Changes to Bargaining Disputes: Intractable Bargaining Declarations

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) has broadened the powers of the Fair Work Commission (FWC) to arbitrate enterprise agreement disputes where no reasonable prospects of the parties reaching an agreement exist.

These powers are now in effect and the first intractable bargaining declaration was handed down on 4 October 2023.

 

What are intractable bargaining declarations and determinations?

Intractable bargaining declarations are orders made by the FWC where parties have been bargaining for an extended period and negotiations have reached a stalemate. The FWC can make such declarations if it is satisfied that:

1. the latter of nine months have passed since the nominal expiry date of the existing enterprise agreement or nine months have passed since the day bargaining commenced;
2. it has dealt with the dispute under section 240 of the Fair Work Act 2009 (Cth) (eg via conciliation) and the applicant participated in the process;
3. there is no reasonable prospect of an agreement being reached if the FWC does not make the declaration; and
4. it is reasonable in all the circumstances to make the declaration, considering the views of all the bargaining representatives for the agreement.

If a declaration is made, the FWC must make an intractable bargaining determination as quickly as possible after the declaration or any post-declaration negotiation period set out in the declaration. As part of any post-declaration negotiation period, the FWC may require the parties to enter into further negotiations and provide support (such as conciliation) to assist the parties in reaching an agreement. If an agreement is still not reached, the FWC will make a determination to resolve any outstanding matters that is binding on all parties.

 

What was the most recent decision?

The FWC has issued its first intractable bargaining declaration following an application by the United Firefighters’ Union of Australia (UFU) in relation to a proposed enterprise agreement being negotiated with Fire Rescue Victoria (FRV).

The application was made with the support of the FRV and arose after 76 face to face meetings between the UFU and FRV regarding the proposed enterprise agreement and 16 appearances before the FWC including in the form of conciliation. The UFU alleged that all matters bar for wages and conditions have been agreed to and that any assertion that there are other issues in dispute constitutes a renege of prior agreements made by the FRV. The FRV alleged that no agreements have been reached on the basis that any in-principle agreements remained subject to final approval by the Victorian Government (which has statutory responsibility for the FRV).

The FWC was satisfied that the four conditions set out above were met to warrant a declaration given that:

• the firefighting services are critical to public safety and the FWC’s concerns that the refusal of an intractable bargaining declaration might lead to an escalation in protected industrial action;
• bargaining has been occurring for over three years and the FRV’s acknowledged change in in-principle agreement on an ‘efficiencies allowance’ to be paid to employees on the instructions of the Victorian Government has “embittered” industrial relations within FRV and would be best resolved by a speedy arbitration;
• the parties have previously prepared for an arbitration on the efficiencies issue (which did not proceed) and, therefore, are substantially prepared for that component of the arbitration; and
• the parties agree to an intractable bargaining declaration being made.

The FWC has provided the parties two weeks to determine the outstanding matters that should be arbitrated by the FWC.

 

What does this mean for employers?

Given these new powers afforded to the FWC, employers should revisit the current enterprise agreements they have in place (if any) and their bargaining strategies. Employers should also consider their strategy as to the priority to be given to various terms.

Our team would be very happy to discuss this further with you.