstances, taking into account the views of all the bargaining representatives for the agreement. 

In simplified terms, the Commission’s first decision arose in a context where: 

• The application for the intractable bargaining declaration was made by the employer. 
• The parties had met on seventeen occasions, although the union argued that active bargaining did not occur on all occasions. 
• The main matters in dispute related to wages, uniforms and equipment, allowances, an increase to long service leave and personal leave entitlements, backdating, increases to the maximum redundancy entitlements and the duration of the agreement. 
• The employer’s most recent proposal had been “soundly rejected” by the employees in a ballot. 
• Bargaining was occurring within the context of the employer tendering for the continuation of services, being services to which the agreement would apply. 

While finding that “[t]here is … little doubt that the bargaining is presently at an impasse, including by virtue of the positions adopted by the parties on some of the key outstanding claims”, the Commission declined to make the intractable bargaining declaration sought by the employer.  It declined to do so on the grounds that there were “other countervailing factors” that on balance lead to the Commission being unable to be satisfied that there was no reasonable prospect of agreement being reached.  These countervailing factors included: 

• The Union changed its position during the hearing, indicating that it was open to an agreement of a longer duration that it had formally adopted in negotiations. 
• The employer had advanced through the tender process to become the sole tender for the services (albeit the Commission acknowledged that did not guarantee the employer would be successfully awarded the contract). 

Having regard to these factors, the Commission observed “I accept that it may be that the respective bargaining positions of the parties may not change sufficiently to reach an agreement.  However, this had not been tested and the evidence is that these factors have played a very important part in the bargaining dispute to date.  … In addition, although the bargaining has been in place for an extended period, the duration of active bargaining has been only for part of that time and dominated by the impact of the contract tendering process.  There has been very little bargaining, if any, since the unsuccessful employee ballot…and the contract developments.” 

There’s undoubtedly a lot of runway that still needs to be covered by the Commission in intractable bargaining disputes, but if the first decision provides an insight as to what lies ahead, there’s several initial takeaways for employers: 

1. Intractable bargaining declarations are likely to be an outcome of last resort, with the focus remaining on agreements reached between the parties.
2. It’s not an impasse until the Commission agrees.
3. The history of the parties in successfully making prior agreements will be a matter of relevance.
4. Even if parties have become entrenched in their bargaining positions, if relevant external factors are changing, an impasse might not be reached to the satisfaction of the Commission until those factors have concluded.
5. If one party changes position (however late), an impasse is unlikely to exist until the impact of that change has been properly tested through further bargaining. 

Chris Oliver, Director