Enterprise Bargaining, Settlement of Agreements and Fair Work Act - Assignment Example

Enterprise Bargaining, Settlement of Agreements and Fair Work Act Name Institution Course Professor Date Introduction The Fair Work Act 2009 (FW Act) is the legislation introduced by the government to restore the collective bargaining as the principal means where employment conditions are determined (Creighton &Forsyth 2012, p. 90). It was primarily devised to be used at the enterprise level in determining conditions of employment. The FW Act provided several mechanisms for achieving fair framework for collective bargaining and agreement that includes a tribunal that facilitates the process in the Fair Work Australia (FWA). Moreover, it stipulates that these representatives should bargain in good faith (Forsyth 2009, p. 124). The procedural rules that govern the process of making enterprise agreements in the FW Act underpinned these core mechanisms. Indeed, the procedural rules that promote bargaining in good faith ensure that each employee has knowledge of his or her right to be represented in negotiations for a suggested agreement. Furthermore, they have a right to be informed of the agreement contents and its effect (Coulthard 2012, p. 90). Q1) Bargaining Process Leading to Enterprise Agreements In Australia, the policies that has been promoting enterprise bargaining are in most cases associated with collective bargaining. Nonetheless, this term does not describe in an accurate manner the various enterprise bargaining activities. The FW Act signal an era of significant consolidation of enterprise bargaining practices through institution of one collective agreement process. In the last two decades, there has been substantial promotion of enterprise bargaining in the Australian employment relationship. This has been achievable in large part due to numerous legislative changes that have been adopted since 1990s. This has popularised enterprise bargaining process as a way of resolving industrial disputes. These processes have manifested themselves in various forms that include bilateral bargaining or unilateral bargaining whereby the employer determines the terms, union involvement and individual or collective coverage (Walpole 2015, p. 04). The FW Act has consolidated enterprise bargaining policies and all agreements are collectively referred to as enterprise agreements. However, this does not mean that non-union agreement-making is no longer there. It is present only that ‘there is no formal designation between union and non-union agreements’ (Gahan & Pekarek 2012, p. 210). The Australian laws on workplace relations have continuously changed over the last three decades because of the need to resolve ever evolving and increasing conflicts between employees and their employers. In 1990s, the Australian industrial relations saw many significant changes (Wooden 2000, p. 158). Indeed, this decade saw the enactment of important legislative changes to the employment relationship. The comprehensive and inclusive FW Act replaced Work Choices Act and completely changed how bargaining process is conducted in Australia. The FW Act became operational in 2009 and it covers employers and employees in the maritime industry, Constitutional Corporation, and Commonwealth authority. The employers of the Victorian private sector and the public sector are also covered by the FW Act. On the other hand, the partnerships and sole traders are not covered by the FW Act except those in Victoria, Northern Territory and ACT (Forsyth 2009, p. 125). The bargaining process between employers and employees has been greatly facilitated by the framework of the FW Act. Enterprise agreements have become more common after the enacted of FW Act. Fair Work Commission (2015) defined enterprise agreements as collective agreements that are made between employees and their employers at an enterprise level. These agreements cover the employment terms and conditions of employees pertinent to the agreement. The enterprise agreement that is formed must be better in comparison with the modern award. Furthermore, it must be more beneficial to an employee than the standards contained in the National Employment Standards. The Fair Work Commission ensures that the agreement made benefits the employee satisfactorily and is better than when the relevant modern award is applied. It undertakes this function by assisting in the process of agreements making, assessment and approving agreements (Fair Work Commission 2015). The commission can also deal with various disputes that arise from the terms of agreements. The FW Act contains guidelines on how the bargaining process should be conducted by the trade unions and employers in determination of terms and conditions of enterprise agreements. In the FW Act procedural agreements for enterprise agreements, there is no distinction between union and non-union agreements (Gahan & Pekarek 2012, p. 203). The explanation for this is the need to support good faith bargaining regardless of the negotiating parties or the type of agreement. All agreements are therefore called ‘enterprise agreements’ and are made by employees and an employer in a collective manner. The default bargaining representative for the members that the proposed agreement will cover is the union. However, according to section 183 of the FW Act, union is not party to it (Lafferty, p. 211). Therefore, the genuine and informed consent of each employee that is party to the proposed agreement is at the centre of the agreement making process (Coulthard 2012, p. 91). The content of enterprise agreements that has been agreed by the negotiating parties are regulated by the FW Act through the strong safety net that pertains to the statutory employment conditions. Additionally, the outcome of the bargaining process is regulated by FW Act through ‘better off overall test’ that requires that the award that has been given to the employee in the enterprise agreement is better than the modern award that is applicable. The process of bargaining starts with the employees and employers representatives meeting and discussing the grievances on the table. After the agenda is set, both parties offer their views and the process continues until an agreement is reached. However, before an enterprise agreement is put to a vote of employees, there are a number of steps that must take place. The completion of these steps must be undertaken under a strict timeline. In summary, these steps include the notification of employees about their representational rights and an access to the proposed agreement (Gallan, Patmore, & Xu 2014, p. 365). In addition, employees must be provided with the terms, conditions and effects of the proposed agreement. The employer is required to comply with the statutory requirements as its primary obligation although employers can at times adopt a collaborative approach involving other bargaining representatives (Utz 2010, p. 10). Under the FW Act, the bargaining representatives play an important role in the collective bargaining process. Indeed, the Act specifies the persons that can be appointed to be the employers and employees bargaining representatives. Specifically, section 176 of the FW Act provides the person to be appointed as representatives besides the employer who is automatically a bargaining representative and union which has a default representative status. The proposed enterprise agreement that will cover an employer gives it a duty to take all steps that are deemed ‘reasonable’ in order to give employee notice of a right to be represented by a bargaining representative. The purpose of the representational notice is to notify employees of their representational right in the bargaining process and what that right entails (Coulthard 2012, p. 92). This obligation is mandatory and if such notice was not given prior to the agreement, FWA will not approve the agreement. In fact, the representational notice should be given not later than 14 days after the agreement notification time. 2) Role of Fair Work Commission in Enterprise Bargaining Process The unions in Australia have increased and undergone significant growth since being mostly independent of the British unions in nineteenth century. There was therefore need for a national system legislation that will deal with workplace dispute resolution. The first one was enacted in 1904 (Van Gramberg, Bamber, Teicher & Cooper 2014, p. 442). However, the development of a truly national system took a much longer time. This legislation has been amended and renamed several times over the years, although, surprisingly, there has been some sort of continuity in relation to the federal tribunal. Historically, the early growth in the role and significance that the federal tribunal possess has been demonstrated by the industrial relations regulation in Australia (Van Gramberg et al., 2014, p. 442). This trend continued to the 20th century where in late 1980s, due to political and economic forces led to the onset of decentralisation of dispute resolution and in some ways, to re-regulate the industrial relations system. In most cases, there was consensus on the notion of decentralisation but fundamentally, they differ on the role of unions and industrial tribunals in the conflict management resolution. Consequently, the changes to the Australian government have continuously precipitated major changes to the industrial relations legislation. This is well illustrated by the by the introduction of the Workplace Relations Act 1996, the subsequent Work Choices Act 2005 and the Fair Work Act 2009 that gave rise to the Fair Work Commission (FWC) that is the backbone of this discussion. The FW Act gave FWC a bigger role than it was the case under Work Choices in relation to dispute resolution in enterprise bargaining, particularly in terms of interest and rights disputes. Today, FWC play a substantive role in the enterprise bargaining process. This is not surprising since it the national workplace relations tribunal in Australia (FWC 2015). It has several roles in the process of enterprise bargaining. FWC facilitates good faith bargaining (Pittard 2013, p. 88). This relates to the procedural matters in the bargaining process and an agreement or concessions is not required to be made. Indeed, this makes it possible for the parties to satisfy the good-faith bargaining provisions yet they have not reached an agreement. Essentially, the bargaining requirements stipulate that the meetings should be held at reasonable times and bargaining representatives nominated by employees should be recognised by other bargaining representatives. Admittedly, these provisions are in most part procedural and might be weak in the sense that they cannot force negotiating parties to agree. The FWC has interpreted these provisions so that employers can be permitted to communicate with employees in a direct manner even in case they have a bargaining agent. Essentially, they are specific roles that FWC performs in the bargaining process. FWC has a supervisory role in the bargaining process in order to ensure that bargaining has been conducted in good faith. This can be achieved through granting of ‘bargaining orders’ for purposes of ensuring that good-faith requirements are satisfactorily met. FWC helps in resolution of bargaining disputes (Finkin et al., 08). In this case, FWC has a power to order for compulsory arbitration albeit in limited circumstances only. It scrutinises and approves enterprise agreements. The agreement made cannot be binding or can be called a legal document unless the commission approves it after it is satisfied that all the requirements in the bargaining process were met. FWC provides a safety net that contains minimum conditions that includes minimum wages that can be awarded (FWC 2015). In case a bargaining representative foresaw the difficulty in negotiations, it may apply to the tribunal under section 240 of the FW Act to offer its assistance in resolution of bargaining-related dispute. The commission may mediate, conciliate or make a recommendation (Forsyth 2012, p. VII). Moreover, it can also arbitrate the dispute. In case there is an industrial action, FWC regulates it. Besides these roles, FWC also have powers that it can exercise in the process of bargaining. The industrial action that has been instituted and is regulated by FWC can be suspended or terminated. This is because FWC has a power to suspend or terminate protected industrial action (Pittard 2013, p. 89). This can occur if the industrial action has significant economic harm on the negotiating parties or it can significantly affect the economy. FWC can grant remedies for any unfair dismissal. It also has discretion to approve the agreement when in its own opinion, considers it as not contrary to the public interest (Pittard 2013, p. 88). FWC has power of policing industrial action as well as other tactics that are used in negotiation of enterprise agreements (Finkin et al., 2013, p. 09). Lastly, FWC determines unfair dismissal claims. A person can apply to the commission to investigate the unfair dismissal claim. The commission will conduct its investigation and determines if an individual was fairly or unfairly dismissed. 3) Arguments for Improvement of the Bargaining Process by Unions and Employers Enterprise bargaining has had several impacts on trade unions, employers and employees since its inception. The push for enterprise bargaining by Australian unions was as a result of several interrelated motives- the shift occurring due to the willingness but constrained choice by other parties to have some form of ‘flexibility’. The objectives of the unions were achieved although others have never been achieved. Indeed, enterprise bargaining led to ‘negative’ consequences to the unions as some previous techniques used to maintain membership cannot be applied. Effective advocacy and servicing that were more comfortable techniques for the unions have not been applicable since the shift to enterprise bargaining (Peetz 2012, p. 237). The shift to enterprise bargaining was seen by the trade unions as a way of reviving their membership while most of the employers regarded it as the opposite. It is without doubt that the shift to enterprise bargaining was inevitable and the shift has been transformative. However, there have been several upheavals within the trade unions for the whole of the enterprise bargaining period. Before collective bargaining was introduced, award system was used where awards were made by the tribunals formed to settle disputes between employers and unions. Unions used to take advantage of the system by strategically using arbitration and wage board systems that focuses on advocacy in tribunals (Peetz 2012, 237). In some cases, this discourages the union organisation in the workplaces. The award system led to introduction of industrial disputation strategies for unions. Due to several issues with the award system and frequent strikes, the unions pushed for enterprise bargaining as a way of decentralising bargaining (Briggs 2001, p. 29). The reason was for the creation of stronger unions that would push for real wage increases. Secondly, there was dissatisfaction with the conduct of Australian Industrial Relations Commission by the top level management of the trade unions (Briggs 2001, p. 32). In some cases, the Commission could not deliver the outcome that unions and the government have agreed. Thirdly, the union membership had stagnated and there was a strong desire to revive it (Peetz 2012, p. 240). The shift to enterprise bargaining would reduce free riding by the members who do not belong to unions and the wage gains that will be awarded would be much visibly seen as the struggle by the unions unlike previously. There was also political momentum that was emerging from employers on the desire to shift to the enterprise level. Although the move to enterprise bargaining was unanimous and inevitable at the end, there has been several calls by trade unions and employers for it to be improved. The world of enterprise bargaining is not a smooth one and has its own issues and challenges. There is need for democratic practices in trade unions if enterprise bargaining is to prosper and the making of decisions must be centred towards the workplace. On the other hand, the coordination of the trade union practices is harder when decision-making is based on workplace (Peetz 2012, p. 251). The move to enterprise bargaining expose the weaknesses of the unions and shift balance of power against them. It opened the door to union revitalisation methods that are based around organising principles. It is not clear whether the unions can successfully implement these in an environment that is increasingly becoming more hostile. However, several arguments have been raised by trade unions and employers for improving the bargaining process. The system has been faulted for its uncompetitive wage deals and modern awards that are inflexible. The unions are demanding for better leadership and a management that is more capable of facilitating bargaining process at FWC. They want the FW Act reformed to allow for other forms of bargaining other than the mandatory collective bargaining regime (AMMA 2009, p. 04). They want for more direct engagement and negotiations between employers and employees. The trade unions and employers argue for the parties to be obligated before FWC approve an enterprise agreement. This will ensure that the flexibility clauses that have been mandated can deliver genuine flexibility and productivity benefits. The negotiating parties are required to give enterprise agreements to the FWC for approval after the bargaining process. They argue for a requirement that parties must produce evidence that demonstrates proper consideration of productivity improvements as part of the agreement that has been finally agreed. Unions have argued that in instances where assent of employees vote is relied upon as a way of reaching an agreement should be regarded as refusal to accept the position of employer. Hence, these should be regarded as a denial to have a representational relationship (Walpole 2015, p. 10). However, the FW Act prioritises the choice of representation of an individual and bargaining representatives are only regarded as advocacies of their direct constituents views and demands. Conclusion Enterprise bargaining has been part of industrial firmament in Australia. The decision by the Industrial Relations Commission of Australia in 1991 marked the formal acceptance and transition to enterprise bargaining in the country (McLaughlin 2012, p. 229). This was achieved after a long history of industrial relations regulation that is demonstrated by early growth in the role and significance of tribunals. In 1980s, economic and political forces led to decentralisation of dispute resolution. This trend continued into 1990s whereby Workplace Relations Act was enacted in 1996 to govern industrial relations. It was followed by Workchoices in 2005 and then the FW Act in 2009. The FW Act has been governing enterprise bargaining processes that leads to the settlement of enterprise agreements. The FWC carry out supervisory role in order to ensure that good faith bargaining is carried out. It has discretion to approve an agreement when in its own opinion, considers it as not contrary to the public interest (Pittard 2013, p. 88). Although enterprise bargaining has been used for quite some time, arguments have been raised by trade the unions and employers concerning the need to improve the process. They want FW Act to be changed in order to be in line with the current realities. References Australian Mines and Metals Association 2012, ‘Review of the Fair Work Act 2009’, http://www.amma.org.au/assets/images/stories/submissions/201202_AMMA_FairWorkSubmission2012_ShortExecutiveSummary.pdf Briggs, C 2001, 'Australian exceptionalism: the role of trade unions in the emergence of enterprise bargaining', Journal of Industrial Relations, vol. 43, no. 01, pp. 27-43. Coulthard, A 2012, The Mechanics of Agreement Making under the Fair Work Act 2009, in WB Creighton & Forsyth, A, Rediscovering Collective Bargaining: Australia’s Fair Work Act in International Perspective, Routledge, New York. Fair Work Commission 2015, Making Enterprise Agreement, >https://www.fwc.gov.au/about-us/resources/guide-making-enterprise-agreement Read More