Jurisdiction - Australia
Australia – Direct Dealing With Employees During Bargaining.

25 February, 2014


Legal News & Analysis – Asia Pacific – Australia – Labour & Employment


Under the Fair Work Act 2009 enterprise bargaining must be conducted through bargaining representatives who must bargain in good faith with each other.


That obligation includes:


  • refraining from capricious or unfair conduct which undermines freedom of association or collective bargaining; and
  • recognising and bargaining with the other bargaining representatives.


The obligation to bargain in good faith may limit the type of communication an employer can have with its employees directly. Employers must continue to interact with their employees on a wide range of matters while enterprise bargaining is occurring. What types of communication – “direct dealing” as it has been called – are inconsistent with the good faith bargaining requirements? This article looks at three types of direct dealing: verbal and written communication, employer ballots and unilateral alteration of conditions.


Verbal And Written Communications


At a general level there is acceptance that direct communication, both verbal and written, is good management practice and is not of itself contrary to good faith bargaining. It has been suggested, however, that an employer should not use direct communication with employees to completely exclude a bargaining representative from the bargaining process.


Clearly the nature of the communications can be important in deciding whether there is a failure to meet the good faith bargaining requirements. If the employer conducts employee meetings without the consent of the bargaining representatives to explain its bargaining position, there may be no failure to meet the good faith bargaining requirements. However, it is important to convey the state of the negotiations accurately and not alter the position put to the bargaining representatives. Communications containing misleading or inaccurate information, even if unintended, may breach the requirements.


Employer Ballots


If an employer conducts a ballot of employees without the knowledge or agreement of the bargaining representatives, the employer is potentially acting unfairly and undermining freedom of association and collective bargaining. In putting its proposal to a ballot of employees, the employer may be breaking off negotiations and bypassing the bargaining representatives.


The circumstances can be important. In CFMEU v Tahmoor Coal Pty Ltd [2010] FWAFB 3510, the Full Bench decided that an employer that conducted a ballot had not failed to observe the good faith bargaining requirements. There had been extensive bargaining (40 to 50 meetings) over a long period of time (more than 12 months in aggregate) with no progress on important matters and there was virtual agreement that a stalemate had been reached.


While the usual position is that at least some negotiation would be required, there is at least one decision which indicates that it may not be necessary for an employer to negotiate with the union/bargaining representative at all before arranging a ballot, provided it meets with them (see ASU v Global Tele Sales Pty Ltd [2011] FWA 3916). A bargaining representative that seeks an order to stop an employer from conducting a ballot should act promptly.


The Fair Work Commission might also be more likely to stop a ballot where the employer proposal differs from the proposal put to the bargaining representatives. But all of the relevant circumstances will be taken into account.


Unilateral Alteration Of Conditions


Unilateral alteration of a standard contract of employment during bargaining might constitute a failure to meet the good faith bargaining requirements, even if the standard contract applies to more employees than those involved in enterprise bargaining. In Finance Sector Union of Australia v Commonwealth Bank of Australia [2010] FWA 2690, the employer had postponed discussions with the bargaining representatives on wages but had concurrently made a commitment outside the negotiating forum to increase the employees’ wages. The FWC found that this conduct was unfair and undermined collective bargaining. On the other hand, the FWC has also found that a restructuring which altered the allocation of work was not capricious or unfair (see LHMU v Coca Cola [2009] FWA 153) and nor was a change in rosters (see AWU v Woodside Energy Limited [2012] FWA 4332).


Alterations in wages and conditions which are directly relevant to bargaining will be more likely to constitute a breach of the requirements than alterations in other conditions.


Recommended Action


An employer may communicate with employees about its bargaining position, but should not negotiate directly with them to the exclusion of the bargaining representatives.

Conducting a ballot against the wishes of the bargaining representatives may be risky unless the negotiations have reached a genuine stalemate.


During bargaining, it may be better for an employer to avoid unilateral alterations to wages and other conditions, at least those conditions which are directly relevant to the negotiations.


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For further information, please contact:


Geoffrey Giudice, Ashurst

[email protected]


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