Employers get more bargaining chips

by 02 Sep 2008

THE INTRODUCTION of a good faith bargaining obligation under Fair Work Australia will have a significant impact on enterprise bargaining and workplace relations generally, according to a leading expert in enterprise bargaining.

The substance of good faith bargaining negotiations will be scrutinised more closely given Fair Work Australia’s regulation of the obligation and the capacity for Fair Work Australia to arbitrate outcomes where both parties agree, said Freehills’ Chris Gardner.

Gardner, practice area leader for the Freehills Melbourne employee relations group office, said a lot of commentators have been focusing on the challenges that good faith bargaining will pose for employers. But the obligation cuts both ways,he said, and there is a real opportunity for employers to take advantage of good faith bargaining to strengthen their bargaining position.

“Controlling the bargaining process is a key success factor in any enterprise negotiation. Good faith bargaining will provide the tools to do this,” he said.

“A number of union officials have quietly acknowledged to me their view that aggressive bargaining tactics will offend the obligation to bargain in good faith. Hence the obligation has the capacity to put Australian enterprise bargaining more generally on a more mature footing.

“Obviously, Fair Work Australia’s role in monitoring this behaviour will be vital and will be a key force in whatever culture ultimately emerges,” Gardner said.

The Government’s legislation will likely stick closely to its policy position,which is, in turn, similar to the good faith bargaining obligations found in the Industrial Relations Act.

Most significant, according to Gardner, is the restriction on any conduct “that undermines … collective bargaining”. “This requirement could impact both bargaining strategy and have broader operational impact,” he said.

Gardner said that the capacity to assess strategies and issues and the involvement of a third party regulator will impact the course of negotiations.

As such, the good faith bargaining obligation will almost certainly require a high level of investment in the bargaining process, according to Gardner.

“Put another way, those employers that make this investment will be rewarded with a better bargaining outcome. It is like that old saying,‘What you focus on expands’.”

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