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Considering Enterprise Bargaining: analysing the Fair Work Act’s (2009) impact on the Crane Industry

Enterprise agreements are there for all employees to see and reduces the need to enter into comprehensive individual employment agreements with new starters.

National Commercial law firm Holding Redlich examines the changes made to the Fair Work Act 2009 including the impact on the Secure Jobs, Better Pay Act and industrial strategy for the Crane Industry.

According to the Federal Minister for Employment and Workplace Relations, Tony Burke, Australia’s enterprise bargaining system has not been working effectively for a long time. 

To fix this, amendments to the Fair Work Act 2009 were made on 6 June 2023 to make it easier for employers to bargain for a collective agreement and have it approved by the Fair Work Commission. 

This change presents an opportunity for employers in the crane industry to consider enterprise agreements as a means to regulate employment in their businesses.

Why make an enterprise agreement

Enterprise bargaining allows employers to tailor modern award conditions, to create a set of conditions that suit the particular requirements of their business and workforce. For crane industry employers, it would allow the awards covering its employees, like the Mobile Cranes Award, to be replaced by an instrument that makes more sense for the business and its workforce.

Once made, the agreement is there for all employees to see and reduces the need to enter into comprehensive individual employment agreements with new starters. During its life, the agreement buys the employer insurance against any industrial action because this is unlawful prior to the nominal expiry date of the agreement.

However, the rules regarding making an enterprise agreement have been very technical and, unless a union has been pushing you to make an agreement, a large number of employers have not attempted to
create their own.

The changes introduced on 6 June 2023 are designed to make it easier for the Fair Work Commission (FWC) to approve enterprise agreements and remove roadblocks and delays in bargaining. In this article, Holding Redlich looks at the changes to enterprise bargaining and the potential impact on industrial relations strategies for the crane industry. 

New single-interest bargaining stream

The new laws introduce single-interest employer agreement where two or more employers with a common interest can be covered by the same agreement. Either an employer or union can apply to the FWC to start bargaining for one of these agreements, although it will not impact small businesses (less than 15 employees) or employers already covered by an enterprise agreement within its nominal life.  The FWC has to be satisfied the majority of employees are in favour of the approach, the employers have common interests and it is in the public interest before authorising bargaining. The FWC can also issue an order to put the agreement to a vote whether or not all unions agree to do that.

Importantly, if your business operates only in the civil construction sector, this new single-interest employer stream does not apply.

Enterprise agreements are there for all employees to see and reduces the need to enter into comprehensive individual employment agreements with new starters.
The new laws introduce single-interest employer agreement where two or more employers with a common interest can be covered by the same agreement.

Other streams

There is a new Co-operative Workplaces Bargaining Stream which is open to employers of all sizes including smaller businesses in the crane industry. At least some of the employees involved in the bargaining process must be represented by a union and no party has a right to take industrial action of any kind. 

Although unlikely to have an impact on the crane industry, the new laws have also relaxed the requirements to access the new Supported Bargaining Stream, which applies to employers with a common interest having regard to pay and conditions in the industry, including whether low rates of pay prevail and where at least some of the employees are represented by a union. The FWC now has the power to order employers to be covered by a proposed supported bargaining agreement more easily.

Implications for crane industry employers and other organisations: 

1.  The new changes may prompt for the unions to seek a more formalised industry enterprise agreement involving multiple businesses in the crane industry. This approach may include employers covered by the Mobile Crane Hiring Award (2020) being required to take part in multi-enterprise bargaining.  

2. Little will change if your business has a history of making single-enterprise collective agreements under the FW Act with union bargaining representatives. The prospect of being ‘roped-in’ to bargaining for a multi-employer agreement will be minimal if you engage with union bargaining representatives about a replacement agreement when your current agreement passes its nominal expiry date. This is one of many features of the new laws designed to prod employers to conclude an enterprise agreement.

Easier for unions to start bargaining and to make a collective agreement 

The new laws reduce barriers to commence bargaining by removing the requirement to obtain a majority support determination in the single-enterprise agreement stream. The better off overall test (BOOT) is also simplified and provides further certainty to employers including by applying a global test to a ‘reasonably foreseeable employee’. 

A union bargaining representative can initiate bargaining by simply making a written request to the employer when employees are covered by an agreement that has passed its nominal expiry date within the last five years, and the scope of the proposed agreement is substantially similar to the expired agreement. 

The FWC has been given discretion to work with the parties during the approval process in a constructive manner, to consider specific objections and to vary or excise terms that do not otherwise meet the BOOT. The aim of this amendment is to limit undertakings given to the FWC and prevent delays in the agreement commencing. In the past, undertakings have sometimes made it harder for workers and managers to interpret the document and lead to future legal disputes if it is poorly drafted.

Implications for crane industry employers and other organisations: 

1.  The relaxation of the BOOT will make the approval process for enterprise agreements less onerous. The new laws however also empower the FWC to reassess the BOOT during the life of an enterprise agreement if there has been a material change in working arrangements or the relevant circumstances were not properly considered during the approval process. This may be concerning, given the key reason to make the agreement is to achieve certainty for pay and conditions.

2. If your business has a history of making enterprise agreements with union bargaining representatives including for example, the CMFEU, you will need to engage in more preparation in the final weeks or months before the nominal expiry date passes, given the ease by which bargaining for a replacement can be triggered. You will no longer be able to force the union to test the support for bargaining amongst employees through the majority support determination process.

More pressure on employers and unions to reach agreement

The new laws broaden the FWC’s arbitration jurisdiction to assist parties who are bargaining for a new enterprise agreement to resolve disputes. 

After nine months have passed from the nominal expiry date of the enterprise agreement or the commencement of bargaining (whichever is later), the FWC can now make ‘intractable bargaining declarations’ and ‘intractable bargaining workplace determinations’ to resolve bargaining issues that remain in dispute. The FWC will try conciliate first, but if this fails they can make binding determinations when it concludes there is no reasonable prospect of an agreement being reached by other means.

Implications for crane industry employers and other organisations: 

Employers will need to carefully consider their bargaining strategy in light of the expanded avenues for the FWC to apply pressure on industrial parties to make concessions in order to reach an agreement. An employer may well consider at the outset of bargaining that an industrial issue is most unlikely to be resolved by agreement, in which case it will need to consider how it will convince the FWC not to impose the unwanted outcome by arbitration.

Other changes

The new laws restrict protected action in some cases until 120 hours’ notice is given to the employer. If a protected action ballot order has been made the bargaining representatives must attend a compulsory conciliation conference before the FWC, in order to reduce the chance of industrial action.

Also, to reduce the bargaining strategy of terminating an existing expired agreement, the new laws provide that the FWC cannot terminate the agreement unless it is unfair to employees, does not cover any employees or would pose a threat to the viability of the business.

Finally, the new laws have put an expiry date on old ‘zombie’ agreements which will cease to have effect from December 2023 unless an application is made to the FWC. The FWC has also released the Statement of Principles on Genuine Agreement Instrument 2023 which the FWC must consider as part of its determination of an employee’s genuine agreement to an enterprise agreement – if that guide is not satisfied, the FWC may not approve the agreement. 

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