how the parties bargain: the nature and reach of good faith bargaining (gfb)

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How the parties bargain: the nature and reach of Good Faith Bargaining (GFB)

• GFB obligations in s. 228

• Centrepiece of bargaining framework

• Bargaining orders (s. 229) & other mechanisms

• Important role for FWC in oversight & enforcement of GFB

Applications for bargaining orders, monthly total

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Applications for bargaining orders, by industry

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Applications for bargaining orders, by outcome

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Assessing the impact of the GFB obligations

• Useful in facilitating bargaining

– ‘I suppose the good faith bargaining provisions sort of provided an initial push for the company to get along and actually come to the bargaining table …’

• ‘Shadow effect’, i.e. lodgment of application (or threat) sufficient to alter other party’s bargaining conduct

• One employer’s view:– GFB is ‘a tool, [but really] it’s … what people work around.’

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Assessing the impact of the GFB obligations (2)

• Union concerns about the limits of GFB:

– ‘At the end of the day the good faith bargaining provisions can be used to bring people to the table, can make them put certain information on the table, but … they don’t seem to assist in any way in terms of actually getting to some sort of outcome.’

– ‘we really believed we would get a couple of [bargaining] orders that we were seeking … [but] if the bar has to be so incredibly high, then what’s the point?’

– Particular concerns re 3rd parties not at the bargaining table; & employer “direct dealing” & “surface bargaining” tactics/conduct

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Facilitating bargaining by assisting parties to resolve disputes

• Dispute resolution by FWC under s. 240

• Conciliation/mediation – arbitration only if all parties agree

• The most utilised of the Part 2-4 mechanisms (60.2% of all applications)

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Section 240 applications, monthly total

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Section 240 applications, by industry

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Section 240 applications, by outcome

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Assessing the impact of FWC dispute resolution in bargaining

• Mostly used by “repeat players: unions & large, unionised employers

• Motivations for using s.240:

–1. to finalise agreement or overcome impasse

– ‘… we had reached a point where we weren’t making any progress in the negotiations, and we were really… seeking to have somebody with, I suppose with some authority and some… knowledge, assist with the process…’

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Assessing the impact of FWC dispute resolution in bargaining (2)

• Motivations for using s.240:

–2. to defuse hostilities– ‘we made [the] application … because we were going through all this, threats

and intimidation. But also the meetings were just not at all constructive… so we wanted to get into a forum where we had an independent person sitting there because that tends to make people at least make reasonable … responses. And so we got into that and we went right through the claims. That was the first really civil meeting…’

–3. as an “exit strategy” & way of “saving face”– ‘There may be times when we say to the employer… there’s an issue where

we actually … agree with the employer, but the membership aren’t that keen on it and so, we’re going to take it to [FWC] and take along a posse of members and see if we can get a Commissioner to tell them that it’s not that bad after all and they can accept the offer…’

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Assessing the impact of FWC dispute resolution in bargaining (3)

• Motivations for using s.240:

–4. to demonstrate all efforts are being made

–5. escalate the dispute

–6. no other option!

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Assessing the impact of FWC dispute resolution in bargaining (4)

• Effectiveness of FWC’s role under s. 240:

–depends on willingness of parties to get involved

–difficult where high level of hostility

–preference for “interventionist” conciliators

–limits of conciliation – arbitration needed where employer determined to resist

–lack of awareness among less experienced negotiators

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Promoting bargaining among historically excluded workers: the Low Paid Bargaining (LPB) Stream

• Highly innovative set of provisions (Part 2-4, Division 9)

• Only 3 applications in 3-year period

• Aged Care Case – authorisation granted, but excluded employees on existing agreements

• ANF GP clinics – authorisation rejected, “logistical difficulties”

• Union concerns that LPB won’t deliver improved wages/conditions for employees (not enough compulsion on e’ers; no industrial action)

• Some unions have used alternative strategies, e.g. Equal Remuneration Case

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Updated FWC case data (to 30.09.13)

Year to 30 June 2013 September quarter 2013

78 bargaining order applications 16

74 MSDs 16

15 scope 5

231 section 240 49

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Key findings & conclusions

• 1. The extent of FWC’s influence is greater than the case data suggests – the “shadow effect”

• 2. FWC’s role & influence in bargaining is largely restricted to unionised workplaces

• 3. Part 2-4 has different effects for “new”, as opposed to “mature”, bargainers

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Key findings & conclusions (2)

• 4. FWC’s role is facilitative, not determinative

• 5. Parties value the FWC’s role highly

• 6. A need for greater awareness of the FWC’s dispute resolution services – especially among new bargainers, & individual bargaining reps

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