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Australia's bargaining system is crying out for some common sense

"A decision of the Fair Work Commission yesterday has demonstrated that Australia’s enterprise bargaining system is in need of major repair and urgent Government attention," Innes Willox, Chief Executive of the Australian Industry Group said today.

"The split decision of a Full Bench of the Fair Work Commission in the Uniline case highlights how far Australia's enterprise bargaining system has moved away from facilitating enterprise agreements between employers and employees in favour of an overly technical approach.

"Enterprise bargaining has become a minefield for employers, employees and bargaining representatives, partly because of problems with the drafting of the Fair Work Act and partly because of the overly technical manner in which the Fair Work Commission is approaching its task of assessing enterprise agreements which are lodged for approval. The dissenting decision of Vice President Graham Watson in the Uniline case says it all:

"[46] In my view, the issue involved in this case cries out for a common sense approach. The legislation encourages enterprise bargaining and agreement making. It is intended to provide a simple, flexible and fair framework for agreement making and the facilitation of enterprise agreements. The proposition that a notice issued more than 14 days after the commencement of bargaining advising employees of their representation rights renders an agreement, otherwise genuinely agreed, to be incapable of approval is demonstrably inconsistent with the statutory scheme. Indeed such a conclusion in my view is the very antithesis of a simple, flexible and fair framework. The employees may already know of their representation rights and may already have made decisions in accordance with their rights. They may have expended much time and resources to agreeing on the content of an agreement. A common sense interpretation gives weight to such considerations. A conclusion of automatic failure of a test based on a technicality fails the legal test and produces a nonsensical outcome."

"The decision of the Majority in the case (Deputy President Gostenknic and Commission Riordan) is very disappointing. They took the view that it is up to Parliament to address the overly technical approach mandated by the Fair Work Act. They said:

[120] We would observe in passing that we are not unsympathetic to the position in which an employer or indeed other bargaining representatives might find themselves upon discovering that a Notice is not valid. If the legislative provisions provided some discretion about this and other pre-approval technical requirements then an examination of the actual impact of any deficiency upon the bargaining process and its outcome might result in the deficiency being disregarded. But that is not the legislative scheme the Commission is required to administer. It is a matter for Parliament to make such amendments to the scheme of the Act as it sees fit.

"The Federal Government needs to act without delay to introduce legislation to implement recommendation 20.1 of the recent Productivity Commission inquiry into the Workplace Relations Framework, and all Parliamentarians need to support the legislation. Recommendation 20.1 is:

"The Australian Government should amend the Fair Work Act to:

  • allow the FWC wider discretion to overlook minor procedural or technical errors when approving an agreement, as long as it is satisfied that the employees were not likely to have been placed at a disadvantage because of an unmet procedural requirement.
  • extend the scope of this discretion to include minor errors or defects relating to the issuing or content of a notice of employee representational rights.

"The Uniline case was not one where there was a contest between an employer and a union. The overly technical manner in which the bargaining laws are currently being applied is causing problems for all parties involved in enterprise agreement making, often at great cost," Mr Willox said.  

Media Enquiries: Tony Melville – 0419 190 347