Australian labour law is primarily governed by the Fair Work Act 2009 (Cth) (FW Act).
A central feature of the Australian labour law system is collective enterprise-based bargaining between employers and their employees, who are usually represented by trade unions.
Recently, the Australian Federal Government has sought to introduce a number of changes to the bargaining system under the FW Act. The Fair Work Amendment Bill 2014 proposes important changes to:
- an employer’s ability to make a ‘greenfields’ agreement, a special type of collective agreement for the future workforce of a new venture; and
- employee rights to engage in protected (or in other words, lawful) industrial action before bargaining has formally commenced.
This article provides a brief overview of these two proposed key changes, which are particularly relevant for companies operating in the Australian resources sector.
Greenfields agreements
It has historically been of critical importance for mining and oil and gas companies in Australia to ensure project stability by having a collective agreement in place that prevents employees from engaging in protected industrial action during the life of that agreement.
A greenfields agreement is a special type of collective agreement that employers can enter into with relevant trade unions in respect of a new business, activity, project or undertaking that the company is proposing to establish where there is no existing workforce. Greenfields agreements are very common in the Australian resources sector because of the certainty they provide for the commencement of projects and beyond.
The proposed changes to the FW Act will now require trade unions to bargain in “good faith” with employers about the terms of a greenfields agreement. An aggrieved employer may apply to the Fair Work Commission, Australia’s independent industrial tribunal, for bargaining orders where a trade union’s conduct falls short of good faith bargaining requirements.
Further, where a trade union does not respond to an employer’s requests to bargain for a greenfields agreement, or there is a deadlock in the negotiations regarding its terms, the employer can now apply to the Fair Work Commission for approval of the proposed greenfields agreement if a deal has not been reached within a six (6) months.
The proposed changes to greenfields agreements will provide employers operating in the Australian resources sector with greater certainty about securing their industrial arrangements before work actually commences on the project, and limiting the risk that protected industrial action will affect mobilisation of their workforce to the project.
Changes to protected industrial action
The proposed changes to the FW Act will also close a loophole in the FW Act which currently allows employees to engage in protected industrial action before formal bargaining actually commences with their employer.
The so called “strike first, talk later” approach to collective bargaining will no longer be available to employees and trade unions under the proposed changes.
Australian employers will now only face an application for a ballot of employees regarding protected industrial action where formal bargaining has been initiated by the employer voluntarily, or where the majority of employees at the workplace apply to the Fair Work Commission, demonstrating their desire to bargain with the employer.
These amendments will also serve to provide employers in the Australian resources sector with greater certainty around project delivery by limiting the circumstances in which employees can engage in protected industrial action.