Bad Faith, Bad Outcome

If a party to enterprise agreement negotiations is found to have breached the good faith bargaining requirements, the consequences can be a lot more than a mere rebuke from the Fair Work Commission as a major cosmetics manufacturer found out.

Many of the employees in this workplace were union members and relying on the union to be their bargaining representative. However, the employer took a robust approach to the negotiations, including issuing material which the commission later found to be misleading. A major concern to the commission was the employer’s emphasis in the material that employees were able to nominate anyone as their representative, or indeed, no one at all.

But the concerns didn’t end there. The employer also stated in a document issued to the employees’ that their “current conditions of employment will be protected, preserved and clearly documented for your convenience”. The commission observed that the proposed agreement actually removed “a number of clauses of the current agreement which provide current entitlements to employees”.

Further, the employer made misleading representations to the employees about some of the union’s claims, implying these matters could not be included as a result of legal restraints. The employer also declared an impasse in negotiations had been reached after just two negotiating meetings and hurried the process to finality ignoring the mandated time lines for the various actions to take place.

Finally, the employer’s proposal for the conduct and timing of the vote were found by the FWC to also breach good faith bargaining requirements.

In these circumstances, the commission exercised its powers and made Orders requiring the employer to meet with the union, to postpone a proposed ballot, to ensure a senior officer of the company was in attendance at negotiating meetings and providing the parties liberty to apply for further orders should there be any more breaches of the good faith bargaining requirements.

The lesson, in this case, is that there is little mileage in trying to rush the process or circumvent bargaining structures. The commission is empowered to require specific performance of good faith bargaining requirements as it did in this case, which puts the employer, not only on the back foot but in a poor light as well.

NUW v Ross Cosmetics Aust Pty Ltd [2012] FWA 3252 (18 April 2012)