On 12 June 2024, a Full Bench of the Fair Work Commission (the Full Bench) made the first intractable bargaining workplace determination.
In summary, section 269 of the Fair Work Act 2009 (the FW Act) provides that a Full Bench must make in intractable bargaining workplace determination (i) after making an ‘intractable bargaining declaration’ in relation to a proposed enterprise agreement; or (ii) if the Commission’s intractable bargaining declaration specifies a post-declaration negotiating period, after the end of that negotiating period.
In this case, the TWU and Cleanaway had been in negotiations for an enterprise agreement to cover a substantial Cleanaway site between October 2022 and August 2023. With matters in dispute including pay rises and hours of work provisions (including terms relating to weekend ordinary hours and penalty rates) the TWU filed an application for a bargaining dispute. Following a series of member assisted conferences, the TWU filed its application leading to the making of an intractable workplace declaration in January 2024. The Commission’s declaration included a post declaration negotiating period that ended in January 2024. During the declared negotiating period, the parties attended further member assisted conferences but were unable to reach agreement on the matters that ultimately were determined by the Full Bench.
The approach to determining matters in dispute
The Full Bench approached its task having regard to the factors that it was required to consider under sections 270A and 275 and authorities that dealt with similar provisions in earlier versions of the FW Act.
In summary, section 270A required that the Full Bench not include any term in its determination that was less favourable to the employees covered by the earlier enterprise agreement and the TWU (with the exception of wage increase terms). Section 275 required the Full Bench to consider numerous discretionary factors including (i) merits; (ii) the interests of employees and employers; (iii) arrangements and benefits in an enterprise agreement applying before the determination is made; (iv) public interest; (v) productivity; (vi) conduct of bargaining representatives; (vii) good faith bargaining requirements; and incentives to continue to bargain at a future time.
The Full Bench gave lengthy reasons demonstrating consideration of all of these matters.
Significance of the Full Bench’s reasons
The Full Bench (with reference to preceding legislation and earlier Full Bench decisions) endorsed the principle that the Commission’s approach should be to “assess the respective positions of the parties in relation to the matters at issue and by reference to the statutory factors, arrive at a conclusion that would be regarded as appropriate in the context of the bargaining had the bargaining concluded successfully”.
Whereas future “judgements” about appropriate terms will be discretionary, the assessment that informs those discretionary outcomes must be based on an assessment of objective evidence. In this case, some of the matters that the Full Bench gave substantial weight to:
- the facts as between the parties;
- evidence of personal impacts on employees and their circumstances;
- cost of living evidence; and
- evidence that Cleanaway’s business had been and was currently profitable.
Significantly, in one respect, the Full Bench accepted Cleanaway’s contentions that it was already paying employees more than its competitors but did not place as much weight on that finding as it did on Cleanaway’s profitability and presumed capacity to pay future wage increases.
The outcome
There were five matters determined by the Full Bench. Significantly on the issue of weekend hours, the Full Bench made a determination that was closer to Cleanaway’s compromise position advanced during the proceedings. On the question of wage increases, and because employees had not had a wage increase since September 2021, Full Bench determined a series of back dated and future dated wage increases in excess of 25% over the life of its determination (which expires on 30 June 2027).
Specifically on the question of wage increases, the Full Bench determined that “there is no reason in principle why employees should be disadvantaged by the time taken in the bargaining process in the absence of unreasonable behaviour”. The Full Bench considered that there was nothing unreasonable about employees resisting earlier bargaining proposals that they perceived would leave them worse off and, on that basis, a retrospective and front-loaded increase could be awarded.
This apparent ability for employees to bargain hard for a particular outcome and still feel confident that they might be awarded a significant back-dated increase will no doubt be a very important consideration for employers trying to resist substantial claims or trying to use enterprise bargaining to effect workplace change.
Conclusion
We consider that the Full Bench’s decision will be helpful for parties to assess the evidence and submissions required to obtain a favourable determination. However, employers will no doubt be disappointed at the apparent difficulty of using wage increases to incentivise agreement making.
If you would like further information about how to make or respond to an intractable bargaining workplace determination, our Employment and Workplace Relations Team are here to help. Please call us on (08) 9321 0522.
