What specific IR or employment law developments do employers need to be aware of?

ELM: In your recent experiences in dealing with EBAs Marie-Claire, can you cite any common challenges employers are facing? 

MARIE-CLAIRE:  The common challenges that employers are facing now in bargaining aren’t new.  There’s always going be that tension between employees seeking wage increases and the employers trying to ensure that their agreements remain competitive.  Problems always arise when wage increases aren’t available, which we see happening a lot in the current environment, where there are constraints within many industries and in the broader market.  The question can then become: What else can employers offer?  To combat the issue of not being able to put money on the table, we’ve seen an increasing trend towards employers offering greater flexibility, or something such as a new leave entitlement (such as the newly developing domestic violence leave).  Also with the move towards plain language agreements, we see that employers are trying to engage with their workforce more directly – which can typically lead to a more positive result for both employers and employees. oth employers and employees.

ELM: Have there been any recent case law developments that put EBAs in the spotlight; if so, what can we learn from one or two of these examples?

MARIE-CLAIRE: Yes, we have seen a number of cases that have considered various aspects of the EBA process over the last 18 months.   

A key trend from 2016 is that it seems to be getting harder to get EBA’s approved by the FWC.  There is greater attention to technical compliance issues.  In the Uniline decision a two member majority of the Fair Work Commission found that a NERR that was issued late was invalid and of no effect.  This decision follows from the decision of the Commission in Peabody, which confirmed that any departure from the standard NERR form will render the NERR invalid.  Just the other day there was another decision along the same lines.

The effect of these decisions is that if a NERR has been issued late, or is defective in a tiny bit of content, bargaining needs to be re-commenced, and a valid NERR issued within 14 days.  However, we have seen members of the Commission express varying views on strict compliance with the NERR, including strong dissent.  The Productivity Commission Report into the Fair Work Act recommended amendments to allow the Commission to overlook errors or defects relating to NERR and Minister Cash has recently said this will happen.  We will continue to monitor any legislative developments in this space.

The BOOT was considered for a Coles Enterprise Agreement that was to apply to employees at Coles Supermarkets around Australia.  A part-time employee at Coles and the Australasian Meat Industry Employees Union appealed against approval of the Agreement.  Their primary ground of appeal was that some employees, in particular those who were rostered to work a high proportion of shifts that attracted penalty rates, would be disadvantaged under the proposed agreement.  The Full Bench held that the application of the BOOT requires satisfaction, as at the test time, that each Award-covered employee and each prospective employee would be better off overall under the Agreement.

Since the landmark Aurizon decision, where the Federal Court upheld a decision of the Full Bench to terminate 12 of Aurizon’s expired and outdated enterprise agreements, there’s been a trend towards employers applying to terminate enterprise agreements.  It’s likely that this trend is going to continue.  Before Aurizon, an application for termination wasn’t considered a viable option.  The Federal Court’s decision and the trend toward termination of agreements reminds us that there isn’t any statutory imperative that the promotion and delivery of productivity benefits at an enterprise level is to be primarily or exclusively achieved through enterprise bargaining in good faith.  Termination of an agreement, particularly an outdated agreement with clauses that create business inefficiencies, is now a viable option.  This is one of the most significant developments in enterprise bargaining for some time.

ELM: Coming into 2017, are there any specific IR or employment law developments that you see as areas that employers need to be aware of?

MARIE-CLAIRE:  There were quite a few legislative developments during 2016.  With further likely reform in 2017, employers need to be aware about what has changed, how those changes will affect their business, and what proposed changes are in the legislative pipeline.

One of the big changes last year (which also saw us go to the double dissolution election) was the establishment of the Registered Organisations Commission (ROC) and the re-establishment of the Australian Building and Construction Commission (ABCC)The ABCC legislation is aiming to change the way in which the building industry operates, and the ROC Act will have an effect on the way in which workplaces (and union conduct in workplaces) are regulated moving forward.

With the re-establishment of the ABCC, there was also the establishment of a new building Code.  The Code has immediate application to enterprise agreements made by Code-covered entities after 2 December 2016.  This will have an effect on the businesses with agreements with up-coming nominal expiry dates.

With the establishment of the ROC, the parliament enhanced whistle-blower protection for people who blow the whistle on misconduct by registered organisations.  This is actually just one part of an increased focus by the federal government on whistleblowing reform.  There’s a Joint Parliamentary Inquiry reporting on whistleblowing by 30 June 2017.  We could see reforms in this space as early as the end of this year.  It’s definitely one area of reform employers need to keep an eye on.

While the legislative reforms may not affect all workplaces, the legislative reforms weren’t easily achieved.  The fact that they got passed shows that the government was strongly committed to achieving IR reform and that a similar approach could be taken for future IR reform.  Future areas of reform still likely to be on the government agenda include reforms resulting from the recommendations of the Heydon Trade Union Royal Commission, and the increase to penalties relating to secondary boycott provisions.

In the general employment sphere, 2016 saw a number of high profile investigations by the Fair Work Ombudsman in relation to vulnerable (as well as foreign) workers not receiving their award entitlements.  There could be moves to reform labour hire regulation, or even to provide greater powers to the Fair Work Ombudsman.

Employers will need to be mindful of the developments that have occurred, and the future developments occurring, to make sure they can best prepare themselves for legislative reform.

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About Marie-Claire Foley:

Marie-Claire has extensive legal experience in all areas of employment and industrial relations, with acknowledged expertise in discrimination/adverse action and occupational health and safety law. Marie-Claire works for significant players in a wide range of industries including energy and resources, construction, financial services, logistics, transport, telecommunications, maritime, media and higher education. Before practising as a lawyer, Marie-Claire worked in the Western Australian public sector in research/legal policy areas in a range of areas, including the Equal Opportunity Commission of WA. Marie-Claire is also an experienced facilitator of legal education and training.

Marie-Claire is Partner at Ashurst and will be addressing our delegates at the upcoming HR Law Masterclass event in Perth this March.