No agreements without unions

Fair Work Australia has, almost inevitably, confirmed that it is virtually impossible for employers to negotiate collective agreements directly with employees without involving the union in negotiations.

In Alphington Aged Care and Mary MacKillop Aged Care, FWA decided that the employer was obliged to notify the Union of a proposal to put an agreement to a vote of employees. A failure to do so was a breach of the Fair Work Act good faith bargaining provisions. FWA accordingly refused to grant the employers’ application to approve the agreements.

There were a number of defects in the process which the employers followed to have the agreements approved, but the main objection brought by the Health Services Union, was that it had not been notified that the employees were to be asked to vote on the agreement.

The Union had sought to commence negotiations with the employers in December 2008, but no outcome had been reached by March 2009. At that stage, the employer decided it would put an offer directly to its staff.

During April and May 2009, the employer again communicated with employees about its preferred position and provided a copy of a proposed agreement.

Only after the employer had given notice of its intention to hold a ballot of employees did the Union write to it directly again. It is not clear how actively negotiations were taking place between the Union and the employer’s representative during this period.

The employer held the ballot, with about a third of employees voting. Of those who voted, only two employees rejected the agreement.

However, because the Union was deemed by the Fair Work Act to be the bargaining representative of the employees, the application was required to be accompanied by a declaration by the Union in the form required by the FWA rules.

The main objection of the Commission was summed up in the following statement:

“Where the employer is aware that there are employees who are Union members and the union is therefore their bargaining representative, it would be a breach of good faith bargaining to put an agreement to a vote without notifying the Union of its intention to do so.

Particularly, as occurred in this case, where bargaining is underway with the Union, to not notify the Union that bargaining is at an end – which a decision to put an agreement to the vote clearly implies – undermines the process of good faith collective bargaining which the objects of the Act support.”

Another important recent decision of FWA in National Union of Workers v CHEP Australia, confirmed that the Commission has the power to prevent employers balloting employees where there would otherwise be a clear breach of good faith bargaining requirements.

While each of these cases was influenced significantly by the particular facts in issue, they demonstrate a worrying trend for employers.

At least in part they add to the growing body of evidence from decided cases which suggests that unions no longer need to actively protect their members interests. Those unions that don’t keep pace will have the fall back of the good faith bargaining regime to ensure that they are not dealt out of the process entirely, regardless of what their members actually want to do. The proof of the pudding, in the Rudd Government’s decision to specifically eliminate genuine non-union collective agreements is now very much showing itself in the eating.

Peter Vitale is the principal of CCI Lawyers.